West Bengal's politicians have starved their state of revenue, and thus crippled its ability to serve its citizens, writes Devesh Kapur
Very high tax rates can make states turn from extractive to rapacious, and in the process killing the goose that lays the golden egg.
There is, however, little doubt that in the absence of some equivalent of manna from heaven, a strong tax base is a sine qua non for a developmental state.
While the Indian Left has focused primarily on state expenditures -- their level and distribution -- lamenting the multiple evils of the 'neoliberal' monster, it has been uncharacteristically silent on the revenue side of public finance.
In no state is this more evident than in West Bengal, where the three-plus decades of Left front rule have been followed by a regime whose belief-system on revenues is hardly different.
The most recent report of the Reserve Bank of India on state finances released last week is revealing in this regard.
Unsurprisingly, when it comes to non-tax revenues, which are user charges on public services provided by the state, during the period 2004-08 West Bengal had the lowest share of revenue to gross state domestic product, and only Bihar was marginally lower in the most recent year, 2011-12.
More interestingly, West Bengal's share in central transfers has been no different from the all-India average across the 17 non-special category states and, indeed, in the most recent period, it is even marginally higher (5.7 per cent of GSDP, compared to the all-India average of 5.6 per cent).
For decades, the Left in Bengal kept up the drumbeat against discrimination by the Centre.
While that had undoubtedly been true in earlier decades, this has been much less the case after the onset of economic reforms.
But the most revealing data concern the ratio of own tax revenue to GSDP; in West Bengal it was just 4.5 per cent between 2004 and 2008 -- which placed the state among the bottom three states, with only Bihar (4.2 per cent) and Jharkhand (4.4 per cent) marginally lower.
By 2011-12, Bihar's own tax revenue to state domestic product had risen to 5.3 per cent and Jharkhand's to 5.7 per cent.
West Bengal's tax revenues, like its ruling politicians' beliefs,
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