Table of Contents:
- What are the major challenges before the revenue system of Uttar Pradesh ( UPPSC 2021)
Question.
What are the major challenges before the revenue system of Uttar Pradesh
(UPPSC Mains General Studies-II/GS-2 2021)
Answer.
The revenue system of Uttar Pradesh, like any other state in India, faces several major challenges that impact its efficiency and effectiveness.
Some of the key challenges before the revenue system of Uttar Pradesh are:
Land Revenue Management:
Efficient land revenue management is crucial for the state's revenue generation. However, challenges such as outdated land records, disputes over land ownership, and land encroachments lead to revenue leakages and hinder proper assessment and collection of land revenue.
Lack of Investment in Infrastructure:
Adequate investment in infrastructure is vital for economic growth and revenue generation. Challenges in attracting private investments and financing infrastructure projects can hinder revenue growth in the long run.
Low Industrial Growth:
As far as Industrial growth is concerned, Uttar Pradesh's rank comes in the bottom five among Indian states. As per the data, the Industrial growth of Uttar Pradesh was 1.95 % and 1.93 % in 2013-14 and 2014-15 respectively.
Agricultural Income and Rural Economy:
A significant portion of Uttar Pradesh's population relies on agriculture for their livelihood. Around 75 % of the rural population of Uttar Pradesh is dependent on agriculture. However, annual growth in the agriculture sector is about 2.9 %, which is below the national average growth rate of 3.7 %. The low income levels and agrarian distress limit the state's revenue generation potential.
Low Tax Base:
Uttar Pradesh faces challenges in widening its tax base and increasing tax compliance. A significant portion of the economy operates in the informal sector, making it challenging to collect taxes effectively. There is high youth unemployment and low quality of education in the state. Expanding the tax base and encouraging tax compliance are essential for increasing revenue collection.
Inadequate Tax Collection:
The state government often faces challenges in realizing the full potential of revenue collection due to weak tax administration, inefficient tax collection processes, and a lack of modern technology for tax monitoring and enforcement.
Dependence on Central Transfers:
Uttar Pradesh heavily relies on central grants and transfers for its revenue requirements. Overdependence on these transfers can affect the state's fiscal autonomy and may lead to uncertainties in the flow of funds.
Fiscal Deficit and Debt Burden:
A high fiscal deficit and mounting debt burden strain the state's finances. Managing the fiscal deficit and ensuring a sustainable debt level are crucial to maintaining fiscal stability and financial health.
Corruption and Leakages:
Corruption in the revenue administration leads to leakages and misappropriation of revenue, adversely affecting the state's revenue collection.
Demographic Pressures:
Around one-third of Uttar Pradesh's population is living in poverty. The per capita income of Uttar Pradesh is far below the National average. Uttar Pradesh's large and growing population poses challenges for the revenue system in terms of providing essential services and meeting the rising demand for public goods and infrastructure.
To address these challenges, the Uttar Pradesh government needs to undertake various reforms, including modernizing land records, improving tax administration, promoting investment in infrastructure, and enhancing overall fiscal management.
Strengthening revenue administration and governance, along with implementing effective measures to increase tax compliance, can contribute to sustainable revenue growth and economic development in the state.
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