The correct answer is: d) All of the above.
Limited resources and a small population can be a challenge for Sikkim’s ability to offer competitive tax rates, long-term economic sustainability, and revenue generation capacity.
Sikkim is a small state with a population of just over 600,000 people. This means that the state has a limited tax base, which makes it difficult to generate revenue through taxation. Additionally, the state’s limited resources mean that it is not able to offer competitive tax rates to businesses, which can make it difficult to attract investment.
Sikkim’s small population also means that it has a limited market for goods and services. This can make it difficult for businesses to operate in the state, as they may not be able to find enough customers to support their operations. Additionally, the state’s limited resources mean that it is not able to provide a high level of infrastructure and services, which can make it difficult for businesses to operate in the state.
All of these factors can make it difficult for Sikkim to achieve long-term economic sustainability. The state needs to find ways to generate more revenue, attract investment, and improve its infrastructure and services in order to overcome these challenges.
Here is a more detailed explanation of each option:
- Option a) Ability to offer competitive tax rates: Sikkim’s limited resources mean that it is not able to offer competitive tax rates to businesses. This can make it difficult to attract investment, as businesses may be able to find lower tax rates in other states.
- Option b) Long-term economic sustainability: Sikkim’s small population and limited resources make it difficult for the state to achieve long-term economic sustainability. The state needs to find ways to generate more revenue, attract investment, and improve its infrastructure and services in order to overcome these challenges.
- Option c) Revenue generation capacity: Sikkim’s limited tax base and small population make it difficult for the state to generate revenue through taxation. The state needs to find other ways to generate revenue, such as through tourism or natural resource extraction.
I hope this helps!