A Review of Own Tax Revenue Receipts of Manipur State in India

Abstract

Taxation plays a crucial role in meeting a state’s fiscal needs and ensuring economic stability. Tax buoyancy, which reflects the responsiveness of tax revenue to changes in state income, indicates a tax system's efficiency—where a buoyancy greater than 1 signifies tax revenue growing faster than the economy. This paper analyses the buoyancy and composition of Manipur’s Own Tax Revenue (OTR) using time-series data from 2001–02 to 2021–22 with Ordinary Least Squares (OLS) estimates. Findings show that OTR depends heavily on indirect taxes, particularly Taxes on Commodities and Services, while income and property taxes remain underutilized. Most taxes are inelastic (buoyancy < 1), indicating revenue growth lags-behind economic growth, except GST and Taxes on Vehicles which display higher buoyancy. Underperformance is noted in state excise, land revenue, electricity duties, and passenger taxes. In addition, the persistently low OTR–GSDP ratio, together with weak fiscal indicators compared to other states and the all-India average, highlights structural inefficiencies for Manipur state. The study recommends broadening the tax base, diversifying revenue sources, improving compliance, and strengthening administrative efficiency to enhance fiscal autonomy and ensure long-term sustainability.