Expand tax base: CAG to state

BHUBANESWAR: The CAG has asked the State Government to mobilise additional tax resources through tax and non-tax revenue by expanding the tax base, rationalising the user charges, collection of arrear revenue and cost recovery of maintenance expenditure of irrigation projects as per the recommendations of the 12th and 13th Finance Commissions. According to the latest CAG report, the revenue receipts, which was ` 33,276 crore, grew by 26 per cent in 2010-11 over that of the previous year compared to 12 per cent in 2008-09 and seven per cent in 2009-10. This was mainly contributed by own tax revenue, State’s share of Union taxes and duties and grants-in-aid receipts from the Centre.  The revenue buoyancy ratio relative to gross State domestic product (GSDP), which was at its lowest at 0.314 in 2009-10, increased to 1.104. But the growth rate of revenue receipts was lower compared to 28 per cent growth in 2006-07, it said.  The CAG maintained that revenue expenditure (RE), which constituted 86 per cent of the total expenditure during 2010-11, increased by 16 per cent over that of the previous year. But non-plan revenue expenditure (NPRE) of ` 21,975 crore constituted 75 per cent of the revenue expenditure. The NPRE increased by 12 per cent over that of the previous year and exceeded the 13th Finance Commission’s normative assessment by ` 4,292 crore. The increase in NPRE was mainly due to increase in committed expenditure under salary, pension, interest payments and subsidies during the year which was ` 17,351 crore. Expenditure on salary of ` 8,969 crore and pension of ` 4,011 crore exceeded the 13th Finance Commission’s projection by ` 2,455 crore and ` 1,377 crore respectively. According to the CAG, food subsidy at ` 932 crore exceeded the normative projection of the 13th Finance Commission of ` 84 crore. Stating that the 13th Finance Commission has recommended phasing out of subsidies, the CAG has advised the State Government to consider reduction in subsidy payments to public sector undertakings for boosting their operational efficiency and close down non-working PSUs.