The Indian government is a welfare-oriented one with all policies aimed at the welfare of citizens. Government spending may continue as long as the country's fiscal health is robust and sound. To ensure this, the cost of welfare should not exceed the fiscal capacity of the state. We need to exercise financial prudence in policy spending. Greece is a burning example of higher social cost leading to fiscal collapse.
With increased burden due to one rank, one pension and 7th Pay Commission directives, it is imperative for the government to ensure that finances are managed rationally. A wide-ranging fiscal reform, including rationalisation of food, fertiliser and electricity subsidies could be initiated. Implementing goods and services tax along with increasing direct tax should be emphasised.
Badal Jain Jalgaon
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