- India’s growth has been “impressive” in recent years and this gives the room for tax broadening efforts by the government, a top International Monetary Fund (IMF) official has said.
- Elimination of fuel subsidies and the targeting of social benefits has delivered in terms of allowing the union budget target to be achieved at 3.5 per cent of GDP.
- IMF has been collaborating with the Indian authorities in terms of looking at fiscal structural measures, including expenditure rationalization while protecting infrastructure investment, tax broadening efforts.
- In this context, the roll out of the Goods and Services tax (GST) is an extremely important step that would create a true unified national market in India.
- Inequality has increased in both India and China.
- Moreover, globalization and technological change have been major drivers of economic growth and cross country convergence.
- More than one billion people have been lifted out of extreme poverty since the early 1980s, and most of them come from China and India
- The clear perception around the world of widespread increases in income inequality illustrates the dominance of national politics shaping these perceptions.
- Fiscal policies, government expenditures and revenues are powerful means to ensure the sharing of the growth dividend
Important for Mains. Collaboration of India with IMF for Fiscal structural measures can be used to show commitment to fiscal prudence by India. Points 5 to 9 can be used in Essay as well as other GS Papers.