Our Correspondent
Kohima | June 15
Chief Minister Neiphiu Rio today said that to COVID-19 lockdown has a negative impact State’s financial health.
Addressing a press conference in Kohima on June 15, Rio highlighted the following regarding the State’s finance:
Revenue gap grant:
Rio said that the main receipts of the state are the Revenue Deficit Grant and the Share of Central Taxes and Duties.
“We receive the Revenue Deficit Grant because as the name itself says, we are in revenue deficit even after the awards. So in order to reduce the gap of deficit in resources to meet revenue expenditure, the Revenue Deficit Grant is given. For the year 2020-21, the 15th Finance Commission has recommended Revenue Deficit Grant of Rs. 326.42 crore each month to the state,” Rio said adding that this is a fixed amount and does not change.
Since it is meant to meet the shortfall in expenditure relating to salaries, pensions, debt servicing etc., there is no scope to divert this grant for other purposes as is being misunderstood by many, Rio said.
In fact, this grant does not fully cover shortfall in revenue expenditure and so, a deficit in resources still remains even after this grant, he added.
Share of central taxes and duties
Rio said that share of central taxes and duties is given to each state based on the formula worked out by the Commission which includes parameters such as geographical area, forest cover, population and income distance.
While the Union budget of 2020-21 has projected an amount of Rs. 4493.37 crore as Share of Central Taxes and Duties for Nagaland to be released in 14 equal instalments, the actual receipt is much less at Rs. 263.80 crore which is being received in 14 equal instalments, Rio said.
Since the state's budget is prepared based on the figures reflected by the central government in its budget, this will leave the state with a shortfall of Rs. 800.17 crore by the end of the year at current levels of receipt, Rio said.
However, there is possibility of receipts under this head further reducing since it is based on actual tax collections of the Central Government, Rio said.
With tax collections deeply affected by the COVID-19 pandemic, it is possible that reduced tax collections in the current financial year may result in further reduction of receipts under this head, Rio stated.
“As in the case of Revenue Deficit Grant, receipts under this head go to meet revenue expenditure on salaries, pensions and debt servicing etc. and so, the scope for utilising this receipt for other purposes does not arise,” Rio said.
