Funding for power

 Tax incentives like giving a deduction for contributions to political parties produce the same financial strain on the government as direct spending. Reduction in tax liability is as good as collecting the tax and then spending it. Hence, giving direct subsidy is open, simple and easier to administer than reduction in taxes.

 Direct expenditure has the merit of being identifiable, while it is not so in the case of expenditure in the form of tax reduction. The accountability and audit of such revenue loss involve complex processes. Further, such spending of government money in cases of other incentives cannot be quantified and subjected to parliamentary control and revenue.

 Special provisions for deductions/reliefs in tax laws are not justified on several grounds. There is consensus amongst tax-policy experts that such benefits have been grossly misused. The unanimous view is that better results can be realised by direct spending.

 Tax economists consider spending through incentives, exemptions and deductions as unreasonable because it goes against the concept of neutrality in a tax system, distorting the concept of the ability to pay.

 Besides, it would add one more link to a large chain of incentive provisions whose efficacy has been doubted by most economists