1.

(a) Briefly explain any two merits of direct taxes.(b) Expand the term RTI. How does this help a citizen of India ?(c) ‘Define price elasticity of demand.(d) What is food adulteration ? Mention any one harmful effect of food adulteration.(e) What is degressive tax ?

Answer»

(a) (i) Equitable : A direct tax is an equitable tax as it is levied according to the tax paying capacity of the people. Under progessive taxation system, tax rate increase as the income increases. 

(ii) Economical : Direct taxes are economical in the sense that cost of collecting them is low. They are usually collected ‘at the source’. \

(b) RTI is Right Information Act which empower citizens to find out what is happening in government. The citizens have the right to seek any information from any public office. 

(c) Price elasticity of demand means the change in the quantity demanded of a commodity in response to change in its price. In other words, it measures the degree of change of demand in response to change in price. 

(d) Food adulteration is the act of intentionally debasing the quality of food offered for sale either by substitution of inferior substances or by the removal of some valuable ingredients. 

Example : Addition of melamine into milk, addition ot Vanaspati into Ghee. Honey is adulterated with sugar, brick powder in chilly powder. 

Harmful effects of food adulteration are : 

(i) Food adulteration reduces the quality of the food and this weakens the health of the one who consumes them, thereby increasing the cost of health care. 

(ii) It can also cause heart diseases, loss of eye-sight or tumour. 

(e) Under the system rate of tax increases upto a certain limit but after that a uniform rate is charged.



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