Mukul Asher, Professor Public Policy Program, National University of Singapore, and Part of a World Bank team to analyse the economy of Orissa, review the Tax system and Pension system of civil servants was in Bhubaneswar from 24th April 2002 to 1st May 2002.
Professor Asher is also in the International Advisory Board of the Centre for Peace and Development Studies (CPDS) and has contributed a number of articles for publication in the web page titled "Global Human Security," "South Asian Commentaries" and "Asia Pacific Security Analysis."

At his behest CPDS arranged and organized a number of meetings and interactions involving persons/ institutions/associations and academics to ascertain possibilities of medium term fiscal reform for the state of Orissa which minimizes adverse impact, and specifically to:

- understand the quality of tax administration.
- whether NGOs can use right to information laws to raise tax awareness in both administration and taxpayers.
- understand the pension Administration System and procedure in Orissa and elicit views on ‘pension reforms for civil servants’ with focus on how to make the pension more affordable by the state given the current state of its financial resources:
- discuss India’s economic opportunities in South East Asia.

Apart from interactions at the personal level, CPDS arranged a meeting with NGOs with City based leading NGO, Centre for Youth and Social Development (CYSD) taking the initiative. The meeting was held in the conference hall of the CYSD on 27th April with Mr. P.K.Sahoo, Chairman of CYSD presiding. There was extensive interactions on the role of NGOs in development administration especially in the context of right to information laws and what role NGOs in Orissa envisage to raise tax awareness in both the administration and the taxpayers. The emphasis has been on inducing transparency, block leakages and improve administration so as to ensure larger tax revenue for the state with out increasing the tax burden.

On 29th April 2002, CPDS arranged an interface between senior academics of Orissa from Utkal University and education department of the Government of Orissa, representatives of the industry from Utkal Chamber of Commerce and Industry, and Professor Asher in the conference hall of Hotel Keshari.

A Report by Tarun Mohanty:

The focus of discussion was on the state of tax administration in Orissa with a view to elicit opinion on various logistical and conceptual issues involved in the system as well as prospects of reforms. The discussion started around the nucleus question put forth by Prof. Asher about the cost of taxation vis-à-vis cost of governance. The almost unanimous response was that the tax revenue generated is being over-run by the cost of governance itself, thus leaving no surplus for any developmental work. Prof. Asher observed that though Orissa can not deviate much from the national consensus, the implementation of Value Added Taxation (VAT) is getting delayed due to certain bottlenecks as:

- State administrative machinery is under-prepared.

- Awareness in the local industry is minimal,

- Faulty accounting pattern.

Prof. Asher made a plea to the Academics to study the Draft VAT Law for Orissa, being implemented by CII and NIPFP and help raising awareness.

There was also a discussion on the viability of a generic rise in taxation and VAT system. With apprehension about the working of VAT and its consequential benefit in raising the GDP, queries were raised about decentralization of tax administration to bring in more transparency vis-à-vis not so perceptible success (in the short run though) of the scheme of Pani Panchayat. Symbolic digressions were also made regarding use of private sector initiatives in running and bearing the cost of maintenance of infrastructure facilities.

Prof. Asher made the contemporary economic thought’s positioning abundantly clear by remarking that rise in revenue is not the ultimate and only objective of a taxation system. On the contrary optimization of the efficiency of the revenue structure can come through better auditing skill both of the administration as well as the trading community. Enhancing the inter-departmental coordination in respect of data monitoring to improve upon the efficiency and promptness of tax administration thus got emphasized.

On the issue of private sector participation in maintenance of infrastructure Prof. Asher has this to say that the economic efficiency is not determined by pattern of ownership. The bottlenecks in terms of lack of proper property rights, lack of competition and lack of maintenance of proper inventory of state’s assts can make the private sector participation ineffective. It therefore devolves upon each one specially the more informed section of the society to generate a preparedness to accept harsh measures in certain aspects of economic reforms as has been the case with almost all developing countries keeping in tune with inescapable global trends.

There was consensus on issues such as one point taxation, simplified disputes redressal mechanism, the need to avoid clogging of expenditure processes at the end of the financial year and to prevent corruption. There need to avoid competition among states in India in tax collection was emphasized since it runs the risk of leading to national loss.

A focus group type discussion with State government pensioners represented by members of the Orissa Retired Government Employees Association, was arranged on 30th April in Hotel Kehari. The meeting was an occasion to understand the present pension delivery system, its efficiency as well as efficacy and to know the sustainability of the scheme given the poor growth rate and poor health of state finances.

All the events were coordinated by Arabinda Acharya, U.K.Pati and Tarun K. Mohanty of CPDS.