International Journal of Social Science Research (IJSSR)

Public Sector Enterprises and Fiscal Health: Evidence from Nagaland

The role of Public Sector Enterprises (PSEs) in India’s development process is significant, promoting industrialization, employment generation, infrastructure development, and ensuring regional balance. However, the growing financial burden of inefficient and loss-making public enterprises has raised concerns regarding their implications for fiscal sustainability, particularly in fiscally constrained states like Nagaland. This study examines the State Public Sector Enterprises (SPSEs) and their fiscal health in Nagaland during the period 2012–13 to 2021–22 using secondary data from Comptroller and Auditor General (CAG) reports and State financial documents. The study analyzes trends in turnover, debt, accumulated losses, investment patterns, grants, subsidies, and budgetary support. The findings reveal that the contribution of SPSEs to the state’s economy has steadily declined, while debt liabilities, accumulated losses, and dependence on government grants have increased significantly. The debt-turnover ratio deteriorated over the study period, indicating weak operational efficiency and growing fiscal stress. The study concludes that SPSEs in Nagaland have increasingly become fiscal liabilities rather than engines of economic growth. The paper recommends improved governance, financial restructuring, monitoring mechanisms, and timely closure of non-performing enterprises to strengthen fiscal sustainability.