Quite often it is argued by mainstream economists that a sizeable chunk of the Union Budget every year is wasted because the Government spends that on food and fertiliser subsidies. The burgeoning size of these two subsidies relative to the entire budget as well as the gross domestic product (GDP) is often used to build the argument that economic as well as environmental sustainability of the country is at stake...

-The Hindu The government’s announced fiscal policy stance and the fiscal regime it is running seem contradictory There used to be a time — and this was well before India began to globalise — when each Union Budget announced Sales Tax increases on tobacco products, especially cigarettes. The demand for cigarettes being somewhat inelastic, the rise in tax was expected to be a shot in the arm for the revenue-starved government of...

-The Hindu To show Indian agriculture as being net taxed to argue for the farm laws has poor conceptual validity Over the past three decades, a major rationale offered in favour of liberalising Indian agriculture was that farmers were “net taxed”. In other words, incomes of farmers were kept artificially lower than what they should have been. It was argued that this “net taxation” existed because protectionist policies deprived farmers of higher...

-The Hindu Discontent over the new farm laws is a result of sidestepping debate and discussion in Parliament The ongoing farmers’ agitation epitomises the need to have detailed discussions and consultations while making law and policy. The process of building consensus and addressing concerns may be time-consuming, but it leads to greater acceptance of policy objectives. While such work has to be done at multiple levels, Parliament is perhaps the most important...

Just before Dhanteras and Diwali this year, the Reserve Bank of India (RBI) released the November edition of its monthly bulletin. The latest RBI Monthly Bulletin says that the GDP has contracted by -8.6 percent in the second quarter of fiscal year 2020-21 (i.e. July-September, 2020) as compared to the gross domestic product (GDP) during the corresponding period last year. It may be noted that India’s GDP shrunk by -23.9...