It is a real honour for me that I have been asked to deliver the I. S. Gulati Memorial Lecture for 2005. Iqbal Gulati was not only an outstanding economist but also a person of the highest level of integrity. He was not one to change his views for convenience. He would not bend with the wind. He remained true to his basic humane values and made common cause with all those who shared these values. It is a symptom of this integrity that while many who began their careers being far more radical than Iqbal Gulati in their political convictions and academic views drifted into anti-Leftism and propagated the currently dominant IMF–World Bank positions, Iqbal Gulati moved in the opposite direction, coming closer and closer to the Left, and was even writing a regular column for Deshabhimani on economic matters until his failing health prevented it.

Today's occasion is particularly poignant for me since Iqbal was a close personal friend of mine, warm-hearted and generous to a fault. His company and the warm hospitality that he and Leela showered on me over the years were a source of much joy for me. I am grateful that this lecture offers me the opportunity to pay my tribute to this extraordinary man whom I had the privilege of knowing for well over a quarter century.

Iqbal had varied interests in economics, but the one area that claimed his passion was public finance. I have therefore decided to devote this lecture to an examination of certain currently fashionable propositions in public finance.