Chelliah Committee Recommendations on Indian Fiscal Policy! The committee, set up in August , submitted its Interim Report in February , and final. Tax Reforms Chelliah Committee Report — I Guiding Principles of Tax Reform he guiding principles underlying the tax reforms proposed by the Committee. Raja Jesudoss Chelliah (12 December – 7 April ) was an economist and founding He served as chairman of Tax Reforms Committee of Union Government between and and as chairman of the Tax Reforms and.

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Since Feport, a number of committees were constituted by the Government of India for suggesting reforms in the Indian Tax System. Improve Tax Administration, Ensure flexibility and stability, broadening the tax base and Equity higher revenue realization should be possible with better compliance. Research Methodology The present study Descriptive in Nature, data extracted fromsecondary Sources viz.

It is suggested that reforms are necessary for Indian Taxation so that leads to economic development of the country. The then system failed to take in effects of price inflation over the period replrt which taxable gain has occurred. They suggested for increasing the tax collections to meet the growing demands of government expenditure by reducing concession and exemptions, tapping the rural rich, need of rationalization disclosure scheme with stiff penalties.

The proposed model examines whether the regression coefficient of the model is differ significantly from zero because the impact of the Chelliah committee recommendations are assumed to made significant impact on the Tax to GDP ratio. Crore Year Total Tax Revenue All India Direct Indirect Total Source: This page was last edited on 19 Octoberat The tax to GDP ratio of India from to is under taken after the inception of the Chelliah committee.


The peak level of customs duty rpeort scaled down to 35 percent with the abolition of 10 percent surcharge. An additional levy called National Calamity Contingent Duty was imposed on cigarettes, pan masala, bidis, etc.

Chelliah Committee Recommendations on Indian Fiscal Policy

Raja Chelliah in order to examine and recommend. The tax reform measures aimed at increasing resource mobilisation, i. They suggested that tax reforms combining lower statutory rates with base broadening would help to achieve pro growth fiscal adjustment in India. Improvement of Tax Collection Procedure Constitution rwport a settlement Commission for quick and final settlement of complicated cases.

The basic approach has been to move to tax structure which is simple, relies on moderate tax rates with a wider base and better enforcement and serves the objectives of equity and administrative efficiency.

The present tax system is cheloiah and difficult to interpret, leading to many disputes and court cases.

Tax Reforms Committee: Interim report

It helps in securing social justice, reducing inequalities in income and wealth, mobilizing savings and discouraging undesirable investment. Due to resource and time constraint, only Chelliah Committee Report and period from to ,its impact on Tax Revenue and Tax-GDP ratio has been selected for detailed study.

It is suggested that cehlliah should not tinkering with the tax rates and slabs every year because it will influence the tax revenue and Tax — GDP ratio. The number of slabs has been reduced from 4 to 3 i.

The exemption limit cgelliah be raised to Rs. To encourage the flow of foreign capital, it is also necessary to reduce tax rates of foreign companies. Restructuring the Tax System as broad based and fairer particularly with regard to personal taxation. By using this site, you agree to the Terms commjttee Use and Privacy Policy. He also worked in several state and central government financial institutions in India.


The coverage of service tax at the rate of 5 percent in the value of taxable service was expanded to include fifteen new services. Since, before the reform-era began, ad valorem commiftee duties had been replaced by specific duties, the revenue of the Government from this source had fallen.

Chaudharishreeniwas publications Jaipur Restricting Taxation of Wealth to unproductive assets. Finding ways and means for Increasing the Elasticity of the tax revenues in both committeee and indirect taxes.

Rao opined that the Indian tax system was characterized by a high dependence on indirect taxes, low average effective tax rates, high marginal effective tax rates and large tax induced distortions on investment and financing decisions and therefore reforms should be aimed at improving fiscal consolidations, lowering the marginal tax burden and reducing tax induced distortions.

He was a reader and professor at the Department of Economics of University of Rajasthan between and professor of economics at Osmania Relort between Thus, the tax system has to adjust to the requirements of a market economy international competitiveness.

In many developing countries, the immediate reason for tax reforms has been the need to enhance revenues to meet impending fiscal crises. At present, there is double taxation of partnership firms.

Recipients of the Padma Vibhushan in public affairs births deaths University of Madras alumni Fulbright Scholars. Therefore it can be conclude that the Tax to GDP ratio is increased significantly from to and it is significantly different from zero.