Need to formalise ‘large underbelly’ of economy: FM

‘Revenue generation now will help should third wave arrive’

India needs to formalise ‘a large underbelly’ of businesses operating outside the system to widen the tax base and make its finances more resilient, Finance and Corporate Affairs Minister Nirmala Sitharaman on Thursday. Stating that she was not concerned about India’s debt burden at this point, the Minister said a turnaround in the economy driven by public infrastructure investments will be able to bolster revenue collections. “In India, we have to be a lot smarter in the way in which (tax) evasion can be contained. Tax avoidance will also have to be carefully studied and action needs to be taken on that without obviously making it difficult for honest taxpayers,” she said, adding that technology would be a critical tool to plug loopholes as was being done under the Goods and Services Tax (GST) regime.