This refers to “Dismal scientist” in the Chinese Whispers column (April 2). M Govinda Rao need not be so pessimistic about the role of economists in policy making. Allow me to point out some major policy changes introduced by the finance ministry in fiscal matters at the behest of economists:
- MAT or minimum alternate tax.
- MODVAT or modified value-added tax.
- Advaloremisation of specific customs and excise duties.
- Reduction in the average rate of duty on customs and excise.
- Reduction in the baggage duty from 250 per cent to 50 per cent.
- Reduction in the income tax rate from 80 per cent to the present rate of 30 per cent.
- Extension of duty credit on inputs to capital goods.
- Introduction of service tax in 1994.
- Introduction of comprehensive service tax in 2012.
- Allowing gold imports.
- Removing quantitative restriction, or QR, on imports.
- Harmonisation of customs, excise tariffs and import license and drawback entries.
- Reduction of non-tariff barriers.
- The goods and services tax.
- The fiscal responsibility law.
These are some of the fundamental changes, among many others, that were brought about by economists. Some of these may have come from economists at the International Monetary Fund or Customs Cooperation Council but most of these were predominantly initiated by our own, home-grown economists. I know for sure that these changes were not made at the instance of departmental officers, though while implementing the policies, the officers played a stellar role.
Sukumar Mukhopadhyay New Delhi
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