Mumbai: The state government has set up a Maharashtra Sustainable Public Finance Committee to recommend measures for sustainable augmentation of the state’s own tax and non-tax revenues and for the consolidation of its fiscal position to support the “Viksit Maharashtra @ 2047” vision.The high-powered committee will be headed by economist and former Union finance secretary Vijay Kelkar and includes Karthik Muralidharan, Tata Chancellor’s professor of economics, University of California San Diego; T Rabi Sankar, former deputy governor of RBI; Ashima Goyal, president of The Indian Econometric Society; and Nitin Kareer, former chief secretary.The Pune International Centre will provide the secretariat to the committee, which will submit its recommendations within six months. State government will spend close to Rs 70 lakh on the committee.The committee will study the buoyancy and stability of the state’s tax revenues including the various components of tax revenues covering among others GST and VAT on petroleum and liquor – and recommend measures to improve tax collection through the linking of various tax and administrative databases and the use of analytics and risk-based enforcement; and, in particular, to recommend ways of enhancing revenue from alcohol for human consumption through changes in the regulation and taxation of potable alcohol, keeping in mind to public health and enforcement considerations.“It will identify new and under-tapped non-tax revenue sources and to make specific suggestions for their enhancement, including among others dividends and other returns from state public sector undertakings, royalties and dead rent from major and minor minerals, public- private partnerships and user charges; and to recommend a framework for the periodic review of user charges, royalties, and fees against the cost of the services and assets to which they relate. It will examine financial liquidity management within the state’s public financial management system and to suggest ways of improving its efficiency, and to advise on increasing the allocative and quality of government expenditure, including through outcome budgeting, particularly in the infrastructure and social sectors,” a Government Resolution (GR) issued last week said.The committee will also suggest organisational and institutional reforms to improve efficiency and transparency, including a permanent capacity within the finance department for revenue forecasting, tax expenditure analysis and revenue research; to examine the own revenues of urban and rural local bodies and development authorities, including property tax, development charges and land value capture, to the extent that these bear upon the state’s fiscal transfers and contingent liabilities.“The delivery of the vision requires a sustained increase in public investment in infrastructure, human capital, water security, urban systems and the energy transition, over and above the state’s growing commitments on salaries, pensions, interest and social welfare. The state has consistently observed the targets prescribed under the Maharashtra Fiscal Responsibility and Budgetary Management Act, 2005 and intends to continue to do so. Within that discipline, the fiscal space available for development is determined principally by the strength of the state’s own revenue effort and by the efficiency with which its expenditure is allocated and executed,” the GR stated.
