Revenue gap fund cut sparks northeast concern; Tripura faces Rs 4,000-crore annual loss

Tripura Chief Minister Manik Saha on August 30 said all northeastern states have taken up the issue of the withdrawal of the revenue gap fund with Union Finance Minister Nirmala Sitharaman.

Saha said the withdrawal of the revenue gap fund following the recommendations of the 16th Finance Commission would put additional financial pressure on northeastern states, with Tripura expected to face a loss of around Rs 4,000 crore annually.

He said the issue was raised collectively by the northeastern states during a meeting in Shillong with the Union Finance Minister. While the Centre has sanctioned a fund titled ‘Pride of Hills’ to bridge the financial gap, Saha said the allocation was not sufficient to compensate for the loss.

The Chief Minister, however, clarified that the financial constraints would not affect the ongoing recruitment drive in various government departments.

“We are committed to filling vacant posts as much as possible if there are no technical problems,” Saha said, adding that the curtailment of the revenue gap fund would not impact the recruitment initiatives undertaken by the state government.

Tripura Finance Minister Pranajit Singha Roy had earlier expressed concern over the withdrawal, stating that the state could lose around ₹4,000 crore annually, amounting to approximately ₹20,000 crore over five years.

He said the state had highlighted its fiscal burden, including expenditure commitments towards government employees and pensioners, before the Finance Commission. The issue has also gained significance amid the process of constituting the 8th Pay Commission, which is expected to revise pay for government employees.