GST: One more NDA failure C. P. Chandrasekhar

July 2018 marks the first month of the second year in which the much-heralded Goods and Service Tax (GST) regime has been in place. When launched 13 moths earlier, in a propaganda blitz that (wrongly) claimed that this “one nation, one tax” system was a game-changer, the government had promised that the new regime would help the Centre and the states to efficiently mobilise the resources needed to put India on a high growth trajectory. In fact, demonetisation and the GST regime were presented as the two initiatives of the Modi government that would transform India. Demonetisation, as the government’s…

Greater Cooperation To Strengthen Taxation Jomo Kwame Sundaram

Since the 1950s, there has been a popular dance called the ‘limbo rock', with the winner leaning back as much as possible to get under the bar. Many of today's financial centres are involved in a similar game to attract customers by offering low tax rates and banking secrecy. How Low Can You Go?  This has, in turn, forced many governments to lower direct taxes not only on income, but also on wealth. From the early 1980s, this was dignified by US President Ronald Reagan's embrace of Professor Arthur Laffer's curve which claimed higher savings, investments and growth with less…

Fiscal Policy Evolution and Distributional Implications: The Indonesian experience Smitha Francis

[Working Paper No. 01/2012] This paper analyses Indonesia's resource mobilisation and public expenditure policies against the backdrop of her inequality trends and macroeconomic policy evolution. It is argued that the country's fiscal policy stance has been adversely impacted by her monetary and financial sector policies under an open capital account, with attendant regressive distributional implications. Juxtaposing the analysis of revenue mobilisation trends and taxation policies with the evidence of increasing asset and land concentration and persisting high inequalities reveals that the increase in income tax revenue did not necessarily come from the upper income profiles or corporate profits. Meanwhile, although…

The Spectre of Public Debt C.P. Chandrasekhar

Pegging their arguments on the still-ongoing drama relating to sovereign debt in Greece, conservative opinion is making a case for a reduction of the size of public debt in developed and developing countries across the world. The latest signatory to the appeal is IMF chief Dominique Strauss-Kahn who reportedly told an audience at the inaugural conference of the Soros-funded (Financial Times, 10 April 2010) Institute for New Economic Thinking that public debt in the advanced economies is forecast to rise by about 35 percentage points on average, to about 110 per cent of gross domestic product in 2014. In his…