Economists call for enhancing tax base 

Economists call for enhancing tax base 
News:

A group of economists has suggested various measures to address economic concerns in India

Important facts

Concerns:

1. Income distribution in India is extremely unequal with income of higher income groups rising much faster than the rest.
2. Job opportunities in India remains limited with not enough jobs being created.
3. India is not well positioned to follow export-led growth path.
4. Sharp rise in local pollution levels, CO2 emissions which if unchecked, threatens to stall or reverse socio-economic progress.
5. Consolidated fiscal deficit of 6.5% of GDP higher than most G20 countries and current account deficit has widened.

Suggested Reforms:

1. Job: There is an urgent need to create jobs for semi-skilled, amend labour laws & strengthen MNREGA for landless labourers
2. Government Finances: It is important to prioritise spending, expand tax base, reduce state fiscal deficit with incentives to better performers.
3. Regulations: It is necessary to strengthen independence of regulatory institutions. Further there is a need for more predictable & better regulatory environment.
4. Farm Sector: Land holding-linked fixed cash subsidy should be provided. There is also an urgent need to improve access to markets and build infrastructure.
5. Financial Sector: A need to reduce the statutory liquidity ratio and substituting this with the liquidity coverage ratios and net stable funding ratios set by Basel.
6. Further, it is important to clean up bank balance sheets by reviving projects and also improve governance before recapitalisation.
7. Social security:  Economist have suggested cutting down the multiplicity of schemes, explore cash transfers instead of food via PDS, introduce index pension.