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Submitted by Apurva Sanghi on
Dear Shanta Congrats on a wonderful and thought-provoking post. In my experience, in addition to mixing arithmetic with economics, I find that many of us continue to get mix other equally important things such as stocks vs. flows; accounting / financial costs vs. economic costs and so on. I hope you do a post on just these issues at some point. While I agree with most of what you said, one minor quibble I have is related to your point 3 that the "fiscal space" so created by reducing subsidies should be spent on infra. I say this because a) whether more needs to be spent on infra vs. on other sectors, is likely to be highly context / country specific. In some cases, additional resources would have a bigger bang for the buck from paying down debt; in others it could be in social or other sectors and so on. And b) even if it were infra, one could argue that there too poor public (government and donor) interventions are arguably biased towards new, greenfield projects rather than routine, less glamorous, operations and maintenance, which is often ignored. Anyway, as I said, it's a minor quibble, and I look forward to reading more such interesting posts. Best regards, Apurva