'India has among lowest tax/GDP ratios, no room for sops'

Pointing to the problematic fiscal deficit situation, Minister of State for Finance Jayant Sinha on Wednesday said the government has little room for tax concessions with India's "very low" tax-to-GDP ratio.

"Our tax-to-GDP ratio is simply not acceptable. If we want to run a modern 21st century state, and if we want to deliver to our people the public goods and services that they demand and which is their right, we cannot deliver at our tax-to-GDP ratio at which we are right now," Sinha said here at an interaction with the corporate world organised by industry body Ficci.

"Our challenge right now is that we have very little room for tax concessions," he added.

"Basically as a government we are on backlog. The tax-to-GDP ratio for the central government is 10 percent and state plus centre is about 15-16 percent," the minister said.

"The OECD average is 35 percent. Brazil, Indonesia, Kenya, Nepal, each of these countries have a tax-to-GDP ratio higher than India and then we as a society are thinking of tax concessions", he added.

The NDA government has also inherited a fiscal deficit of 4.7 percent from the previous UPA government, Sinha said.