Economics · Fiscal Reforms
Consider two policy actions: Policy Action P (complete removal of capital gains tax on long-term equity) and Policy Action Q (implementation of a national GST with a single moderate slab). Evaluate these statements: Statement I: Policy P is classified as a Tax Reform. Statement II: Policy Q is fundamentally a Second Generation Reform due to Centre-State administrative restructuring. Statement III: Policy Q eliminates the cascading effect of taxes. Statement V: Policy Q is expected to reduce the overall CPI as the tax burden is lower than the combined pre-existing VAT, Excise, and Service Tax structure. Which combination of these statements is correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Statements I, II, III, and V are correct.✓
- 2Statements I, II, III, and IV are correct.
- 3Statements I, II, III, V, and VII are correct.
- 4Statements I, II, III, IV, and VII are correct.
Correct answer
Statements I, II, III, and V are correct.
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