14 Oct 2021  |   05:24am IST

Illegalities draining finances of local bodies

Illegalities draining finances of local bodies

Margao Municipal Council unearthed a shocker during its drive for collection of pending taxes. The council has found that there are at least 150 businesses being run in its jurisdiction without a trade licence and some of these businesses have been in existence for years. The council expects there are many more such illegal businesses, as their recovery team has only surveyed one area and has yet to fan out to other parts of the town. The council, however, has acted quickly to issue these illegal businesses notices of show cause with directions to apply for the trade licence at the earliest or face action. Margao Municipal Council has perhaps acted leniently with these illegal traders, giving them the opportunity to legalise their business and continue to ply their trade. What about the back taxes? But, there is a warning that such illegalities will not be tolerated and the council will not hesitate in sealing the premises.

The illegalities came to light because the Margao civic body has been facing a very tight financial situation leading to a delay in payment of salaries to the staff and hence the drive to recover the taxes in an attempt to fill up the coffers. Had the council not taken on this drive, it may never have unearthed this illegality happening in its jurisdiction. In a way, the shortage of funds that it felt has come to benefit the council. So the Margao civic body faces not just a huge backlog in recovery of taxes but also finds that there are businesses that have never paid the body any tax as they were never registered. 

The issue of a lack of finances, however, is not limited to Margao Municipal Council but all the civic bodies in the State face a similar situation. It is also highly possible, and also very probable, that there are businesses being run in all the municipal bodies without obtaining any of the required licences. If there are such instances in one town, won’t there be in others too? These illegal businesses will come to light only if the local authorities launch a drive to check for documents from the traders in their jurisdictions. Panchayats too will have similar illegal businesses that have gone unnoticed because the local body has not bothered to check the documentation of the establishments. This is a serious issue and requires to be tackled by the local bodies if they desire to earn from the businesses that are run in their jurisdictions.

Finances of the local bodies have to be carefully planned and also handled. The proper functioning of the local body depends on having adequate reserves in the kitty and this can be ensured if the councillors and panchas elected are serious about the welfare of the town or village. Then only will the recoveries of the outstandings fall in line. 

What this episode goes on to indicate is just how perfunctorily local bodies operate in the State. It required a financial crisis to stir the council into activity and discover that it was being cheated in more ways than one. All municipal councils and all village panchayats must now make it a point to wake up to the reality of the situation within their jurisdictions. Rather than complain of lack of revenue and grants from the government, the local bodies could actually be losing revenue due to their own inaction. There is revenue to be earned if only the local governing bodies are on the job to ensure that there are no leakages in the system. This calls for a mapping of all the businesses in the State so as to plug the loopholes that are being exploited by unscrupulous businesses leading to loss of revenue.