ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by R J ChelliahSubscribe to R J Chelliah

Implementing FRBM Act, 2003

Because the Kelkar Task Force believes that the implementation of the FRBM Act should be revenue-led, discussion of tax reform dominates the report. This has also inhibited an adequate consideration of the details involved in achieving fiscal consolidation without affecting growth.

Task Force Recommendations on Direct Taxes

The Kelkar Task Force on direct taxes has gone much farther than its predecessors in respect of tax administration. However not all its recommendations on structural changes are "congruent with generally accepted principles of taxation", though it was the KTF's objective to make them so. In respect of both personal income tax and corporate profits tax there are recommendations that are not really in accord with international practices based on accepted tax theory.

Tax Policy as Revealed in the Budget for 2002-03

Yashwant Sinha, having started with a protectionist and nonreform budget, has moved towards substantive reforms. While in his last two budgets he has been pushing through some major reforms of the tax structure, side by side he has been introducing several destabilising ad hoc changes including increases in the number of concessions. The tax proposals presented in the Budget for 2002-03 indicate the same combination of acceptance of the principles of tax theory in parts and continuance of adherence to the older practices in other aspects.

Fiscal Policy Must Be Reoriented

R J Chelliah Some of the basic premises of our fiscal policy are valid in the context of our conditions and support the case for growing government sector. But they do not require nor do they justify a purely revenue approach to taxation or a high rate of growth of government consumption. Also, in translating any theory of fiscal policy into practice, institutional and administrative realities have to be taken into account. As it has happened, we have scarcely paid any attention to the problem of efficiency in government spending and to devising ways of measuring relative benefits from increases in government expenditure in different directions. Failing to do this, we have permitted increase;: in public expenditure which are clearly unjustified and wasteful.

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