Is Your Government Gabbar, Robin Hood, Or Both? Review Of ‘Fiscal Fables’

Public finance is usually not the sort of subject that makes people reach for a book after dinner. Yet, Fiscal Fables: A Citizen’s Guide to Public Finance manages to make taxation, government spending and fiscal federalism surprisingly engaging. Sarthak Pradhan and Pranay Kotasthane do this not by making public finance simplistic, but by finding stories, characters and everyday examples through which complicated ideas become easier to grasp.

The book announces its approach right from the beginning. The government can be Gabbar Singh, extracting money; Robin Hood, redistributing it; Richard Musgrave’s benevolent planner; or James Buchanan’s self-interested Leviathan. As the authors put it, the Indian state can be “all four on a given day”. The point is not to decide which character the government is, but to develop a method for asking what it is doing, why and whether there is a better way.

Fiscal Fables is an attempt to teach readers how to look at the state—and importantly, how to look at the money the state spends on their behalf.

The Tax You Pay isn’t Always the Tax You Bear

One of the book’s most useful lessons is that the person who legally pays a tax is not necessarily the person who ultimately bears its economic burden. The authors make this particularly relatable through the example of housing. A tax on apartment owners may sound like a tax on landlords, but in a city where housing is scarce, part of the burden can travel through the market and appear as higher rents for tenants.

The same logic can apply to company taxation. A tax on profits does not necessarily stop with shareholders; if a company responds by changing investment or employment decisions, workers can also be affected. These examples make “tax incidence” feel less like an economics textbook term and more like something that can affect an ordinary household.

The authors then return to Adam Smith’s four principles of taxation—equity, certainty, convenience and economy—and examine India’s experiences with wealth tax, estate duty and Goods and Services Tax. Their point is not simply whether a tax raises revenue. It also has compliance costs, administrative costs and behavioural consequences. As the book repeatedly reminds the reader, following the money means following the incentives too.

Spend Less Sometimes, Regulate More

The chapter on government spending begins with a question designed to make the reader stop: “Do we even need a Union Ministry of Youth Affairs and Sports?” The provocative wording is useful because it separates two questions that are often treated as one: is something socially valuable, and does that mean the government itself must provide it?

The authors’ example makes the distinction clearer. India invested heavily in state-owned steel production, but steel output subsequently increased enormously even as budgetary support to the sector became much smaller. The lesson is not that government has no role in steel. Rather, the government need not produce every commodity itself. Its role may instead be to create the conditions in which production can take place efficiently.

But the authors don’t turn this into a simple “government bad, market good” argument. Steel production can impose pollution costs on people who are neither producers nor consumers, creating a case for regulation or taxation. Vaccination provides the opposite: one person’s vaccination can benefit others by reducing transmission, giving government a reason to support vaccination. The question is not simply whether government should intervene, but what problem exists and what is the appropriate instrument?

Where did the Money Go?

The book becomes especially compelling when it turns to Indian cities. Cities generate enormous economic activity, yet, municipal governments often remain fiscally weak. The result is a mismatch between the importance of local services and the financial powers available to the institutions responsible for providing them.

This leads to the basic question of accountability: who raises the money, who spends it and who is responsible for delivering the service? The book’s discussion of decentralisation shows why these questions matter. Giving local governments responsibilities without giving them sufficient financial resources and authority makes it difficult to hold them accountable for outcomes.

The argument then expands into fiscal federalism. The “Monkey and the Two Cats” fable turns an intricate dispute over the division of resources between levels of government into something memorable. The authors explore the tensions between autonomy and accountability, and between competition and cooperation, without pretending that fiscal federalism has one perfect formula. Their discussion of cities also connects to a larger policy point: governments can launch programmes relatively easily, while fixing the rules and institutions that create underlying problems is much harder. The phrase “regulatory cholesterol” captures the authors’ concern about rules that accumulate and restrict economic activity.

What makes Fiscal Fables work is that it keeps bringing abstract questions back to citizens. Why does a government choose to tax one activity rather than another? Why does it produce something itself instead of regulating or financing it? Why can a city that creates enormous wealth still struggle to fund basic services? And when money is spent, are we measuring the money allocated, the things produced or the actual outcomes?

The book does not pretend that these questions have easy answers. In fact, one of its strengths is its repeated emphasis on trade-offs. A government may have a legitimate reason to intervene and still choose the wrong instrument. A tax may raise revenue and still distort behaviour. A spending programme may sound attractive and still have a large opportunity cost.

The final message is therefore less about what citizens should believe and more about how they should think. “Government spending is not destiny after all,” the authors write, pointing towards the connection between public finance and public policy. Their concluding invitation is even more direct: citizens should pick a public service, trace the money, identify which level of government is responsible and examine where implementation can go wrong.

That is perhaps the book’s most valuable contribution. The aim, ultimately, is to turn the taxpayer into a “fiscally aware citizen”.