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July 2023

Economic Growth – Role Of Direct Tax

By Pinakin Desai, Chartered Accountant
Reading Time 23 mins
1. Let me delineate the scope of this article
The title “Economic Growth – Role of Direct Tax” has two different facets. An economist will read this as nexus between economic growth and direct tax by adverting to economic areas such as – what should be the tax policy of India; how to ensure horizontal and vertical equity; how to ensure buoyancy in tax revenue commensurate with GDP growth; relative composition of direct and indirect tax; whether agricultural income should continue to remain exempt; should income tax be supplemented by other taxes like Gift Tax or Wealth Tax to address wealth disparity, etc. etc.The brief from the organisation does, however, surround the alternative facet of nexus. The brief is to analyse the impact which currently applicable direct tax laws and their administration have on the economic growth of the country or on the morale of taxpaying community. The mandate is to examine legitimate expectations which taxpaying community contributing fair share of tax may have from the framers and administrators of direct tax laws as enacted. Indeed, this is a highly significant area of discussion inasmuch as the reas
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