Realignment of Economic & Tax Policies for Development and Poverty removal required : A Study

Realign economic policies for development and poverty removal urged Mr. Mohd. Haleem Khan in a study published in latest issue of Finance India – The Quarterly Journal of Finance. Mr Khan suggests that prolonged public fiancé architecture with difference is required. Mr. Khan was former Secretary, of Disinvestment, Ministry of Finance, Government of India.

The study proposes a five prolonged public finance architecture that includes comprehensively to institutionalize the intergenerational equity. Public expenditure prioritization that factors its revenue nexus depoliticize poor and opulence definitions, remainant of Macaulayism against skill development as part of literacy be done away with & to universalize access of green technologies and institutionalize life cycle pricing.

According to Mr. Khan, India is a immense socio cultural diversity and magnitude. India would hardly qualify to be considered a legal jurisdiction amenable to thumb rule prescriptions. Her genius must propel her to work with typically home grown solutions in the light of her own past experiments with success and vicissitudes of efforts across the legal jurisdictions near and afar. Mr. Khan supports the contentions of MCKinly’s (2004) Millennium Development Goals of having extreme income poverty by 2015 that poverty reduction is of overriding importance. According to author even when growth occurs in some developing countries, it is often not reaching poor. A participatory process for determining pro-poor economic policies be based on examining a range of credible alternatives.

According to the author Tax systems should be more equitable as well as more efficient. The poor should not pay proportionately more taxes that the rich nor should they receive proportionately few are public benefits. Tax systems in developing countries often place a disproportionate burden on low-income households and let the rich off the hook with a host of loopholes, exemptions and deductions. A lot of attention has been paid to re-allocating expenditures to the poor but much less has been done to reform tax systems to make their impact more equitable.

Fiscal policies are needed to play a number of cyclical role in stabilizing the economy and to accelerate growth, state the author. Within this context public investment plays a crucial role in accelerating the rate of Economic growth, both for providing demand stimulus to the economy, expanding its productive capacity and in allocating resources to the poor. Neolioberal economists often argue that increasing public investment will enlarge public deficits and that these, in turn will fuel inflation, depreciation of the exchange rate and higher real rates of interests. There is a little empirical evidence to support this. According to author too much emphasis on keeping fiscal deficit within a prescribed limit is neither a guarantee of fiscal prudence nor it helps in rising up to the challenges and expectations of an aspirational society.

According to the author there should be a creation of a Sovereign Fund in which shall flow non-recurring receipts year after year by bringing amendment in article 266 of the constitution of India to institutionalize the inter generational equity concerns. The corpus available would be available for investment and not for the proverbial “selling the family silver to pay the grocery bills”.
The author also suggests that algorithm to calculate Revenue Nexus Index of Public expenditure be researched and formulated. It also suggests that poverty line and income tax slabs be more scientifically determined based on some percentile of the distribution continuum of income earners and their contribution to GDP. It states that poverty line and income tax slap delineation have to be articulated on scientific basis and should not be subject to political filibustering and one-up manship.

The author suggests that Skill as a part and parcel of literacy should also be present. International organizations should also make green technologies easily available.

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Finance India – Quarterly Journal of Finance of Indian Institute of Finance published since 1987 is a Two Tier Triple Blind Peer Review Journal of more than 400 pages. Its has an exalted Editorial Board of over 70 Experts from all over World including 6 Nobel Laureates headed by Prof. Dr. JD Agarwal, an eminent economist. It is indexed and abstracted by more than 31 agencies and over 100 Universities worldwide. Finance India is ranked at par with top international journals. Finance India, SCOPUS Indexed & UGC approved Journal, is placed at 3rd best position amongst 21,000+ Journals Indexed in SJIF Journals Rank by Scientific Journal Impact Factor (SJIF) with a high SJIF Impact Factor Value for 2019 as 7.262.

This release was published on openPR.