Problems Of Indian Fiscal Structure

The volume contains 21 research articles dealing with General Issues of Taxation; Issues in Indirect Taxation; Issues in Direct Taxation of Agriculture; Expenditure Tax; Centre-State Financial Relationship and Black Economy. With regard to the development finance in the process of planning in India the fiscal measures like taxation ? direct and indirect both, public expenditure, public borrowings and deficit financing have been effectively used. However, of all the sources of financing outlay, taxation is considered to be the best method. Looking at the state of tax revenue it seems very difficult to raise much needed resources through taxation alone. Very high rates of direct and indirect taxes have led to widespread tax avoidance and evasion and contributed in no mean way to the generation of black money which is now like a cancerous growth in out economy. Heavy burdern of indirect taxation on lowest expenditure groups calls for urgent remedial measures. Another equally important problem in indirect taxation is of cascading. To tackle Introduction of VAT is the remedy to tackle this problem. The Finance Minister, as promised in the LTFP instrument, has rightly introduced MODVAT. On the question of replacing the sales tax by the Additional Union Excise Duties, the author stresses upon the rationalisation of administration of sales tax and the simplification of the producers rather than substituting it as demanded by the business class. Another major aspect of Indian Public Finance is the direct taxation of agriculture. Raj Committee (1972) proposed to replace land revenue by AHT which would ensure more revenue and also progression. This recommendation did not, however, find favour, on administrative grounds. In the last few years, there has been growing conflict between the Indian Union and States in the matter of finances. The major federal fiscal problems of vertical and horizontal fiscal imbalances have been sought to be resolved through transfer of financial resources. All these questions are discussed in great detail. Besides the author has critically examined the issue of state Overdrafts with RBI, Excise Duties and the Union Budget, Role of Deficit Financing, Defence Expenditure, Reintroduction of Expenditure Tax and the Long Term Fiscal Policy. The research scholars as well as scholars of economics and commerce and also the planners and policy makers will find this book highly useful as well as of deep interest in understanding the complex issues of Indian Public Finance.