Taxation policy needs accurate data

Taxation policy and our Data System

This refers to the debate "should there be a super rich Tax?" ( Business standard Feb 29,2012).The concept of super rich tax has been engaging the attention of advanced countries for quite some time and even some of the highly rich individuals in these countries have volunteered to contribue to rescue the economies from financial crisis.The taxation policy should be very fair and those who earn and accummulate wealth have to naturally come to the rescue of the poor who are not only below the poverty line but are also virtually starving without even a single meala day. The equitable distribution of nation's wealth is the responsibility of the Govt and it is unfortunate to observe that only 3 percent of our population is paying tax which is absurd and not tolerable when nearly 80 percent of the population lives on less than Rs 20 a day and 77 percent of our Ministers and 300 MPS who frame the policies for the people are millionaires.
This sort of situation naturally gives room for doubt whether the economic policies so far pursued in the name of AAM ADMI have been on the right track?The major problem faced in the economy is the absence of accurate data/ information and the economy which supports the whole world with its Information Technology power has not been able to put into optimum use of its IT power to generate proper data system. Mr Kamath Chairman ICICI BANK and Infosys is right for his observation under Chinese Whispers colum next to the debate column BS dated Feb29 that there is a lot of growth that gets lost due to inefficiencies in our data collection mechanism ,largely omissions and there is growth that is not recorded in the system. This is more or less true in our data relating to tax, people below poverty line, inflation, employment etc. It is time for the Govt to aim to capture exact data so that the policies that are pursued towards eradication of the ills of the economies achieve the desired result. Even the Governor of the Reserve Bank once sounded on the need for accurate data to frame policies. Taxation policy needs all the more accurate data to assess and decide equitable distribution of wealth of the nation.


Dr.T.V.Gopalakrishnan

( An edited version of this appeared in Business Standard dt1/03/12)