The Global Financial Crisis And India’s Policy Development For Public Expenditure Management

The global financial crisis started in the USA and then gradually affected the entire world with a major effect on the Euro zone economies. The Asian economies also came under the influence of the global financial crisis. The Indian economy, considered the fastest growing economy of the world was not severely affected by the global financial crisis. The Government of India and various State governments came up with austerity measures in order to manage and curb public expenditure. A new policy initiative and push was witnessed in India with regard to the public expenditure management. But the policy initiatives for public expenditure management would be successful only when these are properly and effectively managed and implemented by the government organizations. In this paper, ten questions/ areas contributing towards public expenditure management are identified. Than the responses of the Financial Advisors & Chief Accounting Officers (FA&CAO) of different organizations of Government of India and nine State governments are collected. The responses of FA&CAO are than analyzed and concluded. It is found that the various orders and circulars of the Government advocated for measures which would bring efficiency and prudence in public expenditure management. But the ground reality of their implementation is still far behind than designed and anticipated.