The undergirding ideology is liberal seeking structural reform of all markets with a view to opening them up further. The moot point then is whether the above-stated objectives can be achieved via the prescribed route. Our experiences with the IMF policies indicate that when the stated objectives become difficult to achieve, relentless pursuit of the means become ends in themselves, at least, on the surface. On the fiscal reform front, while none can dispute the requirement to document the economy and to broaden the tax base, some of the premise on which the conclusions are based is unrealistic. Instead, it projects a smooth sailing overall as though the stipulated target of Rs4 billion in AIT is achievable easily and smoothly.
Reality is to the contrary.
For, even a target of Rs 2 billion in AIT has been difficult to achieve. While the amount is modest, AIT's symbolic value is immense in according legitimacy to the tax reform and documentation drive. Unless there is actual progress on this front, the tax collectors will remain on a weak moral wicket and thereby not very effective in documenting the economy and broadening the tax base. Merely mentioning it emphatically in the document does not take us home on the AIT front. In fact, it shows the short shrift given to this key issue in fiscal reform.