Financing Economy-Wide Wage Subsidies A Response to Kesselman Kaushik Basu JONATHAN R KESSELMAN provides an extremely valuable survey of fiscal policies for employment generation ("Formulating Fiscal Policies to Expand Employment in Indian Industry", EPW December 1, 1979), This note is a response to his paper in general and his section V in particular, where he discusses at length the problems of financing wage subsidies in dual economy models of the Harris-Todaro (HT) type. The note argues that some of the conclusions reached by Kesselman in this section are. untenable; and it also reports on some of the recent researches in this area.