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

It assesses the State's fiscal position, including revenue, expenditure, debt, and compliance with fiscal responsibility laws.

Who it concerns: Government of Nagaland

What the auditor found

• 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.

Also in the document

• The State’s dependence on central Grants-in-Aid remained substantial despite improved own revenue performance.
• Committed costs and subsidies consumed the majority (75.01%) of revenue expenditure, leaving limited fiscal space for capital investment.
• Several funds, including the Nagaland Road Safety Fund and State Compensatory Afforestation Fund, were not transferred as required, representing undischarged liabilities.