IMF Working Papers

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

Download PDF

Preview Citation

Format: Chicago

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 17, 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:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2015/152

  • Stock No:

    WPIEA2015152

  • ISBN:

    9781513592657

  • ISSN:

    1018-5941

You May Also Be Interested In...

Somalia: Selected Issues

December 17, 2024

Jordan: 2024 Article IV Consultation, Second Review Under the Extended Arrangement Under the Extended Fund Facility, and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director for Jordan

December 17, 2024

A Bitter Aftertaste: How State Aid Affects Recipient Firms and Their Competitors in Europe

December 16, 2024

The Dynamics of Trade Integration and Fragmentation in LAC

December 13, 2024