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How did the LPG reforms impact India's fiscal policies and government spending?

AImplementation of stringent austerity measures and reduced government spending on social welfare programs.

BIntroduction of a more transparent and simplified tax system, promoting ease of compliance.

CAdoption of expansionary fiscal policies, including increased government spending and borrowing.

DShift towards a more regressive taxation system, with increased direct tax rates.

Answer:

B. Introduction of a more transparent and simplified tax system, promoting ease of compliance.

Read Explanation:

Introduction of a more transparent and simplified tax system, promoting ease of compliance.

  • The LPG (Liberalisation, Privatisation, and Globalisation) reforms had a significant impact on India's fiscal policies and government spending, leading to changes in the tax system and allocation of funds.
  • The introduction of a more transparent and simplified tax system was one of the key aspects of the reforms.
  • The reforms aimed to streamline the tax structure, making it easier for individuals and businesses to comply with taxation requirements.
  • This move was essential in promoting greater tax compliance and improving the overall efficiency of the tax collection process.
  • By implementing a simpler tax system, the government intended to reduce tax evasion and promote a more equitable distribution of the tax burden among different sections of society.

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