Financial crunch pinches State Government?
Source: The Sangai Express

Imphal, February 11 2016: Following installation of a new Government led by Prime Minister Narendra Modi at the Centre and subsequent changes made in the mode of providing Central financial assistance to States, the State Government led by Chief Minister Okram Ibobi is facing a difficult time.

Not long after Narendra Modi became the Prime Minister of India, the Planning Commission was replaced by NITI Aayog and the mode of providing Central financial assistance to States underwent drastic changes.

As a result, all the Northeastern States including Manipur which have limited resources are facing severe financial constraints, informed a well placed source.

The State Govt has already banned release of funds except for employees' monthly salaries, pensions and the State's matching share for central sponsored schemes.

Chief Minister, Manipur Inaugurated Prabhabati College,Mayang Imphal on 5th February 2016 :: Pix - DIPR

Whereas the incumbent Government is in the last year of its term, the next State Assembly election is due next year which means the Government must complete many pending works within the next 10 months or so.

This has turned out to be a serious challenge to the State Government.

With the exception of some funds released for the most essential purposes, the Government is unable to execute pending projects/works in full gear.

The Central Government has been providing money needed for payment of monthly salaries of employees and pensions while keeping the non-plan amount untouched without undue interruption.

The Central Govt has also been releasing plan amount regularly.

At the same time, the Central Government has issued strict instructions not to use plan amount for any other purposes.

In case any amount of fund sanctioned by the Central Government for a particular work is utilized in another work by the State Govt, the same amount should be paid back within 15 days.

If the State Government cannot repay the amount within the stipulated period, there is a provision of penalty.

Given these restrictions, the State Government is now facing a very hard time.

The Central Government's monthly non-plan assistance is enough to pay monthly salaries and pensions of State Government employees and pensioners.

Notably, the State Government has been spending Rs 270 crore to Rs 320 crore in paying monthly salaries and pensions.

Nonetheless, the State Government led by O Ibobi has been exploring different avenues to enhance the Government's revenue collection in order to tackle the worsening financial difficulties.

The Government has been scrupulously utilizing whatever funds available after payment of monthly salaries and pensions so as to avoid overdraft.

Informing that the State Government has started taking loans from financial institutions, the official source said that the Government is under immense from its own Ministers and MLAs who are seeking release of funds.