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Chelliah, economist who made taxman friendly

india Updated: Apr 08, 2009 22:26 IST

Raja Jesudoss Chelliah, eminent economist and the man who set the foundations for comprehensive tax reforms in India, passed away in Chennai on Tuesday, leaving behind a policy footprint that changed the way taxpayers looked at the government. He was 86.

Chelliah's rich body of work has shaped India’s public finance policy making, particularly in the areas of direct tax reforms, fiscal responsibility and budget management and value added taxation.

Starting with membership of the Indirect Taxes Enquiry Committee in 1976, Chelliah has been contributed significantly to India’s mainstream economic thought over the last few decades.

Former Reserve Bank of India governor Y V Reddy described Chelliah’s death as a big “personal loss”.

Chelliah headed the Tax Reforms Committee, whose reports (1991-93) guided the far-reaching tax reforms of the 1990s.

A PhD from Pittsburgh University, Chelliah came back to India and worked with the National Council for Applied Economic Research (NCAER). He also worked with the International Monetary Fund (IMF) and was chief, fiscal analysis division, fiscal affairs department.

He founded the National Institute of Public Finance and Policy and built it up into a full-service research institution in fiscal matters. As chairman of the Tax Reforms Committee between 1991 and 1993, Chelliah contributed significantly to fiscal policies post-liberalisation in the country.

Experts said Chelliah’s work contributed a great deal in laying the foundations for rolling out a nation-wide value added taxation (VAT) regime in the country, which subsequently is expected to lead to a comprehensive uniform goods and services tax (GST) structure.

“Chelliah’s recommendations is instrumental in bringing down the peak income tax rates from about 80 per cent to a simple and easy-to-administer three rate regime with the peak rate currently capped at 30 per cent,” said Pulin Nayak, of the Delhi School of Economics who have worked closely with Padma Vibhushan recipient.

The government is targeting rollout of the GST regime from the fiscal 2009-10.

The government’s proposal for the GST is in line with the Kelkar Committee’s report to reform the tax structure in the country, which has built upon the broad contours on tax reforms hammered out by the Chelliah committee.

Chelliah had authored a number of books, including Aspects of the Black Economy in India. He also shaped policy making in various capacities including as Fiscal Advisor in the finance ministry, member of the Planning Commission and member of the Ninth Finance Commission.