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

Authors: Poonam Sharma; Jaspal Singh

Addresses: P.G. Department of Commerce and Business Administration, Khalsa College, Amritsar-143005, Punjab, India ' Department of Commerce, Guru Nanak Dev University, Amritsar-143005, Punjab, India

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.

DOI: 10.1504/IJEBR.2015.070268

International Journal of Economics and Business Research, 2015 Vol.10 No.1, pp.18 - 29

Received: 20 Dec 2013
Accepted: 10 Nov 2014

Published online: 20 Jun 2015 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article