Centre asks states to conduct periodic review of duty on liquor, property tax
The decision to merge 112 (of 231 identified) autonomous bodies was made last month. This was done in order to bring down the costs and enhance the delivery of public services.
According to TOI, finance secretary, TV Somanathan had shared the government’s review of schemes. He revealed that each centrally sponsored scheme (CSS) is being evaluated and re-appraised before a decision on its continuation is taken. 60 schemes were merged into larger schemes and five have been wound up, reducing the number of operational schemes to 65 out of the 130 sponsored schemes.
Somanathan also pitched for higher revenue mobilisation as revenue generated from taxes has been a matter of key concern. As per a TOI report, the secretary had asked to review excise on liquor, VAT on fuel, property and automobile registration as they can generate resources. Since the introduction of GST, the states have fewer options for the same.
“Somanathan is learnt to have told the top bureaucrats from the states that property tax could be a buoyant source of revenue, with a progressive regime that focuses on the richer segments will be in line with the recommendations of the Finance Commission, which had also suggested a periodic revision, factoring in inflation and growth,” stated the TOI report.
This move is likely to support municipal bodies, whose revenues add up to less than 0. 8% of GDP, compared to 6-7% in countries like South Africa and Brazil, reported TOI. The government has also suggested a higher user fee for services that are being offered by the states.
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