The revenue system of Uttar Pradesh faces several major challenges:

1. Tax Evasion: Widespread tax evasion and a large informal economy hinder accurate revenue collection and reduce the state’s fiscal resources.
2. Administrative Inefficiencies: Outdated procedures and lack of coordination among revenue departments lead to delays and inefficiencies in tax collection and land administration.
3. Land Records Management: Inaccurate and outdated land records create disputes and complications in property transactions, affecting revenue generation from land-related taxes.
4. Corruption: Corruption and bureaucratic red tape impact revenue collection efficiency and discourage compliance among taxpayers.
5. Dependency on Central Transfers: Heavy reliance on central government transfers and grants limits the state’s financial autonomy and capacity to address local needs independently.

Addressing these challenges requires reforms in tax administration, land records management, and greater transparency and efficiency in revenue collection processes.