Nagaland has posted a mixed fiscal performance in the Comptroller and Auditor General (CAG) State Finances 2024-25 report, recording a revenue surplus but continuing to remain among states with relatively high fiscal deficit levels.
According to the report, only 10 of India’s 28 states kept their fiscal deficit within the 3 per cent of Gross State Domestic Product (GSDP) benchmark recommended by the Fifteenth Finance Commission. Nagaland was not among them, reporting a fiscal deficit of 6.1 per cent of GSDP.
Among the higher-deficit states, Meghalaya recorded the highest fiscal deficit at 8.7 per cent, followed by Nagaland (6.1 per cent), Sikkim (5.6 per cent), Himachal Pradesh (5.4 per cent) and Mizoram (5.3 per cent). These figures place all five Northeastern and hill states above the recommended fiscal prudence limit.
A fiscal deficit reflects the gap between total government expenditure and total revenue receipts, excluding borrowings, indicating reliance on debt to finance spending.
Despite this, Nagaland was among 13 states that recorded a revenue surplus in 2024-25, meaning its revenue receipts exceeded routine expenditure such as salaries, pensions and administrative costs. Arunachal Pradesh led this category with a surplus of 19.4 per cent of GSDP, while other surplus states included Goa, Odisha, Uttar Pradesh, Tripura, Jharkhand and Gujarat.
However, 15 states ended the year with a revenue deficit, with Punjab and Andhra Pradesh among the highest, reflecting pressure on day-to-day finances.
The CAG data further highlights that revenue surplus does not necessarily translate into overall fiscal stability, as several states, including Nagaland, continue borrowing for infrastructure and development spending. (With inputs from agencies)