Dr. Vidhu Shekhar@profvidhu
My latest article in The New Indian Express on the topic of Who Pays How Much GST in India. Oxfam's claim that 64.3% of the GST is paid by the poorest 50% in India has been widely circulated several times in various media outlets.
Inspired by a student's comment during a casual discussion on the Indian Economy, I investigated this assertion.
After analyzing detailed NSSO Consumption data and GST rates on over 400 items consumed by Indian households, the results revealed a stark contrast. The bottom 50% actually contributes 9.6% of the Total GST in India, debunking Oxfam's figure of 64%.
Related academic paper here: https://papers.ssrn.com/sol3/papers.cfm ... id=4979861
Vidhu Shekhar
Bharatiya Vidya Bhavan - S.P. Jain Institute of Management & Research (SPJIMR)
Date Written: October 08, 2024
Abstract
This study critically evaluates Oxfam's claim that the poorest citizens in India bear most of the Goods and Services Tax (GST) burden. Despite gaining significant media attention following its presentation at the World Economic Forum in Davos, Oxfam's assertion lacks robust empirical support and suffers from several methodological shortcomings. This paper presents a comprehensive analysis of GST contributions across different income groups by leveraging detailed consumption data from the National Sample Survey Office (NSSO) and applying precise GST rates. The findings reveal that the bottom 50% of the population contributes only 9.6% of the total GST revenue and 28.1% of the GST contributed by Households, contrary to Oxfam's claim of 64.3%. In contrast, the top 20% contributes 41.1% of Household GST contribution and 14.2% of Total GST, reflecting the progressive nature of GST. This analysis underscores the need for accurate data and rigorous methodology in shaping public policy discourse, as misleading narratives can distort perceptions of economic fairness and influence policy decisions.
Statistics: Posted by chetak — 14 Oct 2024 01:10