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


Chadi Abdallah ; David Coady ; Sanjeev Gupta ; Emine Hanedar

Publication Date:

July 13, 2015

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

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


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.


Working Paper No. 2015/152



Publication Date:

July 13, 2015



Stock No:




Please address any questions about this title to