ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Subsidies, Merit Goods and the Fiscal Space for Reviving Growth

The incidence of implicit and explicit budget subsidies provided by the central and state governments has declined from about 12.9% of the gross domestic product in 1987–88 to 10.3% at present, with the bulk of these subsidies being provided by the states and about half being spent on non-merit subsidies. This paper argues that rationalisng non-merit subsidies is one of several deep fiscal reform measures that could together free up massive fiscal space that can be used to finance an inclusive growth revival strategy.



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Updated On : 31st Jan, 2020

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