Question

Discuss any two liberalization measures pertaining to the tax reforms, introduced by the government, during the economic reform process of 1991.

Hint:

The 1991 reforms simplified tax structures and reduced rates to enhance compliance and boost economic growth.

Answer 1

Reduction in Tax Rates: The government reduced corporate and personal income tax rates to encourage compliance and boost investment. Simplification of Tax Procedures: Introduction of reforms like VAT and later GST streamlined indirect taxes, reducing cascading effects and promoting transparency.