3 months after President's Rule, Manipur seeks Rs 1,000 crore from Centre as special assistance
Three months after President's Rule was imposed in Manipur, Governor Ajay Kumar Bhalla has sought Rs 1,000 crore from the Central government as a special assistance grant for the state in the backdrop of the ethnic violence which broke out over two years ago, adversely affecting the state's economic activity and revenue collection, people familiar with the matter told The Indian Express.
It has been separately learned that Governor Ajay Kumar Bhalla has also requested an early release of Rs 500 crore of the Rs 1,000 crore to meet the state's immediate requirements, such as clearing the pension backlog and security-related expenses.
The Indian Express has learnt that the Finance Ministry has decided to grant additional funds of Rs 500 crore to Manipur as of now towards various projects under the existing Special Assistance to States for Capital Investment (SASCI) 2025-26.
In a communication to Finance Minister Nirmala Sitharaman in May, Bhalla is learnt to have spoken about reduced revenue collection because of the unrest in Manipur that followed the ethnic violence which broke out in May 2023. This, he had mentioned, affected the state government's ability to pay pensions, salaries, and other committed liabilities, adding that pension backlogs amounted to Rs 600 crore.
It is learnt that the Manipur Governor pointed to tax revenue losses for the state for the 2024-25 fiscal at Rs 1,554 crore compared to Rs 1,528 crore in the previous fiscal. He mentioned that the revenue collection for the state in 2022-23 was Rs 1,983 crore, which shows that there hasn't been any significant recovery in revenue collection, and this may affect the state's ability to meet its developmental and security-related objectives.
He is also understood to have pointed out that poor revenue collection has also been due to state expenses on relief and law and order, adding that dues worth Rs 300 crore are yet to be paid to the state by the Ministry of Home Affairs as reimbursement under these heads.
He told the finance ministry that the special assistance grant of Rs 1,000 crore to Manipur will help the state clear pension backlogs and meet expenses for security and relief measures for people who had been displaced due to the violence. It will also help the state give its share in various Centrally sponsored schemes and aid with taking various developmental measures in rural areas of the state, particularly in the hill areas.
The Manipur Governor has also conveyed that the state has been unable to claim funds under the 15th Finance Commission grants for local bodies from 2021-22, which amounts to Rs 629 crore, due to its inability to hold elections for urban local bodies and Autonomous District Councils from 2020 and for Panchayati Raj institutions from 2022.
Earlier, the Ministry of Finance had provided Rs 500 crore to the state as special assistance for revenue loss and economic recovery, which was provided in two instalments. The funds are understood to have been fully utilised by the state.
Last year, The Indian Express reported that the Manipur government, ahead of the Union Budget presentation, had approached the Centre with a wishlist that includes demand for additional funds over and above the 10 per cent usually earmarked from gross budgetary support for northeastern states, financial support for 5,000 units of housing for violence-affected victims as a special project under Pradhan Mantri Awas Yojana (PM-AWAS), and enhanced allocation for security-related expenditure.
Last year, former Manipur chief minister N Biren Singh sought a financial grant of Rs 2,000 crore from the Centre as a special case, citing the loss of tax revenue in the state due to security and economic challenges. In October 2023, Singh had also requested a three-month advance of Manipur's share in Central taxes to tackle the financial crisis due to the ethnic clashes in the state.
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