Special Correspondent
Ukhrul/Imphal, March 14:
In a significant intervention in the ongoing debate over equitable development in Manipur, K. Timothy Zimik, IRS (Retired), former Principal Chief Commissioner of Income Tax, Ministry of Finance, Government of India, has submitted a comprehensive representation to the Chief Minister of Manipur, Yumnam Khemchand, and the Governor of Manipur, urging the State Government to adopt a separate budget framework for the hill areas in the upcoming Manipur Budget 2026–27.
The memorandum, running into 36 pages, was formally submitted on March 10, 2026. In the document, Zimik has placed a series of policy suggestions and financial recommendations aimed at addressing what he described as longstanding disparities in the allocation of developmental resources between the Imphal Valley and the hill districts of the state.
Introducing himself in the representation, Zimik stated that he served as the Principal Chief Commissioner of Income Tax under the Ministry of Finance (Revenue), Government of India, and also contested the 2024 Lok Sabha election as the NDA candidate from the Outer Manipur (ST) Parliamentary Constituency. He congratulated the Chief Minister on his elevation to office and expressed hope that the forthcoming budget exercise would reflect the principles of inclusive governance and participatory development.
Zimik said that an equitable and balanced budget must consider the voices of the public, professionals, and stakeholders. He therefore requested the state leadership to consider his recommendations in the formulation of the financial plan for the fiscal year 2026–27.
Central to his submission is the demand for the creation of a separate budget mechanism for the hill areas of Manipur. According to Zimik, such a step is necessary to ensure fair and transparent allocation of developmental funds and to address structural inequalities that have persisted for decades.
He referred to a committee constituted by the Government of Manipur through Notification No. FBUD-9/16/2021-e-FD dated August 25, 2021, which had been tasked with examining the funds released to the hill districts of the state. The committee submitted its report on October 28, 2021, commonly described as a “White Paper,” recommending that the government consider adopting a Tribal Sub-Plan model similar to those followed by the Central Government and several other states.
The committee had observed that the existing system of allocating development funds between the valley and the hills was largely ad hoc in nature and lacked a clear, objective framework. It recommended that fund allocation should be based on measurable criteria such as population and geographical area, following the approach adopted by the Finance Commission for distributing resources among states.
However, Zimik pointed out that the state government has not yet implemented these recommendations. In his memorandum, he argued that the methodology used in the committee’s report and the high percentage of hill developmental expenditure claimed therein were “faulty and unsubstantiated.” His own analysis, attached as Annexure-8 of the representation, attempts to reassess the allocation pattern by examining official budgetary documents and demands for grants over several years.
A major feature of his proposal is the adoption of the six key criteria used by the 15th Finance Commission of India for distributing central tax revenues among states. These criteria, he explained, are designed to balance equity, need, and governance efficiency.
The first and most significant factor is “income distance,” which measures the gap between a state’s per capita income and the national average. Under the Finance Commission’s formula, this criterion carries the highest weight of 45 percent and aims to support regions with lower levels of economic development.
The second factor is population based on the 2011 Census, accounting for 15 percent weight, which reflects the expenditure needs of a region. The third criterion is geographical area, also assigned a weight of 15 percent, recognizing the additional administrative costs associated with delivering services across larger territories.
The fourth factor is forest and ecology, given a weight of 10 percent, acknowledging that regions with large forest cover often face restrictions on industrial and commercial activities. The fifth criterion is demographic performance, with a weight of 12.5 percent, rewarding efforts made by regions to manage population growth. The final criterion is tax and fiscal effort, weighted at 2.5 percent, which encourages better revenue collection efficiency.
According to Zimik, applying these six formulas within Manipur’s internal resource distribution would provide a more objective and equitable mechanism for allocating development funds between the valley and hill areas.
He argued that such an exercise clearly reveals the depth of resource deprivation faced by the hill districts. Based on his analysis of budget documents and capital expenditure figures over the past seven years, he claimed that the Imphal Valley has consistently received a disproportionately large share of developmental funds.
Data compiled in his memorandum shows that while the valley accounts for roughly 57.2 percent of the state’s population according to the 2011 Census and occupies only about 10 percent of the geographical area, it has received over 80 percent of capital expenditure allocations in most years.
A summary of adjusted capital expenditure from 2016-17 to 2025-26 presented in the memorandum indicates that the valley’s share of development spending ranged between 80 percent and as high as 97 percent in certain years. In contrast, the hill districts received between 3 percent and 20 percent of total capital expenditure during the same period.
For example, in the fiscal year 2016-17, the total capital expenditure of the state was recorded at ¹ 4,056 crore, of which ¹ 3,337 crore—about 82 percent—was spent in the valley. In 2018-19, the valley’s share rose to 85 percent. By 2024-25 and 2025-26, the proportion reportedly increased further to 93 percent and 97 percent respectively, leaving only a minimal share for the hill districts.
Zimik contended that such imbalances have contributed to widening gaps between the valley and hill regions in terms of infrastructure, economic development, and access to essential services.
To address this structural disparity, he proposed that the Government of Manipur formally adopt the Finance Commission’s six-formula model for internal resource distribution and institute a separate budget for the hill districts. According to him, this would ensure transparency and accountability while guaranteeing that development funds reach the intended beneficiaries in the tribal areas.
He also supported the recommendation that funds earmarked for hill development should be distributed among individual hill districts based on objective criteria similar to those used by the Finance Commission, thereby preventing arbitrary allocation.
Another important suggestion in his memorandum concerns financial support for village authorities in the hill areas. Drawing a parallel with Panchayati Raj institutions in other parts of the country, Zimik recommended that village authorities should receive direct grants from the state government to strengthen grassroots governance and local development initiatives.
He emphasized that empowering local institutions would improve implementation of development programmes and ensure that government schemes effectively reach remote communities.
Zimik maintained that these reforms are not merely financial adjustments but are essential steps toward ensuring peace, justice, and long-term prosperity for the people of Manipur. By addressing historical grievances and promoting balanced development, he argued, the state can create a more stable and harmonious social environment.
The submission of the memorandum comes at a time when the issue of equitable development between the valley and hill regions continues to remain a major political and administrative concern in Manipur. With the state government preparing its Budget for 2026-27, Zimik’s detailed policy recommendations are expected to contribute to the broader discussion on fiscal justice and regional balance.
In his concluding remarks, the retired senior revenue official expressed hope that the government would give serious consideration to the proposals and adopt reforms that would ensure fair distribution of resources and sustainable development for all communities in the state.