Need to reduce Nagaland’s tax expenditures | MorungExpress
Members of the Kohima Press Club with resource persons at the “Simplified Budget” workshop in Kohima on March 12. (Morung Photo)
Kohima Journalists Attend State Budget Workshop
News Morung Express
Kohima | 12th of March
Apart from having the highest number of government employees, the state of Nagaland has the highest number of government departments and establishments totaling 70, followed by the neighboring state of Assam with 50.
This was revealed at the one-day “Budgeting Simplified” workshop hosted by the Kohima Press Club on March 12 at The Heritage conference room (former DC Bungalow). Along with the upcoming budget session, the workshop was organized to enable journalists to better understand state finances and budget when reporting.
Resource persons were Ketoulhou Metha, Principal Research Officer (Budget) and Y Kikheto Sema, Agricultural Production Commissioner (APC) and former Finance Secretary who presented the state and overview of state finances and the ways forward.
Overemployment, a major problem
The two resource persons agreed that “overemployment” in the public sector is a major problem in the state as a large portion of the state’s finances are spent on wages and salaries amounting to Rs 5303.20 cr and Rs 1752.48 cr in retirement.
According to the APC, as of March 31, 2020, Nagaland had a total of 1,00,001 regular employees, 24,854 fixed employees and 14,744 dependent employees, bringing the total number of government employees to 1,40,765.
He also observed that the state spends heavily on education outside the state, reliance on other states for essentials, especially meat and meat products, fruits and vegetables s amounting to Rs 1500 cr per year.
Another problem, Sema pointed out, is “the indecent amount of money spent during elections, poor work culture and dependency on others”.
Sources of income and expenses
According to Metha, the main sources of state funding come from the central tax share, the revenue shortfall grant; Own state tax – SGST, VAT, road tax, etc. ; non-tax revenue – electricity, NST, lotteries, water supply, forestry fee, etc. ; Centrally Sponsored Programs/NEC/NLCPR; Projects benefiting from external assistance (PAE); reimbursements of security-related expenses; other scholarships from the Finance Commission and borrowings from Open Market Loan, General Provident Fund, Negotiated Loan – HUDCO/NABARD/REC, etc., loan component for RBI’s EAPs and WMAs (short-term ).
Major expense items are salaries and wages, pensions, debt service, administrative/setup expenses, PSU grants, asset maintenance, purchased power, sponsored plans Center/NEC/NLCPR, EAPs, State Development (Old State Plan), State Programs, and State Share for CSS.
Briefly, they also explained the different components of finance and the budget, and answered questions from journalists.
Moving forward with austerity measures
With the need to reduce state tax expenditures, Metha in his walk suggested streamlining government employment and also creating an alternative environment conducive to economic growth.
While proposing that the state facilitate the growth of the private sector to accommodate the coming population, he observed the need to increase capital investments and rely more on EAP funding for capital projects. He also underlined the enormous potential of the tourism sector.
Meanwhile, citing the unresolved Naga political issue as a major setback, Sema suggested a quick solution to the Naga political issue and investment in quality educational institutions in the state.
Besides more investment in infrastructure, viz. road, electricity, water and agriculture and related sectors, it also recommended reforms in the electoral process and clean elections, and the inclusion of biodiversity, culture of work and food”, etc., in the elementary curriculum, Sunday school, preaching and pulpit teaching.