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

Poonam Sharma and Jaspal Singh

International Journal of Economics and Business Research, 2015, vol. 10, issue 1, 18-29

Abstract: 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.

Keywords: tax determinants; core developmental indicators; growth boosters; sustainable development indicators; principal component analysis; PCA; multiple regression analysis; tax revenue; India; tax generation; taxation. (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:10:y:2015:i:1:p:18-29

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