A Press Meeting is held at Nehru Institute of Youth Affairs, Where CA Raja Narayan Tripathy, Convenor of Odisha Development Council addressed the Press on the need to demand before Hon’ble Prime Minister & Niti Ayog to make Fiscal Policy more inclusive by rationalizing tax incentives (both direct & indirect) through quota to different states like the allocation of Central Tax Revenue to different States through Gadgil-Mukherjee Formula, so as to Promote Balance Regional Growth and consequently to develop Odisha Like states very fast.
Tax Benefits or incentives are given by Government in the form of exemption, deduction or Credit and is meant to attract the investors or Business community to invest more.
Companies take advantage of various concessions to reduce tax liabilities like Income Tax, Central Excise, Customs & Service tax
Both State as well as Central Govt do such types of tax forgone to attract investors community.
In the past, Govt. Of India has forgone tax amounting to Rs. 50 Lakh Crores to various Corporate in different sectors since the year 2005-06.
Though such tax forgone has encouraged many industries to prosper & grow but the way in which such exercises are being made are largely benefitted by few states.
For Example, Karnataka, Tamilnadu, Maharashtra, Telengana & NCR region has more than 90% of Software Turnover of India & accordingly 90% of tax benefits are enjoyed by these states. There is no State wise quota.
Through Software Technology Park of India (STPI), Hardware Technology Park of India (HTPI), Special Economic Zone (SEZ), National Industrial Corridor etc, few states took the major advantages of Tax benefits. Hence, the growth story of India is very much non-inclusive state wise.
For Example, if we will take major Information Technology companies in India, they invest more in few state & thereby the Information Technology industry in Odisha has not grown substantially and also faced slow progress in committed investment.
To make it further clear, Software Revenue of India has crossed the revenue of Rs. 10 lakh Crores (147 Billion Dollar) in the year 2016 of which more than Rs. 6.5 lakh Crore (99 Billion Dollar) consists of export Revenue and 3.5 Lakh Crore domestic Revenue (48 Billion Dollar).
In 2015-16, Direct Employment given by Information Technology Industry is 37 Lakhs & Indirect Employment is more than 1 Crore.
But however, during 2015-16, Odisha’s software export has crossed just Rs. 3000 Cores.
It happens because, a company if it invests its entire amount in a particular state, it can get the full tax benefit irrespective the magnitude of investment.
The same story is there in almost every sector.
Odisha Development Council demands before Hon’ble Prime Minister & Niti Ayog to make Fiscal Policy more inclusive by rationalizing tax incentives (both direct & indirect) through quota to different states like the allocation of Central Tax Revenue to different States through Gadgil-Mukherjee Formula, so as to Promote Balance Regional Growth and consequently to develop Odisha Like states very fast.
“We demand to recast the Tax revenue forgone state wise through a retrospective calculation since the year 2005-06 to arrive the state-wise tax benefit availed by the Corporate & accordingly the looser states like Odisha should be compensated by state specific tax benefit, concession etc. by Govt. Of India. A State specific quota may be fixed for availing tax concessions & benefits given under Software Technology Park of India (STPI), Hardware Technology Park of India (HTPI), Special Economic Zone (SEZ), National Industries Corridor. Disproportionate tax incentives for corporate inside the Odisha state since 2005-06 be adjusted against the Sales Tax deferment to Indian Oil Corporation (IOC) by suitable mechanism through Govt. Of India.” Tripathy added.
Once the state wise quota is fixed, Corporate has to move from one state to another to enjoy the Tax benefits, thereby the economic concentration in a few state will be discouraged.
For inclusive growth in india, It need to emphasise the change of mind-set of the Government of India which will be encouraged to facilitate the inclusive growth of the Country.
For example, IT entrepreneurs usually invest 90% of their money in the aforesaid five locations. Thereby there is a massive shifting of Knowledge Workers from One State to another state. More than 2 lakh Information Technology Workers from Odisha work in outside the state. Such non-inclusive fiscal policy has also destroyed the joint family concept & forced the educated as well as non-educated mass to concentrate on few locations of the Country.