An autonomous research institute under the Ministry of Finance


Envisioning Tax Policy for Accelerated Development in India

Publication date

Mar, 2017


NIPFP Working Paper No. 190


M. Govinda Rao and Sudhanshu Kumar


The objective of the paper is to highlight the reforms needed in the tax system to improve the revenue productivity of the tax system to conform to the vision of accelerating economic growth and development in India. Based on the cross-country analysis of tax-GDP ratios in 98 countries, the paper estimates the extent of under-taxation in India. Assuming 8 per cent growth in GDP, the paper estimates the increase in tax–GDP ratios needed to be raised and this additional e ort would provide  scal space for much needed investments in physical infrastructure and human development.  e paper goes on to identify the reforms needed to raise the revenue productivity of the tax system keeping in view the best practice approach to tax reform in India.
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