IDEAS home Printed from https://ideas.repec.org/p/npf/wpaper/tru1.html
   My bibliography  Save this paper

Trends and issues in tax policy and reform in India

Author

Listed:
  • M. Govinda Rao

    (National Institute of Public Finance and Policy)

  • Rao, R. Kavita

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

Suggested Citation

  • M. Govinda Rao & Rao, R. Kavita, 2005. "Trends and issues in tax policy and reform in India," Working Papers tru1, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:tru1
    Note: Tax Research Unit Working Paper 1, 2005
    as

    Download full text from publisher

    File URL: http://www.nipfp.org.in/working_paper/wp05_nipfp_037.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Emran, M. Shahe & Stiglitz, Joseph E., 2005. "On selective indirect tax reform in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 599-623, April.
    2. Das-Gupta, Arindam, 2004. "VAT versus the turnover tax with non-competitive firms," Working Papers 04/21, National Institute of Public Finance and Policy.
    3. Burgess, Robin & Stern, Nicholas, 1993. "Taxation and Development," Journal of Economic Literature, American Economic Association, vol. 31(2), pages 762-830, June.
    4. Keen, Michael & Ligthart, Jenny E., 2002. "Coordinating tariff reduction and domestic tax reform," Journal of International Economics, Elsevier, vol. 56(2), pages 489-507, March.
    5. repec:ind:nipfwp:08 is not listed on IDEAS
    6. M. Shahe Emran & Joseph E. Stiglitz, 2004. "Price-neutral Tax Reform With an Informal Economy," Public Economics 0407010, University Library of Munich, Germany.
    7. repec:ind:nipfwp:21 is not listed on IDEAS
    8. Engel, Eduardo M. R. A. & Galetovic, Alexander & Raddatz, Claudio E., 1999. "Taxes and income distribution in Chile: some unpleasant redistributive arithmetic," Journal of Development Economics, Elsevier, vol. 59(1), pages 155-192, June.
    9. Gordon, Roger & Li, Wei, 2009. "Tax structures in developing countries: Many puzzles and a possible explanation," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 855-866, August.
    10. repec:npf:wpaper:15 is not listed on IDEAS
    11. Jagdish Bhagwati & Bent Hansen, 1973. "A Theoretical Analysis of Smuggling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(2), pages 172-187.
    12. Ahmad,Etisham & Stern,Nicholas, 1991. "The Theory and Practice of Tax Reform in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521397421, Enero-Abr.
    13. repec:npf:wpaper:08 is not listed on IDEAS
    14. repec:ind:nipfwp:15 is not listed on IDEAS
    15. Bird, Richard M. & Zolt, Eric M., 2005. "The limited role of the personal income tax in developing countries," Journal of Asian Economics, Elsevier, vol. 16(6), pages 928-946, December.
    16. Richard M. Bird, 2005. "Value-Added Taxes in Developing and Transitional Countries: Lessons and Questions (2005)," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0505, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    17. Das-Gupta, Arindam, 2004. "The Income tax compliance cost of corporations in India, 2000-01," Working Papers 04/8, National Institute of Public Finance and Policy.
    18. Richard M. Bird & Eric M. Zolt, 2005. "Redistribution via Taxation: The Limited Role of the Personal Income Tax in Developing Countries (2005)," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0507, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    19. Martin, Lawrence & Panagariya, Arvind, 1984. "Smuggling, trade, and price disparity: A crime-theoretic approach," Journal of International Economics, Elsevier, vol. 17(3-4), pages 201-217, November.
    20. Hatta, Tatsuo, 1986. "Welfare effects of changing commodity tax rates toward uniformity," Journal of Public Economics, Elsevier, vol. 29(1), pages 99-112, February.
    21. repec:bla:econom:v:71:y:2004:i:283:p:483-492 is not listed on IDEAS
    22. repec:npf:wpaper:21 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bernardi, Luigi & Gandullia, Luca & Fumagalli, Laura, 2005. "Tax Systems and Tax Reforms in South and East Asia: Overview of Tax Systems and main policy issues," MPRA Paper 1869, University Library of Munich, Germany.
    2. Bernardi, Luigi & Fumagalli, Laura & Gandullia, Luca, 2005. "Tax systems and tax reforms in south and East Asia: Overview of the tax systems and main policy tax issues," MPRA Paper 18214, University Library of Munich, Germany.
    3. Emran, M. Shahe & Stiglitz, Joseph E., 2005. "On selective indirect tax reform in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 599-623, April.
    4. Knud Munk, 2008. "Tax-tariff reform with costs of tax administration," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(6), pages 647-667, December.
    5. M. Govinda Rao & Sudhanshu Kumar, 2018. "Envisioning tax policy for accelerated development in India," Asia-Pacific Sustainable Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 25(1), pages 85-107, June.
    6. Canavire-Bacarreza, Gustavo & Martínez-Vázquez, Jorge & Vulovic, Violeta, 2013. "Taxation and Economic Growth in Latin America," IDB Publications (Working Papers) 4583, Inter-American Development Bank.
    7. Kalle Hirvonen & Giulia Mascagni & Keetie Roelen, 2018. "Linking taxation and social protection: Evidence on redistribution and poverty reduction in Ethiopia," International Social Security Review, John Wiley & Sons, vol. 71(1), pages 3-24, January.
    8. Haibara Takumi, 2017. "Indirect Tax Reform in Developing Countries: A Consumption-Neutral Approach," Journal of Globalization and Development, De Gruyter, vol. 8(1), pages 1-11, June.
    9. Kodjo Adandohoin & Jean-Francois Brun, 2020. "Are incomes and property taxes effective instruments for tax transition?," CERDI Working papers hal-03053683, HAL.
    10. Kodjo Adandohoin & Jean-Francois Brun, 2020. "Are incomes and property taxes effective instruments for tax transition?," Working Papers hal-03053683, HAL.
    11. 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.
    12. Kodjo Adandohoin & Jean-Francois Brun, 2021. "The Role of Income and Property Taxes in Tax Transition and the Mediating Effect of Financial Development," Post-Print hal-03470540, HAL.
    13. Glauben, Thomas & Herzfeld, Thomas & Loy, Jens-Peter & Renner, Swetlana & Hockmann, Heinrich, 2012. "The impact of fiscal policies on agricultural household decisions," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 29(2), pages 166-177.
    14. Richard M. Bird, 2014. "Foreign advice and tax policy in developing countries," Chapters, in: Richard M. Bird & Jorge Martinez-Vazquez (ed.), Taxation and Development: The Weakest Link?, chapter 4, pages 103-144, Edward Elgar Publishing.
    15. Richard M. Bird, 2008. "Tax Challenges Facing Developing Countries," Working Papers id:1618, eSocialSciences.
    16. Kalle Hirvonen & Giulia Mascagni & Keetie Roelen, 2018. "Linking taxation and social protection: Evidence on redistribution and poverty reduction in Ethiopia," International Social Security Review, John Wiley & Sons, vol. 71(1), pages 3-24, January.
    17. Boadway, Robin, 2005. "Income tax reform for a globalized world: The case for a dual income tax," Journal of Asian Economics, Elsevier, vol. 16(6), pages 910-927, December.
    18. Paul E. Carrillo & M. Shahe Emran & Anita Rivadeneira, 2011. "Do Cheaters Bunch Together? Profit Taxes, Withholding Rates and Tax Evasion," Working Papers 2011-03, The George Washington University, Institute for International Economic Policy.
    19. Pierre Bachas & Lucie Gadenne & Anders Jensen, 2024. "Informality, Consumption Taxes, and Redistribution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(5), pages 2604-2634.
    20. Richard M. Bird & Eric M. Zolt, 2014. "Taxation and inequality in the Americas: Changing the fiscal contract?," Chapters, in: Richard M. Bird & Jorge Martinez-Vazquez (ed.), Taxation and Development: The Weakest Link?, chapter 7, pages 193-237, Edward Elgar Publishing.

    More about this item

    Keywords

    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:npf:wpaper:tru1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: S.Siva Chidambaram The email address of this maintainer does not seem to be valid anymore. Please ask S.Siva Chidambaram to update the entry or send us the correct address (email available below). General contact details of provider: http://www.nipfp.org.in .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.