Sikkim : Tax and Economic Reforms

The economic Liberalization-2/”>Liberalization in India , initiated in 1991, with principles of Liberalization , Privatization and Globalization/”>Globalization-3/”>Globalization (LPG) of the country’s economic policies, with the goal of making the economy more market and service-oriented and expanding the role of private and foreign Investment. Specific changes include a reduction in import tariffs, deregulation of markets, reduction of taxes, and greater foreign investment. Liberalization has been credited by its proponents for the high economic Growth recorded by the country in the 1990s and 2000s. And it has positive impact on the state of Bihar as can be visibly seen from various sectors.

India’s GDP has increased thereafter and also the GSDP of state has increased many folds. Between 2004-05 and 2015-16, Gross State Domestic Product (GSDP) of Sikkim has expanded at a compound annual growth rate (CAGR) of 19.44 per cent to US$ 2.75 billion whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 19.11 per cent to US$ 2.33 billion.

Agricultural Sector

The state’s economy is largely agrarian, based on the terraced farming of rice and the cultivation of crops such as maize, millet, wheat, barley, oranges, tea and cardamom. Sikkim produces more cardamom than any other Indian state, and is home to the largest cultivated area of cardamom

Sikkim has a suitable Climate for agricultural and horticultural products. It supports multiple crops; viz., rice, wheat, maize, millet, barley, urad, pea, soya bean, mustard and large cardamom. Sikkim is the top producer of large cardamom, contributing over 80 per cent to India’s total production.

As per the state budget 2016-17, Sikkim got certified as first fully organic state in India by the Central Ministry of agriculture and Farmers’ Welfare as well as other recognized agencies of the country.

Organic Farming

Sikkim has been transformed as the first Organic State of the country and the world by design and have opened unlimited opportunities in sectors like Agriculture, Horticulture-2/”>Horticulture and Animal Husbandry.

Industrial Sector

Industries plays an important part to the development of the state. State Government has taken various measures to provide impetus to the growth of the economy.

There has been a drastic shift in the sectoral contribution from primary and tertiary to the Secondary Sector. The overall performance of the economy of the state during 2015-16 was encouraging. At a CAGR of 33.91%, the secondary sector witnessed the fastest growth among the three sectors during 2004-05 to 2015-16. It was driven by manufacturing, construction and electricity, gas & water supply. In 2015-16, the secondary sector contributed 67.73% to the state’s GSDP at current prices.

The state follows the North East Industrial Investment Promotion Policy, 2007, which provides several incentives and concessions for investment. Institutional support is provided through various central and state government agencies viz., North East Council, Ministry of Development of North Eastern Region and Commerce and Industries Department.

The main industries like Brewing, distilling, tanning and watchmaking are located in the southern regions of Sikkim.

Tertiary Sector

State government has implemented various policies to increase the growth rate of Tertiary sector. Various policies like IT Policy , Tourism Policy gives impetus for the growth of the Services sector and hence development of economy. Industrial sector contributes majorly to the development, followed by the tertiary sector at 23.65% and Primary Sector at 8.62%. The tertiary sector grew at a CAGR of 15.23% between 2004-05 and 2015-16. The growth has been driven by trade, hotels, real estate, finance, insurance, transport, communications and other services. The primary sector grew at a CAGR of 15.55% between 2004-05 and 2015-16.

Tourism provides the main thrust to the economy. With the tranquil climate, the natural beauty and the fine cultural heritage of Sikkim, the growth of tourism has immense possibilities. There are large number of places of tourist attraction particularly the snow clad Mountains, the lakes and unspoiled forest areas and valleys of flowers. The advantage of having very fine monasteries in Sikkim can also be taken to attract Buddhist tourists from countries like Japan and the South Eastern countries.

Total Receipts and Total Expenditure

For the fiscal year 2017-18, a gross expenditure of Rs. 6364.02 crores has been projected in the budget.

After taking into account recoveries amounting to Rs. 142.20 crores, the net expenditure comes to Rs. 6221.82 crores.

The Fiscal Deficit remains in adherence to the fiscal management targets set in the Sikkim Fiscal Responsibility and Budget Management Act, 2010, i.e. not more than 3% of GSDP. The contribution from total tax revenue is of the order of Rs. 669.51 crores and in the case of Non-Tax revenue, Rs. 426.46 crores.

The total gross expenditure includes allocations amounting to Rs. 81.76 crores under the dispensation of the North Eastern Council, Rs. 153.66 crores under Non Lapsable Pool of Central Resources, and Rs. 1326.76 crores under Centrally Sponsored Schemes.

In Union budget, the distinction between Plan and Non-Plan has been done away with from the year 2017-18 onwards. This has been done as a measure towards bringing about major fiscal and budgetary reforms while retaining the distinction on the basis of Revenue and Capital expenditures. Since the Union and the States have to work together on the methodology, State has also adopted the same system from the financial year 2017-18 budget.

Tax proposals

Accordingly, the main taxes of the State Government like the Value Added Tax, Central Sales Tax, Entry Tax, Cess and Luxury Tax etc. and also the taxes of the Government of India like the Central Excise and Services Tax, have now been subsumed in the Goods and Services Tax.

Goods and Service Tax (GST)

GST, will replace multiple state and central taxes to create one national market and single tax in the country. This bill seeks to subsume all central indirect levies like excise duty, countervailing duty and service tax and also state taxes such as value added tax, entry tax and luxury tax, to create a single, pan-India market.

GST will be a game changer in the states as they eradicate the cascading effect on goods and services.GST will bring down the cost of goods and services as there will be no cascading effects of taxes. He added that GST is expected to increase revenue by widening the tax base and improving the taxpayer compliance. 7% items are such on which no taxes would be levied, 14% items would be in the lowest bracket of 5% tax, 17% items will have 12% tax, 43% items will have 18% tax, and 19% items, which are generally not used by people will have 28% tax.

Only the Goods and Services Tax will be levied in place of all these taxes in the Indirect Tax regime. Petroleum products and liquor have been kept out of the GST, as of now. The rates of the tax will be uniform on goods and services in the entire nation. As per the decision taken by the GST Council, the Goods and Services Tax will be implemented from 1st July, 2017 onwards.

The State Government has made all necessary preparations for the implementation of the new tax regime so that the trade and Industry of the State do not face any difficulties. E-payment will be made compulsory for the payment of taxes.

Sikkim is a small state in the eastern Himalayas. It is bordered by Bhutan to the north, China to the east, Nepal to the west, and West Bengal to the south. The capital of Sikkim is Gangtok.

Sikkim has a Population of about 600,000 people. The majority of the population is Buddhist. The Official Language of Sikkim is Nepali.

Sikkim is a beautiful and mountainous state. It is home to many different ethnic groups and cultures. The state is also home to a number of important Buddhist monasteries.

Sikkim became a part of India in 1975. Since then, the state has undergone a number of economic reforms. These reforms have helped to improve the lives of the people of Sikkim.

The economy of Sikkim is based on agriculture, tourism, and hydropower. Agriculture is the main source of EMPLOYMENT in Sikkim. The main crops grown in Sikkim are rice, maize, wheat, and potatoes.

Tourism is also an important part of the economy of Sikkim. Sikkim is a popular tourist destination due to its beautiful scenery and its Buddhist monasteries.

Hydropower is also an important part of the economy of Sikkim. Sikkim has a number of hydroelectric power Plants. These power plants generate electricity for the state of Sikkim and for other parts of India.

The tax system in Sikkim is based on the Indian tax system. The main taxes in Sikkim are Income tax, sales tax, and excise duty.

Income tax is levied on the income of individuals and businesses. Sales tax is levied on the sale of goods and services. Excise duty is levied on the manufacture and sale of certain goods, such as alcohol and tobacco.

The government of Sikkim has implemented a number of economic reforms in recent years. These reforms have helped to improve the lives of the people of Sikkim.

One of the most important economic reforms in Sikkim is the introduction of the Sikkim One Time Settlement Scheme. This scheme allows businesses to settle their outstanding taxes at a discounted rate.

The government of Sikkim has also implemented a number of other economic reforms, such as the introduction of a new Industrial Policy and the SIMPLIFICATION of the tax system. These reforms have helped to attract investment to Sikkim and to create jobs.

The economy of Sikkim is growing at a healthy rate. The government of Sikkim has implemented a number of economic reforms that have helped to improve the lives of the people of Sikkim. The future of the economy of Sikkim looks bright.

The following are some of the key economic reforms implemented by the government of Sikkim:

Introduction of the Sikkim One Time Settlement Scheme: This scheme allows businesses to settle their outstanding taxes at a discounted rate. This has helped to improve the cash flow of businesses and has also helped to reduce the amount of outstanding tax due to the government.
Introduction of a new industrial policy: The new industrial policy has made it easier for businesses to set up and operate in Sikkim. The policy has also offered a number of incentives to businesses, such as tax breaks and subsidies. This has helped to attract investment to Sikkim and has also helped to create jobs.
Simplification of the tax system: The tax system in Sikkim has been simplified. This has made it easier for businesses to comply with the Tax Laws and has also helped to reduce the cost of doing business in Sikkim.

These reforms have helped to improve the lives of the people of Sikkim in a number of ways. They have helped to create jobs, improve the cash flow of businesses, and reduce the cost of doing business. These reforms have also helped to attract investment to Sikkim, which has further helped to create jobs and improve the economy of the state.

What are the Tax Reforms in Sikkim?

The government of Sikkim has announced a number of tax reforms in recent years, including:

A reduction in the state sales tax from 14% to 10%.
A reduction in the state excise duty on liquor from 50% to 40%.
A reduction in the state tax on motor vehicles from 10% to 8%.
A reduction in the state tax on electricity from 10% to 8%.

These reforms are designed to boost the economy of Sikkim and make it more attractive to businesses and investors.

What are the economic reforms in Sikkim?

The government of Sikkim has also announced a number of economic reforms in recent years, including:

The introduction of a new industrial policy that aims to attract more investment into the state.
The establishment of a new tourism policy that aims to promote Sikkim as a tourist destination.
The development of a new Infrastructure-2/”>INFRASTRUCTURE plan that aims to improve the state’s transportation and Communication networks.
The implementation of a new Education policy that aims to improve the quality of education in the state.

These reforms are designed to make Sikkim a more attractive place to live, work, and do business.

What are the benefits of the tax and economic reforms in Sikkim?

The tax and economic reforms in Sikkim are expected to have a number of benefits, including:

Increased investment in the state.
Increased economic activity.
Increased employment opportunities.
Improved infrastructure.
Improved education.
Improved Quality Of Life.

What are the challenges of the tax and economic reforms in Sikkim?

The tax and economic reforms in Sikkim also face a number of challenges, including:

The need to ensure that the reforms are implemented effectively.
The need to ensure that the reforms are sustainable.
The need to ensure that the reforms benefit all sections of Society.
The need to ensure that the reforms do not lead to social unrest.

What is the future of the tax and economic reforms in Sikkim?

The future of the tax and economic reforms in Sikkim is uncertain. The reforms have the potential to improve the lives of the people of Sikkim, but they also face a number of challenges. It is important to monitor the implementation of the reforms and to make adjustments as needed.

Sikkim: Tax and Economic Reforms

Sikkim is a small state in the Himalayas with a population of just over 700,000 people. It is one of the poorest states in India, with a per capita income of just over $1,000 per year. In recent years, the state government has been working to improve the economy by implementing a number of tax and economic reforms.

One of the most important reforms has been the introduction of a new VAT system. The VAT system is a value-added tax, which means that businesses are only taxed on the value that they add to goods and services. This system is more efficient than the previous system, which was based on sales tax.

The state government has also been working to improve the investment climate in Sikkim. A number of reforms have been implemented to make it easier for businesses to start and operate in the state. These reforms include simplifying the registration process, reducing the number of taxes and fees, and improving the infrastructure.

The state government has also been working to promote tourism in Sikkim. Sikkim is a beautiful state with a lot to offer tourists. The government has been working to improve the infrastructure for tourism, such as roads, hotels, and restaurants.

The economic reforms in Sikkim have been successful in improving the economy. The state’s GDP has grown at an Average rate of 7% per year in recent years. The Unemployment rate has also declined, and the state’s per capita income has increased.

The economic reforms have also had a positive impact on the lives of the people of Sikkim. The state’s POVERTY rate has declined, and the quality of life has improved. The people of Sikkim are now better educated and healthier than they were in the past.

The economic reforms in Sikkim are a success story. The state government has been able to improve the economy by implementing a number of tax and economic reforms. These reforms have had a positive impact on the lives of the people of Sikkim.

MCQs

Sikkim is a state in:
(A) India
(B) China
(C) Nepal
(D) Bhutan
The population of Sikkim is:
(A) Over 700,000
(B) Over 1 million
(C) Over 2 million
(D) Over 3 million
The per capita income of Sikkim is:
(A) Over $1,000
(B) Over $2,000
(C) Over $3,000
(D) Over $4,000
The state government of Sikkim has been working to improve the economy by implementing a number of:
(A) Tax reforms
(B) Economic reforms
(C) Both tax and economic reforms
(D) Neither tax nor economic reforms
One of the most important reforms has been the introduction of a new:
(A) VAT system
(B) Sales tax system
(C) Income tax system
(D) Property tax system
The VAT system is a:
(A) Value-added tax
(B) Sales tax
(C) Income tax
(D) Property tax
The state government has also been working to improve the investment climate in Sikkim by implementing a number of reforms, such as:
(A) Simplifying the registration process
(B) Reducing the number of taxes and fees
(C) Improving the infrastructure
(D) All of the above
The state government has also been working to promote tourism in Sikkim. Sikkim is a beautiful state with a lot to offer tourists, such as:
(A) Beautiful scenery
(B) Diverse culture
(C) Friendly people
(D) All of the above
The economic reforms in Sikkim have been successful in improving the economy. The state’s GDP has grown at an average rate of:
(A) 5% per year
(B) 6% per year
(C) 7% per year
(D) 8% per year
The unemployment rate in Sikkim has also declined, and the state’s per capita income has increased. The economic reforms have also had a positive impact on the lives of the people of Sikkim, such as:
(A) The state’s poverty rate has declined
(B) The quality of life has improved
(C) The people of Sikkim are now better educated and healthier than they were in the past
(D) All of the above