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Determinants of tax-revenue in India: a principal component analysis approach

Poonam Sharma and Jaspal Singh

International  Journal of Economics and Business Research, Vol. 10, No. 1, 2015
The present study seeks to explore the various important determinants of tax-revenue in India besides suggesting measures to improve the tax generation in India. The data has been collect over a period of 13 years,i.e., from 1999–2000 to 2011–2012. The findings of the principal component analysis revealed that three factors influence tax revenue performance in India namely; ‘Core Developmental Indicators’,‘Growth Boosters’, and ‘Sustainable Development Indicators’. Further, results of multiple regression analysis reveal that all the three factors play a positive role towards tax-revenue generation in India. The results suggest that there is an urgent need to control inflation, population growth rate and non-developmental expenditure, besides improving the growth rates of GDP, exports and allied sectors; as all these parameters have an important bearing on the tax-revenue generation in India.
Courtesy:Inderscience
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