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Fiscal Policy in India: Lessons and Priorities


  • Singh, Nirvikar
  • Srinivasan, T. N.


This paper assesses India’s current fiscal situation, its likely future evolution, and impacts on the economy. We examine possible reforms of macroeconomic policy (including fiscal, monetary and exchange rate policy) and broader institutional reforms that will bear on the macroeconomic situation. We also consider the political feasibility of possible reforms. We examine both medium and longer run scenarios, and fiscal sustainability and adjustment going beyond conventional government budget deficits, to include off-budget liabilities, both actual and contingent. We conclude with our assessment of reforms focused on improving the fisc.

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  • Singh, Nirvikar & Srinivasan, T. N., 2004. "Fiscal Policy in India: Lessons and Priorities," Santa Cruz Department of Economics, Working Paper Series qt67t3p20w, Department of Economics, UC Santa Cruz.
  • Handle: RePEc:cdl:ucscec:qt67t3p20w

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    References listed on IDEAS

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    7. Thomas J. Sargent & Neil Wallace, 1981. "Some unpleasant monetarist arithmetic," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall.
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    9. Bell, Clive & Rousseau, Peter L., 2001. "Post-independence India: a case of finance-led industrialization?," Journal of Development Economics, Elsevier, vol. 65(1), pages 153-175, June.
    10. Robert Gillingham & Daniel S Kanda, 2001. "Pension Reform in India," IMF Working Papers 01/125, International Monetary Fund.
    11. Willem H. Buiter, 1990. "Principles of Budgetary and Financial Policy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262524139, July.
    12. Renu Kohli & Kenneth Kletzer, 2001. "Financial Repression and Exchange Rate Management in Developing Countries; Theory and Empirical Evidence for India," IMF Working Papers 01/103, International Monetary Fund.
    13. Giovannini, Alberto & de Melo, Martha, 1993. "Government Revenue from Financial Repression," American Economic Review, American Economic Association, vol. 83(4), pages 953-963, September.
    14. Brian E. Dollery & Joseph Garcea & Edward C. LeSage Jr (ed.), 2008. "Local Government Reform," Books, Edward Elgar Publishing, number 12592.
    15. Wittman, Donald, 1989. "Why Democracies Produce Efficient Results," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1395-1424, December.
    16. Valerie R. Bencivenga & Bruce D. Smith, 2003. "Monetary policy and financial market evolution," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 7-26.
    17. Alberto Alesina & Roberto Perotti, 1997. "Fiscal Adjustments in OECD Countries: Composition and Macroeconomic Effects," IMF Staff Papers, Palgrave Macmillan, vol. 44(2), pages 210-248, June.
    18. Srinivasan, T. N., 1996. "Economic liberalization and economic development: India," Journal of Asian Economics, Elsevier, vol. 7(2), pages 203-216.
    19. V. Pandit, 2002. "Sustainable Economic Growth for India: An Exercise in Macroeconomic Scenario Building," Working papers 100, Centre for Development Economics, Delhi School of Economics.
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    Cited by:

    1. Singh, Nirvikar & Srinivasan, T. N., 2004. "Foreign Capital, Inflation, Sterilization, Crowding-Out and Growth: Some Illustrative Models," Santa Cruz Department of Economics, Working Paper Series qt4c4363xp, Department of Economics, UC Santa Cruz.
    2. Rajiv Kumar & Alamuru Soumya, 2010. "Fiscal Policy Issues for India after the Global Financial Crisis (2008–2010)," Working Papers id:2912, eSocialSciences.
    3. Nirvikar Singh & T.N. Srinivasan, 2004. "Foreign Capital, Inflation, Sterilization, Crowding-Out and," International Finance 0412001, EconWPA.

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