Nagaland faces economic challenges in banking and investment

Nagaland is facing structural economic challenges related to financial inclusion, agricultural metrics, and investment imbalances. During a national workshop on SDG budgeting in Kolkata, Principal Secretary Y. Kikheto Sema highlighted that 14 of the state’s 76 blocks remain unbanked, forcing residents in remote areas to travel up to 40 km for banking services. This lack of access hinders the delivery of government welfare schemes tied to bank accounts.

Sema also noted that national Sustainable Development Goal (SDG) indicators may not accurately reflect the state’s reality. Specifically, regarding food security, he argued that lower agricultural productivity—common due to traditional jhum and shifting cultivation—should not be automatically interpreted as food insecurity. He called for more region-sensitive policies and flexible measurement frameworks.

Additionally, the state faces a significant saving-investment imbalance. While the Gross State Domestic Product is projected to grow by 10.33% in 2025–26, local investment remains low. A key factor is the special land system under Article 371A, which protects Naga customary law but complicates commercial lending by making land difficult to use as collateral. This is reflected in a low credit-deposit ratio of 46.71%, indicating that a small portion of local deposits is being converted into productive loans within the state.