Kohima: Nagaland Chief Minister Dr Neiphiu Rio, who also holds the Finance portfolio, on Thursday presented the state Budget for 2026–27 in the Nagaland Legislative Assembly projecting a deficit of Rs 337.04 crore.
Addressing a post-budget press conference in Kohima, Rio described the 2026–27 Budget as an inclusive, sustainable and growth-oriented roadmap aligned with the vision of a “Developed Nagaland @ 2047”.
Explaining the delay in presenting the Budget, he said the state faced two simultaneous fiscal shocks following the recommendations of the Sixteenth Finance Commission. These include the discontinuation of Revenue Deficit Grants for the period 2026–31 and a reduction in Nagaland’s inter-se share of central taxes from 0.569% to 0.481%.
According to the state’s projections submitted to the Finance Commission, Nagaland’s pre-devolution revenue gap stands at Rs 8,113.70 crore. Rio said he met the Union Finance Minister on February 4, 2026, and conveyed the state’s concerns. Following what he described as reassuring concurrence from the Centre, the state proceeded with the full Budget while anticipating a minimum grant of Rs 4,500 crore in lieu of the discontinued Revenue Deficit Grants.
The Chief Minister said the state’s own revenue generation is expected to improve compared to the previous financial year. Own tax revenue is projected to increase by 10.52%, amounting to Rs 97.75 crore, while own non-tax revenue is expected to grow by 7.5%, or Rs 44.56 crore.
He informed that the Union government has provisioned Rs 7,341.28 crore as Nagaland’s share of central taxes and duties for 2026–27. However, this represents a decline of Rs 752.42 crore compared to the previous year’s Budget Estimates.
For 2026–27, the State Development Outlay under the state programme has been fixed at Rs 1,350 crore, marking an increase of 12.5% from last year’s allocation of Rs 1,200 crore. The social sector received the highest share at 18% of the total outlay. Key allocations include Rs 100.57 crore for grants to the Frontier Nagaland Territorial Authority, Rs 62 crore for Budget initiatives and Rs 250 crore as the state’s share for Centrally Sponsored Schemes.
The fiscal deficit has been projected at 3% of the Gross State Domestic Product (GSDP), in line with the recommendations of the Sixteenth Finance Commission. The GSDP for 2026–27 is estimated at Rs 48,500 crore, with a projected growth rate of 9.13%.
For the financial year 2026–27, Nagaland’s gross receipts are estimated at Rs 22,507.10 crore, while gross expenditure is projected at Rs 22,127.33 crore.
The state’s own tax and non-tax revenue is estimated at Rs 2,714.44 crore, while the state’s share in central taxes is projected at Rs 7,341.28 crore. Internal debt is estimated at Rs 2,978.77 crore, and central assistance in the form of grants and loans is expected to contribute Rs 9,471.08 crore. Recovery of loans and advances by the state government is estimated at Rs 1.53 crore.
On the expenditure side, non-development expenditure (excluding servicing of debt) is estimated at Rs 13,337.51 crore. Servicing of debt, including repayment of Ways and Means Advances (WMA), is projected at Rs 2,618.74 crore, while development expenditure, including Centrally Sponsored Schemes, is estimated at Rs 6,171.08 crore.
The Budget estimates a surplus of Rs 74.77 crore in current transactions for 2026–27. However, due to a negative opening balance of Rs 411.81 crore, the year is projected to close with an overall deficit of Rs 337.04 crore.
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Responding to a query on the implications if the anticipated central assistance does not materialise, Finance Commissioner Kesonyu Yhome said there could be both political and financial implications. Referring to the financial aspect, he noted that the state government may have to revisit its plan outlay and recast priorities.
However, he expressed confidence in the Union government’s support for the state statement under the in the leadership of the Chief Minister.
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