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East of the country's refusal to pay taxes incident occurred before the general election in India have in common between excessive spending it? The answer is shown both in China and India, government tax revenue and expenditure problems.
Downturn in the global economic situation, these two emerging market giants play an important fiscal policy in effect in both binding the hands, but the reasons behind it vary. In China, strong public finances and growth prospects are more bleak for the government to increase the market will turn to fiscal policy is expected to stimulate the economy. The Chinese government has begun to adjust taxes to ease the pressure on small businesses. But the overall change in fiscal policy to support economic growth is easier said than done. Of Chinese local government officials' performance evaluation mainly depends on its ability to raise tax revenue rather than expenditures. But officials in the area of taxation is too active sometimes cause problems. Zhili Town, Zhejiang Province, last week's incident is the example of tax resistance. Financial expenditure, the effectiveness of Chinese government officials tend to a significant infrastructure projects, improve public services such investments require patience are falling by the wayside. But after the first two years driven by the investment boom in bank lending, new investment in infrastructure projects has been filled. The financial expenditure to improve public services need to turn to official change of attitude, but the difficulty of this transition is not small. India faces the opposite problem, the crux of the problem is the lack of spending restraint.Although numerous new projects, but the infrastructure is still India's most significant weaknesses. But in India, inflation and high fiscal deficit has been the case, the key is to convince politicians irresponsible important local elections in the control of fuel and food subsidies such popular works. For India, this is a dangerous financial trap, even though social welfare is very important, but if poorly enforced, the consequences of excessive spending is pushing up prices: India's inflation rate has been close to 10%. At the same time, the rise in prices means that the rising cost of business investment, which will hit corporate profits and thus affect the government's tax revenue. Latest data show that the Indian government in September, sales tax revenue fell 8.7% over the previous year. According to the IMF (International Monetary Fund) predicts that China's 2011 fiscal deficit to GDP (GDP) ratio of 1.6%. India's fiscal deficit-GDP ratio this year will reach 7.7%, well above the government target of 4.6%. China is currently the focus has shifted to boost economic growth, India's focus is to control inflation, China can expand the deficit, and India should reduce the deficit. If China's strong like India to financial expenses, like China and India pay attention to controlling government spending, then the two problems are expected to be resolved. Tom Orlik / Harsh Joshi
source: http://cn.wsj.com
please give me comments thanks
Downturn in the global economic situation, these two emerging market giants play an important fiscal policy in effect in both binding the hands, but the reasons behind it vary. In China, strong public finances and growth prospects are more bleak for the government to increase the market will turn to fiscal policy is expected to stimulate the economy. The Chinese government has begun to adjust taxes to ease the pressure on small businesses. But the overall change in fiscal policy to support economic growth is easier said than done. Of Chinese local government officials' performance evaluation mainly depends on its ability to raise tax revenue rather than expenditures. But officials in the area of taxation is too active sometimes cause problems. Zhili Town, Zhejiang Province, last week's incident is the example of tax resistance. Financial expenditure, the effectiveness of Chinese government officials tend to a significant infrastructure projects, improve public services such investments require patience are falling by the wayside. But after the first two years driven by the investment boom in bank lending, new investment in infrastructure projects has been filled. The financial expenditure to improve public services need to turn to official change of attitude, but the difficulty of this transition is not small. India faces the opposite problem, the crux of the problem is the lack of spending restraint.Although numerous new projects, but the infrastructure is still India's most significant weaknesses. But in India, inflation and high fiscal deficit has been the case, the key is to convince politicians irresponsible important local elections in the control of fuel and food subsidies such popular works. For India, this is a dangerous financial trap, even though social welfare is very important, but if poorly enforced, the consequences of excessive spending is pushing up prices: India's inflation rate has been close to 10%. At the same time, the rise in prices means that the rising cost of business investment, which will hit corporate profits and thus affect the government's tax revenue. Latest data show that the Indian government in September, sales tax revenue fell 8.7% over the previous year. According to the IMF (International Monetary Fund) predicts that China's 2011 fiscal deficit to GDP (GDP) ratio of 1.6%. India's fiscal deficit-GDP ratio this year will reach 7.7%, well above the government target of 4.6%. China is currently the focus has shifted to boost economic growth, India's focus is to control inflation, China can expand the deficit, and India should reduce the deficit. If China's strong like India to financial expenses, like China and India pay attention to controlling government spending, then the two problems are expected to be resolved. Tom Orlik / Harsh Joshi
source: http://cn.wsj.com
please give me comments thanks
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