Mumbai: Nobel laureate Abhijit Banerjee is of the opinion that higher taxes on businesses could help the government spend more on welfare measures such as the income support scheme for farmers and bridge its fiscal deficit in the medium term.
“Taxes are paid by three percent of the population. If you want to leave move money in the hands of poor people, you cannot do it through personal income tax cuts.
You have to just give them money. Basically, increase the amount given under PM-Kisan. On the other hand, you can raise the taxes on the rich, consider wealth taxation and keep corporate tax rate high,” he told media group.
The co-recipient of this year’s economics Nobel is the Ford Foundation International Professor of Economics at the esteemed Massachusetts Institute of Technology and endorses the Indian government’s pro-poor schemes. However, in a media interview, favours no tax cuts for businesses.
Banerjee said it is important ‘for redistribution through schemes in the short run and for plugging the fiscal deficit in the medium term’. “Resources raised this way can be used for PM-Kisan and the rural employment guarantee scheme,” he said.
Further, when asked if there should be an inheritance tax, he opined, “Inheritance tax is even better, but it is hard to implement.”