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Understanding deviations from the fiscal responsibility law in India

Author

Listed:
  • Pratik Datta

    (Shardul Amarchand Mangaldas & Co.)

  • Radhika Pandey

    (NIPFP)

  • Ila Patnaik

    (Aditya Birla Group)

  • Ajay Shah

    (xKDR Forum)

Abstract

The Parliament enacted the Fiscal Responsibility and Budget Management Act (FRBM Act) in 2003. In most of the following years, union public finance has deviated from the strictures of the law. Was it poor drafting of the statutory escape clause in the FRBM Act, 2003 that led to these deviations? We show that this is not the correct diagnosis. The escape clause that flows from the Constitution of India - the special procedure for money bills - gives the union government the ability to get around shackles placed under Parliamentary legislation. If fiscal rules are sought to be implemented through laws, the legal strategy needs to take this constitutional framework into account.

Suggested Citation

  • Pratik Datta & Radhika Pandey & Ila Patnaik & Ajay Shah, 2023. "Understanding deviations from the fiscal responsibility law in India," Working Papers 23, xKDR.
    • Handle: RePEc:anf:wpaper:23
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    File URL: https://papers.xkdr.org/papers/dattaPandeyPatnaikShah2023_frbm.pdf
    File Function: First version, 2023
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    References listed on IDEAS

    as
    1. Ian Lienert & Israel Fainboim Yaker, 2010. "Reforming Budget System Laws," IMF Technical Notes and Manuals 2010/01, International Monetary Fund.
    2. Israel Fainboim Yaker & Mr. Ian Lienert, 2010. "Reforming Budget System Laws," IMF Technical Notes and Manuals 2010/001, International Monetary Fund.
    3. Ian Lienert & Israel Fainboim Yaker, 2010. "Reforming Budget System Laws," IMF Technical Notes and Manuals 10/01, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Charmi Mehta & Radhika Pandey & Renuka Sane & Ajay Shah, 2024. "The electricity chokepoint in Tamil Nadu public finance," Working Papers 31, xKDR.
    2. Kaur, Amandeep & Jha, Ajay Narayan & Chakraborty, Lekha, 2023. "G20 and Climate Responsive Budgeting," Working Papers 23/401, National Institute of Public Finance and Policy.

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    More about this item

    JEL classification:

    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • K3 - Law and Economics - - Other Substantive Areas of Law
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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