Economic Policy

Who pays for welfare programmes?

The government finances its various welfare programmes for the poor largely from the revenue collected through various taxes. If we analyse the tax burden — who actually pays taxes — it seems that the government is taking money from one group of poor to give it to another group of poor. Contrary to the popular perception that middle and upper classes — the better-off in short — of our society are taxed to provide welfare and support to the poor, it is actually the poor who are paying for the welfare programmes run for their benefit!

A Constitution Based On Property Rights?

India is truly a land of paradoxes. She is marching towards liberalisation and privatisation without recognising the right to property as a fundamental right. Legal protection and status of private property is weaker in India than even in formerly communist countries. The Supreme Court has accepted governments claim that any compensation is fair and just when government acquires private property. No dispute about governments payment for takings shall be entertained.

Back to school for some, to first principles for others

From libertarian first principles, Budget 2006 shows hardly any improvement. The Outcome Budget and Performance Budget are still just ideas on the coffee table, they do not inform allocation of funds or assessment of schemes. A government should be judged not by how much it spends but by what it achieves. The finance minister, however, still feels more proud in announcing increases in expenditures and exemptions in tariffs and taxes.