Investigative study urges TTAADC to introduce liquor, rubber, and wealth taxes while expanding PPP partnerships to strengthen financial stability, boost infrastructure funding, and secure long-term fiscal sustainability in Sixth Schedule areas of Tripura.
An investigative study conducted to evaluate the financial health of Tripura and other autonomous bodies functioning in the state has recommended the Tripura Tribal Areas Autonomous District Council (TTAADC) to explore avenues to generate its own revenue sources through the introduction of taxes and partnerships with private parties for capital projects.
The study specifically recommended the administration in the Sixth Schedule areas to impose taxes on locally made country liquor, rubber grown under its jurisdiction, and the introduction of a wealth tax for landholdings.
The study, titled “Evaluation of Finances of State of Tripura”, authored by Professor Subhrabaran Das of the Department of Economics, Tripura University, recognised practices that are prevalent in other northeastern states to justify its recommendations.
“In the TTAADC area, the authority can think about the imposition of tax on the production and consumption of country liquor viz Langi (Chuwak) and Gora. Tripura has a tradition of producing these alcoholic beverages, which are often brewed using traditional methods with locally available ingredients, including rice, herbs, and wild plants. The legalization and taxation of country liquor, similar to other northeastern states like Meghalaya and Mizoram, could help to increase the revenue of the TTAADC area,” the recommendation pointers read.
The findings of the study state that about 9 percent of the country’s total rubber production takes place in Tripura. “A significant portion of rubber cultivation in Tripura falls under the jurisdiction of the Tripura Tribal Areas Autonomous District Council (TTAADC). The TTAADC administration should consider the introduction of a tax to enhance the revenue of the state,” it added.
On the wealth tax, its recommendation reads: “In Tripura, tribal land rights have been protected by the Constitution and various laws, including the Tripura Land Revenue and Land Reforms Act, 1960, and the Forest Rights Act, 2006. The Tripura Tribal Areas Autonomous District Council (TTAADC) has played a crucial role in ensuring these rights and has prevented the alienation of land from tribal to non-tribal individuals. The Act has not confirmed the legal right to sell land; however, the apex authority is empowered to impose ownership rights for tribal people, so that wealth tax can be imposed on the said land. TTAADC also can generate revenue from the sale or purchase of land through the land revenue system.”
The study also suggested that local Village Councils should diversify revenue sources through improved taxation and fees, supported by capacity building. It noted that declining Central Finance Commission grants call for stable financial support and efficient resource use. Greater focus on capital expenditure and infrastructure projects is essential for sustainable growth.
For financial stability, the report recommended the TTAADC administration to chalk out a long-term financial strategy that makes use of government subsidies and PPPs to improve financial stability.
“Optimizing capital receipts, ensuring effective use of grants, and exploring additional funding sources (like PPPs) for capital projects will help meet future infrastructure demands. With fluctuating state and central grants, a more predictable funding model or alternative funding sources could provide greater financial stability,” the report added.
Meanwhile, the report provided a detailed overview of the funding patterns of the Sixth Schedule areas and recommended allocations for subsequent fiscal years so that the financial health of the TTAADC could be improved substantially.
The recommended allocations have been essentially divided into two distinct categories. In the first category of revenue grants, the report recommended an allocation of Rs 5,745 crore in five instalments for the subsequent financial years till 2030–31. It starts with Rs 700 crore in 2026–27, Rs 875 crore in 2027–28, Rs 1,094 crore in 2028–29, Rs 1,367 crore in 2029–30 and Rs 1,709 crore in 2030–31.
These funds shall be utilised for salary, promotion, retirement benefits and administrative costs, among others.
The second category is the Capital Assistance Grant. It has proposed Rs 10,661 crore for the same period in five instalments in successive fiscal years. For the fiscal year 2026–27, it recommended Rs 1,746 crore, Rs 1,921 crore for 2027–28, Rs 2,113 crore for 2028–29, Rs 2,324 crore for 2029–30 and Rs 2,557 crore in 2030–31.
These funds are suggested to be primarily utilised for infrastructure development, including building roads, bridges, drinking water facilities, hospitals, schools and irrigation facilities.
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The report, “Evaluation of Finances of the State of Tripura”, has been submitted to the Finance Commission of India by Tripura University. Professor Subhrabaran Das of the Department of Economics, Tripura University, acted as the principal investigator of the report, while Kiran Bhowmik, research scholar, Department of Economics, worked as a research associate. Sujan Debnath played the role of research assistant.
(Courtesy: Tripura Times)
