The article is very good but your comment about income tax is completely wrong. India has one of the lowest taxes in the world. In China, VAT is 17% and your income tax may range from 5 to 45% depending on what you earn. Corporate tax is 25%. Until recently this was 33% for domestic companies and 15-24% for foreign companies. No wonder they attracted huge foreign investment. Internal demand is created by huge development projects taken by Chinese government which is funded from this taxes. In many developed countries income taxes are about 40% and you also pay 17.5% VAT. The main problem in India is only a small fraction of people pay tax and most high earners completely avoid paying tax. This is a matter of moral corruption. On one side the argument is why pay tax when all politicians are corrupt and the money is not used for development. Nobody wants to pay tax to Govt, but they have very high expectations form the Govt. The fact is Govt. doesn't have enough revenue to address many issues like Health, Quality Education, water, Sofficient power supply, development, flood defences, rescue operations, new railway/road networks, airports and other rural development. These long term solutions require hundreds of billions of dollars and that will definately kick in internal demand to sustain economy. But most importantly we need a strongly motivated people working everywhere from government offices to research centers.
