Question

Consider the following statements

1. A higher Tax to GDP ratio is considered better for the economy
2. India has one of the lowest Tax to GDP ratio

Which of the above are correct?

• A.
  1 only
• B.
  2 only
• C.
  Both 1 and 2
• D.
  None of the above

Answer 1

The correct option is C

Both 1 and 2
The Tax-to-GDP ratio is a measure of a nation's tax revenue relative to the size of its economy. This ratio is used with other metrics to determine how well a nation's government directs its economic resources via taxation.

Developed nations typically have higher Tax-to-GDP ratios than developing nations. India has one of the Lowest Tax to Gdp ratio at 9.88% in FY2020