Why this will be a reform budget

The fiscal deficit is an outcome, not a policy. It is the net resolution of the policies pertaining to taxes and expenditure. It is worth analysing separately the two components of the deficit. The table reports the results of relating the tax and expenditure share of GDP to per capita income for 16 developing countries. Data are from the IMF for the year before the crisis, 2007, and the tax and expenditure figures are inclusive of centre, state and local taxes/expenditure.

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