THE REPORT
ON
THE TAX SYSTEM IN INDIA:
EFFECT ON THE
GROWTH
India is a federal republic comprising the Central Government, twenty-nine self-governing States and six Union Territories. Tax legislation is enacted at both the Central level and State level. The Central Government is empowered to levy almost all direct and some indirect tax. This Report “Tax System In India: Effect On The Growth” Assesses The Effect of India’s tax system on growth ,through the level and productivity of private investment. Comparision of India’s indicators of effective tax rates and tax revenue productivity with other country shows that the Indian tax system is characterized by:(1) a high dependence on indirct taxes (2) low average effective tax rates and tax productivity, and (3) high marginal effective tax rats and large tax-induced distortionon investment and financing decision. This report finds that the most recently proposed and tax –induced distortion. But firms that rely on internal source of funds or face problems borrowing would continue to face high marginal tax rates
ii
ACKNOWLEDGEMENTS
I am extremely thankful to my parents , and DR.D.K. NAURIYAL , DR. S.P.SINGH, Professors of department of humanity and social science. They give me full support to write this report. And last I wish to like thank my family, my parents who always with me.
iii
CONTENTS
.
Preface……………………………………………………. ii
Acknowledgements……………………………………iii
Introduction………………………………………………. 1-2
The Indian tax system…………………………………….....3-10
Empirical evidence on taxation and growth……………….. .11-12
Taxes facts…………………………………………………. 13-14
Kelkar 2002 report proposals………………………………. 15
Average Effective Tax Rates Comparison, 1990–2000…….. 16
The Burden of Taxation on Investors…………………………17-20...