Question

Causes efficience-equity debate in india??

Answer 1

Efficiency is concerned with the optimal production and allocation of resources given existing factors of production. For example, producing at the lowest cost. See: Different types of efficiency

Equity is concerned with how resources are distributed throughout society.

Vertical equity is concerned with the relative income and welfare of the whole population e.g. Relative poverty when people have less than 50% of average income. Vertical equity is concerned with how equitably resources are distributed and may imply higher tax rates for high-income earners.

Horizontal equity is treating everyone in the same situation the same. e.g. everyone earning £15,000 should pay the same tax rates.