Tax System Reforms in India: Achievements and Challenges

National Seminar on Tax Reform in India (May 2011), Pg;54-55, Department of Commerce, University of Lucknow

Posted: 16 Jul 2011 Last revised: 12 Dec 2014

Date Written: May 7, 2011

Abstract

The reforms in Indian tax system in some respects are unique. Unlike most developing countries which were guided in their tax reforms by multilateral agencies, Indian tax reforms have borne the domestic brand largely in response to changes in the development strategy over time while keeping in tune with institutional arrangements in the country. Thus, even when the government sought assistance from multilateral financial institutions, the recommendations of these institutions did not directly translate into an agenda for tax reform. Despite this, the tax system reforms were broadly in conformity with international trends and advice proffered by the expert groups and was in tune with international best practices.

The role of history and institutions in the country was also important in shaping the tax system. Indeed the assignment system in the federal polity has impacted on the tax structure and administration. This has also made encompassing, comprehensive and co-ordinate tax reforms difficult. The system of planning also introduced selectivity and discretion in tax structure and its implementation. The Indian tax reform can experience can provide useful lessons for many countries due to the largeness of the country with multilevel fiscal framework, uniqueness of the reform experience and difficulties in calibrating reforms due to institutional constraints. These, by themselves, are important enough reasons for a detailed analysis of the tax system in India.

Keywords: Indian Tax System, Tax Reform, Tax structure

JEL Classification: ITS, TR, TS

Suggested Citation

Misra, Srikant, Tax System Reforms in India: Achievements and Challenges (May 7, 2011). National Seminar on Tax Reform in India (May 2011), Pg;54-55, Department of Commerce, University of Lucknow, Available at SSRN: https://ssrn.com/abstract=1885261

Srikant Misra (Contact Author)

Integral University ( email )

Basha Dasauli
Kursi Road
Lucknow, Uttar Pradesh 226026
India
09919494606 (Phone)

HOME PAGE: http://www.integraluniversity.ac.in

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