Debt Productivity Study Urges Strategic Fiscal Priorities Ahead of Tripura Budget 2026–27

By Our Correspondent

Agartala, March 14, 2026

As the Finance Minister of the Government of Tripura prepares to present the State Budget for 2026–27 in the Legislative Assembly on March 16, expectations are rising that important policy suggestions emerging from a recent fiscal study conducted by economists of Tripura University will receive due consideration.The study, carried out under the framework of the 16th Finance Commission, was led by Professor Subhrabaran Das, Head of the Department of Economics at Tripura University, along with Kiran Bhowmik, PhD Scholar, and Srijan Debnath, Research Assistant. Their analysis on debt productivity and fiscal sustainability has outlined several strategic policy measures aimed at strengthening the financial stability and long-term development trajectory of the state.The research highlights that improving the productivity of public debt should be a key priority for the government. While borrowing remains an important fiscal instrument for a developing state like Tripura, the study emphasises that such borrowings should be directed primarily toward productive capital investments rather than routine expenditure.One of the major recommendations of the study is the gradual reduction of excessive dependence on debt by diversifying the state’s economic base and strengthening revenue-generating sectors. According to the researchers, expanding the income base through improved tax administration and widening the revenue net can significantly enhance the fiscal capacity of the state.The study also underlines the importance of prudent fiscal management. Reducing fiscal deficits through prioritisation of high-return investments and rationalising unnecessary expenditure can help maintain fiscal discipline. Allocating a larger portion of borrowed funds toward capital expenditure is seen as crucial for generating long-term economic returns and ensuring sustainable fiscal growth.

Infrastructure development, especially the expansion of rural road connectivity, has been identified as a critical driver of productivity in the state economy. Improved connectivity can facilitate better market access for farmers, reduce transportation costs, and encourage private sector investment in rural and semi-urban areas.

The researchers have further identified five priority sectors that could significantly enhance the state’s economic potential if supported through targeted investments. These include the establishment of a new campus of All India Institute of Medical Sciences, tourism development, creation of a medicinal research hub, expansion of green energy infrastructure, and strengthening digital public infrastructure.The study proposes an estimated investment of around Rs.1,500 crore across these sectors. This includes Rs.850 crore for the first phase of establishing the AIIMS campus, Rs.250 crore for tourism infrastructure development, Rs.100 crore for a medicinal research hub, Rs.150 crore for green energy infrastructure, and RS.150 crore for digital public services.Economists believe that incorporating these recommendations into the upcoming budget could strengthen fiscal sustainability, create employment opportunities, improve healthcare and tourism infrastructure, and place Tripura on a more resilient and growth-oriented development path. As the state awaits the budget presentation on March 16, many stakeholders hope that these research-based policy inputs will play a constructive role in shaping the fiscal roadmap for the coming financial year.

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