Question

Discuss any two liberalization measures pertaining to the tax reforms, introduced by the government, during the economic reform process of 1991.

Hint:

The 1991 economic reforms focused on reducing tax rates and simplifying tax procedures to improve compliance, reduce evasion, and boost investment.

Answer 1

Reduction in Tax Rates: High tax rates led to widespread tax evasion. Reducing taxes encouraged voluntary compliance and boosted investment. 
Simplification of Tax Procedures: Complex tax procedures discouraged compliance. Reforms like VAT and later GST reduced cascading effects and improved transparency.