PANAJI
Stating that the long-term financial viability of the local bodies in Goa has been a persistent issue, the Third State Finance Commission (SFC) observed that the introduction of Goods and Services Tax (GST) in 2017 impacted the revenue of local bodies to a great extent.
The Commission, whose recommendations were accepted by the State Cabinet on Monday, has proposed an additional budget provision of Rs 50 crore per year to the local bodies with an annual increment of ten per cent annually to compensate the local bodies for revenue forgone due to the implementation of GST.
“With the introduction of GST in the year 2017, many of the sources of revenue of local bodies like octroi, taxes on entertainment, taxes on advertisement are now subsumed in the GST. As a result, even the bigger municipal authorities like Margao and Mormugao are facing problems in meeting their primary expenditure responsibilities. The disbursement of salaries and wages in municipal authorities is periodically delayed,” the Commission noted.
The Commission has recommended that additional budget provision with an annual rise should be from the fiscal year 2024-25 to 2028-29.
The Commission said that even though the transfer of funds to the local bodies from the Central Finance Commission and SFC has generally increased over time, the own revenue sources (ORS), which constitute approximately 30 per cent of the expenditure, have remained stagnant.
“The available sources of revenue to the local bodies are limited and the full potential of the collection, reassessment, and annual revision of the property tax has not been tapped by the local bodies,” the Commission said, while recommending the introduction of a professional tax, the limit of which is Rs 2,500 imposed as per Article 276 of the Constitution.
The Commission pointed out that at present 21 states are collecting professional tax, which is one of the important sources of revenue for the local bodies.
SFC observed that the full potential of collecting own revenue has not been tapped by the local bodies and hence outstanding revenues are accumulated in most of the cases.
The Commission has also recommended a climate change fund of Rs 10 crore per year to the weaker panchayats and Group C municipal authorities to take up pre-monsoon and post-monsoon works.
The SFC has urged the State government to monitor the finalization of the accounts of the local bodies and the same needs to be audited regularly and placed before the gram sabha.
