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Addressing the Elephant in the Room : State Finances
1. One of the important topic which never gets its attention is the Topic of " State Finances"
How states of India manage their finances has to be discussed at large.
1. One of the important topic which never gets its attention is the Topic of " State Finances"
How states of India manage their finances has to be discussed at large.
2. Telangana :
Lets take the example of latest welfare scheme by TRS Government ,
50 % Off in Property Taxes whose Property Tax is not greater than 15,000 Rs.
Wow, a great Scheme, puts money in the hands of people.
People will spend or save the same.
Lets take the example of latest welfare scheme by TRS Government ,
50 % Off in Property Taxes whose Property Tax is not greater than 15,000 Rs.
Wow, a great Scheme, puts money in the hands of people.
People will spend or save the same.
3. The Problem - How will the Government Recover the Loss ?
Because of the above decision, the income of Government will be reduced.
Its loss to the Exchequer.
How will TRS Govt. recover this loss to GHMC ?
Whats the Plan ?
No One talks about it .
Because of the above decision, the income of Government will be reduced.
Its loss to the Exchequer.
How will TRS Govt. recover this loss to GHMC ?
Whats the Plan ?
No One talks about it .
4. Compromise on Citizen Services :
Funds are Limited,
One can only provide services to the extent of availability of funds.
Because of decisions like this, services to be provided to the people of Hyderebad will be compromised.
Funds are Limited,
One can only provide services to the extent of availability of funds.
Because of decisions like this, services to be provided to the people of Hyderebad will be compromised.
5. Always a Hero, Never a Villian :
State Governments always want to be Heroes by giving away Schemes to public but never be a Villian by imposing some taxes on Public to recover the Losses because of Welfare Schemes.
State Governments always want to be Heroes by giving away Schemes to public but never be a Villian by imposing some taxes on Public to recover the Losses because of Welfare Schemes.
6. Fear of Improving Finances :
Though constitution has given many avenues to states to improve their finances, they rarely take these steps to improve finances.
Reason - Very poor Performance in all indices.
Unless you give out Doles, you cant Win.
Though constitution has given many avenues to states to improve their finances, they rarely take these steps to improve finances.
Reason - Very poor Performance in all indices.
Unless you give out Doles, you cant Win.
7. Where does Funds Come from ?
Major Source of Funds for all these Fancy Ideas of State Governments are - GST & Funds Devolution.
That is the reason all Hue and Cry over GST, other than this, states doesnt have a clue on how to improve Finances.
Major Source of Funds for all these Fancy Ideas of State Governments are - GST & Funds Devolution.
That is the reason all Hue and Cry over GST, other than this, states doesnt have a clue on how to improve Finances.
8. Blame Central Government :
Do you often see these state governments blame central Government, that is the only escape route for their poor performance :)
Without proper thought - A Scheme will be launched, when funds are not enough for the scheme,
Blame the Centre .
Do you often see these state governments blame central Government, that is the only escape route for their poor performance :)
Without proper thought - A Scheme will be launched, when funds are not enough for the scheme,
Blame the Centre .
9. Central Government - Eternal Villain :
Who is Villain : Central Government .
Why - Because Centre Imposes Taxes.
Who is Hero : State Government.
Why - Because State Government Distributes the Taxes.
This Mindset has to Change.
Who is Villain : Central Government .
Why - Because Centre Imposes Taxes.
Who is Hero : State Government.
Why - Because State Government Distributes the Taxes.
This Mindset has to Change.
10. Conclusion : Spend, but also Increase your Revenue.
State Governments should stop depending heavily on Central government for funds and should start improving their Finances for their Fancy Ideas.
End.
State Governments should stop depending heavily on Central government for funds and should start improving their Finances for their Fancy Ideas.
End.
