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

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State Government Subsidies

Competitive populism of political parties has led to a distortion of the subsidy system in India. This article examines the nature, causes and consequences of the growth of subsidies in Tamil Nadu. Any study of subsidies has to take into account the political economy of their structure and functioning. Besides statistics, there is qualitative evidence to show that the subsidy system in Tamil Nadu is wasteful, corrupt, regressive and counter-productive. The two major political parties are locked in an unhealthy Nash equilibrium of inefficient populism.

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