Lecture PE 7

Q4. Why do governments do what they do?

• Vijay Kelkar’s talk: “as a finance secretary, I can say that giving subsidies at this level is not good.”
• Government is an agent with political motives, so even if it will affect the economy of the country in a detrimental way, but makes them popular across people to win their votes, they will implement it.

Role of the government

• The trend for the government expenditure has gone up across the years… Which means the role of the government has increased in terms of the intervention

Todo

• check The article on Public Economics in the economic survey.
• what is RNR, in context of GST?
  • Revenue neutral rate
  • A structure of different rates established in order to match the current revenue generation
• The revenue generated by the new tax regime will be the same,
• If not, the government will