Tripura’s strong natural rubber production offers scope for new revenue measures, a Sixteenth Finance Commission-funded research report says, suggesting the TTAADC could explore an appropriate tax on rubber-related activities while protecting growers and supporting fiscal sustainability and public development.
Tripura’s position as one of India’s leading natural rubber-producing states could provide an opportunity to explore new and sustainable measures for strengthening the state’s revenue base, according to a research report on the finances of Tripura funded by the Sixteenth Finance Commission, Government of India.
The report, titled “Evaluation of Finances of State of Tripura,” highlights the growing economic significance of the rubber sector and suggests that revenue mobilisation from rubber-related activities could be considered as part of efforts to improve the financial capacity of the state and autonomous institutions.
According to the report, Tripura is the second-largest producer of natural rubber in India after Kerala. Citing the Economic Review, 2023–24, the study states that the state produces around 1,10,717 metric tonnes of rubber annually, accounting for approximately 9 per cent of India’s total natural rubber production.
A considerable portion of rubber cultivation in Tripura is located within the jurisdiction of the Tripura Tribal Areas Autonomous District Council (TTAADC). In view of the sector’s significant presence in the autonomous areas, the report suggests that the TTAADC administration could examine the possibility of introducing an appropriate tax on rubber-related activities as one potential measure to enhance its revenue.
The recommendation comes amid the growing importance of strengthening own-source revenue for improving the financial position of state and autonomous institutions. A suitable revenue mechanism connected with the rubber sector could potentially provide additional resources for infrastructure development and public services in areas where rubber cultivation is concentrated.
At the same time, the report’s suggestion raises the need for a balanced approach that takes into account the interests of rubber growers. Any proposed taxation mechanism would need to consider the financial capacity of small and marginal producers, who could be affected by additional costs.
Consultations with rubber growers, producers and other stakeholders could therefore play an important role before any such measure is introduced. A transparent and proportionate system could help ensure that revenue mobilisation does not unnecessarily increase the burden on cultivators while allowing local institutions to benefit from the economic activity generated by the sector.
The study also underlines the broader economic importance of rubber production in Tripura. With an established production base and a substantial contribution to national rubber output, the sector represents an important component of the state’s rural economy. Improving the mobilisation of resources from productive economic activities, alongside sound financial management, could contribute to greater fiscal sustainability.
The report was conducted under the Sixteenth Finance Commission and funded by the Sixteenth Finance Commission, Government of India. The research team was headed by Prof. Subhrabaran Das, Professor and Head of the Department of Economics at Tripura University, as Principal Investigator.
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Kiran Bhowmik, Research Scholar in the Department of Economics, Tripura University, served as Research Associate, while Srijan Debnath, M.Sc. in Economics, Tripura University, worked as Research Assistant. Sekharan Das, Samar Das and Alimipya Das, Research Scholars in the Department of Economics, Tripura University, served as Supporting Research Assistants.
The report’s recommendation places Tripura’s natural rubber sector within the wider discussion on improving revenue mobilisation and strengthening the financial sustainability of state and autonomous institutions.
