Surjit Bhalla

While India is not the richest country in the world, the tax collection here is one of the highest and the income tax rate should be reduced to 25 per cent from around 40 per cent at present, eminent economist Surjit Bhalla said. While speaking to PTI, Bhalla said reduction in tax rate is required to accelerate the pace of economic growth. "We are a much more globalised economy in the world and the world is a lot more globalised. If you look at the overall tax rate structure in India, collection of taxes is one of the highest in the world and we are not the richest economy of the world," Bhalla said. He said that tax collection by state, Centre and local bodies is around 19 per cent of India's GDP. "We should move towards reducing it by 2 percentage points. As far as direct taxes are concerned, I think the overall tax rate should not be more than 25 per cent. Right now it is close to 40 with surcharges etc. 25 per cent, which is our corporate tax rate, that's what our income tax ra

Bhalla is currently the executive director for India, Nepal and Bhutan at the International Monetary Fund (IMF)

Sources also added that overall, we are clear that a mutually beneficial RCEP, in which all sides gain reasonably, is in interests of India and of all partners in the negotiations.

Bhalla's appointment comes at a time when India is facing an economic slowdown and the government is struggling hard to revive it

The EAC- PM is headed by Niti Aayog member Bibek Debroy. Economists Rathin Roy, Ashima Goyal and Shamika Ravi are other part-time members.

Economic growth slipped to its lowest level in three years in the first quarter, logging an annual rate of 5.7%