CBSE 2025, Set 1

Question

(a) (i) Discuss briefly, causes and consequences of tax reforms taken by the Indian Government during economic reforms.
(ii) Distinguish between Multilateral Trade and Bilateral Trade.

Edvaya · Accepted Answer

The correct answer is Subjective. **(i)** The causes of the tax reforms initiated during economic reforms in India were to curb tax evasion, encourage savings and voluntary disclosure of income. Additionally, indirect tax reforms were necessitated to facilitate the establishment of a common national market for commodities.
The tax rate rationalisation during the reform period, aimed at yielding larger tax revenue but did not result in an increase in the tax revenue. Moreover, tax incentives provided to foreign investors further reduced the scope for raising tax revenues which adversely impacted developmental and welfare expenditures.
*(Any other valid cause or consequence to be awarded marks)*

**(ii)** Multilateral trade is the trade by a country with more than two nations to exchange goods and services.
Whereas;
Bilateral trade refers to the exchange of goods or services between two countries.

Edvaya Target

Edvaya Aspire

Take a Free Mock Test

Target Subjects

Aspire Subjects

Subject Mastery

Economics > Indian Economic Development > Economic Reforms 1991

Keep Practicing

Current Question

Community Stats

Track Your Progress

Edvaya Target

We Value Your Privacy