“Bharat’s Big Bang Tax Reform: A Laffer Curve Moment?”, Swarajyamag, February 1, 2025:
“In 1981, when then-United States (US) President Ronald Reagan announced sweeping tax cuts, economist Arthur Laffer — famous for the “Laffer Curve” — quipped that tax policy wasn’t just about numbers but about human behaviour. The right cut at the right time, he argued, could spark growth rather than shrink revenues.
His words have echoed through economic debates ever since, and nowhere is this search for “big bang” reform more evident than in Bharat’s annual budget speeches. Every year, as the finance minister steps up to her seat in Lok Sabha, economists, businesses, and citizens alike tune in with one question: What’s the big takeaway? In 1991, it was Manmohan Singh’s sweeping liberalisation.
In 1997, P Chidambaram’s “dream budget” slashed tax rates, making compliance simpler. In 2016, Arun Jaitley’s budget paved the way for the goods and services tax (GST), fundamentally reshaping Bharat’s tax regime. This year, the headline-maker was a substantial tax break — one that promises to put more money in the hands of individuals and businesses. The rationale for an income tax cut in the Union Budget 2025 was anchored in the need to stimulate domestic demand amidst slowing economic growth and persistent inflationary pressures……”
Read the full article at Swarajyamag.com
