How to quadruple the number of tax payers in India

Have just two rates of personal income tax: 10 per cent and 20 per cent.

India’s tax to GDP ratio is around 12 per cent currently. It used to be around 10 per cent till recently. Most people think even this 12 per cent is too low and that it needs to increase to around 15 per cent.

But they forget two things. One, that as developing countries go, India is not doing too badly on this count and is more-or-less at par. Second, more importantly, a tax assumes the existence either an adequate income or adequate consumption or both.

India has a population of around 1,300 million people. Around 800 million of these live