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Revenue Mobilization Effort of Special Category States: The Case of Assam in North-east India

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  • Mrinal Kanti Dutta
  • Parag Dutta

Abstract

Liberal resource transfer from the centre to economically backward states in India has ensured overcoming the mismatch between revenue generated and expenditure commitments of the states. From the point of view of long-term fiscal sustainability of states, however, greater effort to generate enough resources as per the potential of individual states is important, which makes the issue of revenue effort significant. Based on secondary data, this article is an attempt to analyze revenue mobilization efforts of the Government of Assam during 1991–2010. By examining the issues of arrears of uncollected tax and non-tax revenue, cost of collection of different taxes and duties, and cost recovery of different services, the study confirms low-revenue efforts on the part of the state government. The time series regression analysis between ‘per-capita own tax revenue’ and ‘per capita GSDP of the state’ and ‘per-capita revenue expenditure of the state in the previous year’ also confirms low-revenue efforts, necessitating the need of extra tax effort on the part of the state government. JEL Classification : H20, H27, C4

Suggested Citation

  • Mrinal Kanti Dutta & Parag Dutta, 2015. "Revenue Mobilization Effort of Special Category States: The Case of Assam in North-east India," South Asian Journal of Macroeconomics and Public Finance, , vol. 4(2), pages 178-204, December.
    • Handle: RePEc:sae:smppub:v:4:y:2015:i:2:p:178-204
    DOI: 10.1177/2277978715602394
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    References listed on IDEAS

    as
    1. Rodden, Jonathan, 2003. "Reviving Leviathan: Fiscal Federalism and the Growth of Government," International Organization, Cambridge University Press, vol. 57(4), pages 695-729, October.
    2. C. Rangarajan & D. K. Srivastava, 2008. "Reforming India’s Fiscal Transfer System : Resolving Vertical and Horizontal Imbalances," Finance Working Papers 22509, East Asian Bureau of Economic Research.
    3. Prasant Kumar Panda, 2009. "Central Fiscal Transfers and States’ Own-Revenue Efforts in India," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 3(3), pages 223-242, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Revenue effort; cost of collection; tax and non-tax revenue; time series regression; Assam;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics

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