Assam Tax and economic reforms

Assam Tax and Economic Reforms:-

Assam is located in the northeast of India. The state Shares its borders with Arunachal Pradesh, Nagaland, Manipur, Mizoram, Meghalaya, Tripura and West Bengal. The state shares international borders with Bangladesh and the Kingdom of Bhutan. Assam is India’s gateway to Northeast India and acts as a vital link for trade with Southeast Asian countries. The state is known for its tea, petroleum Resources, muga silk and bio-diversity. It is also becoming an increasingly popular destination for wildlife tourism.

The Assam economy and development depend on the production of the state. The economy is prevalently agrarian in nature. The government makes continuous efforts to develop the already existing agrarian economy and to improve the other sectors of the economy in the state of Assam. Almost 63 percent of the Society of Assam earns its living from the agricultural sector. The state is reputed all over the world for its production of tea. The state produces 15 percent of the tea produced in the world. A large section of the labor force of the state is employed in the tea estates of Assam that cover large areas of the state. The other agricultural produce involves rice, sugarcane, pulses, potatoes and jute. Fruits like mangoes, bananas, pineapple and guavas are also produced in the state.

The Secondary Sector of the economy comprises of the industries in Assam with large and medium scale productions. Agro Based Industries prevail in the state coupled with the tea Industry that has a major contribution to the economy of the state of Assam. Other industries include the petroleum industry with one of the oldest oil ventures of the world situated in Digboy. The state also earns revenue from the mining industry that produces the four important industrial Minerals of coal, limestone, sillimanite and oil.

Assam’s Economy:-

Between 2012-13 and 2014-15, agriculture sector’s Growth has declined (real) from 16.5% to 0.3%. Over the same period, Industrial Sector’s growth increased from -5.5% in 2012-13 to 8.1% in 2013-14, to 5.1% in 2014-15. Services saw the most growth of 12.2% in 2014-15, an increase from 2.1% in 2012-13. Industrial production in the state declined by 1.7% and 1.8% in 2014-15 and 2015-16 respectively. During the same period, the industrial production of the country grew by 2.8% and 2.4% respectively.
Assam’s finances are, however, in a much better position than those of its peers. Assam was one of first SC States to pass the Fiscal Responsibility and Budget Management (FRBM) Act in 2005, and had a Revenue Deficit of 0.1 per cent of GSDP in 2013-14, against the Average of 1.7 per cent for the SC States.
The State’s debt-to-GSDP ratio was fairly comfortable (19.2 per cent of GSDP in 2013-14); it was the lowest among all the SC States. The tax-revenue-to-GSDP ratio was 32.8 per cent in 2013-14, the highest in the country and nearly double that of the next best State.
At current prices, the Gross State Domestic Product (GSDP) of Assam was US$ 30.72 billion in 2015-16 while the average annual GSDP growth rate from 2004-05 to 2015-16 was 9 per cent.
The 12th Five Year Plan estimates the growth rate to be around ten per cent overall, while estimating industry and services sub-sectors to grow at 9 per cent and 13 per cent respectively.
The state is rich in Water Resources and has vast tracts of fertile land. Assam is also the third-largest producer of petroleum and natural gas in the country and has ample reserves of limestone. With its five national parks and 18 wildlife sanctuaries, the state is a Biodiversity-2/”>Biodiversity hotspot. Other potential areas of Investment include power and energy, mineral-based industries, tourism and crude oil refining.
Assam has adopted numerous investor-friendly policies to attract investments and accelerate industrial development. Key areas of focus include the IT, tourism and power sector along with several other initiatives such as the North East Industrial and Investment Promotion Policy (NEIIPP) 2007 and the Industrial and Investment Policy 2014. Assam stands 22nd among Indian states in rankings based on Ease of Doing Business and reforms implementation, according to a study by the World Bank and KPMG.
According to the Department of Industrial Policy & Promotion (DIPP), cumulative FDI inflows during April 2000 to March 2016 totaled to US$ 94 million.

Recent Developments:

Recently Assam government has decided to come up with International Trade Centre in Guwahati. State cabinet has approved land for centre which will have twin towers with 65 storeys. The international centre will have trade advisers office from different countries. Already Bangladesh government has an office in Guwahati. Bhutan has applied to government of India for opening consulate office in Guwahati.
Assam has come up with a Bamboo Technology Park with an investment is Rs 62.28 crore in Chaygaon in Industrial Growth Centre in the vicinity of Guwahati. The Park has been set up at the initiative of Industries & Commerce department of Government of Assam with the help from Department of Industrial Policy & promotion, Government of India through a Special Purpose Vehicle of Assam Industrial Development Corporation (AIDC) and private entrepreneurs. The park has a modern Common Facility Centre for producing many innovative bamboo products like – Strand woven bamboo block making facility, Vacuum Pressure Treatment Plant, Resin Making Facility, Bamboo Stick Making Facility, Bamboo – Waste Plastic Composite Making Facility, Charcoal making facility, etc.
The Government of India signed the agreement for third and last tranche of US$ 273 million loan, out of total US$ 800 million loan agreement with The Asian Development Bank (ADB), for constructing 6,000 kms of all-weather rural roads in Assam, Chhattisgarh, Madhya Pradesh, Odisha and West Bengal
The first passenger train was flagged off from Silchar to Guwahati that will ply on the newly converted Silchar-Lumding section in Assam.

Key Sectors:

Tea:

During 2015-16, the State Government provided Assam State Electricity Board (ASEB) with US$ 1.52 million for the electrification of quarters of the Tea Workers. The state government has proposed to construct a Tea Museum in Dibrugarh, in 2016-17.

Energy-Coal, Oil, and Gas:

The Assam-Arakan Basin in Northeast India is an important oil-producing region and contains more than 15 per cent of the country’s reserves. Assam has over 1.3 billion tonnes of crude oil and 156 billion cubic metric tonnes of natural gas reserves.

Medical Herbs and Plants:

Assam, with its vast area under hills and forests, is home to a variety of medicinal herbs and plants. About 300 types of medicinal herbs and plants are found in abundance in the state with the Brahmaputra valley alone having 150 varieties of herbs and plants of commercial value.

Sericulture:

Assam enjoys global monopoly in terms of Muga silk (also known as golden silk) production. The state accounts for around 95 per cent of global Muga production. Moreover, Assam is the country’s major Eri silk producer (accounts for 65 per cent of the country’s Eri silk production). Raw silk production in the state during 2015-16 was recorded to be 3,325 MT whereas during 2016-17 (up to May 2016), the raw silk production was 1,137 MT.

Tax Reforms:-

Assam became the first state in the country to pass Constitution Amendment Bill on Goods and Services Tax (GST) on August 12, 2016. The State Assembly unanimously passed the Bill following its passage by both Houses of Parliament. State to benefit about Rs. 300 crore per annum in terms of GST compensation for five years with annual growth rate of 14%.
Recently Assam has witnessed whopping growth of 21.60 per cent in revenue collection. In 2014-15 revenue from Taxation stood at Rs 9449.81 Crore, this increased to Rs 10,726 Crore in 2015-16 and Rs 12180 Crore in 2016-17.
Revenue collection from non-tax sources was Rs 2412.98 Crore in 2014-15 and Rs 2188.09 Crore in 2015-16.Sarma said. The collection was all time high in 201617 and state received Rs 3500 Crore.
Using the digital platform the state government has released Rs 43000 Crore in 2016-17, this figure was Rs 33,357 Crore in 2015-16. Digitally state government received Rs 8343 in 2016-17 and Rs 6775 Crore in 2015-16 .

New Tax reforms in Budget 2017-18:–

Barcode containing holographic label on the liquor bottles is being implemented after completing the formalities like floating the tenders.
e-Governance has been taken up under the ASPIRe (Assam State PUBLIC FINANCE Institutional Reforms) Project and all kinds of revenue collection, permits, licences shall be made online and fully digital.
Assam Motor Vehicle Taxation Act, 1936 is being amended for effective taxation on ad-valorem basis in case of 2 Wheeler/3 wheeler (Private)/Ambulance (commercial use).
Land re-Classification will be done immediately with online provision.
In eight districts, Mouzadar system will be introduced in place of existing Tahsildari system.
Sale permission will be made online and time bound. Land revenue activities will be made online in an integrated manner.
Mouzas will be computerized. Collection of land revenue will be monitored online.
101 new areas identified for extraction of Sand shall be expedited for commission so that it will fetch estimated additional revenue of Rs. 45 crore.

Assam Budget 2022-23

The Assam Budget 2022-23 was presented by Finance Minister Himanta Biswa Sarma on February 24, 2022. The budget has a total outlay of Rs. 3,35,888 crore, which is an increase of 15.7% over the previous year’s budget. The budget focuses on agriculture, Infrastructure-2/”>INFRASTRUCTURE, Education, Health, and social welfare.

The budget has allocated Rs. 10,000 crore for agriculture, which is an increase of 20% over the previous year. The allocation will be used for various schemes such as the Pradhan Mantri Krishi Sinchai Yojana, the Pradhan Mantri Fasal Bima Yojana, and the Pradhan Mantri Kisan Samman Nidhi.

The budget has also allocated Rs. 10,000 crore for infrastructure, which is an increase of 25% over the previous year. The allocation will be used for various schemes such as the Pradhan Mantri Gram Sadak Yojana, the Pradhan Mantri Kaushal Vikas Yojana, and the Pradhan Mantri Awas Yojana.

The budget has also allocated Rs. 5,000 crore for education, which is an increase of 15% over the previous year. The allocation will be used for various schemes such as the Sarva Shiksha Abhiyan, the Mid-Day Meal Scheme, and the Rashtriya Madhyamik Shiksha Abhiyan.

The budget has also allocated Rs. 3,000 crore for health, which is an increase of 20% over the previous year. The allocation will be used for various schemes such as the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, the Pradhan Mantri National Health Mission, and the National Rural Health Mission.

The budget has also allocated Rs. 2,000 crore for social welfare, which is an increase of 15% over the previous year. The allocation will be used for various schemes such as the Indira Gandhi National Old Age Pension Scheme, the Pradhan Mantri Jeevan Jyoti Bima Yojana, and the Pradhan Mantri Suraksha Bima Yojana.

The Assam Budget 2022-23 is a progressive budget that focuses on the development of the state. The budget has allocated adequate funds for various sectors such as agriculture, infrastructure, education, health, and social welfare. The budget is expected to boost the economy of the state and improve the lives of the people of Assam.

Assam GST Collection

The Assam government has collected Rs. 12,000 crore in GST in the first six months of the current financial year. This is an increase of 20% over the same period last year. The state government has attributed the increase in GST collection to the growth in the economy and the implementation of various measures to improve tax compliance.

The Assam government has also announced a number of measures to further boost GST collection in the state. These measures include the setting up of a special task force to crack down on Tax Evasion, the launch of a taxpayer awareness campaign, and the SIMPLIFICATION of the GST filing process.

The Assam government is confident that it will be able to achieve its target of collecting Rs. 25,000 crore in GST in the current financial year. The government is also hopeful that the increase in GST collection will help to improve the state’s finances and provide better services to the people of Assam.

Assam Excise Duty Collection

The Assam government has collected Rs. 2,000 crore in excise duty in the first six months of the current financial year. This is an increase of 15% over the same period last year. The state government has attributed the increase in excise duty collection to the growth in the economy and the implementation of various measures to improve tax compliance.

The Assam government has also announced a number of measures to further boost excise duty collection in the state. These measures include the setting up of a special task force to crack down on tax evasion, the launch of a taxpayer awareness campaign, and the simplification of the excise duty filing process.

The Assam government is confident that it will be able to achieve its target of collecting Rs. 4,000 crore in excise duty in the current financial year. The government is also hopeful that the increase in excise duty collection will help to improve the state’s finances and provide better services to the people of Assam.

Assam Income tax Collection

The Assam government has collected Rs. 1,000 crore in income tax in the first six months of the current financial year. This is an increase of 10% over the same period last year. The state government has attributed the increase in income

What is tax reform?

Tax reform is the process of changing the structure of a country’s tax system. This can involve changes to the rates of taxation, the Types of Taxes that are levied, or the way in which taxes are collected.

What are the goals of tax reform?

The goals of tax reform can vary depending on the country and the specific reforms being proposed. However, some common goals include:

Increasing economic growth
Reducing the tax burden on businesses and individuals
Making the tax system more fair and equitable
Increasing government revenue
Reducing tax evasion and avoidance

What are the different types of tax reform?

There are many different types of tax reform, but some common approaches include:

Base broadening: This involves reducing the number of tax deductions and exemptions, which can increase government revenue.
Rate reduction: This involves lowering the rates of taxation, which can stimulate economic growth.
Simplification: This involves making the tax code simpler and easier to understand, which can reduce compliance costs for businesses and individuals.
Harmonization: This involves making the tax system more consistent across different jurisdictions, which can reduce compliance costs and make it easier for businesses to operate in multiple countries.

What are the benefits of tax reform?

The benefits of tax reform can vary depending on the specific reforms being proposed. However, some potential benefits include:

Increased economic growth: Tax reform can stimulate economic growth by reducing the tax burden on businesses and individuals. This can lead to increased investment, hiring, and innovation.
Reduced tax evasion and avoidance: Tax reform can make it more difficult for businesses and individuals to evade or avoid taxes. This can increase government revenue and reduce the cost of tax compliance.
Increased fairness and Equity: Tax reform can make the tax system more fair and equitable by reducing the tax burden on low- and middle-income households.
Reduced compliance costs: Tax reform can reduce compliance costs for businesses and individuals by making the tax code simpler and easier to understand.

What are the risks of tax reform?

The risks of tax reform can vary depending on the specific reforms being proposed. However, some potential risks include:

Decreased economic growth: Tax reform can decrease economic growth if it is not implemented carefully. This can happen if the reforms lead to higher taxes or if they make the tax system more complex.
Increased inequality: Tax reform can increase inequality if it is not designed to protect low- and middle-income households. This can happen if the reforms lead to higher taxes on these households or if they make the tax system less progressive.
Reduced government revenue: Tax reform can reduce government revenue if it is not implemented carefully. This can happen if the reforms lead to lower taxes or if they make the tax system more difficult to enforce.

What are the challenges of tax reform?

Tax reform is a complex and challenging process. There are many different factors to consider, and it is important to get buy-in from a wide range of stakeholders. Some of the challenges of tax reform include:

Designing a fair and equitable system: It is important to design a tax system that is fair and equitable. This means that the system should not place an undue burden on any one group of taxpayers.
Getting buy-in from stakeholders: It is important to get buy-in from a wide range of stakeholders, including businesses, individuals, and interest groups. This can be a challenge, as there are often competing interests at play.
Implementing the reforms: Once the reforms have been designed, they need to be implemented effectively. This can be a challenge, as there are often many different parts of the tax system that need to be changed.

What is the future of tax reform?

The future of tax reform is uncertain. There are many different factors that could influence the direction of tax reform in the future, including economic conditions, political changes, and technological developments. However, it is likely that tax reform will continue to be a major issue in the years to come.

Sure, here are some MCQs without mentioning the topic Assam Tax and economic reforms:

Which of the following is not a type of tax?
(A) Income tax
(B) Sales tax
(C) Property tax
(D) Wealth tax
Which of the following is not a goal of economic reform?
(A) To increase economic growth
(B) To reduce POVERTY
(C) To improve the distribution of income
(D) To protect the Environment
Which of the following is not a tool of economic reform?
(A) Fiscal Policy
(B) Monetary Policy
(C) Trade Policy
(D) Environmental policy
Which of the following is not a benefit of economic reform?
(A) Increased economic growth
(B) Reduced poverty
(C) Improved distribution of income
(D) Increased environmental protection
Which of the following is not a cost of economic reform?
(A) Increased Unemployment
(B) Increased inequality
(C) Increased Environmental Degradation
(D) Increased Inflation
Which of the following is not a factor that can affect the success of economic reform?
(A) The level of Economic Development
(B) The political system
(C) The culture
(D) The Climate
Which of the following is not a way to measure the success of economic reform?
(A) Economic growth
(B) Poverty reduction
(C) Income inequality
(D) Environmental protection
Which of the following is not a challenge to economic reform?
(A) Political instability
(B) Corruption
(C) Lack of infrastructure
(D) Lack of Human Capital
Which of the following is not a lesson learned from economic reform?
(A) Economic reform is a complex process that takes time
(B) Economic reform requires political will
(C) Economic reform requires public support
(D) Economic reform requires international support
Which of the following is not a policy recommendation for economic reform?
(A) Focus on macroeconomic stability
(B) Promote private sector development
(C) Invest in human capital
(D) Protect the environment