New Delhi, Jan. 24 -- India's combined tax-to-GDP ratio, accounting for both central and state collections, currently stands at 19.6 per cent, positioning the country at par with several major global economies. While the central gross tax revenue remains lower at 11.7 per cent, the integrated figure exceeds those of other emerging markets such as Hong Kong, Malaysia, and Indonesia.

However, the ratio still lags behind advanced economies like Germany and the United States, which report ratios of 38 per cent and 25.6 per cent, respectively.

A report from Bank of Baroda highlights that this gap represents a significant policy opportunity, as India possesses larger potential due to favourable demographics. The report notes that more efforts...