ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Corporate Taxation: Voice from the Past

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In the July-September 1999 issue of the Journal of Indian   School of Political Economy, the Report of the Study Group on Corporate Taxation has been reproduced. The study group was set up by the Planning Commission long ago, in July 1983, and it submitted its report in December 1984. According to the editor of the Journal, the report is being published for the first time. Its publication is very well timed, coming out as it does on the eve of the union government's budget for 2000-2001.

For reasons unknown, the report had not seen the light of the day all this time. Perhaps some of the observations of the study group on the present system of taxation of corporate profits were not to be liking of successive governments at the centre. According to the group, "the present system of taxation of corporate profits appears to put a premium on inefficiency and waste, and inhibit the growth of the corporate sector". It is relevant to note in this context that, as the group observes, both in GDP as well as in value added in manufacturing "the share of the private corporate sector suffered a decline over the last two decades". Between 1960-61 and 1977-78 the share of the corporate sector in net value added in the registered manufacturing sector had declined from 70 per cent to 48 per cent and the share of non-government companies in gross value added by the non-financial corporate sector had come down from 96 per cent to 74 per cent.

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