Rio presents tax-free Rs.365.33 cr deficit budget

Rio presents tax-free Rs.365.33 cr deficit budget
Correspondent KOHIMA, FEB 18 (NPN) | Publish Date: 2/18/2021 12:54:04 PM IST


Nagaland chief minister Neiphiu Rio presented a tax-free deficit budget of Rs 365.33-crore for the year 2021-22 at Nagaland Legislative Assembly (NLA) here on Thursday. 

Reading out his 19-paged budget, Rio, who also holds the Finance portfolio, said that while revenue receipts have been estimated at Rs 22,451.28 crore, expenditures have been projected at Rs 22,816.61 crore for the next financial year, thus entailing a deficit of Rs 365.33 crore. He said that on account of the negative opening balance of Rs.2314.13 crore, the year 2021-22 is estimated to close with a negative balance of Rs. 2679.46 crore.

Rio informed that during 2020-21, the state’s finance were severely affected due to the lockdowns during the pandemic, as a result the State’s revenue receipts- both from own resources as well as Share of Union Taxes and Duties had fallen far below initial estimations projected in the budget.

Thus, in view of the difficult situation faced by the state, Rio said no new taxes have been proposed, even as the social sector has been allocated 15.12% of the total outlay. He said that the State’s share of Central Taxes was reduced in the Revised Estimates (RE) of the Union Budget by Rs. 1341.99 crore while State’s own revenues was also estimated to decline by Rs.86.19 crore. 

Rio however, said that owing to various measures to reduce expenditure, 2020-21 was expected to close with a deficit of Rs 2,314.13 crore, which he claimed was an improvement of Rs 44.68 crore over Budget Estimate figures. The chief minister admitted a shortfall in revenue where, against the Budget Estimates (BE) of Rs.844.49 crore for 2020-21, the Taxes Department has collected only Rs.506.20 crores as of November 2020. He said this constituted 59.95% of the target set.

Another area where the state continues to lose revenue was in the Power sector, which Rio said was incurring heavy losses that are no longer acceptable. Against an amount of Rs.407 crore spent on power purchase during 2019-20, he said the revenue earned was Rs.159 crore only. During the current financial year, against power purchase of Rs.452 crore, he said the state was expected to get about Rs.175 crore only. Rio said this showed how serious the problem has become and also that it was time to have a relook at communitisation of the power sector . He said the situation was similar since 2010 with the state’s revenue realisation being less than 50 percent of the expenditure on power purchase since 2010-11. 

He stressed on making all possible efforts to increase revenue collections through measures such as better enforcement and steps to check leakage of revenue. As a part of this exercise, he said instructions have been issued to all Government departments not to award any supply orders or works contract to the firms or contractors who are not registered with the Taxes department to reduce scope for evasion of taxes.

In order to curtail expenditure under non-development (state resources), Rio said like the central government, the state government has frozen three instalments of Dearness Allowances and Dearness Relief payable to the State Government employees and pensioners. Further, he said expenditure under various items such as office expenses, travel expenses, motor vehicles and maintenance under non-development were also reduced by 15 per cent. In addition, purchase of new vehicles and fresh appointments have also been put on hold. He said there has also been 15 per cent reduction in the development outlay given to various departments.


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