Surplus projected, but declining central support keeps finances under strain
Chief Minister Neiphiu Rio on Thursday presented the State Budget for 2026-27, projecting a surplus of Rs 74.77 crore. Despite this, Nagaland is expected to end the year with a deficit of Rs 337.04 crore.
A surplus, but still in deficit
The State expects to earn more than it spends in 2026–27. However, a deficit of Rs 411.81 crore carried over from the previous year keeps the overall finances in the red. In other words, the surplus reduces the deficit, but does not eliminate it.
Why is the State under pressure?
Two key changes in central funding:
• Nagaland’s share of central taxes has been reduced from 0.569 percent to 0.481 percent
• Revenue Deficit Grants (RDG), which helped bridge financial gaps, have been discontinued for 2026–2031
Both mean less assured money for the State.
How is the government managing this?
The State has gone ahead with a full budget after an assurance of at least Rs 4,500 crore in grants to offset the loss of RDG.
At the same time:
• Tax revenue is expected to increase by 10.52 percent
• Non-tax revenue is projected to rise by 7.5 percent
Where is the money going?
• Rs 1,350 crore has been allocated for development (up from Rs 1,200 crore)
• The social sector received the highest share at 18 percent
• Rs 250 crore has been earmarked as the State’s contribution to centrally sponsored schemes
What does this mean?
The budget shows signs of improvement, with the deficit expected to narrow from Rs 411.81 crore to Rs 337.04 crore.
However, with reduced central support and the discontinuation of RDG, the State remains dependent on uncertain external funding.
ALSO READ | Rio presents Nagaland Budget 2026–27: Rs 337.04 Cr deficit despite Rs 74.77 Cr surplus
