The Reserve Bank of India on Monday said the procedural reforms aimed at widening the tax base, improving efficiency in tax collection and providing certain concessions for investment, which have seen a steep rise in the tax mop-up, are expected to continue during the current financial year.
As a result, the gross tax-GDP ratio - which has been rising since 2002-03, is budgeted to improve from 12.5 per cent in the revised estimates for 2007-08 to 13 per cent in 2008-09, the central bank's report on Macroeconomic and Monetary Developments in 2007-08 said.
It pointed out that the budget has proposed to continue the fiscal consolidation process with both revenue deficit and the gross fiscal deficit projected to dip.
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