Budget delay due to RDG cut, lower central tax share
Chief Minister Dr Neiphiu Rio said that Budget 2026-27 serves as a roadmap for inclusive, sustainable and growth oriented development, aligned with the vision of a ‘Developed Nagaland’ by 2047.
Addressing a press briefing at the Nagaland Legislative Assembly Secretariat, Kohima, following the presentation of the budget during Phase II of the Eighth Session of the 14th Nagaland Legislative Assembly, Dr. Rio explained that the delay in presenting the budget was due to the discontinuation of Revenue Deficit Grants (RDG) for the period 2026 to 2031, along with a reduction in Nagaland’s share of central taxes from 0.569 percent to 0.481 percent, as recommended by the 16th Finance Commission.
According to the State’s projections, the pre-devolution revenue gap was estimated at Rs 8,113.70 crore. Following an assurance from the Finance Minister on February 4, 2026, the government proceeded with a full budget, anticipating a minimum of Rs 4,500 crore in grants in lieu of RDG.
He noted that the State’s own revenue generation is showing an upward trend compared to the Budget Estimates of 2025 to 2026, with tax revenue projected to increase by 10.52 percent (Rs 197.75 crore) and non-tax revenue by 7.5 percent (Rs 44.56 crore).
The Chief Minister stated that Rs 1,350 crore has been earmarked for development, marking a 12.5 percent increase from the previous year’s Rs 1,200 crore. He added that the social sector received the highest allocation at 18 percent. Among the Key allocations are Rs 100.57 crore for FNTA, Rs 62 crore for 17 budget initiatives and Rs 250 crore as the State’s share for centrally sponsored schemes.
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Highlighting fiscal consolidation, he said the Revised Estimates for 2025-26 show a closing deficit of Rs 411.81 crore, reflecting an improvement of Rs 431.39 crore, largely due to reduced expenditure. He further stated that the Budget Estimates (BE) for 2026–27 project the deficit to decline further to Rs 337.04 crore, marking an additional improvement of Rs 74.77 crore.
Govt committed to FNTA MoA: Rio
The Chief Minister also informed that the government remains committed to implementing the provisions of the Memorandum of Agreement (MoA) signed on February 5, 2026, between the Government of India, the State Government, and ENPO for the creation of Frontier Nagaland Territorial Authority (FNTA). In this regard, Frontier Nagaland Territorial Authority Bill, 2026 has been drafted by the Law and Justice Department and is expected to be passed during the ongoing session of the Assembly. He added that the Union Home Minister has expressed a desire to inaugurate the FNTA by April 2026, and the State Government is making all efforts to meet this timeline. (With DIPR inputs)
