Nagaland's 75% revenue spent on subsidies, leaving little for capital investment

This audit examines the financial performance, budgetary management, and financial reporting practices of the Government of Nagaland for the financial year 2024-25. It assesses the State's fiscal position, including revenue, expenditure, debt, and compliance with fiscal responsibility laws.

Government of Nagaland

• Revenue receipts contracted by 0.42 per cent due to decreased grants from the Centre, despite higher tax collections.
• Revenue spending grew by 3.47 per cent, with committed costs and subsidies accounting for 75.01 per cent of revenue expenditure.
• Capital expenditure remained volatile and below budgeted levels, indicating constraints in infrastructure investment.
• The report identifies issues such as expenditure incurred without authority of law, excess expenditure, and non-adherence to Quarterly Expenditure Limits.
• Undischarged liabilities were noted, including short contributions to the National Pension System and non-transfer of funds to various trusts (e.g., National Mineral Exploration Trust Fund, Nagaland Road Safety Fund).
• Delays in the submission of Utilisation Certificates (UCs) and pendency of refund cases were observed.
• Misclassification of Revenue expenditure as Capital expenditure was identified.
• Recommendations were made to improve revenues, address expenditure issues, and ensure compliance with accounting standards.

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