
Sacchidananda MukherjeeNational Institute of Public Finance and Policy | NIPFP · Tax Research Cell
Sacchidananda Mukherjee
Ph.D. (Economics), M.A. (Economics)
Value Added Tax (VAT/ GST), Revenue Potential Estimation, Tax and Non-Tax Revenue Mobilization
About
157
Publications
99,168
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Introduction
Dr. Sacchidananda Mukherjee is a Professor at the NIPFP, New Delhi. Before joining NIPFP, he was with IWMI, Hyderabad, and WWF-India, New Delhi. For the past one and a half decades, he has worked on public finance, environmental economics, and water resources management issues in India. Dr. Mukherjee studied at the Madras School of Economics, Chennai (Ph.D. in Economics from the University of Madras) and Jawaharlal Nehru University, New Delhi (M.A. in Economics).
Additional affiliations
December 2013 - November 2022
September 2008 - February 2009
World Wide Fund for Nature (WWF)-India
Position
- Senior Manager - Water Resources Management
Description
- WWF-India & HSBC Climate Partnership - Living Ganga Programme
Education
May 2003 - May 2008
University of Madras (Madras School of Economics), Chennai, Tamil Nadu, India
Field of study
- Economics
August 1998 - May 2000
Jawaharlal Nehru University (Centre for Economic Studies and Planning), New Delhi
Field of study
- M.A.
Publications
Publications (157)
Taxes on commodities and services (TOCS) contribute, on average, 62.31% of the general government's total tax collection in India. This shows that a larger share of the tax burden rests on consumption than taxes on income, property, capital and other transactions. Indian public finance literature lacks a comprehensive assessment of tax collection f...
The above-mentioned article was first published with errors in Tables 1, 4, 5, 6 and Figures 1 and 2. This has now been corrected and the article has been republished online.
This paper explores VAT compliance costs and associated burdens, a topic of paramount importance in tax policy evaluation and reform. Tax compliance costs, which encompass the financial and non-financial burdens taxpayers face in meeting their tax obligations, present significant challenges, particularly in developing countries. Our analysis of the...
This study analyses poverty rates and inequality indices in Indian states from 2016 to 2022, examining different methodologies to provide a comprehensive view of poverty and inequality. It finds that there are drastic regional disparities in poverty rates, where Bihar, Jharkhand, Odisha and Uttar Pradesh all have uniformly heightened levels. The im...
The goods and services tax data varies based on sources. Therefore, depending on the database one chooses, the revenue performance assessment of the GST will be different. Moreover, GST collection and revenue realisation differ as the settlement of IGST depends on a state's inbound and outbound fl ows of goods and services.
The Union government foregoes revenue on account of various tax exemptions/incentive schemes promoted for various purposes. Like the Union government, state governments also provide tax incentives but the revenue impacts of those tax-exemption schemes are yet to be assessed. The present chapter assesses the trends and patterns of tax expenditures o...
State excise, the third largest source of the state's own tax revenue (OTR), is a crucial aspect of state finances in India. This study is important as it delves into the factors influencing state excise collection from alcoholic beverages. The tax base of state excise is the consumption of alcoholic beverages (viz., IMFL, country liquor, beer) and...
We assess the revenue potential of states in the Passenger and Goods Tax (PGT) collection based on available information in the public domain. Taxes on Goods and Passengers (also known as PGT) is a tax on services provided by commercial vehicles for carrying goods and passengers on roads or inland waterways. This tax is not subsumed into the GST, e...
The distributional impact of goods and services tax across different consumer groups in India is estimated for 2021–22 for various tax rates. Multiple rate structures and fixation of GST rates based on product specification make it difficult to assign a specific rate or estimate the effective rate across items. The Centre for Monitoring Indian Econ...
This study delves into the intricate interplay between visible inequality, conspicuous consumption, and food consumption in Indian households. Leveraging data from the Consumer Pyramids Household Survey (CPHS) provides significant insights. Through empirical analyses, including panel data analysis and instrumental variable panel data analysis, this...
We present an overall as well as state-wise assessment of state finances of 28 Indian states (18 major states and 10 minor states) for the period 2013-14 to 2023-24BE in this paper. To capture the changes in the state finances, we divide the period of our analysis into two sub-periods – pre-GST (2013-14 to 2016-17) and post-GST (2018-19 to 2021-22)...
Revenue forecasting is an integrated part of annual budgeting exercise of the government. Literature on revenue forecasting is sparse in India. To fill this gap in literature, an attempt is made in this paper to forecast the revenue of Corporate Income Tax (CIT) collection. Based on available quarterly data of CIT collection, real Gross Value Added...
Assessing the revenue implications of GST on Indian state finances cannot be contained to compare the revenue stream which is subsumed into GST with State GST collection alone. Since GST subsumes many taxes from state tax bases, comparing the revenue performance of taxes which are outside the GST framework would be equally important. Moreover, in t...
We estimate GST rate-wise distributional impact of GST across different consumer groups in India for 2021-22. Multiple rate structure and fixation of GST rates based on product specification make it difficult to assign a specific GST rate (or estimation effective GST rate) across items (or group of items) of consumption. In absence of recent consum...
By comparing comparable revenue streams of pre- and post-GST periods, in this paper we assess the revenue performance of GST in India for the period 2012-13 to 2022-23. Sustaining revenue streams of the Union and State governments (in terms of percentage share in nominal Gross Domestic Product or GDP) between the pre- and a post-GST period is impor...
Many countries have initiated structural reforms in corporate income tax (CIT) to attract investment and promote growth. There has been a continuous decline in CIT rates worldwide. It is expected that cuts in CIT rates may increase after-tax profits and encourage investment. A change in the CIT rate may also be shifted backward (by changing salarie...
The states that will suffer the maximum revenue impact if the expected goods and services tax collections do not improve in the coming years, are identified. The pre-and post-GST buoyancy of the states is compared to understand the possible outcome. The likely revenue requirement for servicing the accumulated special market borrowings of the union...
Linkages between international trade and environment are bidirectional. Both the literature on impacts of domestic environmental policies on international trade and impact of international trade-investment flows on environmental sustainability are vast and expanding by each day. On one hand, stringent domestic environmental policies / regulations a...
Assessing the revenue implications of GST on Indian state finances cannot be contained to compare the revenue stream which is subsumed into GST with State GST collection alone. Since GST subsumes many taxes from state tax bases, comparing the revenue performance of taxes which are outside the GST framework would be equally important. Moreover, in f...
Compliance cost is often referred as “hidden cost of taxation” and acts as disincentives for enterprises to comply with the tax regime. In the present paper, we develop a methodology to measure VAT/Sales Tax compliance costs of unincorporated enterprises in India based on unit-level data of the National Sample Survey Office (NSSO)’s 73rd round surv...
After two consecutive years (2019-20 and 2020-21) of fiscal stress, state finances in India show sign of improvement in 2021-22RE. With rising economic growth, revenue mobilization has improved which helped states to increase expenditures during 2021-22. 2020-21. States received GST compensation from the GST compensation fund which helped them to c...
After two consecutive years (2019-20 and 2020-21) of fiscal stress, state finances in India show sign of improvement in 2021-22RE. With rising economic growth, revenue mobilization has improved which helped states to increase expenditures during 2021-22. 2020-21. States received GST compensation from the GST compensation fund which helped them to c...
Improving economic viability of Indian agriculture is contingent upon agri-environmental sustainability (AES). Objective assessment of environmental costs of agriculture is lacking in India. Unless internalise environmental impacts of agriculture will be borne by the society at large, in terms of depletion and degradation of water resources, land d...
Indian GST completes five years on 30 June 2022. Revenue assessment is important to assess the success of GST in protecting revenues of the Union as well as state governments. By compiling comparable revenue streams for pre-and post-GST regime, we compare the revenue performance of GST for the period 2005-06 to 2021-22RE. Our analysis shows that bo...
According to India’s ‘Third Biennial Update Report to the United Nations Framework Convention on Climate Change’, electricity production contributes half of India’s total carbon dioxide (CO 2 ) emission (without land use, land-use change and forestry [LULUCF]) and 40% of CO 2e (CO 2 equivalent) emission in 2016. Coal- and lignite-based thermal powe...
Due to the COVID-19 pandemic, public finance management (PFM) in the FY 2020–2021 and 2021–2022 have become extremely challenging. The economic contraction has created pressures on PFM in India in terms of lower revenue mobilisation and higher expenditure needs. Both the union and state governments are facing dual problem of arresting economic cont...
Harmonization of tax rates across States is expected to minimize rate wars across States and rein in revenue leakage due to cross border tax shopping, trade diversions, and misclassification of goods.
Available at: https://www.timesnownews.com/business-economy/economy/tax-harmonisation-vs-fiscal-autonomy-a-renewed-debate-in-indian-gst-article-91780...
According to India’s Third Biennial Update Report to the United Nations Framework Convention on Climate Change, electricity production contributes half of India’s total carbon dioxide (CO2) emission (without LULUCF) and 40 per cent of CO2e (CO2 equivalent) emission in 2016. Coal and lignite based thermal power sector is the predominant source of el...
The Union government foregoes revenue on account of various tax exemption/incentive schemes promoted for various purposes. The Constitution of India assigns power of taxation of broad-based taxes to the Union (Federal) government (e.g., Corporate Income Tax, Personal Income Tax, Union Excise Duty, Customs duty). Like the Union government, provincia...
It will be important for the government to stick to gliding path of fiscal consolidation by containing deficits and debts. Enhancing revenue mobilization by taking up reforms in revenue administration and improving efficiency in public expenditure programmes may help the government to create fiscal space to boost the economy by investing in infrast...
There is need for environmental regulators to enforce environmental constraints strictly at all levels. Like FRBM Act in PFM, rule-based approach in utilisation of environmental space and restricting pollution loads to the environment could help us to achieve sustainable development. Available at: https://www.timesnownews.com/business-economy/econo...
Introduction of Goods and Services Tax (GST) has resulted in harmonisation of tax compliance system in India. In the new tax regime, tax compliance system has completely moved to online (digital) platforms. Given the inequality in access to digital platform or adoption of Information and Communications Technology (ICT) among marginal, small and med...
GST rate structure has undergone many changes since the introduction of GST in India. Revenue mobilization from the GST is falling short of targets and it is attributable to reduction of tax rates as well as lack of tax compliance. This is hurting tax revenue of the Union government as well as States. Like every tax reform, it was also envisaged th...
Keeping in mind the revenue needs of the governments, we assess the revenue implications of restructuring GST rates. The study builds six alternative scenarios based on various assumptions about the tax rate-wise distribution of taxable value and tax liabilities. Unlike previous studies on RNRs, the present study relies on aggregate tax information...
Shortfalls in GST compensation cess collection vis-à-vis GST compensation requirements of states for the Fiscal Years 2020-21 and 2021-22 are concerns for the Union as well as State governments. During 2020-21, the Union government borrowed Rs. 1.10 lakh crore against Government of India securities to provide compensation to the States. The Union g...
Revenue implications of transition to EVs are not restricted to revenue side of the budget only; expenditure side of the budget also bears the burden in terms of various subsidies given to EVs.
Adopted in 2017, the Goods and Service Tax (GST) marked the beginning of a new era in the history of indirect taxation of India-an era aspiring to realize the dream of 'One Nation, One Tax' for one of the biggest federal democracies in the world. In line with the fiscal federalism prevalent in India, GST has not only branched into IGST, CGST and SG...
India is a federal state with significant autonomy at the sub-national and provincial level. The introduction of the GST in India
since 1 July 2017 is the result of a journey that started 3 decades ago. India embraced the concept of VAT in 1986 by introducing the Modified VAT (MODVAT) to replace Union Excise Duties (UEDs) on manufacturing. Given th...
How government can address the issues in compensating states for GST revenue shortfall
Available at: https://www.timesnownews.com/business-economy/economy/gst/article/how-government-can-address-the-issues-in-compensating-states-for-gst-revenue-shortfall/778314
India’s energy security is significantly dependent on imports of primary energy sources. A large part of India’s imported energy sources are used – either directly and/or after refinement – for generation of electricity. Therefore to achieve energy security as well as reduce the current account deficit, it will be important for India to gradually r...
Due to the COVID-19 pandemic, public financial management in the FY 2020-21 and 2021-22 have become extremely challenging. The economic contraction has created pressures on PFM in India in terms of lower revenue mobilisation and higher expenditure needs. Both the Union and state governments are facing dual problem of arresting economic contraction...
Role of public financing of human development (HD) is inevitable, especially for developing countries like India where access to resources and economic opportunities are not equitably distributed among people. Governments aim to achieve equity in distribution of resources through allocative and redistributive policies whereas macroeconomic stabilis...
Unincorporated enterprises significantly contribute to India's GDP and generate large scale employment. Lack of access to formal credit often constrains these enterprises to scale up. Understanding factors influencing access to formal credit of unincorporated enterprises is important which may help enterprises to improve performance and become cred...
Rapid urbanization and industrialization are the major factors behind growingurban water demand in India. Incidentally, the large urban areas are experiencing faster growth in population, and most of them are in arid and semi-arid regions, which are naturally water-scarce. As a result, water supplies from local water sources including aquifers are...
As GST shows the brightest sign of recovery among all revenue streams, a recent study by NIPFP projects GST revenue for 2020-21.
Available at: https://www.timesnownews.com/business-economy/economy/article/impact-of-pandemic-on-indias-gst-revenue-an-assessment/700454
Unincorporated enterprises significantly contribute to India's GDP and generate large scale employment. Lack of access to formal credit often constrains enterprises to scale up. Understanding factors influencing access to formal credit of unincorporated enterprises is important which may help enterprises to improve performance and become credit wor...
Uncertainties surrounding GST collection in financial year 2020-21 have heightened due to ongoing COVID-19 pandemic. Given that economic activity is gradually returning to pre-pandemic levels, this paper projects overall as well as state-wise GST collection for 2020-21. The estimated GST collection of 2020-21 is the sum of realized GST collection d...
National Sample Survey Office (NSSO) of the Ministry of Statistics and Programme Implementation, Government of India conducts various socio-economic surveys across States in India on a regular basis and brings out reports. The reports provide aggregate (macro) level information which has certain research /policy importance. However, unit level data...
In 1987, the Brundtland Commission introduced the term “sustainable development” to highlight the needs for taking the future generations into account. The term has evolved from only focusing on the human kind to reconciliation between humans and nature. On one hand, this evolution opens space for nature and vulnerable people to be acknowledged, on...
In public finance, estimation of tax potential of a government—either federal or provincial—has immense importance to understand future streams of tax revenue. Tax potential depends on tax capacity and tax effort (TE) and, therefore, joint estimation of both the functions is desirable. There are several frameworks to estimate tax capacity and tax e...
In public finance, estimation of tax potential of a government – either federal or provincial – has immense importance to understand future streams of tax revenue. Tax potential depends on tax capacity and tax effort (TE) and therefore joint estimation of both the functions is desirable. There are several frameworks to estimate tax capacity and tax...
Access to handwashing facilities including soap and water is considered a basic minimum personal hygiene requirement to reduce spreading of infectious diseases like Novel Coronavirus Disease (Covid-19).Outbreak of Covid-19 and subsequent spread of the virus across the world is a serious public health concern of the time. As on 10 April 2020 there a...
States may be hesitant to increase sales tax rates on petroleum products out of the goods and service tax’s ambit to cope with the Covid-19-led revenue shock. The risk of revenue loss on account of the interstate purchase of out-of-GST petroleum products at a concessional rate of 2% may not give an opportunity to state governments to enlarge fiscal...
The question that arises now is how to enforce mandatory social-distancing norms in public transport systems in India once lockdown is rolled back? Available at: https://www.timesnownews.com/business-economy/economy/article/emerging-challenges-in-public-transport-system-amid-pandemic/588330
Access to handwashing facilities including soap and water is considered a basic minimum personal hygiene requirement to reduce spreading of infectious diseases like Novel Coronavirus Disease (Covid-19). Outbreak of Covid-19 and subsequent spread of the virus across the world is a serious public health concern of the time. As on 10 April 2020 there...
A comprehensive multistage Value Added Tax (VAT) system, namely Goods and Services Tax (GST), is introduced in India since 1 July 2017. GST encompasses various taxes from Union and State indirect tax bases, and it is a dual VAT system with concurrent taxation power to Union and State governments. It was envisaged that removal of cascading of taxes...
Revenue from Goods and Services Tax (GST) is not meeting budgetary targets for last two financial years and therefore it is important to understand the reasons behind shortfall in GST collection. Any shortfall in GST collection will not only impact fiscal management of the union government but also it will spill over to state finances in terms of l...
Taxes from the petroleum sector constitute a significant share in indirect tax collection of the union as well as state governments in India. Understanding prospective revenue from petroleum taxes could help governments in better public finance management. The importance of revenue from the petroleum sector has increased after the introduction of G...
Containing the fiscal deficit to the desired target of 3.5% of GDP in 2020-21 will depend on achieving revenue mobilisation targets as well as the flexibility of the government to cut expenditures.
Available online at: https://www.timesnownews.com/columns/article/budget-2020-21-over-ambitious-on-revenue-mobilisation/549766
The introduction of the goods and services tax has resulted in a subsummation of taxes like local body tax, which used to be collected by “local authorities.” Consolidation of tax base under the GST by including various taxes of union, state and local governments resulted in a single tax base. On the consolidated tax base, both union and state gove...
Given the ongoing shortfall in GST collection and uncertainty associated with revenue on account of SGST collection, many states have approached the Fifteenth Finance Commission (FFC) for possible extension of the GST compensation period by another three years, i.e., up to 2024-25. Since the decision on possible extension of the GST compensation pe...
Improving economic viability of Indian agriculture is contingent upon agri-environmental sustainability (AES). For agriculture, environment acts as a sink of pollution load as well as inputs for production. Objective assessment of environmental impacts of Indian agriculture and impacts of polluted environment on agriculture are crucial for AES. The...
Debates on compliance audits of the goods and services tax will have to move beyond mere “invoice matching” to more holistic approaches for data reconciliation that can enable effective tax enforcements, and compliance risk assessment and mitigation.
Achieving harmonisation in design, structure and administration of taxes on goods and services was the major driving force behind the introduction of goods and services tax (GST) in India. Goods and services tax subsumes many taxes from both union and state tax bases. Achieving tax harmonisation in a federal system curtails fiscal autonomy of both...
Revenue from taxes on petroleum products, crude petroleum and natural gas constitutes significant share in major indirect tax collection of the Union as well as State governments. The revenue share of petroleum taxes for the Union government has gone up whereas for the state governments it has gone down since 2010-11. Understanding revenue stream f...
Achieving harmonisation in design, structure and administration of taxes on goods and services was the major driving force behind the introduction of Goods and Services Tax (GST) in India. GST subsumes many taxes from both Union and State tax bases. Achieving tax harmonisation in a federal system curtails fiscal autonomy of both the Union and sub-n...
In India, states may be induced to mobilise revenue through alternative channels by the growing demand for public expenditure, limitations in expanding fiscal space, and the limited scope to deviate from the common harmonised tax system in the goods and
services tax regime. An assessment of existing tax efficiency and strengthening the tax administ...
Evolution of Goods and Services Tax in India - by R. Kavita Rao May 2019
Evolution of Goods and Services Tax in India - by R. Kavita Rao May 2019
Introduction
India is moving towards introduction of Goods and Services Tax (GST). The GST would be a multistage comprehensive value added tax encompassing both goods and services. In the federal structure of India and under the constitutionally assigned taxation powers to different governments, GST would be a major indirect tax reform, as both the...
Evolution of Goods and Services Tax in India - by R. Kavita Rao May 2019
During 2001-16, State Finances in India have undergone significant changes in both revenue mobilization and controlling expenditures which helped states to contain deficits (revenue as well as fiscal). Introduction of Value Added Tax (VAT) helped states to augment revenue mobilization whereas adoption of Fiscal Responsibility Budget Management (FRB...
The quest for a suitable indirect tax framework in India encompassing goods as well as services started a long time back. The constitutional assignment of powers for taxation in India included a number of stand-alone taxes on goods and services in addition to a few relatively more broad-based taxes, none of which were comprehensive in covering both...
In World Energy Outlook 2018, India's total primary energy demand (TPED) is expected to grow from 898 million tonne of oil equivalent (Mtoe) in 2017 to 1465 Mtoe in 2030. India's growth in TPED during 2017 to 2030 is expected to be the single largest source of global growth in TPED. India's share in world's TPED will go up from 6.4 percent in 2017...
The Goods and Services Tax (GST) was implemented in India on 1 July 2017, after four decades of protracted deliberations amid critical socio-economic and political challenges. It is a comprehensive multistage value-added tax on goods and services where both central and state governments share the same tax base. Finding a suitable design for GST tha...
A comprehensive multistage Value Added Tax (VAT) system, viz., Goods and Services Tax (GST), is introduced in India since 1 July 2017. GST encompasses various taxes from Union and State indirect tax bases and it is a dual VAT system with concurrent taxation power to Union and State governments. It was envisaged that removal cascading of taxes and e...
A comprehensive multistage Value Added Tax (VAT) system, viz., Goods and Services Tax (GST), is introduced in India since 1 July 2017. GST encompasses various taxes from Union and State indirect tax bases and it is a dual VAT system with concurrent taxation power to Union and State governments. It was envisaged that removal cascading of taxes and e...
A comprehensive multistage Value Added Tax (VAT) system, viz., Goods and Services Tax (GST), is introduced in India since 1 July 2017. GST encompasses various taxes from Union and State indirect tax bases and it is a dual VAT system with concurrent taxation power to Union and State governments. It was envisaged that removal cascading of taxes and e...
Unincorporated enterprises often bypass formal regulations in general and taxation in particular. Bringing unincorporated enterprises under the taxation system is a challenge often faced by tax administrators, and it is in this regard that the present study explores the factors which influence the decision of unincorporated enterprises to register...
Asia contains great biological and environmental diversity, resulting in a diversity of challenges facing Asian countries. However, Asian nations have in common dense population pressures and lower levels of development, which means that environmental objectives are often not a top priority. Asian nations have exploited natural resources, used grea...
In the context of the initiative “Blueprint for Water Accounting in India” of the India-EU Water Partnership, several workshops have been held so far and three topics are aimed to be addressed in detail: Water Quality, Water Efficiency Indicators and Cost Recovery Ratios. At the 4th meeting, “the task force on cost recovery was asked to develop an...
In the context of the initiative Blueprint for Water Accounting in India, anchored with the Ministry of Water Resources, River Development and Ganga Rejuvenation (MOWR), and supported by 2030 Water Resources Group (2030WRG) and the India-EU Water Partnership (IEWP), the Task Force on cost recovery was asked to develop an initial concept note on cos...
India left aside the economic philosophy of import-substitution led growth model in 1991, and increasingly integrated itself with the world economy. While the GDP growth of the country has been commendable in global comparison, devolution of actual development at state level is a relevant research question. It has been argued that India’s poorer gr...
In this article, the authors discuss the equity aspects of corporate tax incentives in India and analyse the effectiveness of some of the incentives against their stated objectives. The article attempts to provide an overview of the status of corporate tax concessions in India by comparison with comparable countries, and asks whether the incentives...
An alternative methodology to measure the scale of unaccounted income in India (shadow economy) using transport as the universal input is developed. Based on input –output tables and National Accounts Statistics, annual demand for road freight transport is estimated. Correspondingly, annual supply of road freight transport is obtained based on avai...
Assessing the present state of water services (access to water supply and sanitation) is important to estimate the demand for infrastructure investment. Different countries and regions are generally in different stages of providing access to safe drinking water and sanitation. Unlike other infrastructure investment, investment in water services inf...
With rise in population and the ongoing urbanisation drive, the urge to ensure energy security both for the rural and urban areas has emerged as a major challenge in India. The demand for energy has increased in all spheres of life, e.g., for cooking, cultivation, production purposes, transportation, and so on. Although through various government i...
With inception of a comprehensive WTO framework in 1995, while the tariff barriers across Member countries have declined, several procedural and policy-related hassles still continue to obstruct trade flows. To reduce the procedural hassles to export and import flows, from the Cancun Ministerial (2003) onwards, negotiations to reach an agreement on...