6.5 Own-Source Revenue ofPRIs,All Tiers

Local Government Organization and Finance: Rural India 217

number ofcases,under the tax rental arrangement,the village panchayats collect taxes and pass them on to the higher level ofpanchayats (Jha 2004).Property tax,cess on land revenue,surcharge on additional stamp duty,tolls,tax on professions,tax on advertisements,nonmotor vehicle tax,octroi,user charges,and the like contribute the maximum to the small kitty ofown-source revenue, which contributes only 6 to 7 percent ofthe total expenditure ofPRIs (tables 6.5, 6.6,and 6.7).In most states,the property tax contributes the maximum revenue. However,this tax remains inelastic because ofinefficient administration in its collection.Its assessment is based on the annual rental value oftaxation and its associated evil:underdeclaration ofrentals.However,some progressive states have reformed the tax structure and use the unit area method in determining the tax base.

After own-source revenues,assigned revenues are the most efficient in the dispensation to PRIs.Such revenues are levied and collected by the state

TABLE 6.5 Own-Source Revenue ofPRIs, All Tiers

Rs million

Annual growth of State 1990/91 2000/01 2002/03 1998–2003 (%)

Andhra Pradesh 627.0 1,516.5 1,708.5 7.6 Assam 30.1 73.2 76.1 2.0 Bihar — 77.1 66.7 4.2 Chhattisgarh — 573.9 578.7 2.0 Goa 10.5 76.5 80.1 2.2 Gujarat 274.5 759.2 698.6 –3.1 Haryana 293.9 701.4 783.6 9.3 Himachal Pradesh 0.2 33.5 53.9 30.2 Karnataka 173.3 668.3 594.6 2.0 Kerala 313.2 2,196.6 2,260.1 3.9 Madhya Pradesh 119.4 1,420.9 1,748.1 8.3 Maharashtra 342.1 3,279.8 4,700.7 18.1 Orissa 59.0 90.6 55.1 –9.6 Punjab 215.6 806.7 987.7 5.7 Rajasthan 242.8 368.9 376.8 3.6 Tamil Nadu 157.2 572.0 654.4 5.2 Tripura 0.1 4.9 6.0 6.8 Uttar Pradesh 227.5 588.3 631.7 7.5 Uttaranchal — 48.7 61.0 4.9 West Bengal 142.3 325.3 312.7 2.8 All (20 states) 3,228.7 14,182.3 16,435.1 8.0

Source: Government ofIndia 2000, 2004d. Note: — = data not available in the given source.