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Tax-GDP ratio at 9.6%
April 21, 2003 18:51 IST
A parliamentary panel on Monday criticised the government for being "casual" in setting revenue targets, and said India's tax-GDP ratio was very low at 9.6 per cent in 2002-03 as large number of prospective tax-payers were yet to be tapped.
"Tax-GDP ratio in India is very low when compared not only with developed countries but many developing countries as well. This distortion is largely due to the fact that large number of prospective tax-payers in the country are yet to be tapped and brought under the tax net," the Standing Committee on Finance said in its report tabled in Parliament.
Tax-GDP ratio is estimated to inch up to 9.6 per cent in 2002-03 from 8.1 per cent in 2001-02, the committee, headed by N Janardhana Reddy, said.
The ratio was 9.0 per cent in 2000-01, which was slightly higher from 8.9 per cent in 1999-2000 and 8.3 per cent in 1998-99.
Tax-GDP ratio was 10.1 per cent in 1990-91, but fell to 9.4 per cent in 1995-96 and further to 9.1 per cent in 1997-98, it said.
"Concerted efforts ought to be made by the government in this regard," the panel said.
In this context, the panel said the government should implement the measures suggested by Vijay Kelkar panel to establish a tax information network to identify tax evaders.
The committee also noted the casual approach of finance ministry in setting revenue targets. "It is a matter of deep concern that Budget estimates were not being achieved in regard to collection of income tax, corporation tax, central excise and customs duty," it said.
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