Government Revenues as GDP Percentage

The Finance Minister of India in his recent Budget Speech proudly says that this year Tax Revenues will be over 10% of GDP and next year it would be increased to 11% and so on.Why does an otherwise well meaning man think in such a convoluted manner. If we agree that the government's delivery of services is very inefficient and only 15% of expenditure incurred lands with the intended recepient, it means that 85% of all Government expense is absorbed by the Government's delivery channels comprising of bureaucracy etc. So what is required is a reduction in the Tax : GDP ratio and not the other way around.

At a broader level, we need to examine the premise that a large percentage of a country's GDP needs to be mobilized away from immediate consumption and directed towards infrastructure creation so that future benefits to human society are assured. Let us logically see where this strain of assumption leads to. A significant proportion of national income invested in long term infrastructure would generate correspondingly more output which in turn would lead to more infrastructure and more income in an upward spiral. No two ways about this. Sooner or later, especially if large sections of global populations including India and China do this, a stage would arrive where all roads, water works and electricity utilities would have been created (hopefully they would leave some forests untouched). Everybody would have secondary education and primary health care.

The definition of basic needs would then begin to change. Food and Sanitation may become part of infrastructure. Travel (which is already subsidised to some extent) to nearby locations may become free. Some forms of entertainment like having a colour TV at home with some free channels thrown in and indeed even home computers with free internet may get redefined as a basic need.

Where would would all this lead to? Hopefully, oil would vanish soon enough to put temporary brakes on this rush towards infrastructure creation for all. Governments and indeed Human society needs to wake up to the coldness of this mathematical logic.Capital formation and then targetted deployment for development projects would only accelerate the spiralling growth without objectives.

Are there no checks and balances in place? Not in largely market driven society where the devil takes the hindmost. Or may be there is some hope after all. If everyone has connectivity and unlimited bandwidth, where is the need to travel. If the human brain is supplementable with synthetic chips, where is the need for secondary education. If human behaviour can be modified or programmed, where is the need for competition. If life can be indefinitly prolonged, where is the need to accumulate property.

May be there are seeds of sustainable existence right at the heart of human quest for knowledge. Actually it could not be otherwise...God could not have been stupid after all...