ENVIRONMENT TAXATION IN INDIA: NEED FOR GREEN FISCAL REFORM FOR A SUSTAINABLE FUTURE

Abstract

Most developed nations have, of late, resorted to using taxation as a means to address the growing menace of environmental pollution. However, the Indian lawmakers have paid limited attention to this policy option. The primary premise of this paper is that eco-taxes must be deployed more effectively under the Indian law, as sound “eco-taxation” policy can turn out to be much more effective in addressing the issue of environmental pollution than traditionally prohibitive and regulatory laws. In light of this, the paper aims to highlight the role environmental taxation can play in reducing the consumption and demand for environmentally harmful goods. It will provide a brief overview of the history of taxation and the considerations that affect the design and scheme of eco-taxes. The paper would also specifically delve into the challenges that must be addressed in order to render eco-taxation as a successful policy measure in India.