Itanagar, Mar 12 (PTI) Arunachal Pradesh Chief Minister Pema Khandu on Thursday said the state must accelerate governance reforms, improve resource mobilisation and encourage investment, especially in the MSME sector, to offset the financial impact of reduced central tax devolution recommended by the 16th Finance Commission.
Summing up the discussion on the 2026-27 Budget in the Assembly, Khandu said the state could face a shortfall of around Rs 4,000 crore annually in its share of central taxes, potentially amounting to nearly Rs 40,000 crore over the next five years.
He described the situation as a “testing time” and stressed the need for structural reforms to maintain fiscal stability.
The chief minister said the government has directed the chief secretary to constitute a committee to identify key reform areas, including land management and the power sector, to enhance revenue generation and tighten administrative efficiency.
Emphasising the need to attract greater investment, the chief minister urged local entrepreneurs and business communities to invest in the state, citing opportunities in tourism, agriculture, allied sectors and floriculture.
He said the government would aggressively promote the micro, small and medium enterprises sector, noting that MSMEs contribute nearly 30 per cent to India’s GDP and around 40 per cent of exports.
Over 2,000 MSMEs from the state are currently registered on the Udyam Registration Portal, and the number needs to grow substantially, he said.
Khandu announced that a special session with all MLAs would be held involving entrepreneurs, financial institutions and MSME stakeholders to expand awareness and encourage entrepreneurship.
Special camps will also be organised across districts to help youth and businesses access financial support and set up enterprises.
“If MSMEs grow, our GSDP will rise, GST contribution will increase, and the state’s own revenue base will strengthen,” he said, adding that the goal should be to transform youth from job seekers into job providers.
Highlighting the state’s fiscal performance, Khandu said Arunachal Pradesh has been ranked the ‘Top Performer’ among northeastern and Himalayan states in the Fiscal Health Index released by NITI Aayog.
He congratulated Deputy Chief Minister Chowna Mein and officials of the finance department, and praised Mein for presenting the state Budget for the 12th consecutive time.
The chief minister credited the rapid transformation of the state over the past decade to cooperation between the Centre and the state government under Prime Minister Narendra Modi, describing it as a result of a “double-engine government”.
He said infrastructure development has accelerated significantly, with the state’s road construction capacity increasing from about 300 km annually a decade ago to more than 1,800 km per year.
More than 4,000 km of national highways have been completed or are under construction, alongside major connectivity projects such as the Trans-Arunachal Highway and the Frontier Highway, he said.
Referring to governance outreach, the chief minister said initiatives such as Sarkar Aapke Dwar, Seva Aapke Dwar and Cabinet Aapke Dwar have helped bridge the gap between the government and the public, benefiting over 15 lakh people across the state.
Khandu further referred to the Centre’s rural development initiative Viksit Bharat Gram Yojana, which focuses on water security, village infrastructure improvement and sustainable economic activities such as tourism and agro-based enterprises.
The chief minister thanked members of the Assembly for their constructive participation in the Budget discussion and assured that the government would incorporate their suggestions while implementing development programmes across the state.
Later, Speaker Tesam Pongte adjourned the house sine die. PTI UPL UPL MNB
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