Nagaland Budget
India has a quasi-federal system of government and hence every state prepares its own budget. The Constitution of India stipulates that no expenditure can be incurred from the Consolidated Fund of a State without the authority of Appropriation Act. In order to obtain this authorization from State Legislature, a statement of anticipated receipts and expenditure for each financial year needs to be laid before the State Legislature in the form of a 'Budget'.
The Budgets are prepared for every fiscal year that begins on 1st of April in a year and ends on 31st of March in the following year. These Budgets capture the entire magnitude of funds collected by the government as well as the expenditure incurred from the government treasury in the previous year. The actual revenue and expenditure figures for the preceding fiscal year generally are revised estimates (RE) which are firmed up in the following year upon receipt of final figures from all departments.
The state earns its revenue primarily from levy of local taxes, income from state-owned enterprises and investments, and from its share of central taxes which are collected by the central government. In addition, it also receives annual grants from the Centre to carry out specific development projects. The expenses are undertaken for providing various social and economic services as well as to meet its obligations for debt servicing in the form of interest and principal repayments.
The State Budgets do not capture the Own Sources of Revenue collected by the institutions of local self governance (e.g. Municipalities in the urban areas and Panchayati Raj Institutions in the rural areas) and their expenditure from these funds; however, the size of such funds is believed to be very small as compared to the overall magnitude of funds and expenditure captured in the State Budgets. The total expenditure incurred from the State Budgets accounts for more than half of the Total Public Expenditure in the country. A large share of the total “developmental expenditure” incurred from the government budgets in the country, i.e. the budgetary expenditure on social services (such as, education, health, nutrition, water and sanitation) and economic services (such as, agriculture, irrigation, rural development, transport), is incurred from the State Budgets. Also, a substantial share of the total fiscal transfers to the institutions of local self governance, i.e. Municipalities and Panchayati Raj Institutions, is made by the State Governments through the State Budgets. Hence, the overall magnitude of the State Budgets is significant and the nature of spending incurred from those is crucial for development.
The budget figures presented here are sourced from Nagaland's budget documents and RBI.
India has a quasi-federal system of government and hence every state prepares its own budget. The Constitution of India stipulates that no expenditure can be incurred from the Consolidated Fund of a State without the authority of Appropriation Act. In order to obtain this authorization from State Legislature, a statement of anticipated receipts and expenditure for each financial year needs to be laid before the State Legislature in the form of a 'Budget'.
The Budgets are prepared for every fiscal year that begins on 1st of April in a year and ends on 31st of March in the following year. These Budgets capture the entire magnitude of funds collected by the government as well as the expenditure incurred from the government treasury in the previous year. The actual revenue and expenditure figures for the preceding fiscal year generally are revised estimates (RE) which are firmed up in the following year upon receipt of final figures from all departments.
The state earns its revenue primarily from levy of local taxes, income from state-owned enterprises and investments, and from its share of central taxes which are collected by the central government. In addition, it also receives annual grants from the Centre to carry out specific development projects. The expenses are undertaken for providing various social and economic services as well as to meet its obligations for debt servicing in the form of interest and principal repayments.
The State Budgets do not capture the Own Sources of Revenue collected by the institutions of local self governance (e.g. Municipalities in the urban areas and Panchayati Raj Institutions in the rural areas) and their expenditure from these funds; however, the size of such funds is believed to be very small as compared to the overall magnitude of funds and expenditure captured in the State Budgets. The total expenditure incurred from the State Budgets accounts for more than half of the Total Public Expenditure in the country. A large share of the total “developmental expenditure” incurred from the government budgets in the country, i.e. the budgetary expenditure on social services (such as, education, health, nutrition, water and sanitation) and economic services (such as, agriculture, irrigation, rural development, transport), is incurred from the State Budgets. Also, a substantial share of the total fiscal transfers to the institutions of local self governance, i.e. Municipalities and Panchayati Raj Institutions, is made by the State Governments through the State Budgets. Hence, the overall magnitude of the State Budgets is significant and the nature of spending incurred from those is crucial for development.
The budget figures presented here are sourced from Nagaland's budget documents and RBI.
SUBJECT Variables
RECEIPTS
This is the money received by the government from tax and non-tax sources to enable it to undertake government expenditures.
Total receipts (excluding borrowings)
- The total receipts (excl borrowings) in 2020-21 are budgeted at ₹14,649 crore, 21.6% higher than the actual receipts estimated in 2019-20.
- The total receipts (excl borrowings) in 2019-20 are estimated to be lower than budgeted by ₹1,132 crore (8.6% of the budget).
- Barring 2017-18, Nagaland's total receipts between 2013 and 2019 have been consistently lower than budgeted by an average of 11.5%
Total receipts (including borrowings)
- The total receipts (incl borrowings) in 2020-21 are budgeted at ₹20,826 crore, 8.6% higher than the actual receipts estimated in 2019-20.
- The total receipts (incl borrowings) in 2019-20 are estimated to be higher than budgeted by ₹1,568 crore (8.9% of the budget)
Revenue Receipts are those sources of revenue that are recurring in nature. They do not create any liability nor cause any reduction in the assets of the government. These include the proceeds from local taxes levied by the state, share of taxes levied by the Centre, fees and charges levied for providing various services, interest and dividend received on investments, and grants-in-aid received from the Centre.
Nagaland's total revenue receipts for 2020-21 are budgeted at ₹14,648 crore, 21.6% higher than the actual revenue receipts estimated in 2019-20. Revenue receipts comprise 70% of the total receipts budgeted in 2020-21.
Tax Revenue
- Revenue from taxes levied by Nagaland is budgeted at ₹1,011 crore in 2020-21, 7.9% higher than the actual collections estimated in 2019-20. Tax revenue is expected to contribute only 7% of the government's total receipts (excl borrowings) in 2020-21.
- The actual tax revenue in 2019-20 is expected to exceed its budget by ₹157 crore (20% of the budgeted amount).
Non-Tax Revenue
- Revenue from non-tax sources such as interests, dividends and fees in 2020-21 is budgeted at ₹272 crore, 27% lower than the actual receipts estimated in 2019-20.
- The actual non-tax revenue in 2019-20 is expected to exceed its budget by ₹44 crore (13.4% of the budgeted amount).
Share in Central Taxes
- In 2020-21, receipts from Nagaland's share in Central taxes are budgeted at ₹4,493 crore, 37.5% higher than the actual receipts estimated in 2019-20.
- The actual receipts from share of Central taxes in 2019-20 are expected to fall short of the budget by ₹925 crore (22.1% of the budgeted amount).
- In line with the recommendations of the 15th Finance Commission, Nagaland's share in the Centre's tax revenue will increase from 0.21% applicable during the 2015-20 period to 0.23% from 2020-21 onwards (an increase of 10%).
Central Grants
- Receipts from grants-in-aid by the Centre are budgeted at ₹8,871 crore in 2020-21, 19% higher than the actual receipts estimated in 2019-20. Central grants is expected to contribute 61% of Nagaland's total receipts (excl borrowings) in 2020-21.
- The actual receipts from Central grants in 2019-20 are expected to fall short of its budget by ₹408 crore (5.2% of the budgeted amount).
Capital receipts are those that create liabilities and are non-recurring in nature. These include loans taken by the state from the public, financial institutions and the Centre. It also includes recoveries of loans and advances given by the State.
- Nagaland's total capital receipts for 2020-21 are budgeted at ₹6,178 crore, 13.4% lower than the actual capital receipts estimated in 2019-20. Capital receipts comprise 30% of the total receipts budgeted in 2020-21.
- Borrowings to cover the revenue shortfall is budgeted at ₹6,177 crore in 2020-21, 13.4% lower than the actual borrowings estimated in 2019-20. Almost all of the borrowings in 2020-21 are in the form of internal debt.
- The actual borrowings in 2019-20 are expected to exceed its budget by ₹2.7K crore (61% of the budgeted amount)
- Recoveries of loans and advances is budgeted at ₹2 crore in 2020-21. The actual receipts from recoveries of loans and advances in 2019-20 are expected to be in line with its budget of ₹2 crore.
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