This fiscal, if all goes well and all of you pay your taxes by October 31 and continue to pay taxes in the remaining part of the year, we can even cross tax-GDP ratio of 10% once again, the finance minister said, underlining the need to increase the tax-GDP ratio, an important parameter to assess the financial health of the government.
He pointed out that Indias tax-GDP ratio, during the second half of 1980s was above the 10% level. However, it dropped to 8.2% in 1990s due to sharp cuts in tax rates he added.
He also mentioned that the Fiscal Responsibility and Budget Management Act, which imposes self-discipline upon the government in managing its resources, was notified only by the UPA government.
We walked the talk by notifying FRBMA three days before the Budget. We did that to signal to the world that we are serious about fiscal discipline and responsibility, he said.