Rangarajan for Higher Taxes on Super Rich

Favours surcharge on income above a level

Pitching on higher rates of taxes on the super rich, Prime Ministers Economic Advisor, C.Rangarajan said, One need not disturb the structure of income tax system as it is now. But add a surcharge for income above a particular level. As we go along we need to raise more revenues and the people with large incomes must be willing to contribute more.

His suggestions comes ahead of the Budget for 2013-14 for which finance minister P.Chidambaram has started consultation with different interest groups. Now the government taxes income at three rates- 10%, 20% and 30%.

Dr. Rangarajan also stressed on fiscal discipline to promote growth. We need to bring down the fiscal deficit over the next few years. For this purpose we need to act on expenditure and revenue sides. On the expenditure side, we must focus on how to prune the subsidies and reduce them as a proportion of GDP. We also need to focus on the revenue side and the tax-GDP ratio for central government.

Inflation has declined marginally to7.24% in November last year from 9.46% in the same month of the previous year. Dr. Rangarajan expressed hope that WPI would come down to 7% by March this year.

The upcoming review of monetary policy would depend on the inflation reported for December, which is expected to be released later this month.

Meaning:

prune- To cut off or remove dead or living parts or branches of (a plant, for example) to improve shape or growth.


Courtesy: THE HINDU