Manipur seeks ₹1,000 crore bailout from union Govt as ethnic unrest cripples revenue, pensions unpaid

Three months after President’s Rule was imposed in Manipur, the embattled state has made a desperate appeal to the Centre, seeking ₹1,000 crore in special assistance to avert a deepening fiscal crisis triggered by two years of ethnic turmoil.

Governor Ajay Kumar Bhalla, in a detailed communication to Finance Minister Nirmala Sitharaman last month, warned that the prolonged unrest, which erupted in May 2023, has devastated Manipur’s revenue streams, crippled economic activity, and left the state struggling to meet even its most basic financial obligations. Among the most pressing concerns: a pension backlog of ₹600 crore, mounting security expenses, and stalled payments under key welfare schemes.

According to official sources, Bhalla has urgently requested an immediate release of at least ₹500 crore to address the state’s short-term needs—including clearing pensions, paying salaries, and managing escalating security operations aimed at containing sporadic violence that continues to plague the region.

Responding to the state’s distress call, the Finance Ministry has approved a ₹500 crore infusion under the Special Assistance to States for Capital Investment (SASCI) 2025-26. However, state officials say this amount barely scratches the surface of Manipur’s widening financial hole.

The Governor’s letter to the Centre paints a grim picture: tax revenues for 2024-25 are estimated to fall to ₹1,554 crore, down from ₹1,983 crore in 2022-23, showing little sign of recovery. Compounding the problem, over ₹300 crore in reimbursements under relief and law-and-order expenditure remains pending with the Ministry of Home Affairs.

Bhalla has underlined that the requested ₹1,000 crore package would not only allow the state to clear pension and salary dues but also fund critical security and relief operations for thousands displaced by the ethnic violence. The grant would also enable Manipur to contribute its share to centrally sponsored schemes and restart long-stalled development projects, particularly in vulnerable hill districts.

Adding to the fiscal strain, Manipur remains unable to access ₹629 crore under the 15th Finance Commission grants for local bodies, owing to its failure to conduct elections for urban bodies and Autonomous District Councils since 2020 and Panchayati Raj institutions since 2022.

This is not the first time Manipur has sought an emergency financial lifeline. Last year, former Chief Minister N Biren Singh had urged the Centre to release ₹2,000 crore in special grants while requesting an advance on the state’s share of central taxes to manage the ballooning crisis.

In recent months, the Finance Ministry had released an earlier tranche of ₹500 crore in two instalments to cushion the blow. But with no end in sight to the ethnic strife and law-and-order instability, Manipur’s financial health remains precarious, forcing the state to lean increasingly on the Centre for survival.