The affluent Indians often complain about the “excessive” income taxation. Yet, very few of them figure among the top income taxpayers. This paradoxical situation results from the relatively low incomes reported by wealthy groups. On average, the wealthier a family is, the smaller the income it reports relative to its wealth.
This analysis based on more than four decades of time series data on sales tax/value added tax/goods and services tax in India does not reveal any nonpareil revenue potential of VAT or the VAT-based GST system.
Even after deregulation of pricing, the movement of retail prices of petrol and diesel is not directly related to global crude oil prices. Taxes make up around two thirds of the petrol and diesel prices paid by consumers.
Price inflation in India as measured by the Wholesale Price Index and the Consumer Price Index has shown diverging trends. While WPI indicates a disinfl ationary situation for 16 months, CPI indicates inflation. Explaining the construction of the two indices, the trends of subgroups of both indices are presented. It is found that the different sample sizes and weightages of commodity groups of both indices and price interventions in the market explains, at least in part, this odd situation of infl ation along with disinfl ation.
