ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Intersectoral Equity and Agricultural Taxation in India

in India Raj Krishna In this paper I propose to argue: (1) that the concept of 'intersectoral equity' which forms the basis of comparisons of sectoral tax burdens is operationally superfluous; (2) that recent studies (Gandhi, 1966; Mathew, 1968y of the relative burden of taxation on agriculture and non-agriculture in India fail to prove that Indian agriculture, as a sector, is "undertaxed"; (3) that there are special historical reasons why agricultural income was not treated like non-agricultural income in the Indian income-tax system after Independence; (4) that in view of these reasons the fiscal treatment of agriculture in Meiji Japan is irrelevant for contemporary Indian policy although it is frequently mentioned2 as an example to be emulated; and (5) that there is no convincing general case for heavier taxation of agricidture as such, but the existing horizontal inequity in the Indian income-tax system in favour of rich farmers should now be remedied by treating agricultural income just like non-agricultural income for fiscal purposes.

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