State Finances in India: A Case for Systemic Reform
AbstractThis paper provides a self-contained overview of the present problems of state finances in India. It begins with an overview of historical evolution and current institutional structures, including economic, political, administrative and fiscal aspects of India’s federal system. The paper then reviews the current situation of India’s state government finances, going on to consider various developments that have shaped the states’ current fiscal situation, including the roles of national economic reform, the intergovernmental transfer system, tax reform, and local government reform. Policy options for reforming institutions of fiscal federalism system, borrowing mechanisms for the states, and governance are then discussed, with an emphasis on the principle that states should have appropriate incentives for fiscal discipline at the margins of revenue and expenditure.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 1281.
Date of creation: Mar 2006
Date of revision:
fiscal policy; intergovernmental transfers; incentives; institutional reform;
Other versions of this item:
- Singh, Nirvikar, 2006. "State Finances in India: A Case for Systemic Reform," Santa Cruz Department of Economics, Working Paper Series qt8560h76z, Department of Economics, UC Santa Cruz.
- P2 - Economic Systems - - Socialist Systems and Transition Economies
- H1 - Public Economics - - Structure and Scope of Government
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-14 (All new papers)
- NEP-CWA-2007-01-14 (Central & Western Asia)
- NEP-PBE-2007-01-14 (Public Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Khemani, Stuti, 2002. "Federal politics and budget deficits: evidence from the states of India," Policy Research Working Paper Series 2915, The World Bank.
- Ricardo Hausmann & Catriona Purfield, 2004. "The Challenge of Fiscal Adjustment in a Democracy: The Case of India," IMF Working Papers 04/168, International Monetary Fund.
- Alan Richards & Nirvikar Singh, 2004. "Inter State Water Disputes in India: Institutions and Policies," Development and Comp Systems 0412010, EconWPA.
- Singh, Nirvikar, 2007. "Fiscal Federalism and Decentralization in Indiaâˆ—," Santa Cruz Department of Economics, Working Paper Series qt11b543tk, Department of Economics, UC Santa Cruz.
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