Dimapur: Nagaland Chief Minister Neiphiu Rio, who also holds the finance portfolio, on Thursday presented a Rs 337.04 crore deficit budget for 2026–27 during the second phase of the eighth session of the 14th Nagaland Legislative Assembly in Kohima, outlining a roadmap focused on fiscal consolidation, improved revenue mobilisation and targeted development initiatives.
Presenting the budget, Rio said that while it projects a net surplus of Rs 74.77 crore, the financial year is expected to close with a deficit of Rs 337.04 crore due to a negative opening balance of Rs 411.81 crore.
He noted that the state’s fiscal position has improved, with the closing deficit for 2025–26 now estimated at Rs 411.81 crore, significantly lower than the earlier projection of Rs 843.21 crore.
For 2026–27, the budget estimates gross receipts at Rs 22,507.10 crore and total expenditure at Rs 22,127.33 crore.
The Chief Minister expressed concern over the revised devolution formula proposed by the 16th Finance Commission, which reduces Nagaland’s share in central taxes from 0.569% to 0.481%. As a result, the state is projected to receive Rs 7,341 crore in 2026–27, compared to Rs 8,684 crore under the previous formula.
He also highlighted the impact of the discontinuation of post-devolution revenue deficit grants. Referring to his meeting with Union Finance Minister Nirmala Sitharaman on February 4, Rio said the state had sought continued grants-in-aid to bridge the anticipated fiscal gap and safeguard Nagaland’s unique constitutional provisions.
Emphasising the need for fiscal discipline, Rio pointed to concerns raised by successive finance commissions regarding high revenue expenditure, particularly on salaries. He reiterated the government’s commitment to strengthening revenue generation, rationalising expenditure and managing deficits while maintaining developmental momentum.
The 2026–27 budget also outlines a series of new initiatives focusing on governance reforms, women’s empowerment, social development and economic growth, supported by targeted allocations and structural measures.
In a first for the state, the budget introduces an SDG-linked framework, along with a gender budget statement and outcome budgeting, aimed at improving transparency, accountability and results-based planning across departments under a “whole-of-government” approach.