The recent indication of a possible shake in existing tax structure to bring the service community within the taxable framework evokes both cautious interest and seminal concern. The proposed departure from the present tax structure fundamentally stems from the narrative that a little deduction (read tax) of salary from the service community shall be channeled towards augmenting / funding infrastructure development in the state. There may be certain merits in such shift in narration considering our state which is perpetually burdened with dearth in revenue generation. However, skepticism over ensuring fiscal discipline as well as effecting responsible implementation by the authority concerned still looms large.
The CAG report (2018) highlighted issues of manipulation of tax rules, loopholes in implementation of projects funded by central and other financial agencies, and financial irregularities at various stages in development departments. We may be reminded from below simple illustration of irregularities in three different fields:
(i) A combination of tax evasion by concealment of overturns by the dealers, payment of inadmissible input tax credit due to oversight of tax authorities and rare enforcement of extant tax rules set up the state to suffer a loss of Rs 11.31 crore by the year ending 2018. The excuse of oversight by the tax authorities is subject to further debate in view of the rampant practice of “arrangement/adjustment” in exchange of some “commission” at the cost of people’s government.
(ii) Construction of hostels for girls with lodging and boarding facilities in Educationally Backward Blocks, which aimed to accommodate the girl students providing an opportunity to continue their studies irrespective of their societal considerations, had been left incomplete and hence could not be put to operation the facilities worth Rs 23.01 crore. The intention of the government does not warrant any scrutiny as it strives to uplift the weaker sections of the society. Nonetheless, it is pilfering at the implementing stage that earns not only the wrath of our society but further discourage people from placing their trust on the government.
(iii) Similarly, a reflective case of what representative Jacob Zhimomi recently asked his officials not to be mere “table engineers”, DPR of a concrete bridge must have been prepared on engineers’ table without proper physical verifications. Consequently, a bridge had been constructed yet remained unusable as the bridge was not connected with accessible roads from both the ends. And an amount of Rs 4.18 crore lies idle above the river.
There may still be such cases of mismanagement and misappropriation of government resources but chose not to report. At the first sight, there seems to be no resource crunch in the state considering the frequent uncontrolled developments being taken place, not necessarily in the interest of public but as gifts to the star campaigners (during elections) and the crony capitalist friends of our politicians. Yet, on the other hand, majority of the developmental activities had been planned from the angle of “reward and punishment” superstructure which may eventually be held responsible in diminishing our state resources. It is equally irrational and silently hurting our economy when the taxes are not exacted from permissible items. The problems refuse to stop there as it further resulting in lopsided development, regional disparities and the emergence of superrich elites.
It is therefore established that the much hyped fund crunch does not lie in lack of means for revenue generation (as most assumed the case to be). The problem lies in inefficient management of state resources. The managers of the state do not bother to bring about efficient public service with its 1, 27, 889 strong workforce at their disposal. The managers still feel that more posts should be created in public sector amidst this mammoth number of huge government servants (enjoying the sobriquet of highest ratio of state government employees to its total population). Empirically speaking, the corresponding total output presently dispensed by the 1, 27, 889 employees in public sector may well be achieved by roughly two-thirds of the present manpower strength should there be far better personnel management system in place. As such, the proposed tax restructuring (if materialised) may only defeat the very purpose of infrastructure funding if the policy makers overlook the combined ground deficiencies of poor personnel management and excess government employees.
Weak personnel management is further compounded by concerns of casual fiscal discipline resulting in accumulated deficits year after year. As reported by the CAG (2018), instances of excess payment as well as misappropriation of funds not baring the share of the specially disabled community served as a perfect example where more fund inflow (either by generation or by receipt) into the state may end up meeting the same fate. It is still uncertain that should the state policy makers succumb to the pressure groups in legalising liquor market for taxation, or in that case the proposed deduction of salary, the revenue generated shall be utilised responsibly and equitably. It may accelerate phenomenal concentration of wealth in the hands of a few. None would like to be taxed in the absence of any fiscal accountability.
It is obvious that replication of imported economic system is a flawed adventure for our infant society. We must now dive deep back into the economic arrangement devotedly aspired and practiced by our forefathers – the feast of merit. Under this system, hard work and meticulous overheads are fundamental in wealth production. There is evidence of wealth concentration in a few. However, the accumulated wealth is not kept to oneself for long but is equitably redistributed by performing the feast of merits. All are invited in the feast of merits – rich and poor, young and old, men and women, abled or disabled, beautiful and misshapen. None is technically left out in the feast of merit. This is in stark contrast to the present system where wealth is rewarded in return of a favour, individualism preoccupied wealth production, distribution of resources is secretive and selective – poor are overlooked, old ignored, women deprived, disabled denied and misshapen untouched. Our state is resourceful (not resource crunch) when there is efficiency in management. Managerial lapses cost our state dear thus far.
Revival of this time tested economic system – feast of merit – in our society is of paramount importance. As in the ancient of days, replication of exact hosting of merit-feast may be untenable in the present context. Still then, there is imperative in systematic propagation of its principles including equality of opportunities, inclusiveness, proportionate redistribution of state resources, disciplined fiscal management and a work culture in wealth production.
Adopting the “feast of merit” as an economic system entails a change of mind-set of each citizen concerned. It may not warrant any major structural reforms for its take off. More importantly, space and time along with patience must be provided for facilitating gradual re-evolution of the feast of merit as a revered economic system in our state. It is, therefore, hoped that none would be reluctant to let the state tax her / him under a robust, indigenous and revitalised economic system – the feast of merit – where the means cascade deep down to the weakest and the marginalised.
Nukhosa Chüzho
Kohima
khozch@gmail.com