To Spend or Not to Spend

First, we should keep in mind how to-

1. Redistribution of resources
2. Reducing inequality in income and wealth
3. Economic stability
4. Management of public enterprises
5. Economic growth
6. Reducing regional disparities

The government spends money in various ways to fulfill certain objectives, which is fine because these objectives have a direct effect on our economic, social, and political policies, but I would like to know who is the actual beneficiary, the public or the government?

In my view, the various objectives of government expenditures are:

1. Reallocation of Resources:

Through the government's expenditure policy, the government aims to reallocate resources according to the country's economic profit maximization and social (public welfare) priorities. The government should restrict the funds to:

Tax Concessions or Subsidies:

Our government subsidies taxes, etc., to the producers to encourage them and increases the tax, for example, to discourage the production of harmful goods such as alcohol and cigarettes, etc. Our government has succeeded in this segment to a large extent

1. Reducing Inequalities in Income and Wealth:
   Economic impairment needs to be abolished; therefore, I support our government's efforts to reduce inequalities of income and wealth through its expenditure policy, but it should be transparent and have no loopholes that lead to evading taxes and money going into the wrong hands.

The government could restructure income by imposing taxes on the rich and spending more on the welfare of the poor. This taxation will reduce the income of the rich and raise the standard of living of the poor, thus reducing inequalities in the distribution of income.

1. Economic Stability:
   The government budget is used to contain the business fluctuations of inflation or deflation in order to achieve the objective of economic stability. The government aims to control the various phases of the ups and downs of business through its budget policy.

The policies of spending in the budget during inflation and a deficit budget during deflation help maintain the stability of prices in the economy. This should be revised to ensure the money is going in the right direction.

1. Management of Loss-Making Public Enterprises:
   A large number of industries, which were established by the government for the social welfare of the public, are proving to be burdens on the country due to their mismanagement. I would like to see a drastic cut in their staff because the budget they use is grossly mishandled, or, better yet, these industries transferred to the private sector. Example, the Air India, which was incurring losses in the billions until recently, is recovering fast in private hands.

I suggest our government keep the tax structure straight to stop manipulation.

1. Economic Development:

The growth rate of any country depends on how it encourages people to save their earnings. I have seen big economics go to dogs by not keeping their budgetary policies aimed at raising the economy or encouraging its citizens to invest in useless expenses. Therefore, I would like to see our government make several provisions to encourage its citizens to increase their overall savings rate and help grow the economy.

I suggest stopping the various unnecessary subsidies and spending them here for overall development.

1. Reducing regional disparities:
   The government's expenses aim to reduce regional disparities through its taxation and expenditure policies and encourage the establishment of production units in economically backward areas.

Some types of public improvement works, such as the construction of roads, the provision of drainage, street lighting, etc., may confer a special advantage on those who own property in the vicinity.

As a result, the rental values of these properties may increase. Therefore, the government may impose some special levies to recover some of the expenses. Such a special assessment is generally levied in proportion to the increase in the value of the properties involved. This should go into the development of infrastructure.

In India, these special assessments are referred to as "improvement levies" on land when its value is increased by a public authority to induct the funds into the construction of drainage systems, flyovers, roads, etc.

Subsidies:
The government provides subsidies, or financial aid, to different needy groups, including farmers, industries, and poor consumers, but our governments have made it a vote-catching tool that should be stopped immediately in the general interest of the nation.

For instance-

1. Different subsidies, including food: Our government spends billions providing rations free of charge to the poor through the Public Distribution System, and trust me, we don't have 900 million poor people in India, so to me, it feels like a vote-catching tactic.

This subsidy was okay during COVID-19, but now that the situation has improved, giving this facility to 900 million people is sheer wastage of government funds, which is nothing but a popularity-seeking gimmick. I oppose it.

1. Subsidy for farmers (Farmer Subsidy): This type of subsidy includes fertilizer subsidies, cash subsidies, interest waivers, subsidies for buying vehicles and other equipment, etc.

The government is providing this subsidy to every farmer in India, which is not the right policy. This subsidy should be given only in cases of natural calamity or an emergency situation.

1. Oil and Fuel Subsidy: In this subsidy, the government provides kerosene oil at cheap prices to people living below the poverty line. Subsidies provided by the government for cooking gas, diesel, and gasoline were reconsidered and stopped, which was a good step and should be reconsidered now.

This subsidy has been stopped for the time being, but it should be given only to people coming under the very the "very poor" category people.

1. Tax Subsidy: This subsidy is mainly provided to big industrial houses so that these people do not stop production in high-cost conditions and unemployment does not spread in the country. A subsidy in the tax levied is also made available to the industrial houses.

Summery

I suggest that if the government has imposed a tax, there should be no subsidy, or the tax should not have been imposed in the first place. It provides chances for manipulation.

Religious Subsidy: This subsidy is given by the government to the people for pilgrimage purposes.

I suggest stopping the subsidies, as religious journeys are personal choices, so our government should have no role in this.

I invite-
@josevas217
@weisser-rabe
@franyeligonzalez
@irawandedy