Is Rs 500 Crore Contingency Fund Enough to Stabilize Strife-Torn Manipur?

Manipur, the violence-hit Northeastern state for nearly two years now, where President’s Rule is on, is set to receive a Rs 500 crore corpus, as announced by Finance Minister Nirmala Sitharaman. This is to establish a contingency fund. 

This decision comes as part of its broader effort to stabilize the violence-hit state. However, given the scale of destruction, deep-rooted ethnic tensions, and the collapse of law and order, this amount appears to be a mere stopgap rather than a comprehensive solution. 

The northeastern state has witnessed an unprecedented breakdown of law and order over the past two years following clashes between the Meitei and Kuki-Zo communities. Despite Nirmala Sitharaman’s assurance that "all possible financial assistance" will be provided, the actual implementation of relief measures and long-term peace-building efforts will determine whether this allocation suffices.

While the fund may help in immediate relief and administrative contingencies, a larger, sustained financial and governance strategy is imperative for Manipur’s recovery. The state’s economic, social, and infrastructural damages require deeper investment beyond a short-term contingency corpus. Restoring normalcy requires substantial investment in rehabilitation, security measures, and economic revival. While financial assistance is crucial, a structured and long-term strategy, including political dialogue and administrative reforms, is equally necessary to bring lasting peace to the state.

Manipur Budget: Key Allocations

The Lok Sabha on Tuesday passed the Manipur budget for the fiscal year 2025-26, proposing an expenditure of Rs 35,104 crore. This is a modest increase from the Rs 34,899 crore allocated in the previous budget estimate (BE) for 2024-25 and significantly higher than the Rs 32,657 crore under the revised estimate (RE) for FY25.
Sitharaman reiterated the central government’s commitment to Manipur’s economic development, stating that “all financial support” would be extended to aid recovery. The proposed revenue expenditure stands at Rs 21,512 crore, while the capital outlay is estimated at Rs 7,773 crore. The minister also highlighted efforts to recover arms and ammunition looted during the early phases of the violence, indicating ongoing security concerns in the region.

The Lok Sabha also approved supplementary demands for grants, entailing an additional expenditure of Rs 51,463 crore for the current fiscal year. Within this, Rs 1,291 crore was sanctioned as demands for excess grants for 2021-22, and Rs 1,861 crore was allocated for Manipur under the 2024-25 fiscal period.

Sitharaman and Gaurav Gogoi Lock Horns in Lok Sabha

Prime Minister Narendra Modi’s absence from Manipur since the outbreak of ethnic violence in May 2023 sparked a political row in the Lok Sabha on Tuesday, with the Opposition questioning his absence from the session and the Treasury Bench accusing opposition leaders of targeting him. A heated debate as Congress leader Gaurav Gogoi and Finance Minister Nirmala Sitharaman locked horns over Prime Minister Narendra Modi’s absence from key national discussions. The exchange took place during deliberations on the supplementary demands for grants, excess grants, and the Manipur budget. Sitharaman countered Gogoi’s claims, dismissing them as “profound” yet misleading. She argued that the Prime Minister had frequently been denied the opportunity to speak in Parliament due to opposition disruptions. She then demanded an apology from the opposition for allegedly “abusing” Modi in the past.

Manipur’s Path to Stability

While financial allocations signal intent, the on-ground reality in Manipur necessitates a more comprehensive approach that extends beyond budgetary provisions. The imposition of President’s Rule on February 13, following the resignation of Chief Minister N. Biren Singh, underscores the gravity of the situation. With the state assembly under suspended animation, governance challenges persist, making effective fund utilization a critical concern.

Despite assurances, whether Rs 500 crore as a contingency fund will be enough to restore normalcy and rebuild Manipur remains a contentious issue. The state's recovery will depend not just on financial support but on holistic governance, community reconciliation, and robust security measures.