'Nagaland financial position published is deceptive'

Kohima, 25th September 2020

The attention of the NPF Legislature Party is drawn to the atrocious claims of the State Finance Department apropos the State’s financial position published in the local dailies on Sept. 24. The deceptive facts and figures put forth in the Media by the spin doctors running the State Finance Department portrays the well-defined objective of Chief Minister, Neiphiu Rio, who also holds the Finance portfolio, to continue embezzling public fund while giving the impression that the prevailing State Deficit scenario is the creation of the previous Government under former Chief Minister, TR Zeliang.

The truth will always be the truth, no matter how harsh it sounds. In 2003, the one-time grant of Rs. 365 cr by former Prime Minister, A.B Vajpayee managed to bring the State Deficit to Zero. Subsequently, when the first Budget was presented by Chief Minister, Neiphiu Rio during DAN-I, the surplus Budget was Rs. 18.47 cr for the year 2003-2004. Thereafter, the State Deficit figure started witnessing an abnormal increase and by the time Neiphiu Rio left for Lok Sabha as an MP in 2014, the accumulated State Deficit was Rs. 1234 cr.

Prior to his departure for Lok Sabha, when the Vote on Account was presented by Chief Minister, Neiphiu Rio on March 21, 2014 for withdrawal of Rs 3523.58 cr from the Consolidated Fund of Nagaland during the 4th Session of the 12th Nagaland Legislative Assembly, the closing Deficit was estimated at Rs. 1234 cr.

This Vote on Account, which in layman’s term means the interim permission for grant in advance, was presented by Sh. K. Therie (who was State Minister of Finance then) to settle the expenses of the State Government for four months, April 1 to July 31 of the fiscal year 2014-2015, wherein the closing Deficit figure was projected to stand at Rs. 1234 cr. Later, when the full Budget amounting to Rs. 12,127.59 cr was presented during the 5th Session of the 12th Nagaland Legislative Assembly which commenced on July 22, 2014, the Deficit figure was estimated at Rs. 1252.45 cr.

Disturbingly, the State Finance Department today claims that when the present Chief Minister, Neiphiu Rio left for Lok Sabha in 2014, the Deficit stood at Rs. 950.09 cr and by the time the present Government returned in 2018, it had grown to Rs. 1607.73 cr. This is absurd, illogical and unacceptable. If the State Finance Department still have doubts on the two controversial figures of Rs. 1234 cr and Rs. 950.09 cr, it should come out with the reconciled and confirmed Deficit figure against the year 2014-15 to clear all doubts failing which the matter will be destined for legal recourse.

It must be noted that bringing projected statistics, which are only estimated figures prepared by the State Finance Department, to public domain and portraying the same as conclusive and confirmed figures by the same Department is hypocrisy of the cheapest standard. As is a known fact, the State Finance Department does not reconcile the projected Deficit figures but depends on the actual reconciled figure of the Reserve Bank of India (RBI). The figures in question are projected figures and do not illustrate the actual reconciled figures as it ought to be which the State Finance Department is well aware of.

In 2014, after the DAN-III Government led by TR Zeliang took over with an inherited Deficit of Rs. 1234 cr left behind by DAN-I and DAN-II Government; Revision of Pay-2017 was implemented with an additional amount of Rs 178.24 cr. It is also worth mentioning that in 2018, when the present-day Government under Chief Minister, Neiphiu Rio took over, the negative opening balance stood at Rs. 1600.72 cr for the year 2018-2019.

Simple arithmetic in this regard elucidates the case: If the inherited Deficit of Rs. 1234 cr left behind by Neiphiu Rio’s Government as on March 31, 2014 along with the implementation cost of RoP-2017 amounting to Rs 178.24 cr is subtracted from the negative opening balance of Rs. 1600.72 cr for the year 2018-2019; the end result of actual deficit during 2014-2018 under Chief Minister, TR Zeliang was Rs. 195.49 crores with a yearly average deficit of Rs. 48.97 crores.

Therefore, when the State Finance Department says that the current year 2020-21 is expected to close with a Deficit of Rs. 2358.81 cr as per budget estimates with an increase of Rs. 939 cr since 2014-15, it must be construed and understood that the said amount of Rs. 2358.81 cr is the sum total inclusive of Rs. 1234 cr deficit inherited from DAN-I and DAN-II under Chief Minister, Neiphiu Rio.

In its statement, the State Finance Department claims that the State Government had initially estimated monthly receipt of Rs. 320.96 cr. per installment as Share of Central taxes and Duties as reflected in the Union Budget of 2020-21. In this regard, was the Chief Minister who also holds the Finance portfolio satisfied with the normal arrangement of the 15th Finance Commission in providing only Rs. 320.96 cr on installment basis to meet all recurring expenditure?

If so, what was the estimated requirement of the State Government for monthly instalment? If the said amount of Rs. 320.96 cr was not sufficient, why didn’t the Chief Minister convince the 15th Finance Commission with proper justification during the initial assessment?

Even after closing the financial year 2018-19, the State Finance Department failed to bring out the exact confirmed figure of the State Fiscal Deficit in the subsequent Budget Document of 2019-20. Yet, for reasons best known to the State Government, it continues to give extra interest to the Deficit figure of a specific fiscal year.

As such, apropos the fictitious claims of the State Finance Department portraying the previous NPF led DAN-III Government in bad light, the Naga Peoples’ Front challenges the State Finance Department and the Minister In-charge of the Department, Neiphiu Rio to bring out the accurate confirmed Deficit figures of the last 20 years if at all the Government desires to educate the general public on the matter.

Issued by:
NPF Legislature Party.