Tax policy and the size of the government
The article above is 4th in a sequence of 5 articles in Indian economy. To say that i am shocked at the piece and the lack of logic (coming from an economist no less) is an understatement. The articles effectively can be used by Congress in their manifesto. She claims the reason for the fiscal deficits in India is simple. Low taxes. Oh yes you read it correct. The reason for that is compared to developed countries we spend very less. Unfortunately she does not realize that the social security net increases as economy grows ..not the other way round. For example the system in us took decades to establish. But in India in the last 6 years the increase in social spending increased 10-15 times what it was. I am all for improving the social net but it should be based on enhancing self-sufficiency. Nrega or any scheme in place do not serve that. They offer short term relief. There should be short term relief for the needy but as a government we also need to focus on the longer. Not to mention the skewed rural economics because of the scheme. Social security in the US does not result in a skew of the system. The Non-work wages paid are less than the economical equivalent of a working wage. This is ignored conveniently by the author.
I am actually surprised the author got to write a 5 piece with her logic and dubious theories
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