Tax to GDP Ratio

India’s tax to GDP ratio is very low, and the proportion of direct tax to indirect tax is not optimal from the view point of social justice.

Overview

  • India consists of one direct taxpayer for every 16 voters present. Income tax is paid by only 1% of India’s population.
  • India’s Gross tax to GDP which was 11% in FY19, fell to 9.9% in FY20 and marginally improved to 10.2% in FY21 (partly due to decline in GDP) and is envisaged to be 10.8% in FY22, this is much lower than the emerging market economy average of 21 percent and OECD ....
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Indian Economy