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Implementing policies and measures to expand the direct tax base should be a priority for India’s fiscal and economic policymakers. Discuss.

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

3. Implementing policies and measures to expand the direct tax base should be a priority for India’s fiscal and economic policymakers. Discuss. (250 words)

Difficulty level: Moderate

Reference: Live MintInsights on India

Why the question:

The linked article discusses the state of direct taxation in India.

Key Demand of the question:

To write about need for India to widen its direct tax base- what benefits it will provide and why it is important.

Directive word: 

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

Structure of the answer:

Introduction: 

Start by giving context.

Body:

First, write about need for fiscal deepening of India and also discuss its consequences – generating additional revenue, reducing fiscal deficits, promoting equitable distribution of tax burden, enhancing compliance and accountability, supporting sustainable development goals, and fostering economic stability and resilience.

Next, write about the measures that are needed to achieve the above.

Conclusion:

Conclude by writing a way forward.