Taxation in Nagaland

Paper 2 - Polity and Governance


Why in news?
  • The Dimapur Chamber of Commerce and Industry (DCCI), said “unabated taxation” by the government as well as the “Naga political groups (NPGs)” – a euphemism for armed extremist groups – had made many traders shift base to Assam.


The current taxation provisions in Nagaland?
  • Presently Nagaland is going through a paradoxical contradictory developmental phase, both in social and economic aspects.
  • For its development Nagaland receives a lot of central aids. Still, it is underdeveloped both in terms of social and physical infrastructure because projects are majorly incomplete because of inflation resulted due to taxation.
  • Nagaland is the state where the multi-government rule and their taxation is acknowledged.
  • There are many governments and organisations governing and collecting taxes from the people in the state.
  • The government that exists can be divided into two broad groups,
  • State Government and Non-state Government (Under Grounds).
  • State government is the one which governs the people under Indian constitution whereas the Non-state Government (Under Ground) is the one which governs the people based on their ideologies.
  • Various Non-governmental Organisations are also there who collect taxes from the people based on their own laws.


Types of Taxation
  • The state government in Nagaland has the right to levy any tax on the state to developmental activities in the state.
  • The state government collects professional tax, income tax, house tax, sales tax, excise tax etc per the constitution of India.
  • The other non-state governments (Under Grounds) also collect tax from the people on the pretext of working for the cause of Naga people. These governments collect income tax, house tax, sales tax, excise tax and yearly vehicle tax for commercial vehicles plying in the state.
  • Apart from aforementioned taxes, there are many other taxes that are imposed by the state government and non-state government machineries and also by the Non-governmental organizations (NGO’s).
  • Various taxes are collected from each and very shops by the non-state governments and organisations who are supposed pressure groups responsible for safeguarding the interest of the society.
  • There are many random collections and donations by very many organisations all over the state apart from the publicly shown taxation.


How taxation is forcing businesses out of Nagaland?
  • The traders have been forced to exit Nagaland because they have been paying 50-75% of their profit margin to the NPGs since long.
  • Due to this Assam has gained the business but the business volume of Nagaland has shrunk by 60-75%, therefore the business scenario in Nagaland has hit its lowest ebb because of being taxed heavily. Traders in Nagaland get the same profit margin as their counterparts elsewhere in the country, they still have to shell out 50-75% of their profit margin in “taxes” to the NPGs on average.
  • Also, the number of monthly train wagons arriving at Dimapur railway station has come down to a “miserable” 20 from 120 a year ago.
  • The number of trucks entering Nagaland has reduced drastically.


The Impact of Taxation
  1. The excessive taxation by various governments and organisations causes hyperinflation in the state which may lead to a situation in which  a good that cost Rupees 2 in Assam may cost Rupees 10 in Nagaland.
  2. Welfare of the people is decreasing because of the rising prices as the burden of indirect taxes always shifts to the final consumers.
  3. Projects are never completed in the state because of the ever rising cost of the projects.
  4. Investors do not want to invest in the state because of various taxation and extortion by multiple non-state governments and organisations which is the very reason why there is negligible inflow of FDI in the state.
  5. The good laden trucks are now not entering Nagaland gate for fear of being taxed which  results in the truckers pushing the transportation cost further with the untimely delivery of goods.
  6. A contractors getting a contract work has to give certain percentage to the bureaucrats and office workers in order to expedite his/her payment to be made and to non-state government as tax. Thus in the end, the work done does not usually crosses 20% of the allotted money. Hence, the corruption rates are high.


Alarming situation
  • If the State government and the NPGs do not take immediate corrective steps, business in Nagaland is heading towards a point of no return.
  • For eg, Manipur bound businesses that shifted to Silchar in southern Assam over the last few years.
  • These businesses depended on goods and services to and from Manipur via the highway linking Dimapur and Manipur capital Imphal.
  • These businesses are now focussed on the alternative highway to Imphal via Jiribam bordering southern Assam.
  • Consequently, the chain support business such as hotels, transport and wayside dhabas in Nagaland have been hit hard.


Few suggestions for the state government and non-state governments to act upon-
  1. The state government should make a law so that no security personnel in the gate other than those in charged for a particular purpose must be entertained  to collect the tax from any person or vehicles plying in the state.
  2. Any security personnel caught in this kind of illegal taxation should be terminated from his/ her services with the imprisonment for a period not less than 5 years.
  3. The state government should also amend a law that bars the organisations from collecting taxes from the shops or anywhere. If  any organisation is found in indulging in this activity should be de-recognised immediately and forever.
  4. The non-state government may adopt one time tax system to bring down prices to a certain level. In this system the shops and vehicles that have paid yearly tax should not be taxed over and over again.
  5. All the non-state government taxing on their own must form an economic committee which is a representative of all the groups. This committee should be held responsible with the work of collecting taxes (only one tax) from the gate and elsewhere and the distribution of revenue to all non-state governments. When, the revenue is distributed equally to all non-state governments, the burden of taxation will be reduced and will also reduce factional feud in the state.
  6. Non-state governments must be held accountable for the money they are being taxed. Thus, causing transparency in their activities.

Mining in Aravalis

Paper 3- Environment and Ecology

Why in News?

Haryana government has appealed to the honourable Supreme Court to allow it to resume Mining in the Aravali hills stating that the state’s economic activity has halted due to pandemic but the environmentalists and the residents are strongly opposing the mining being legalised.

  • In August 2020, due to the illegal flattening of Aravalli hills to build a road to farmhouses in Bandhwari near Gurgaon-Faridabad road in Haryana.  The Supreme Court of India ordered the Haryana authorities to stop road construction in the ecologically sensitive zone of Aravalli hills.
  • Residents have been demanding that no mining and real estate be allowed in the Aravalis.


Current Picture
  • As many as 58 mines out of the total 119 have been allocated in Arvalis.
  • More than 26,000 cases of illegal mining, including 1,358 till September 2020 for the current financial year, have been reported.
  • Besides, the collection from mining for 2020-21, till January 2021, is 770.00 crore – the highest since 2005-06.


About Arvalis-

  • The Aravalis, with their natural cracks and fissures, have the potential to put two million litres of water per hectare in the ground every year.
  • Besides, the mountain range is a biodiversity hotspot with 400 odd species of native trees, shrubs and herbs; 200odd native and migratory bird species; 100odd butterfly species; 20odd reptile species and 20odd mammal species, including leopards.


What if mining resumes in Aravalis?
  • Restarting mining in the Aravallis, one of the oldest fold mountain ranges, will have massive environmental implications for groundwater recharge, biodiversity and wildlife.
  • destruction of the Aravalis would worsen the air pollution situation in the NCR and the mountain range is the only natural barrier against desertification.
  • This is a controversial move that could threaten one of the oldest mountain ranges in the country and have significant environmental impact, in terms of groundwater recharge and biodiversity.
  • The appeal, by Haryana government claims that there is large-scale unemployment in Haryana due to the Covid-19 pandemic which can be addressed by opening up mining.


Legal Points
  • In 2009 the honourable Supreme Court imposed a blanket ban on all mining of major and minor minerals in the eco-sensitive Aravalli hills in Faridabad, Gurugram and Mewat.
  • The order suspended all mining activities in the region till statutory provisions for restoration and reclamation were complied with, particularly in cases where pits or quarries had been abandoned.
  • In 2009, the Supreme Court, in principle, agreed to allow mining on 600 hectares of land across Faridabad subject to finalising of a rehabilitation plan.


Current Challenges related to the mining and environment?

a. New Artificial Lakes:Current Challenges related to the mining and environment?

  • According to Down-To-Earth (May 22, 2013), new lakes have been formed in the Aravali ranges due to the deep depressions left because of the mining.


b. Groundwater contamination:

  • The mining done in this particular area was for the Red Badarpur sand (Red Silica) which is used for glass making, abrasives, and sand traps at golf courses.
  • The result of deep mining these “lakes’ also interfere with the groundwater.
  • Digging to that depth always impacts surrounding areas. It interferes with the flow of groundwater, which in this area flows towards the plains and mountains.


c. Lake drying:

  • It is also highly likely that the drying up of the Badkhal lake, situated south-east of Aravalli, is a consequence of this disturbed flow regime and puncturing of aquifers.
  • It seems the most plausible explanation because the lake would not be dry since there has been adequate rainfall in the past few years.
  • Surajkund Lake is another well-known water body that has dried up because of mining activities.


d. Air Pollution:

  • Another effect of mining is that due to crushing and mining of stones the air pollution is very high around these areas.
  • The main air pollutants in the mining areas is particulate matter especially Respirable Particulate Matter (RPM). However, SO2 and NOx also exist due to vehicular emissions; DG sets exhaust, domestic use of fuels etc. High level of suspended particulate matter is attributed to increase in respiratory diseases such as chronic bronchitis and asthma cases .
  • Methyl Mercury is a toxic compound which is released into the atmosphere when mining is done.
  • This affects both the wildlife and the people who consume freshwater in these areas. Moreover there is loss of vegetation and groundwater contamination.


e. Noise Pollution:

  • The main sources of noise pollution are blasting, movement of Heavy Earth Moving Machineries (HEMMs), drilling and mineral processing plant.


f. Wildlife Destruction:

  • Aravali hills sustain wildlife.
  • There are almost 20 different wild life sanctuaries in the Aravali hill range such as Ranthambhore, Sariska, Jamwa Ramgarh, Sawai Mansingh, Ramgarh Bishdhari, Mount Abu, Kumbhalgarh, Asola Bhatti and Sajjangarh. Thus, mining is destroying the homes of the various wildlife of this area.
  • The restoration work carried out by the forest department is damaging Aravali hill range as well.
  • When the forest department, funded by the Japanese government for afforestation of Aravali, planted a Mexican species called Prosopisjuliflora, they ended up killing many native species. At that time, the threat posed by juliflora was not known and it led to some irreversible damage.


g. Conversion into waste dumping site:

  • 50% of the mineral extracted is waste, thus vast area is dumping sites. There are artificial hillocks of solid marble waste. This solid waste composes of hazardous components.


h. Environment vs. Economics:

  • On top of all these problems, the lack of willingness of the local people isn’t helping to solve the problem at all. The villagers have in fact invested in the mining and are happy with the returns.


Suggestive measures-
  • The mining operations must be scientific and planned with environmental considerations.
  • A properly monitored Environmental Management Plan must be followed.
  • The biodiversity should be supported and conserved; for which the Government and the local people should involve heartily and work in sync.
  • Mining should not be allowed at all, if practices involved are unsustainable.
  • This can aid in keeping a safe and clean environment which can be provided to our future generations like we received from our ancestors.
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