Indian Public Finance in the 1990s: Challenges and Prospects
AbstractThis study updates and extends to the period 1988/9--1992/3 our earlier analysis of the public finances of India. The foreign exchange crisis of early 1991 forced the government to recognize the severity of the fiscal crisis it was facing and led to the implementation of a restrictive fiscal and monetary programme. We conclude that the magnitude of the fiscal correction undertaken was insufficient. Further significant increases in the public debt/GDP ratio would be destabilizing and inflationary financing of public sector deficits is not an option. We calculate that a further permanent increase in the public sector primary surplus of about four and a half percentage points of GDP is needed to achieve the modest objective of stabilizing the public debt/GDP ratio. On the revenue side, this increase in the primary surplus is best achieved by expanding the direct and indirect tax bases and improving tax administration, collection and enforcement. On the expenditure side, reductions in the general government wage bill, in fertilizer subsidies, in some (but not all) food subsidies and in operating and capital subsidies to public sector enterprises are recommended. For efficiency reasons and to support the proposed expenditure cuts, the overwhelming majority of the public sector enterprises should be privatized and cut off from further government subsidies.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Yale - Economic Growth Center in its series Papers with number 706.
Length: 58 pages
Date of creation: 1993
Date of revision:
Contact details of provider:
Postal: U.S.A.; YALE UNIVERSITY, ECONOMIC GROWTH CENTER, YALE STATION NEW-HAVEN CONNECTICUT 06520 U.S.A
Phone: (203) 432-3610
Fax: (203) 432-3898
Web page: http://www.econ.yale.edu/~egcenter/
More information through EDIRC
fiscal policy ; inflation;
Other versions of this item:
- Buiter, Willem H & Patel, U, 1994. "Indian Public Finance in the 1990s: Challenges and Prospects," CEPR Discussion Papers 920, C.E.P.R. Discussion Papers.
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).
If references are entirely missing, you can add them using this form.