Budget ignores collapsing economy of violence-hit state
Source: Chronicle News Service / Prof Chinglen Maisnam

Imphal, August 06 2025: The 2025-26 Manipur Budget presented by finance minister Nirmala Sitharaman on Wednesday, ignores the present collapsing economy of violence-hit Manipur.

As is well-known, there is a pressing need for a huge fiscal incentive to boost aggregate demand in the state's economy in this extremely challenging time.

Many people have lost jobs, income and savings, and are heavily indebted owing to the scale of economic devastation and unprecedented decline in economic activity in the state due to the ongoing crisis.

Women, children and vulnerable segment of population are suffering the most.

There should have been a huge fiscal stimulus for econom-ic revival.

The budget needs to make an immediate and substantial intervention to halt the unparalleled economic breakdown, address the humanitarian crisis, and lay the groundwork for lasting peace and development in the state.

The crisis situation merits a comprehensive relief and recovery plan, enlarged financial aid and support.

The people of the state hoped for a special economic package from the budget, which the budgetary allocation, sadly, does not reflect.

The provision of Rs 2198 crore is too meagre an amount to support those internally displaced, asset creation for rehabilitation efforts, security expenses and prepayment of high interest loans.

The budget, thus, ignores the durrent humanitarian crisis and collapsing economy of Manipur.

Large scale forced displacement, and huge spike in prices (Inflationary burdens) combined with mounting unemployment and collapsing incomes, have severely impoverished state's living standards and household incomes.

One of the key drivers of the economy of the state, the private sectors, especially the MSMEs are also being hardest hit.

The breakdown to the productive base has continued to deteriorate as the violence lingers.

The budget needs to respond to the urgent needs of the violence-hit Manipur.

What is needed at present is larger Central government's transfer to the strife-torn Manipur.

This would generate a righteous spiral.

Demand would pick up in the economy because greater purchasing power is put into the hands of the people, and also greater spending by the government on social welfare.

Regarding overall allocations, this budget reflects, once again, its clear commitment to fiscal conservatism.

The Manipur Budget 2025-26 squeezes the government expenditures to reduce the fiscal deficit.

Fiscal deficit is estimated at 3.49 per cent of the GSDP.

For 2025-26, the total outstanding debt as a percentage of GSDP is projected at 37 per cent as is evident from the union finance minister proposing total expenditure of Rs 29,988 crore out of the Consolidated Fund of the state.

Total revenue expenditure is estimated at Rs 19,496 crore and capital outlay pegged at Rs 4,040 crore.

A closer look at the budget shows that it has drastically cut back on its expenditure and the size of the government expenditure has become smaller.

It is, thus, a contractionary budget, implying that there will be further reduction of government expenditures.

There is also huge cuts in all centrally sponsored schemes from last year's budget estimates.

This would lead to lower growth, higher unemployment, higher inflation and higher degree of inequality in the face of a crisis in state's economy.

The budget does not reflect any seriousness to address the worsening economic crisis of the violence-hit Manipur.

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