Fiscal challenges facing Nagaland came into focus during the general discussion on the State Budget 2026–27 in the Nagaland Legislative Assembly, with members highlighting issues such as the discontinuation of revenue deficit grants and the need for improved revenue generation.
Chief Minister Dr Neiphiu Rio informed the House that the State has been facing financial constraints following the absence of revenue deficit grants under the current Finance Commission framework. He stated that the matter has been taken up with the Central Government and expressed hope for a favourable outcome.
Advisor for Food & Civil Supplies and Legal Metrology, KT Sukhalu, pointed out concerns raised by successive Finance Commissions regarding the State’s high revenue expenditure, particularly on salaries. He stated that irregular appointments made in the past may have contributed to the issue and stressed the need for strict adherence to established recruitment procedures.
Sukhalu also emphasized that as a welfare State, Nagaland must strengthen revenue collection, noting that essential services cannot be sustained if citizens do not contribute through payment of electricity and water bills. He suggested awareness campaigns involving civil society organisations, village authorities, and student bodies.
He further called for measures to enhance revenue generation and reduce dependence on borrowing, stressing the importance of fiscal sustainability and responsible governance.