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Improving Taxpayer Base Necessary for a US$ 5 Trillion Economy
Jul 4, 2019


To double India's GDP within five years, the government will have to be on an overdrive rather than resting on its laurels.

The direct tax mop-up in fiscal 2018, at 6% of GDP, touched a decadal high.

But increasing India's tax payer base consistently would be necessary to rid the economy of fiscal paralysis.

Data Source: World Bank, OECD, CMIE

This Chart Of The Day was published in The 5 Minute WrapUp - The Trade to Make the Most of India's US$ 5 Trillion Potential

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1 Responses to "Improving Taxpayer Base Necessary for a US$ 5 Trillion Economy"

Gunesh Apte

Jul 5, 2019

In fact, it is vital to have Tax to GDP ratio above 25%-30%, which is close to some of the developed nations. Having GDP and economy beyond 5 Trillion $, with only 7-8 Crore people paying the tax out of 135 Crore people would create huge imbalance. It would not only put huge burden on the 5%-6% income tax paying people but it will not create the funds which are required to sustain such a massive economy.
We need to also look at spending close to 5%-6% of GDP on education and healthcare each. What is the use of such massive economy, if majority of the population can not even think of affording post graduate or graduate level education or do not even have access to basic health care as evident recently in Bihar and other Indian states.
In my humble opinion, it is long way to go and some massive hard work is required in areas like infrastructure, public transport, water management, pollution control, education and healthcare if we want to sustain current economy size, and have a meaningful growth. We are fast loosing our demographic dividend by not able to sustain job growth, then it would be difficult to sustain such massive economy with large population without any meaningful work.
We need some major path breaking reforms in all above areas mentioned. It would be a long drawn process and requires vision of 50 years.

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