Q.3 Competitive politics to fund mostly non-merit subsidies is pushing a few states in India to the brink of a deep fiscal crisis. Discuss the need to rationalise the subsidy regime in India. (10 Marks)

Mentor’s Comments-

• https://timesofindia.indiatimes.com/blogs/toi-edit-page/can-politicians-decouple-from-freebies-indias-macroeconomy-is-giving-up-bad-habits-time-indias-politics-does-too/
• Discuss the high proportion of subsidies given by states and substantiate with data.
• Highlight its impact on the fiscal situation.
• State arguments in favour of rationalizing subsidy expenditure.
• Conclude accordingly.