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3) What do you understand by inheritance tax? Do you think the reintroduction of such a tax would serve as a measure to prevent the concentration of income and wealth in the hands of a few? Discuss.(250 words)

Topic: Government Budgeting. Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

3) What do you understand by inheritance tax? Do you think the reintroduction of such a tax would serve as a measure to prevent the concentration of income and wealth in the hands of a few? Discuss.(250 words)

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Why this question: 

The article talks about how Wealth inequality in India has been alarming and in what way Inheritance tax and its reintroduction can prevent the concentration of income and wealth in the hands of a few.

Demand of the question:

Directive word: 

DiscussThis is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction

Define what is an inheritance tax.

Body

Explain that an inheritance tax, coupled with associated tax reforms, can potentially prevent the concentration of income and wealth in the hands of a few, reduce intra-generational inequality, promote inter-generational equity, and serve a meaningful purpose to address the distributional gaps that exist in India today.

Explain that an inheritance tax, if implemented well, can potentially help the government exchequer at a time when it has been scouting for additional sources of revenue to bridge the persistent gap between fiscal targets and outcomes. Recent policies on farm loan waivers, bank recapitalization, universal health insurance, and the expansion of other social sector programmes will pose significant challenges in maintaining fiscal prudence.

List all the benefits and suggest what needs to be done.

Conclusion 

Conclude with importance of such tax initiatives and reforms for the betterment of the economy.

CategoriesINSIGHTS