Applied General Equilibrium Analysis of India's Tax and Trade Policy
This title was first published in 2003. India's tax revenues depend on manufacturing while agriculture and services generate employment. WTO's Uruguay and Doha rounds imply large tariff cuts. This affects the competitiveness of the Indian manufacturing sector and has implications for government deficits. Excessive dependence on indirect taxes and subsidies to regulate markets introduces distortions and is incompatible with free market principles. The book analyses welfare implications of fiscal and trade policies for India. To put the results in perspective, developments in trade theory, public finance and Computable General Equilibrium (CGE) modelling are covered. Theoretical results are juxtaposed with empirical findings from these models. Methodology to construct CGE models is also covered. The trade model covers tariff cuts under various assumptions besides incorporating "new trade theory". As tax reforms and tariff cuts are independent, past tax reforms like MODVAT (MODified VAT) and proposed reforms like VAT, elimination/reduction of subsidies are covered using a separate tax model.
Table of Contents
Contents: Introduction; Literature survey; Tax and trade models; Results from the trade model; Results from the tax model; Summary and conclusion; A: Mathematical appendix; B: Data set; C: Calibration and parameters; D: Programming appendix; E: India - a brief background; Bibliography; Name index; Subject index.
'This is an excellent book, providing a very clear and indepth introduction to all the key concepts of Computable General Equilibrium modeling. The book is unique in its application of CGE models to policies in an emerging economy like India. The conceptual clarity of the book is enhanced by effective use of figures to illustrate complex points. A very comprehensive book which successfully combines theoretical developments with practical applications to tax and trade policy analysis in India. This will be a most valuable teaching, reference and research aid.' Assistant Professor Piyush Tiwari, University of Tsukuba, Japan