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Decline in Central Funds: State govt needs to widen tax revenue
With NDA government reducing a number of welfare schemes introduced under UPA tenure and asking states to take care of implementation of other programmes, the big question that arises is - where does the money come from? Though the increase in states’ share of Union tax revenue from 32 to 42 percent might give a little cushion
Decline in central funds
Hyderabad: With NDA government reducing a number of welfare schemes introduced under UPA tenure and asking states to take care of implementation of other programmes, the big question that arises is - where does the money come from? Though the increase in states’ share of Union tax revenue from 32 to 42 percent might give a little cushion, time has come for states, especially the newly-formed Telangana, to focus on its State’s Own Tax Revenue (SOTR) to swell its exchequer.
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More so for the ruling TRS government which has drawn ambitious programmes like Mission Kakatiya, Drinking Water Grid and Haritha Haaram, besides several welfare schemes that are set to cost a bomb. Commercial Taxes, Excise, Registration and Stamp Duty and Transport Department contribute a major chunk to SOTR.
However, absence of interface amongst these departments and lack of co-ordination amongst officials is leading to leakages thus affecting state revenues to the tune of thousands of crores annually. While these departments have their respective standard operating procedures (SOPs), they operate in ‘silo environment’ resulting in tax evaders to go scot-free, besides hoodwinking government.
For example, tax defaulter details are seldom reported to Registration Department to prohibit sale and registration of properties of the concerned person. Likewise, grossly underpaid agreements or lease deeds are accepted by authorities of other departments due to either ignorance or collusion. Evolving an approach to combat the problem of leakage by forging links between these departments is the need of the hour.
According to T Vivek, OSD, Vigilance and Enforcement Department creation of Revenue Co-ordination Committee (RECCE) will go a long way in revenue optimisation. This body should exchange periodic information (at least once in a quarter) relating to firms and licences, details of cases of default or evasion of tax, recommend measures that will improve the potential to tap revenue from existing sources, , recommend changes in law, rules, procedure among others, he said.
Vivek suggested that Chief Secretary head the RECCE with Secretaries and HoDs of Revenue, Industry, Transport, Vigilance and Enforcement, Civil Supplies, Finance and Municipal Administration as members. Also Central government departments like Income Tax, Service Tax and Central Excise should also be roped in if needed, he felt.
By:Mahesh Avadhutha
