The Quest for the Holy Grail: Efficient and Equitable Fiscal Consolidation in India

By Chadi Abdallah, David Coady, Sanjeev Gupta, Emine Hanedar

July 13, 2015

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Chadi Abdallah, David Coady, Sanjeev Gupta, and Emine Hanedar. The Quest for the Holy Grail: Efficient and Equitable Fiscal Consolidation in India, (USA: International Monetary Fund, 2015) accessed December 22, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Achieving fiscal consolidation without undermining growth and poverty-reduction efforts is a key policy challenge in many countries. Using India as an illustration, this paper shows how a mix of well-designed taxation and spending policies can help address these challenges. On the tax side, the analysis focuses on increasing consumption taxes on goods with negative consumption externalities. On the spending side, some of the additional revenues from the tax reform are allocated to scaling up key social transfer programs. Substantial additional gains are possible if the increased social transfers can be accompanied by improved targeting.

Subject: Consumption, Estate tax, Income, Income distribution, Labor, National accounts, Taxes

Keywords: Benefit share, Consumption, Efficient consumption taxes, Estate tax, Fiscal consolidation, Fiscal redistribution, Global, Household income, Income, Income decile, Income distribution, Income group, India, Kerosene consumption, Lower-income groups, Percentage impact, Population share reference, Price, Price gap, Retail price, Share, Social transfers, Targeting, WP

Publication Details

Pages:

24
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/152
Stock No:

WPIEA2015152
ISBN:

9781513592657
ISSN:

1018-5941

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