An autonomous research institute under the Ministry of Finance


Tax Enforcement Index

Publication date

Jan, 2006


Report submitted to the Ministry of Finance


A. L. Nagar, Sanjay Kumar, Sayan Samanta


The study examines the effectiveness of direct tax administration in India through an econometric model, taking into account the tax collections. It constructs a tax enforcement index treating enforcement as a latent variable through principal component analysis, and attempts policy recommendations for improving the efficiency and effectiveness of tax administration. The paper takes tax rates as given. It does not attempt designing the tax administration; rather focuses only on the effectiveness of tax administration.

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