The Reduced Revenue Riddle

There is a conundrum involving the economy of Assam that only the Chief Minister and the heads of various departments of the Assam government can solve but have refused to do for years. The conundrum or riddle is the progressive reduction of the tax revenue accruing to the exchequer year after year despite the steep rise both in the volume and value of the taxable goods being imported from the rest of the country. It is a well known fact that the sales tax due to the government of Assam from such imports is collected at three check gates of the State, mely, Srirampur in Kokrajhar district, Boxirhat in Dhubri district and Digarkhal in Cachar district. The Transport and Sales Tax departments are supposed to check all commercial vehicles at these check gates and to levy the appropriate quantum of tax due to the exchequer. As we have had occasion to point out in this column on quite a few occasions, the tax rates having remained the same over many years, there ought to have been a quantum jump in the tax revenue collected at these check gates in view of two facts: the astronomical increase in the quantity and variety of goods (mainly consumer durables) coming into the State partly due to the increase in population and partly to the huge amounts of black money in circulation, and largely due to the steep increase in the prices of such goods. Given these two factors, there can be only be the possibility of steep increases in the revenue accruing to the exchequer from the tax collected at the aforesaid check gates. Time and again, we have stated our own estimate of the increases in the value of goods coming into the State over the years. Our estimate has been that compared to the value of goods coming into the State in 1971, the value of such goods increased by about 250 times in 1991 and by about 10,000 times in 2011. This estimate has never been refuted or challenged by the State government at any time. Our argument has been that with increases in the value of goods coming into the State, there should have been corresponding increases in the quantum of tax, considering that the tax structure has remained more or less the same. But what is the situation on the ground? Instead of a substantial increase in the tax revenue accruing to the exchequer, there has been a reduction in tax revenue. For instance, the total amount of revenue collected at the Srirampur check gate was Rs 19.35 crore in 2006-07, but fell to Rs 3.36 crore in 2013-14 and even more sharply to Rs 1.88 crore in 2014-15. In other words, the revenue collected in 2014-15 was a mere 9.71 per cent of the revenue collected in 2006-07. Or take the case of the revenue collected at the Baxirhat check gate. In 2006-07 it was Rs 9.8 crore but got reduced to Rs 3.31 crore in 2013-14 and to Rs 2.74 crore in 2014-15. Likewise, in the case of the Digarkhal check gate, the revenue collected in 1006-07 was Rs 3.49 crore, but it fell to Rs 1.01 crore in 2013-14 and to Rs 96 lakh in the year 2014-15 (till February). As it is, the revenue accruing to the exchequer in the best of times has been a miniscule fraction of what it should really be, but neither simple arithmetic nor principles of accountancy nor plain logic can explain away the phenomenon of sharply reduced revenue. The only explation that can be adduced is that there has been massive siphoning of legitimate government revenue to private coffers. There has been defrauding of the State exchequer. And since the decision to loot the exchequer to the tune of thousands of crores of rupees every year cannot be taken at the level of mere tax collectors, this ‘policy’ decision has to come from much higher up and have the blessings of the head of government. The other obvious conclusion is that such large-scale loot of public money cannot go on year after year unless some legislators and bureaucrats as well as some terrorist outfits are direct beneficiaries of such loot.

Assam is not actually as poor as it is made out to be. It is our lawmakers and bureaucrats who have made it poor by permitting massive leakages from the exchequer to take place. Here is a State that permits thousands of crores of rupees to be diverted from the exchequer to private coffers. So the State cannot mage to pay government employees their salaries on time because the exchequer is always depleted. Here is a State where the Chief Minister makes the preposterous announcement that government employees cannot be paid their salaries regularly every month because the State has to spend available resources on development. The truth is that the exchequer is being robbed of the revenue that should accrue to it. It is, therefore, time for hundreds of applications to be made under the provisions of the Right to Information Act to ask the same questions about the impossible and magical reduction of government revenue in the context of the vastly increased import of consumer durables and essential commodities as well as the sharp increases in prices over the last two decades. And while these questions are raised, the Gauhati High Court should be kept informed of the action taken (considering the extensive public interest and the astronomical amounts of leakage involved) so that the authorities cannot resort to false responses or to long delays. And considering the kind of exercise involved, it would be fair for people to expect the legal profession to be deeply involved in the task that can suddenly result in a quantum jump in the State’s revenues and a much better quality of life for millions of people.