Dimapur– The Finance Department of Nagaland has formally established the Fourth Nagaland State Finance Commission under the Nagaland Municipal Act, 2023, aiming to bolster the financial structures and operational capacities of municipal bodies across the state.
Chaired by Smt. Sarah R. Ritse, a retired Commissioner and Secretary, the Commission includes Sh. G.W. Lee, former Director of Treasuries & Accounts, and Sh. Khrupi Sothu, retired Secretary, who will serve as Member and Member Secretary, respectively.
Set with a 12-month operational timeframe from the notification date, the Commission is tasked with making strategic recommendations on state-municipal financial arrangements, including:
- Revenue Sharing: Proposing equitable distribution of state-level taxes, duties, tolls, and fees between the state government and municipal entities.
- Tax and Duty Allocation: Identifying specific taxes that may be assigned to or collected by municipalities.
- Grant-in-Aid Framework: Recommending grant allocations from the State’s Consolidated Fund to support municipal infrastructure and services.
To further financial self-sufficiency, the Commission will advise on suitable tax rates and methods for revenue generation. Additionally, it will explore options to improve fiscal stability and local governance through new revenue mechanisms and adjustments to existing municipal financial practices.
The Commission’s guidelines emphasize fiscal prudence, requiring an assessment of state and municipal budgets with a focus on achieving balanced budgets and potential surpluses for capital investments. This includes examining the State’s available resources against administrative and maintenance expenditures and assessing municipal bodies’ capacities for efficient financial management.
The final report, due by October 31, 2025, will provide a roadmap of fiscal recommendations to cover the five-year period from April 1, 2026, to March 31, 2031, to improve financial independence and resilience among Nagaland’s municipalities. Member allowances and conditions are set under the Nagaland Finance Commission Rules, 2008, ensuring a structured approach to achieving sustainable financial reform within local governance.
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