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Investing the Expected Tax-Revenue Increase Towards Scientific Research

Janakiraman Balachandran

India has just completed one of the most radical policies of demonetization geared towards curbing black money market. While eminent economists can rightly argue on the pros and cons of the scheme, RBI’s recent statement seems to suggest that most of the outstanding ₹500 and ₹1000 denominations (counted as of March 2016, to be about ₹16.42 trillion) have been deposited into the bank account. This should in turn create a huge boost in the tax revenue for the next fiscal year. In this editorial, we want to urge the Indian policymakers to use a part of the increase in tax revenue to increase spending towards scientific research and development.