The Economic and Institutional Constraints of own source revenue of few Gram Panchayats in Howrah District of West Bengal in India

Abstract

Own source revenue of Panchayats is the resultant of tax revenue and non-tax revenue. Various issues relating to participation of people in own resource mobilization of Gram Panchayats were discussed at the disaggregate level involving 300 sample households randomly selected from 6 sample villages of 3 Gram Panchayats of Bagnan1 block of Howrah district. The amounts of tax paid were low and largely varied across the sample households. The low amount paid in the form of tax on land and buildings is, according to the sample households, mainly due to the lack of proper assessment on the value of land and buildings, irregularity in collection of tax by the Panchayats and lack of political will of the Panchayat members. Per capita income and percentage of non-farm workers are treated as economic factors and per capita land holding may be treated as institutional factor. There are some institutional constraints on mobilization of tax revenue by the Gram Panchayat (GP). The economic and institutional problems constitute the major constraints of the own resource mobilization of Panchayats of Howrah district of West Bengal. The estimated tax per household as per Panchayat Rules was several times higher than actual amount realized at the Gram Panchayat level. The relatively low performance of GPs in tax revenue mobilization is attributed to their unwillingness in optimally applying the tax instrument for fear of unpopularity at the Panchayat level. Besides, in the absence of any post of tax assessor Gram Panchayat find it difficult to assess the present value of land and buildings on which the tax amount has to be scientifically assessed.