Kohima (PTI): Nagaland Chief Minister Neiphiu Rio may have very little scope to cut down mounting deficit and augment internal resources when he presents annual budget for current fiscal on the opening day of the budget session of Nagaland assembly on Tuesday.

During vote-on-account for the first four months of the fiscal year 2009-10 in March, Rio, who also holds finance portfolio, estimated the budget deficit for the current year at Rs 559 crore.

But this figure might go up in the full budget since the government has limited scope to cut non-plan expenditure and increase revenue from internal sources, senior bureaucrats told PTI on Monday.

The target of bringing down the deficit under Fiscal Responsibility and Budget Management (FRBM) Act by 2010 already went haywire in Nagaland like many other states in the country, sources said.

Even if the government targets substantial hike in internal resource mobilisation, the ground reality does not help it to reach the target since the government has already brought almost all services under the tax net.

The revenue collection through VAT may not increase due to sluggish tend in service industries, the main mover of the states economy after primary sectors, sources said.