Public Finance

Back-to-Back Loans

June 9, 2017

Back-to-Back loan is also known as Parallel Loan or Credit Swap Loan. To understand this concept we need to imagine the following: An Indian Parent company having a subsidiary abroad (Suppose US) A Foreign (US) Parent company having a subsidiary in India We assume that the foreign...

Progressive, Regressive and Proportional Taxes

April 2, 2017

There are three kinds of the taxes on the basis of their quantum / ratio of charging viz. regressive tax progressive tax and proportional or flat tax. Regressive Tax A regressive tax is the one in which tax rate decreases as the amount subject to taxation increases;...

India’s Tax-GDP Ratio: Current Figures and Trends

February 15, 2017

Tax-to-GDP Ratio is obtained by dividing the GDP by gross tax collection. It’s an indicator of government income and is shown as percentage of GDP. Higher tax-GDP ratio also denotes higher equitable distribution of national income. India’s Tax-GDP Ratio In 1950-51, India’s tax-GDP Ratio was around 6%...

Swachh Bharat Cess

December 25, 2015

The thrust of new Government towards clean India has recently made the government to impose Swachh Bharat Cess of 0.5% on all services liable for service tax. The Swachh Bharat cess will be an additional levy, making the effective service tax rate 14.05% against the current 14%....

Tax Information Network

November 23, 2015

On behalf of the Income Tax Department, the National Securities Depository Limited (NSDL) established Tax Information Network (TIN). This is a source of the countrywide tax related data.  The basic idea behind establishing TIN was to modernise collection, processing, monitoring and accounting of direct taxes using information...

Contribution of Raja Chelliah to Indian Public Finance

November 23, 2015

Raja Chelliah played a major role in reforming Indian economic policies. He was the main architect of the tax reforms programme when the economic reforms were implemented in 1991. He is often referred to as “The Father of Tax Reforms”.  After working as Chief of the Fiscal...

General Anti-Avoidance Rules: Current Position

November 23, 2015

General Anti-Avoidance Rules (GAAR) are general rules that target any transaction of business arrangement that is done for aggressive tax planning, tax avoidance or tax evasion. GAAR were introduced in Australia in 1981, Canada in 1988, South Africa in 2006 and China in 2008. GAAR in India...

Incremental Budgeting

November 23, 2015

Incremental budgeting is a way of budgeting where the future allocations are based on current allocations. The new budget is prepared by increasing or decreasing the current budget by certain amounts or percentages. The increased amounts are arrived through a fairly simple calculation and the scope for...

Gender Budgeting in India

November 23, 2015

A gender budget is not a separate budget for women. Instead, the gender budgets are an attempt to assess government priorities as they are reflected through the budget and examine how they impact women and men. Gender budgets look at what the impact of the spending is...

Participatory Budgeting in India

November 23, 2015

According to the International Budget Project (IBP), participatory budgeting is the process by which citizens deliberate and negotiate over the distribution of public resources. Participatory budgeting creates opportunities for engaging, educating and empowering citizens, which can equip and advance a more vibrant civil society. Union Budget affects...

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