Only about 5.5% of the people who earn pay taxes in India and only 15.5% of the net national income is being reported to the tax authorities, according to the Economic Survey 2015-16 that was tabled in Parliament on Friday.

Though the estimate for India's tax paying citizens should be closer to 23%, it is estimated by the survey be just 4%, according to a report by The Hindu. It further said that around 85% of the net national income falls outside the tax net.

The tax to GDP ratio is at 16.6%. This level is much below than even other emerging markets which stands at 21% and the Organisation of Economic Cooperation and Development (OECD) average of 34%.

This makes us far from being a full tax-paying democracy. The survey, however, said that the democracies with higher ratios would take a long time to strengthen their tax capacity.

When it comes to expenditure, the country's spends towards human capital, education and health in comparison to the GDP ratio is the lowest among BRICS, OECD and emerging economies, said the report. Countries such as Vietnam, Bolivia and Uzbekistan have a higher expenditure.

The survey has recommended solutions such as bring rich farmers into the tax net, raising property tax rates and phasing out tax exemptions in order to widen the tax net and raise revenue for spending on India's human capital development.

Arvind Subramanian, Chief Economic Advisor on Friday said that there should be reasonable taxation of the better-off, regardless of the source of their incomes, whether it is from industry, services, real estate, or agriculture.

The survey further says that an additional 1.65% income tax payers would have been added had the previous government not raised the threshold level of personal income tax in 2012-13.

The three highest income groups accounted for 12.4%, 9.4% and 5% of the entire income of the Indian economy.