Agartala: A study submitted to the Finance Commission of India has suggested that the Tripura Tribal Areas Autonomous District Council (TTAADC) explore new revenue streams, including taxation of traditional country liquor and rubber produced within its jurisdiction.
The report, titled Evaluation of Finances of the State of Tripura, was prepared by Professor Subhrabaran Das of the Department of Economics at Tripura University and submitted to the Sixteenth Finance Commission.
Kiran Bhowmik, a research scholar in the department, served as research associate, while Sujan Debnath assisted as research assistant.
Referring to revenue options in Sixth Schedule areas, the study said the TTAADC “may consider levying a tax on the manufacture and consumption of traditional country liquor such as Langi (Chuwak) and Gora”. These beverages, the report noted, are part of the state’s long-standing brewing practices and are prepared using rice and other locally available ingredients.
“Regularising and taxing country liquor, on the lines of measures adopted in states like Meghalaya and Mizoram, could strengthen the council’s revenue base,” it said.
The study also highlighted that nearly nine per cent of India’s total rubber production takes place in Tripura and that a sizable share of plantations lies within areas administered by the district council. It said the TTAADC “should explore the scope of introducing a levy on rubber cultivation within its jurisdiction to augment its income”.
On the issue of wealth tax, the report referred to constitutional protections and laws such as the Tripura Land Revenue and Land Reforms Act, 1960, and the Forest Rights Act, 2006, which safeguard tribal land ownership.
Although the existing framework does not grant an absolute right to sell land, the report said “the apex authority is empowered to recognise ownership rights for tribal people, creating the possibility of imposing a wealth tax on such holdings”. It added that the council “can also mobilise revenue through the land revenue system in matters relating to sale and purchase of land”.
The study recommended that village councils broaden their income sources by strengthening taxation and fee mechanisms, backed by capacity-building initiatives.
It pointed out that fluctuations and a relative decline in Central Finance Commission transfers underline the need for predictable financial support and more efficient use of available resources. Higher capital expenditure and infrastructure investment, it said, would be essential for sustained growth.
For long-term fiscal stability, the report advised the TTAADC to prepare a comprehensive financial strategy utilising government subsidies and public-private partnerships (PPPs) for capital projects.
“Optimising capital receipts, ensuring effective utilisation of grants and tapping alternative funding avenues such as PPPs will be necessary to meet future infrastructure requirements,” the report said, adding that a more predictable funding framework would provide greater financial certainty amid variable state and central grants.
Reviewing funding trends in Sixth Schedule areas, the study proposed substantial allocations to strengthen the council’s financial health.
Under revenue grants, it recommended a total outlay of Rs 5,745 crore in five instalments up to 2030–31 — 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 are meant to cover salaries, promotions, retirement benefits and administrative expenditure.
Under capital assistance, the study proposed Rs 10,661 crore over the same period, with allocations of Rs 1,746 crore for 2026–27, 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 for 2030–31. The capital grants are intended primarily for infrastructure projects, including roads, bridges, drinking water supply, hospitals, schools and irrigation facilities.
As justification, the report said the socio-economic condition of people living in TTAADC areas is “far below” that of people in other parts of the state.
“More investments are required to develop those areas and the people living therein. The primary objective is to empower the indigenous people of the state to govern themselves and to bring about all-round development of the backward people so as to protect and preserve their culture and also to remove the disparities between the tribal and non-tribal people,” it said.
The study also found that the TTAADC’s major sources of revenue are transfers of funds, followed by ADC plan grants and share of taxes. Some revenue is also generated from excluded area grants and miscellaneous funds.
“During 2022–23, total revenue receipt of TTAADC was Rs 738.28 crore, of which Rs 223.41 crore came from transfers of funds, Rs 198.98 crore from share of taxes, and Rs 168.02 crore from ADC plan grants. It is also observed that TTAADC has received more than Rs 200 crore in transfers every year since 2015–16. From 2020–21, TTAADC has received an excluded area grant of more than Rs 57 crore,” the report said.
On village committees, which function as rural local bodies under the two-tier governance system in the TTAADC, the report noted that they generate less than two per cent of overall receipts and rely largely on grants.
“Less than two per cent of overall receipts are coming from village councils under TTAADC. Until 2022–23, growth was supported by Central and State Finance Commission funds; however, a steeper drop in Central Finance Commission grants resulted in lower revenue and spending in 2023–24. With little investment in infrastructure, operational costs account for the majority of spending. For sustainable development, village councils require greater autonomy and improved financial management,” it added.
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