"In contrast to the general impression, Bihar's track record in revenue deficit is not bad as compared to other states," writes Shaibal Gupta, in one of the essays included in 'Globalisation, Governance Reforms and Development in India' edited by Kameshwar Choudhary ( www.sagepublications.com).
"Serious fiscal reform was attempted after the division of the state in 2000 when Bihar lost 96 per cent of the mineral and 78 per cent of the forest resources of the state, and much of the economic infrastructure, major industries and technical/training institutions… In 2002-03, tax revenue increased by 19 per cent, recovering lost ground from the first year following bifurcation."
Tax reformsGupta lists the many initiatives on the tax reforms front. Such as: the slashing of entertainment tax by half, setting up multiplexes, and announcing tax holiday for revamping cinema halls; revision of sales tax, revision and rationalisation of entry tax rates; amendments in the Electricity Duty Act and Rules; and the provision of advance deduction of tax from the bill of contractors.
"Bihar was one of the first states to implement VAT (value-added tax)," the author states. "There was not only computerisation of sales tax offices, but also joint check posts of commercial taxes and transport departments were established."
Other revenue-related reforms included the following:
· Amending stamp duty law to cover registration of property outside the state.
· Increase of fee payable on registration of partnerships.
· Hike in the tax on vehicles temporarily entering the state, and introduction of 'high-powered team to check plying of illegal vehicles operating without valid papers.'
· Revision of land ownership fess and process fees under the Bihar Tenancy Act, 1885.
Non-tax reforms too helped in the state's income growth. For instance, "the transfer of the management of canal and irrigation system to Water Users Association was primarily aimed at enhancing revenue," says Gupta. "Apart from that, there was also an increase in the user charges for technical education, veterinary and hospital services."
A long wayDespite the reforms, the present government led by Mr Nitish Kumar may have a long way to go, as a recent 'White paper on State finances and development' on http://finance.bih.nic.in informs. "Even after taking substantial loan, the State Government's development expenditure was just Rs 3,476 crore out of a total expenditure of Rs 20,058 crore," it rues.
"Though this is higher than in the previous years, it is just Rs 423 per person and constitutes only 17.3 per cent of the total expenditure. Out of this, capital expenditure, i.e. the expenditure on creating productive assets is only Rs 1,205 crore, which is barely 6 per cent of the total expenditure and just Rs 147 per person. This is for the whole year."
In comparison, "Karnataka's plan outlay in 2001-02 was about Rs 1,450 per person, Gujarat Rs 1,250, Andhra Pradesh Rs 1,100, Rajasthan Rs 810, Orissa Rs 610 and Uttar Pradesh Rs 400 per person," observes the paper.
Policy inputs.
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Ranjan Rituraj Sinh , NOIDA
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