Nagaland lobbies for Rs 40 Cr from 16th Finance Commission to bridge development gaps

Kohima, Nov 6: Nagaland Chief Minister Neiphiu Rio has appealed to the 16th Finance Commission (FC) to allocate Rs 40,386.5 crore to address the state’s financial challenges and foster development over the next five years.

Highlighting the need for infrastructure and economic growth, Rio highlighted that such funding is crucial to bridge Nagaland’s resource gaps and propel it towards equitable progress with other regions.

During a meeting with a visiting delegation of the Commission, chaired by Arvind Panagariya at a Kohima hotel, Rio highlighted the unique circumstances surrounding Nagaland’s statehood, established in 1963 following the 16 Point Agreement of 1960, which promised special financial support.

The Chief Minister noted that Nagaland’s political history and socio-economic conditions call for dedicated assistance to overcome deep-rooted infrastructural deficits.

Rio highlighted to the state’s deteriorating financial position after the cessation of Additional Central Plan Assistance (ACA) in 1989-90, which marked a turning point with the 9th Finance Commission.

He asserted that the resulting financial strain left Nagaland unable to sustain developmental activities at a desired pace. Rio requested the Commission to recommend revenue deficit grants, which would prevent the state from resorting to heavy borrowing, a move that could otherwise impair future growth.

The Chief Minister also highlighted the declining share of states in the central pool, largely due to an increase in cesses and surcharges that are not shared with the states.

Rio advocated for a revised allocation model that takes into account Nagaland’s limited internal revenue sources.

Further, Rio highlighted the proposal for a 364-kilometer highway along Nagaland’s border with Assam, a project estimated at Rs 9,000 crore.

With Kohima as India’s only state capital without an airport, Rio requested Rs 865 crore for developing the Ciethu Airport.

The state has already secured over 1,000 acres, with a phased construction plan to eventually accommodate Airbus A320-class aircraft.

CM Rio also cited Rs 379 crore as necessary to complete the long-delayed High Court complex in Kohima, which began in 2007.

He noted that the state has already invested Rs 162.8 crore from limited funds, given that Nagaland has received no central assistance for judicial infrastructure.

Additionally, he appealed for either an increase or removal of the expenditure ceiling on Externally Aided Projects, which could support essential programs in urban infrastructure, water supply, health, education, agriculture, and forestry.

Speaking to the press on Tuesday afternoon, 16th Finance Commission Chairman Panagariya highlighted the need for Nagaland to strengthen its revenue generation.

He outlined the Commission's role in recommending the distribution of the divisible pool between the 28 states (vertical devolution) and advising on the allocation among individual states (horizontal devolution).