Beyond GDP: Building an inclusive India

India’s position as the world’s 5th largest economy hides stark inequalities. With only 2.2% of the population paying income tax, fiscal consolidation has come through spending cuts, not fair taxation. Wealthy corporations often enjoy lower tax rates than smaller firms, and exemptions widen the gap. States bear the burden of public spending—especially in education—while the Centre retains non-shareable cess collections. Over-reliance on liquor taxes reflects state complacency, with little effort to tap progressive sources like real estate or electricity taxes. As highlighted at CDPP’s 2025 conference, India needs smarter taxation, better fund sharing, and stronger Centre-state cooperation for true inclusive growth.

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