Envisioning tax policy for accelerated development in India

Rao, M. Govinda; Kumar, Sudhanshu

doi:10.18356/280b6621-en

Cited by 8 publications

(9 citation statements)

References 9 publications

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“…More importantly, the impetus to direct tax reforms in India came with the recommendations of the Task Force on Direct & Indirect Taxes under the chairmanship of Vijay Kelkar (the Kelkar Task Forces) in 2002. The main recommendations of this task force was to increase the income tax exemption limit, rationalization of exemptions, abolition of long-term capital gains tax, abolition of wealth tax and some others (see Rao and Kumar, 2017). The break period of 2002-2015 makes sense; thus, it can be considered in our analysis, while 1996 was not a major happening year especially from point of view of taxation.…”

Section: Results Of Stability Testmentioning

confidence: 99%

Estimating the size of the black economy: new evidence from India

Sharma

2019

IJOEM

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Purpose The issue of black economy has long been debated in India and it has been one of the key targets of policy action from last four decades. The debate is further fueled by demonetization of higher currency notes in the country. In this context, the purpose of this paper is to estimate the size of black economy in India for the period 1970–2017. Design/methodology/approach A currency demand approach is adopted for this purpose. The test of structure break indicates for a break in the system; therefore, the authors employ Johansen et al. (2000) cointegration test. For estimating the empirical model, the authors utilize fully modified ordinary least squares in a cointegration framework for taking care the endogeneity problem. Findings The estimates indicate that the Indian economy has a sizable black economy. In early 1970s, when the tax rate in India was significantly higher, the estimated black economy was above 30 percent of the official GDP. A variety of economic reforms including taxation, regulation and industrial licensing have drastically reduced the size to below 15 percent of official GDP in the last two decades. In the last estimated year (2017), the black economy was 23,849bn Indian rupees at current market price (around $400bn), which was 14 percent of the official GDP. Practical implications On the basis of the findings, the authors suggest some important fiscal, administrative and regulatory reforms to curb the generation of black economy in India. Originality/value The structural breaks can induce stochastic behavior similar to an integrated process, which makes it difficult to differentiate between the lack of cointegration and a structural shift. Thus, in the present study, the authors attempt to address this issue by incorporating the issue of structural break in the analysis. Furthermore, India is a cash-based economy; therefore, it is likely that currency-based models are more suitable. The application of advanced time-series techniques is likely to yield better and robust results.

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Section: Results Of Stability Testmentioning

confidence: 99%

Estimating the size of the black economy: new evidence from India

Sharma

2019

IJOEM

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“…It has been widely acknowledged that a good tax system has three components, namely, tax determination, computation and payment where for the first and second components information and knowledge have been required, respectively (Shome, 2019). The MoF's objective of increasing the lower tax-to-GDP ratio notwithstanding is impressive but, the strategies should be widening the tax base by estimating the proportion of the population who liable to pay tax, incorporating the "missing middle," formalizing the business and enhancing the lower household incomes rather serving notices to the non-filers (Rao and Kumar, 2017;Singh and Bagchi, 2017;Krishnan, 2018). Global experience has also documented that for minimizing the tax evasion and tax litigations countries should work toward developing administrative capacity especially concerning the tax calculation, collection and payment of tax obligations in a transparent manner (Sorel, 2003;Vasile and Croitoru, 2015).…”

Section: The Way Forwardmentioning

confidence: 99%

Limning India’s tax terrorism saga

Deb

2021

XJM

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Purpose This study aims to explain the Indian taxpayers’ harassment saga in the name of revenue collections by the taxmen. Design/methodology/approach The study gas adopted descriptive viewpoints supported by empirical evidence. Findings Pursuant to the recent amendments in the Act, a good number of Sections such as 132(1), 132(1 A) and 153 A have empowered the tax officials to conduct raids without explaining the reasons, call for papers for reopening assessments of cases of a decade old and has increased the quantum of penalty for the default period substantially. Originality/value The paper is an original one and free from plagiarism.

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“…The presence of fragmented Constitutional assignment of taxation power, tax avoidance by multinational companies (e.g., base erosion and profit shifting), the inefficiency of the tax administration, and complications in the tax laws give rise to tax avoidance and tax evasions (Rao, 2017b). Several studies explore issues related to broadening of tax base, tax compliance, tax capacity and tax efforts in India (e.g., Mukherjee, 2019b;Rao & Kumar, 2017;Tax Research Cell, 2015). Perhaps the presence of high unaccounted income and wealth and informal activities are eroding the tax base in India (NIPFP, 2013).…”

Section: Revenue Side Of the Budgetmentioning

confidence: 99%

Public Financing of Human Development in India: A Review

Mukherjee

Badola

2021

Indian Journal of Human Development

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Role of public financing of human development (HD) is inevitable, especially for developing countries like India where access to resources and economic opportunities are not equitably distributed among people. Governments aim to achieve equity in distribution of resources through allocative and redistributive policies whereas macroeconomic stabilisation policies aim to achieve higher economic growth and stability in the price level. Expenditure policies of the governments envisage in delivering larger public goods and services to enable people to take part in economic activities by investing in human capital and infrastructure developments. Progressivity of the tax system helps in achieving equity by redistribution of resources among people. Being merit goods, expenditures on education, health, and poverty eradication make it a case for public investment which empowers people to improve human capital. The benefit of universal economic participation is expected to contribute in larger mobilisation of public resources over time. Lack of economic opportunities and earning a respectable income may increase dependence on public transfers which may reduce fiscal space of the governments to finance programmes to promote overall economic growth. The objective of this article is to review existing studies on public financing of HD in India and highlight emerging challenges.

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Envisioning tax policy for accelerated development in India

Cited by 8 publications

References 9 publications

Estimating the size of the black economy: new evidence from India

Estimating the size of the black economy: new evidence from India

Limning India’s tax terrorism saga

Public Financing of Human Development in India: A Review

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