Nagaland CM calls for oil exploration in inter-state border areas in Budget

Nagaland Chief Minister Neiphiu Rio on Monday presented a Rs 23,183-crore budget for the 2023-24 fiscal, and called for oil exploration along the disputed border with Assam, besides allowing liquor sales in star category hotels.

The budget also emphasised on building infrastructure and strengthening the agriculture sector.

The government intends to start exploration and extraction of oil in the Disputed Area Belt (DAB) once the tripartite MoU with the Centre, Nagaland and Assam is signed, Rio said.

We are concerned at the substantial loss in revenues, while Assam continues to exploit the resources in the border areas to our disadvantage, the CM said, adding that the state government will also explore the possibility of introducing the sale of its own lotteries within Nagaland, to begin with.

Stressing the need to mobilise more resources to meet its increasing developmental needs, Rio also proposed allowing the sale of liquor to foreigners visiting the state, which, he said, is permitted within the ambit of the Nagaland Liquor Total Prohibition (NLTP) Act, 1989, by certain hotels of star category.

The CM, on being asked if the state government would consider revoking the prohibition on liquor, said that "it all depends on the people because they had forced the ban on the sale of liquor back in 1989.

The road and bridge sector has got the highest allocation of Rs 56.80 crore, while the Agri and allied sector has been provided with Rs 54.26 crore.

Rio, who holds the finance portfolio, expressed happiness that the state is seeing an encouraging trend of gradual increase in the revenues in areas like state GST, which has increased from Rs 788.37 crore during the pre-pandemic year 2019-20 to Rs 1,092.21 crore in 2021-22.

Revenues from the coal sector have also seen an increase from Rs 53 lakh in 2019-20 to Rs 200 crore in 2021-22, while during the current financial year, it has already reached Rs 5 crore, according to the latest details furnished by the department, and is expected to cross Rs 8 crore by the end of 2022-23 fiscal.

Despite these encouraging trends, the state's own revenues still account for only 12.36 per cent of the total revenue receipts.

This is barely sufficient to cover our salary expenditure for two and half months. This is mainly because we have a small tax base, he said.

Rio also said that the state will be adversely impacted by the yearly reduction in the Revenue Deficit Grant recommended by the 15th Finance Commission as over the five-year period from 2020-21 to 2025-26. the RDG will reduce by an amount of Rs 910 crore.

"It appears that the Commission has taken this view to pressurize the state to cut down its revenue expenditure, especially on salaries. The unusually huge amount of resources we spend on payment of salaries has been viewed critically by almost all the Finance Commissions, he said.

Given these circumstances, the CM said it has become very urgent for the state to look into all potential areas of revenue generation, streamline collection systems and plug all areas of leakage.