• Karan Deshwal

The direct tax includes income tax, gift tax, capital gain tax, etc while indirect tax includes value-added tax, service tax, Good and Service taxm, customs duty, etc. The Central Government of India imposes taxes such as customs duty, central excise duty, income tax, and service tax. What determines economic growth? This question attracts immense limelight in academic research, and many scholars try to answer it. From the classical theory of economic growth to recent endogenous growth models, all substantiate the ideas of a different aspect of an economy's growth process. The overall trend indicates that employment and agriculture sector has been declined. The government should pay focus to these sectors and try to generate employment in the economy .India has adopted several tax reforms after the 1980s, but still unable to form proper tax base and desired tax revenues. The main reasons were complex tax structure, large tax evasion and improper management. Simplification of tax structure like recent GST and reduction in tax evasion may be helpful for tax generations. Better financial inclusion policies in India will facilitate savings in the economy. Inclusion of more people in the financial system will likely to enhance savings behaviour. Growth tends to be beneficial for trade, thus sustainable and rapid growth rate in India will be favourable for trade and a healthy balance of payments status. Unproductive expenditures should be checked and monitored. The government should adopt input-oriented fiscal strategies to curb the unwanted effects of public expenditures.Agriculture and its allied sector in India are enjoying several exceptions which relief a large part of this sector. Tax evasion also can be seen in the case of this sector as people shifting non-agricultural income to this sector. Thus the government must reexamine the tax exemptions policies for this sector. Trade should be encouraged in India and this will be beneficial for tax collection. With the physical quantity, trade also has several positive externalities which are good for the overall productivity of the economy. Macroeconomic stability becomes very vital for tax performance and hence adequate management of economic policies is necessary. The harmful effect of deficits can be minimized with the domestic resource generation especially tax collection. Resource mobilization through taxation is highly appreciable as India is taxing less than its capacity. Government external liabilities are negatively reducing capital formation. Generation of endogenous resources without progressive distortions to the economy will have a conducive impact on the capital formation which is finally transferred to economic performance. The speed of adjustment in tax to the base is necessary with respect to maintain long-run equilibrium. The government should implement suitable policies to eradicate the tax evasions mainly in direct taxes. Another important aspect of raising revenues is the proper monitoring and transformation of the informal economy to the formal economy. Lower speed of adjustments indicating the increasing gap between revenue collections and expenditures. The current Indian budget system requires cyclically adjusted budget balance i.e. budget balance based on discretionary fiscal policy measures with correspondence to the influence of business cycles on revenues. The potential tax changes at central government level that will have a positive effect on growth performance in the long-run and short-run are the reduction in corporation tax. Corporation tax policy will bring positive changes in FDI, savings and investment which are growth driver. Custom duty is now under the domain of the Interstate Goods and Service Tax (IGST) and exports are now duty-free. The growth conducive implication of custom duty is anticipated to expand further under IGST. In the case of state-level tax policies, property taxes have shown the promising path to generate revenues and enhancing growth. Policymakers could shift the tax burden from income and commodity taxes to property taxes.

TAXATION , ECONOMIC GROWTH IN INDIA

"TAXATION AND ECONOMIC GROWTH IN INDIA", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.9, Issue 11, page no.e157-e165, November-2022, Available :http://www.jetir.org/papers/JETIR2211434.pdf

"TAXATION AND ECONOMIC GROWTH IN INDIA", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.9, Issue 11, page no. ppe157-e165, November-2022, Available at : http://www.jetir.org/papers/JETIR2211434.pdf