The Central Government has prioritized economic rehabilitation in Manipur through targeted fiscal interventions, Finance Minister Nirmala Sitharaman announced during a Rajya Sabha discussion on the state’s 2024-25 budget and a six-month vote-on-account for 2025-26. Amidst ongoing recovery efforts following ethnic violence that disrupted livelihoods and economic activities, Sitharaman disclosed a ₹913 crore allocation under the Special Assistance for State Capital Investment scheme to spur infrastructure development and stabilize the state’s economy.

The violence, which dented Manipur’s GSDP growth, has prompted the Centre to tie economic revival to enhanced security measures. Sitharaman expressed confidence in a near-term recovery, stating, “With improved law and order, economic activity will rebound, reflecting in GSDP figures this year.” This aligns with the passage of the state’s budget, which aims to streamline fiscal resources toward reconstruction and welfare programs.

While defending the government’s response to the crisis, Sitharaman highlighted visits by Union Home Minister Amit Shah and Minister of State for Home Affairs Nityanand Rai as part of a “double-engine governance” strategy to synchronize central and state efforts. The Opposition’s critique of delayed political engagement was countered with data on financial aid and assurances of “greater sensitivity” to Manipur’s needs compared to previous administrations.

The economic stakes are high: prolonged instability risks exacerbating unemployment and slowing regional trade, particularly with Southeast Asia under India’s Act East Policy. The ₹913 crore infusion, alongside central monitoring of state expenditures, signals a focus on capital projects to stimulate jobs and long-term resilience. However, challenges remain in balancing immediate relief with sustainable development, as the state navigates post-conflict recovery.

Key Economic Takeaways:

1. ₹913 Crore Investment: Direct funding for infrastructure to reignite economic activity.
2. GSDP Recovery: Projected rebound linked to security improvements and federal support.
3. Budgetary Planning: Vote-on-account ensures continuity in public spending during transitional months.
4. Strategic Implications: Stability in Manipur is critical for India’s cross-border trade ambitions.

The Centre’s approach underscores a broader narrative: economic normalcy in Manipur is inseparable from political stability, with fiscal tools being leveraged to accelerate both.