2024 Will Set the Agenda for 2047

This year is an opportune moment to take stock, all with an eye on the template and trajectory for 2047

- BIBEK DEBROY

THIS YEAR IS the year of the National Election and there will be a new government. Even if the political composition of that government is the same as the present one, technically, it will be a new government. India is on a trajectory for Amrit Kaal, with an aspirational target of becoming a developed economy (interpreted as high income) in 2047. The year 2024 is roughly midway and is time to take stock and review. Also, the target of a $5-trillion economy will be reached midway—or a few months earlier—into the term of the 2024-29 government. Not to forget Sustainable Development Goals (SDGs), with a terminal goal of 2030; most countries have deviated from this, India less so. Several people will suggest comprehensive reform agendas for the new government. But whatever the case may be, the new government needs to look at the following agendas.

First, there are direct taxes. The ultimate goal of direct tax reform is a simplified system, with removal of exemptions, so that compliance costs and litigation are reduced. For both personal income taxation and corporate taxes, there are two channels, one with fewer exemptions and lower rates. But for both channels, personal and corporate, the fewer-exemption route is not yet attractive enough and needs to be incentivised more. Stated more strongly, one needs a direct tax code with zero exemptions, in the process, unifying personal income rates (which unincorporated enterprises also pay) and corporate taxation. This cannot be accomplished overnight, but the Budget for 202425 can set the tone and timeline.

WITH INDIA BECOMING A MEMBER OF THE UN STATISTICAL COMMISSION IN JANUARY 2024, IT IS TIME TO REVIVE ITS ONCE-RESPECTED STATISTICS SYSTEM