India on Friday resumed publishing its income tax data, which was suspended in 2000 owing to staffing and technical issues.
Prime Minister Narendra Modi said in a tweet that the “big step” towards transparency and informed policy-making was expected to assist researchers and analysts.
The decision comes three months after French economist Thomas Piketty remarked in a lecture at the Jawaharlal Nehru University (JNU) that India could be vastly under-estimating inequality levels in the country in the absence of this data. India had first started publishing its income tax statistics in 1961. The driving force behind the revival of this practice is Chief Economic Advisor (CEA) Arvind Subramanian.
“India discontinued publishing income tax data after publishing for decades. Transparency is a problem in every country but only in India it is falling,” Prof. Piketty had said in his address to students and faculty of JNU on January 22.
In the absence of data, he said, it was not possible to show the evolution of wealth in India as a result of which “we could be vastly underestimating inequality.” The very next day, during a panel discussion at the Jaipur Lit Fest, Dr. Subramanian “promised” to deliver access to the data to Prof. Piketty.
On returning to Delhi, the Chief Economic Advisormade a case for the release in the Finance Ministry, which was at that time preparing the Union Budget.
He demonstrated the usefulness of the data in the Economic Survey in a chapter titled “Fiscal Capacity for the 21st Century”.
Conclusions based on analyses of the data were reported in the chapter, the crux of which was that just four per cent of India’s voters are taxpayers, though it should be closer to 23 per cent, and 85 per cent of the net national income falling outside the tax net.
On Friday, the Income Tax Department put up income tax data from the year 2000, on its website.
Along with it, the department also released the State-wise break-up from 2008-09.