Which of the following Committees was constituted for reforms in Tax Structure?

The correct answer is Chelliah Committee.

Key Points

• The Chelliah Committee was constituted in 1991 to suggest reforms in the tax structure of India.
• It is formally known as the Tax Reforms Committee, headed by Raja J. Chelliah, a renowned economist.
• The committee's recommendations focused on simplifying the tax system, broadening the tax base, and improving tax administration.
• It emphasized reducing tax evasion and ensuring equity in taxation.
• The Chelliah Committee's suggestions laid the foundation for many of the tax reforms implemented during the economic liberalization period in India.

Additional Information

• Tax Reforms in India
  • Tax reforms are aimed at improving revenue generation, reducing complexity, and promoting compliance.
  • India’s tax reform journey includes GST implementation, direct tax code simplification, and digitization of tax administration.
  • Reforms such as lowering corporate tax rates and introducing e-filing systems have improved ease of doing business.
• Economic Liberalization in 1991
  • The economic liberalization of 1991 marked a shift towards market-oriented policies.
  • Key changes included reducing trade barriers, deregulation, and attracting foreign investments.
  • Tax reforms under liberalization were crucial for supporting fiscal stability and economic growth.
• Direct and Indirect Taxes
  • Direct taxes are levied on income or wealth (e.g., Income Tax, Corporate Tax).
  • Indirect taxes are levied on goods and services (e.g., GST, Customs Duty).
  • The Chelliah Committee recommended rationalizing both direct and indirect taxes to improve efficiency.
• Raja J. Chelliah
  • Raja J. Chelliah was an eminent Indian economist and policymaker.
  • He is widely recognized as the architect of India’s modern tax system.
  • His contributions include pioneering tax reforms and advising on economic policies during India's liberalization phase.