New Delhi, May 30: In a major boost to the cash-strapped Nagaland government, the Centre has increased the size of the state?s annual plan for 2003-04 by 16 per cent and converted a medium-term loan into a grant.
The annual plan of Rs 500 crore is an increase of Rs 76 crore over last year?s allocation.
?We are happy with the way things have gone. The Planning Commission honoured our appeals and we are grateful to it. A bigger allocation was important because our government came to power by promising peace and development. We will now have access to ample funds for development,? chief minister Neiphiu Rio said after the meeting with the Planning Commission.
Rio, whose Nagaland People?s Front leads the ruling Democratic Alliance of Nagaland, was accompanied by the ministers of planning, finance and home. The best news for Nagaland was the finance ministry?s decision to convert a medium-term loan of Rs 365 crore into a one-time grant. This was in response to a request made by the Rio government to Prime Minister Atal Bihari Vajpayee.
?The conversion of the loan into a grant will go a long way in boosting the economy. With the loan being waived, Nagaland has moved one step closer to a debt-free economy,? finance minister K. Therie said.
However, the state still has debts totalling Rs 24,000 crore. A substantial part of its revenues go into payment of interest on outstanding loans.?Our financial woes have not come to an end. We will have to work hard to repay our loans. But this year?s budget marks the beginning of a process to cure the malady,? Therie said.
The finance minister said the priorities of the Rio government were development of infrastructure, agriculture and allied sectors and creation of avenues for employment. Sources said the Centre?s decision to effect a 16 per cent increase in Nagaland?s annual plan had as much to do with the condition of the state?s economy as with the installation of a non-Congress government after two terms.