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Multiple Choice Questions

India rsquo s tax to GDP ratio is far lower than the 21 per cent average of its emerging market peer...........

English Language (RBI Ast) Paragraph Completion

India’s tax-to-GDP ratio is far lower than the 21 per cent average of its emerging market peers; its public spending-to-GDP ratio is also the lowest among BRICS nations. ____________________ . About 85 per cent of the economy is outside the tax net. Even among those who pay taxes, the number of individuals who earn more than Rs.1 crore a year or pay tax in the 30 per cent tax bracket is unrealistically low.

The country cannot scale up necessary infrastructure and social spending without widening its tax base.

The government had promised to adopt non-intrusive methods and employ information technology to widen the tax base.

As a target, rough or otherwise, it is an ambitious goal for a country where the direct tax base has grown at a snail’s pace over six decades.

It is not clear why there is such panic about the number, especially if it was a mere statement of intent.

According to recent economic survey, it said India needs to increase its tax-GDP ratio, and spend more on health and education.

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Explanation:

The opening statement of the paragraph states concern over India’s low tax to GDP ratio in comparison to its market peers and the statement following the blank asserts how much percent of the economy is outside the tax net. Clearly, the statement that centres around the same idea would fit the blank.

While statement D is not adding any meaning to the paragraph, statement E is taking the discussion to a different context. Hence, both the options D and E can be eliminated. Statement C talks about ‘an ambitious goal’ whereas the sentence preceding the blank doesn’t specify anything related to that. This eliminates option C as well. A low tax to GDP ratio is a serious issue and as in the statement B, theme asures that need to be taken to resolve this issue are discussed, it’s naturally would fit in the latter part of the paragraph. Clearly, statement given as option A fits the blank appropriately.

Option A is hence the correct answer.

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