Indian Subnational Finances: Recent Performance

By Ananthakrishnan Prasad, Adarsh Kishore

August 1, 2007

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Ananthakrishnan Prasad, and Adarsh Kishore. Indian Subnational Finances: Recent Performance, (USA: International Monetary Fund, 2007) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The fiscal performance of the States in India has been an area of concern for quite some time. The Twelfth Finance Commission (TFC) recommended a three-pronged strategy to alleviate States' fiscal distress, built around greater orientation toward market discipline, incentives for fiscal consolidation targets, and commitment to fiscal correction. We find that States have created fiscal space through raising revenues and reducing and reprioritizing expenditures. Looking ahead, expansion of fiscal space is essential to meet the States' large infrastructure and social needs in order to alleviate bottlenecks to growth. This needs to be accomplished without undermining fiscal sustainability.

Subject: Budget planning and preparation, Expenditure, Fiscal consolidation, Fiscal policy, Government debt management

Keywords: Deficit, GDP, Revenue, WP

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/205
Stock No:

WPIEA2007205
ISBN:

9781451867695
ISSN:

1018-5941

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