Raising Additional Resources In The States

In working out a development plan or a stabilization programme, a major question that always arises is—how much tax and non-tax revenues a country, or a state in a federal country like India, can reasonably expect to raise and what sources should be tapped? Different States in India are at different levels of development. Consequently, problems relating to resource mobilisation differ from State to State. It is generally felt that, to a large extent, the financial problems of the States arise from their lack of tax effort, i.e., their failure to mobilise resources from within their own jurisdiction. One may not agree as to what constitutes a high or low tax effort in particular instances, yet the inter-State comparisons might throw some light on the scope of additional resources mobilisation in different States.
In the present venture an attempt has been made to examine the scope of additional resources mobilisation in the States both from tax and non-tax sources. In particular State lotteries as a source of non-tax source and their economic implications have been examined. State lotteries, as a source of revenue have been found to be inequitable. Most of the States have been observed to be making half-hearted tax efforts in so far as the mobilisation of additional resources is concerned.