Considering the extensive use which policy makers in India make of the instrument of tax expenditures, what is needed is proper management of all tax expenditures. Four points are involved here. The first is concerned with identifying tax expenditures. In order to identify tax expenditures, one will have to take a careful look at the various provisions in a tax law. Not all provisions allowing exemptions, deductions, etc. constitute tax expenditures. It is only special provisions in a tax law which constitute tax expenditures. These special provisions really have nothing to do with the essentials of a tax, nothing to do with shaping the structural framework necessary to operate a tax. Instead, they are methods of spending government funds. The second point is concerned with measurement of tax expenditures. One way of measuring tax expenditures is to figure out the decrease in tax receipts caused by a tax expenditure provision. The other way of measuring tax expenditures is to figure out the amount of spending that would be required to provide an equal after-tax benefit to the tax payer. The third point is concerned with inclusion of the estimates of tax expenditures in the budget. If a government provides assistance through tax expenditures, its budget must include estimates of these expenditures. The fourth point is concerned with controlling tax expenditures. In order that tax expenditures are effectively controlled, it will be absolutely necessary to study in detail each of the tax expenditure provisions. When studying a tax expenditure provision, one will have to deal with questions such as: How much does this provision cost? Is the activity benefiting from this provision high on the national agenda? Is the tax route the better way of assisting this activity? Once the various tax expenditure provisions have been studied in this manner, one should be in a position to come up with a list of provisions which deserve to be eliminated.