In the midst of all the hullabaloo regarding the announcement of loan waiver in several states, I am surprised that not enough has been written on the Reserve Bank of India (RBI) report on state finances. The most important aspect, however, is that the RBI report concludes that there can be no single optimal rate for taxing commodities. There is a lot of empirical literature on such optimal tax rates, particularly against them. Additionally, almost all empirical-computational studies published so far yield non-uniform optimal tax rates. The report also objectively discusses the impact of the Ujwal DISCOM Assurance Yojana on state finances.

Source: Mint July 13, 2017 02:03 UTC