Rupee Trade- Technical Credits Puzzle

March 3, 1984 linked incentives tend to give rise to mere inflation of expenditure rather than to genuine expansion of the desirable activities. If the Finance Minister subscribes to this view, should he not be re-examining the whole of the present system of profit taxation under which, given the prevailing rate of tax, firms have a strong incentive to overstate their expenditures and understate their receipts. The existing system of profit taxation puts a high premium on spending and unless the system itself is radically changed the phenomenon of inflated spending is bound to persist.