Explanation:

Option (a) is correct. Tax reform efforts prior to 1991 focused on enhancing revenue productivity to finance large developmental plans and promoting equity. Tax reforms since 1991 were initially undertaken as a part of the structural reform process following the macroeconomic crisis of 1991. The reforms aimed at augmenting revenues and removing anomalies in the tax structure through restructuring, simplification and rationalisation of both direct and indirect taxes drawing mainly from the recommendations of the Tax Reforms Committee 1991 (Chairman:Dr.Raja J. Chelliah). The key tax reforms include lowering the maximum marginal rate on personal income tax; widening of the tax base by way of a series of steps including introduction of presumptive taxes, adoption of a set of six (one-by-six) economic criteria for identification of potential tax payers in urban areas and taxation of services; reducing the corporate tax rate on both domestic and foreign companies; unification of tax rates on closely held as well as widely held domestic companies; rationalisation of capital gains tax and dividend tax; progressive reduction in the peak rate of customs duty on non-agricultural products and rationalisation of excise duties. The need for tax rationalisation was the focus of various Committees appointed by the Government. The ‘Advisory Group on Tax Policy and Tax Administration for the Tenth Plan’, 2001 (Chairman: Dr.Parthasarathi Shome) recommended the deletion of exemptions and deductions which have become redundant. The Expert Committee to Review the System of Administered Interest Rates and Other Related Issues, 2001 (Chairman: Dr.Y.V.Reddy) recommended withdrawal of tax concessions available on small savings. Task Force on Direct Taxes and Indirect Taxes, 2002 (Chairman: Dr.Vijay Kelkar) reiterated the need to withdraw exemptions and concessions to widen the tax base.