29 November, 2020

The Noble Ledger

Free income tax from wasteful governmental intermediation

Sandeep Adhhwaryu
The Noble Ledger
Budget 2007-08 is a result of an acceptance within the finance ministry that any radical shift from the usual would cause too much trouble. But people who play it safe rarely build great countries. It is a moot point that general elections are a few years away and the only other major election—that in UP—is anyway out of the Left and Congress's reach. We are living through the greatest economic boom in this land, and the government is reaping dividends in the form of unexpectedly high tax revenues. A lot could have been achieved, but has not.

What could the government have done? On the revenue side, it could have made the regime simpler and more inclusive. To do so, it required reducing the number of taxes, reducing the rates of indirect taxes further, improving the reporting and inclusion procedures. On the expenditure side, it should have invested in completely computerising government's information systems so that it's able to improve internal efficiencies. And it should have invested in extensively improving its monitoring and...


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