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Trends and Issues in Tax Policy and Reform in India

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Author Info

  • M. Govinda Rao
  • R. Kavita Rao

    (National Institute of Public Finance and Policy)

Abstract

The Indian tax reform experience can provide useful lessons for many countries due to the largeness of the country with multilevel fiscal framework, uniqueness of the reform experience and difficulties in calibrating reforms due to institutional constraints. This paper details the evolution of the tax system and its reform over the years and analyses its efficiency and equity implications. In section 2, alternative models of tax system reform are presented with a view to identifying the best practice approach followed in tax system reforms. Section 3 analyses the evolution of Indian tax system and the impact of historical and institutional factors in shaping Indian tax policy. The trends in tax revenue are presented in section 4 and these point towards a relative stagnation and deceleration in tax revenues at both central and state levels. Section 5 analyses the reasons for the stagnation in revenues at central and state levels. This is followed by an exploratory discussion on the possible efficiency and equity implications of tax system. The final section presents directions for further reforms.

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Article provided by Global Economy and Development Program, The Brookings Institution in its journal India Policy Forum.

Volume (Year): 2 (2005)
Issue (Month): 1 ()
Pages: 55-122

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Handle: RePEc:bin:indiap:v:2:y:2005:i:2005-1:p:55-122

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Postal: 1775 Massachusetts Ave NW, Washington DC 20036-2188
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Web page: http://www.brookings.edu/global/India-Policy-Forum.aspx
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Related research

Keywords: India; macroeconomics; Reform; Tax Policy;

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References

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Citations

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Cited by:
  1. Singh, Nirvikar & SRINIVASAN, T N, 2006. "Federalism and Economic Development in India: An Assessment," Santa Cruz Department of Economics, Working Paper Series qt2qs4h3t9, Department of Economics, UC Santa Cruz.
  2. M.Govinda Rao & Tapas K. Sen & Pratap R Jena, 2008. "Issues Before the Thirteenth Finance Commission," Working Papers id:1709, eSocialSciences.
  3. Singh, Nirvikar, 2007. "Fiscal Federalism and Decentralization in India∗," Santa Cruz Department of Economics, Working Paper Series qt11b543tk, Department of Economics, UC Santa Cruz.
  4. Rao, M. Govinda, 2005. "Tax system reform in India: Achievements and challenges ahead," Journal of Asian Economics, Elsevier, vol. 16(6), pages 993-1011, December.
  5. Singh, Nirvikar, 2007. "Fiscal Federalism and Decentralization in India," MPRA Paper 1447, University Library of Munich, Germany.
  6. Rajesh Chadha, 2009. "Moving to Goods and Services Tax in India : Impact on India’s Growth and International Trade," Trade Working Papers 23071, East Asian Bureau of Economic Research.
  7. Rakesh Mohan, 2008. "The Role of Fiscal and Monetary Policies in Sustaining Growth with Stability in India," Working Papers id:1778, eSocialSciences.
  8. Nirvikar Singh, 2007. "The dynamics of reform of India’s federal system," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 8(1), pages 22-31, 04.
  9. Singh, Nirvikar, 2007. "The Dynamics of Reform of India’s Federal System," Santa Cruz Department of Economics, Working Paper Series qt9gh5p65t, Department of Economics, UC Santa Cruz.
  10. Chadha, Rajesh, 2009. "Moving to Goods and Services Tax in India: Impact on India’s Growth and International Trade," Working Papers 103, National Council of Applied Economic Research.

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