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Assessing the Fiscal Capacity of Indian Governments


  • Ashima Goyal



In this paper we assess the record of different post reform governments in meeting their targets and improving both delivery and finances. A variety of indices are constructed, and consistency checks devised to measure relative performance. No government has achieved its targets, but the congress has the best record in keeping its promises, and the NDA was most effective in reducing deficits. In the last year of the UPA the deadline effect helped meet expenditure targets, but at the cost of large deficits. The negative effect of the growth dividend on government debt and deficits is established, but the failure of government finances to improve commensurate with this, suggests further improvement in expenditure management is required. Four principles on which to base these improvements are identified.

Suggested Citation

  • Ashima Goyal, 2009. "Assessing the Fiscal Capacity of Indian Governments," Macroeconomics Working Papers 22931, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:macroe:22931

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    References listed on IDEAS

    1. R. Nagaraj & A. Varoudakis & M.-A. Véganzonès, 2000. "Long-run growth trends and convergence across Indian States," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(1), pages 45-70.
    2. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
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    Cited by:

    1. Ashima Goyal, 2014. "Union Budget 2014: Marginal Realignment of Tactics to Strategy," Working Papers id:5976, eSocialSciences.
    2. Ashima Goyal, 2014. "Budget 2014: Marginal realignment of tactics to strategy," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2014-028, Indira Gandhi Institute of Development Research, Mumbai, India.

    More about this item


    Expenditure; Deficits; Governments; Delivery;

    JEL classification:

    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes


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