General (Retd.) K.V. Krishna Rao, PVSM, who was sworn in as the Governor of Nagaland on June 13, 1984 at Raj Bhavan, Kohima, was also the Governor of Manipur and Tripura. In his inaugural message, he especially appealed to the youth of Nagaland to come forward in a constructive way so that the State of Nagaland could make rapid progress in socio economic field. The policy of encouraging the State Government to maintain law and order and strive for further development of the State with the minimal use of special powers of the Governor, continued.
However, tensions on Assam – Nagaland border mounted after the opening of a post and other activities by the Assam Police within the disputed area. There was an exchange of fire between the Assam and Nagaland Police on May 26 which continued till June 6, 1985, resulting in loss of lives. The two Chief Ministers sat down under the aegis of the Governor at Imphal on June 7, 1985 to reach an agreement to abide by a ceasefire and induction of a neutral force of the Border Security Force which helped cool the heightened tensions. A neutral force was later, inducted for the entire disputed area on the inter-state border.
Simultaneously, the Governor took up with the Chief Minister the need for improvement in the financial management and a Committee headed by the Chief Secretary, was constituted to go into all aspects of the problem. The administration got more conscious of the need of handling its finances carefully. The Raj Bhavan also prepared its Manual.
Meanwhile, dissidence in the ruling Congress party led to the resignation of Chief Minister S.C. Jamir and swearing in of Shri Hokishe Sema on October 29, 1986. The new leader led his party to victory in the 1987 election but the new arrangement could not last long. The intra party dissidence resulted in the imposition of President’s Rule from August 7, 1988.
Earlier, the Governor, Gen. (Retd.) K.V. Krishna Rao had prevailed upon the Home Minister and the Prime Minister to obtain approval of the Central Government for the setting up of the Nagaland University (a Central University). The Prime Minister, Shri Rajiv Gandhi laid the foundation of the University at Lumami on October 5, 1987. The Governor was also instrumental in getting the North East Zone Cultural Centre (NEZCC) established at Dimapur. Nagaland celebrated the silver jubilee of the statehood on December 1, 1987 in the august presence of the Prime Minister Shri Rajiv Gandhi.
The Governor had also taken up the issue of adequate provision for funds to the State and was assured by the Prime Minister of an increased outlay for the North East Council by the Planning Commission. During the Seventh Plan, an amount of Rs. 1,196 crore was released to the NEC as compared to Rs. 383 crore released during the Sixth Plan. The Governor, General (Retd.) K.V. Krishna Rao also ensured that the Indian Red Cross Society was made into a well-established institution in Nagaland.