Chairman of Prime Minister's Economic Advisory Council C Rangarajan, on the sidelines of an event at the Indian Statistical Institute, has said that rates of taxation be increased for the rich with a view to raising the tax-to-GDP ratio. About the GDP growth for the current fiscal, he said that it would be closer to six per cent, and seven percent in the subsequent financial year.
According to Rangarajan there are two ways to make this idea going, one to introduce an additional slab at a higher marginal tax rate and other to keep the tax structure as it is and impose a surcharge on the income above a certain level. “The tax-to-GDP ratio should be higher, as demand and expenditure is going up. And, therefore, we will have to explore ways,” he said. Further, added that “super-rich” had to be determined on the basis of income. For those in the lower income level the existing tax structure was good.
The economist, however, clarified that there is no formal proposal placed before the Finance Ministry on this “This is only an idea or thought … The idea being that the people earning above certain level could be charged at a rate of taxation which is higher than what it is now.”
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