Regressive and undemocratic

Often governments resort to measures like imposition of cess or collection of user charges from people in a bid to mop up resources to finance public expenditure. Governments are justified in collecting user charges for certain kind of services and from a certain section of people as someone or other should pay for the public expenditure.

Especially so, as public enterprises become white elephants, gobbling up fiscal resources rather than yielding any revenue for the exchequer. But, the devil lies in the detail.

Taxation is normal procedure in any economy for the governments to raise resources. But, in a hyper media environment, governments are often keen on ensuring headlines to flash across the media which read: Tax-free budget.

In a frantic bid to manufacture consent for its fiscal policy, governments hide other forms of revenue mobilisation from public eye. Such a practice is not just regressive but undemocratic too. Even the Comptroller and Auditor General (CAG) reports indict governments for such indirect and unaccountable forms of revenue mobilisation.

Such practices are not transparent and do not have the legislative sanction. No serious legislative scrutiny or public debate precedes imposition of such user charges and cesses. The money so generated is not spent for the purpose for which it is collected. Instead, it goes into the general pool of the government to bridge its fiscal deficit.

But, a serious debate in the legislature and outside is needed to justify enforcement of such charges. The governments by Constitution and law are mandated to provide basic public services to the people, especially those in the lower ranks of social and economic ladder.

People have no say in deciding the quantum and the sectors in which such charges are levied. Toll tax is one such illustration of unprecedented nexus between politicians, bureaucrats and businessmen at the huge cost of the commuters.

At a time when governments often indulge in fiscal profligacy, competitive political populism and indiscriminate tax cuts to the affluent, asking people to pay for the services they are entitled to from governments which they elect is a fraud on democracy.

Good quality of social or economic infrastructure should be paid for either by the users as user charges or by the governments through explicit subsidies.

However, there is no link between the quality of infrastructure and the charges the people shell out. The poor maintenance of highways is a case in point. Thanks to the much trumpeted Swachh Bharat campaign, garbage has not gone, but cess has come. Consumers of petroleum products pay millions of rupees in the form of oil industry development cess, but the impact of it is not accounted for.

The public-private partnership (PPP) is now giving way to public-private people’s partnership (PPPP). The experience is that the PPP often turns out into a euphemism for private appropriation of public resources. Now, the people will be sucked into the web of appropriation through the PPPP.

Democratic governments are empowered by law to collect revenue. But, such a revenue mobilisation strategy should be transparent, accountable and be guided by principles of equity, economic efficiency and fiscal prudence.