In the formulation of the Arunachal Pradesh State Budget, what structural economic tension arises between allocations for capital expenditure (infrastructure) and revenue expenditure (salary and administrative upkeep)?

💡 Solution & Explanation

Fiscal analysts frequently point out that in hilly states with extensive administrative machinery spanning remote border districts like Arunachal Pradesh, a large share of budgetary resources is absorbed by recurring revenue expenditures such as government salaries and pensions, leaving limited fiscal headroom for long-term capital investments in roads, power grids, and health infrastructure. Sound fiscal consolidation strategies aim to optimize administrative overheads while boosting capital outlays. Multi-lateral funding and central grants assist in bridging this infrastructural funding deficit.