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Taxation is essential for the proper functioning of government and the economy, and it is necessary to support the public good and promote fairness and equity. Elaborate.

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment

4. Taxation is essential for the proper functioning of government and the economy, and it is necessary to support the public good and promote fairness and equity. Elaborate. (250 words)

Difficulty level: Easy

Reference: Insights on India

Why the question:

The question is part of the static syllabus of General studies paper – 1 and mentioned as part of Mission-2023 Secure timetable.

Key Demand of the question:

To write about the objectives of taxation in the country.

Directive word: 

Elaborate – Give a detailed account as to how and why it occurred, or what is the context. You must be defining key terms wherever appropriate and substantiate with relevant associated facts.

Structure of the answer:

Introduction: 

Begin by giving context about taxation and its types.

Body:

Write about the need of taxation – revenue generation, redistribution of income and wealth, encouraging savings and investments, promoting economic growth, controlling inflation, promoting social and economic development, promoting fairness and equity, addressing market failures, and stabilizing the economy. Cite statistics and examples to substantiate.

Conclusion:

Conclude by summarising.