AIZAWL: The Mizoram government has stated that it is hopeful of improving and stabilising the poor financial condition of the state in the next three-four months.
Mizoram state has been reeling under severe financial crisis due to several factors including the COVID-19 pandemic and non-release of the state’s share of taxes and grants by the central government.
Though Mizoram’s treasuries were not closed, payments have been significantly reduced owing to the prevailing situation, a statement issued by the state finance department said.
“The bulk of the financial constraints are expected to be resolved after three or four months. Next instalments of Mizoram’s share of taxes are expected to be released soon by the Centre,” the statement said.
The Mizoram government attributed the current fiscal crunch to the COVID-19 pandemic and non-receipt of revenue from the state.
The total amount of funds that Mizoram expected to receive from the Centre but did not receive, came to more than Rs 2632.58 crores during the last part of 2019-20 to 2020-21, which has adversely affected the fiscal management, the statement said.
Though the Centre provided nearly Rs 100 crore as COVID-19 assistance, it was not adequate to meet the Mizoram’s financial requirement to tackle the pandemic, it said.
The pandemic caused unplanned expenditures, dealing a severe blow to the state’s exchequer, it said.
According to the statement, the Mizoram government is planning to release salaries to regular employees and pensions by August 10, while muster roll and work-charged employees would be paid by August 5.
The Mizoram government said that the Centre’s new procedure on the release of funds under the Centrally Sponsored Schemes (CSS) has impacted not only Mizoram but also other states of the North-eastern region.
Under the new rule called Public Finance Management System (PFMS), the CSS funds are released to the Single Nodal Account (SNA) of the implementing agency.
The Centre can monitor the usage of funds through the new rule, which was introduced last year.
Mizoram implemented the rule in September last year.
However, the CSS funds were sometimes not instantly released to the SNA when there were shortages, the statement said.
The Centre had in July directed all states to release all CSS funds, which were released to states before March 31, 2022, to disburse them to the single nodal agencies’ accounts on or before July 20.
“During the past two weeks, the Mizoram finance department has released CSS funds amounting to Rs. 610.69 crore to implementing agencies by availing overdraft besides ways and means advance and special drawing facilities,” the official statement stated.
Citing that state treasuries have not been closed, the state finance department’s statement said that payments have been rather significantly reduced owing to the prevailing financial constraints.
However, utmost necessary payments are being made and Rs.17.84 crore was released from the state treasuries between July 25 and July 28, it said.
The statement further said that the state government is making massive efforts to stabilise the financial condition and all revenue earning departments have been instructed to release revenues to the state’s account at the earliest.
Earlier on Wednesday, main opposition Zoram People’s Movement (ZPM) had demanded that the state government summon a special session to review and ascertain the state’s financial status.
Congress had also last week asked Mizoram chief minister Zoramthanga, who also holds the finance portfolio, to release a white paper on the state’s fiscal condition.