Governor constitutes fourth Nagaland State Finance Commission to strengthen municipal finances

The Finance Department of Nagaland has announced the establishment of the Fourth Nagaland State Finance Commission under the authority granted by Section 125(1) of the Nagaland Municipal Act, 2023. The Commission, set up to enhance the financial structures and capacities of municipalities within the state, will be chaired by Smt. Sarah R. Ritse, a retired Commissioner and Secretary. The appointed members include Sh. G.W Lee, former Director of Treasuries & Accounts, and Sh. Khrupi Sothu, retired Secretary, who will serve as Member and Member Secretary, respectively.

The Commission’s tenure is set for a 12-month period starting from the issuance date of this notification. During this time, the Commission will focus on formulating key recommendations on multiple financial matters affecting municipal bodies across Nagaland.

Key Responsibilities of the Commission
The mandate of the Commission includes outlining principles for:

- Determining the distribution of net proceeds from state-level taxes, duties, tolls, and fees between the State and its municipalities.
- Identifying specific taxes and duties that may be designated to, or directly collected by, municipal bodies.
- Proposing grant-in-aid measures from the State’s Consolidated Fund to support municipalities.
Additionally, the Commission is tasked with developing strategies to strengthen the financial positions of municipalities, including setting appropriate tax rates and providing methods for revenue generation through tolls and fees. The Finance Department emphasized that the Commission may also explore any other issues directed by the government to improve fiscal stability within local governance structures.

Guidelines for Recommendations
In framing its recommendations, the Commission will consider several financial factors to ensure fiscal prudence:

- Ensuring both the State Government and municipal entities achieve a balanced budget with potential surpluses for capital investments.
- Assessing the State’s budgetary resources against necessary expenditures for administration, maintenance of assets, and ongoing plan commitments.
- Evaluating the fiscal demands of municipal bodies, including their capacity to generate income and manage expenditure effectively.

The Commission is expected to deliver its comprehensive report by October 31, 2025. This report will provide fiscal insights and detailed recommendations for a five-year period spanning from April 1, 2026, to March 31, 2031. The Finance Department has stated that the terms, conditions, and allowances for the Commission’s members will be governed by the guidelines outlined in Rule 6 and 7 of the Nagaland Finance Commission Rules, 2008.

Also Read: Diwali celebrated amid festive fervour in Nagaland