GUWAHATI, Jan 8 — The committee on fiscal reforms has suggested a four-pronged strategy to the State Government to mitigate the financial crisis. The four-pronged strategy include tax reform and selective enhancement of rates, expenditure control and reform, public sector unit reform and disinvestments and improvement in governance. Official sources said the Government has, in principle, accepted the recommendations and directed the concerned departments to work out the modalities for implementation of the recommendations. The committee, headed by former Chief Secretary HN Das submitted its report to the Government on December 7 last year and the Government today made the gist of the report public.
The committee took stock of the background of the financial crisis faced by the State and analysed the position since the days of the Eighth Finance Commission. The Commission observed that Assam has been a State with low investment in all sectors as indicated by the ever decreasing credit deposit ratio from 50 per cent in 1991 to about 33 per cent at present against the national average of 58 per cent. The committee also noted that the successive plan allocations awarded to the State have not increased in real terms over the years, adding to the hardship of the State. The gap between revenue and expenditure is increasing and the government is forced to spend a greater portion of the funds in expenditures like salaries, pension, payment of interests, etc, while the enhancement of the salaries by the Fifth Pay Commission only aggravated the problem. The Reserve Bank of India has been suspending payments due to overdrafts every month. During the year 2000-2001, the RBI suspended payments for 180 days as compared to 57 days during 1995-96, the report said.
The committee gave a number of suggestions for reforms in both tax and non-tax revenue. The Committee said that there is ample scope to increase the tax revenue collection with more effective collection of existing taxes like sales tax, State excise duty, professional tax, land revenue, agricultural income tax, luxury tax, motor vehicles tax, electricity duty, etc. The committee observed that certain duties that can be levied by the State Government as per constitutional provisions remained out of the ambit of tax revenue. These include estate duty in respect of agricultural land, taxes on mineral rights, taxes on advertisements other than those appearing in newspapers, television and radio, capitation tax and tolls, etc. The Committee recommended that the Revenue department should consider enhancement of the rates of land revenue and that professional tax should include all potential assesses. The Government of India should be moved to revise the share of agricultural income for the purpose of agricultural income tax, the report said.
The committee stressed the need for enhancing the crude oil royalty on the basis of international price and suggested disbanding and disinvestment of the public sector undertakings which are suffering heavy loss and cannot be revived. The fiscal reforms committee gave a number of suggestions on curtailment of expenditure, which include freezing of the Dearness Allowance at the present rate, withdrawal of allotted cars to officers, review of the government subsidies, cut on tour-related expenditure of government servants, curtailment of the unproductive revenue expenditure, etc. The Committee is of the view that in addition to the efforts to enhance revenue and reduce expenditure to tide over the financial crisis, the Government should adopt specific strategies on its part to ensure that delivery system of development programmes and normal administration are not affected as a consequence. The government needs to optimise fund ulitisation through efficiency in governance. The State Government should also urge the Union Government for its dues, the committee said.
Our Jorhat Correspondent adds : The report submitted by the committee on fiscal reforms to the State Government on December 7 last, was taken up at a seminar on ‘The Present Economic Scenario of Assam’, held at the CKB Commerce College here today. Speaking as an appointed speaker, the former Chief Secretary Haren Das mentioned that the experts’ panel had suggested minimising of Government holidays to three days in all, tax restructuring, drastic cut on expenditure, public sector reforms, land revenue hike in cities, besides bifurcation of ASEB into three different units for optimising efficiency, etc, to tide over the tight fiscal situation.