ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Puzzles in Budgetary Policies

Puzzles in Budgetary Policies

Mihir Rakshit This paper identifies the more glaring puzzles and contradictions in the policy instruments embodied in the budget, seeks to locate their sources in terms of macro-economic models and examines the efficacy of alternative policies. The analysis leads to the conclusion that there is substantial scope for public investment without adding to inflationary pressures. Such investment would in fact raise the overall saving ratio of the economy and reduce the investment- saving gap in the public sector. Also missing in the budgetary measures is a rational system of tariffs, taxes and subsidies based on considerations of both comparative advantage in production and comparative benefits from domestic absorption of goods and services.

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