Case for Improved Agricultural Holding Tax in Bihar

Bihar is the most backward state in India. Bihar’s backwardness in terms of per capita income was the lowest in India. Taxation, being one of the primary means of internal financing, has been looked upon a powerful instrument for mobilizing resources. In the context agricultural taxation in Bihar may be an effective instrument for economic development. Agricultural Holding Tax (AHT) is a viable alternative as far as Bihar is concerned. The RAJ Committee’s recommendations provide a viable alternative to land revenue. Bird has also supported and calls it critical minimum of a brave attempt has been made by Bagchi to simplify AHT and supports AHT and has put forth a refined version of AHT without destroying the basic tenets of AHT.