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Indian Subnational Finances: Recent Performance

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  • Mr. Ananthakrishnan Prasad
  • Mr. Adarsh Kishore

Abstract

The fiscal performance of the States in India has been an area of concern for quite some time. The Twelfth Finance Commission (TFC) recommended a three-pronged strategy to alleviate States' fiscal distress, built around greater orientation toward market discipline, incentives for fiscal consolidation targets, and commitment to fiscal correction. We find that States have created fiscal space through raising revenues and reducing and reprioritizing expenditures. Looking ahead, expansion of fiscal space is essential to meet the States' large infrastructure and social needs in order to alleviate bottlenecks to growth. This needs to be accomplished without undermining fiscal sustainability.

Suggested Citation

  • Mr. Ananthakrishnan Prasad & Mr. Adarsh Kishore, 2007. "Indian Subnational Finances: Recent Performance," IMF Working Papers 2007/205, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2007/205
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    Cited by:

    1. Shah, Ajay, 2008. "New issues in Indian macro policy," Working Papers 08/51, National Institute of Public Finance and Policy.
    2. Narayan, Laxmi, 2015. "Some Aspects of Haryana State Finances –An Exploratory Analysis," MPRA Paper 64697, University Library of Munich, Germany, revised Apr 2015.
    3. Narayan, Laxmi, 2017. "Growth of Public Debt in Haryana – Dynamism or Misplaced Priorities," MPRA Paper 79431, University Library of Munich, Germany, revised 05 May 2017.
    4. Pinaki, Chakraborty, 2008. "Budget Rules, Fiscal Consolidation and Government Spending:Implications for Federal Transfers," MPRA Paper 30938, University Library of Munich, Germany, revised 2011.
    5. Darshini J S & K Gayithri, 2019. "Fiscal dependency of States in India," Working Papers 433, Institute for Social and Economic Change, Bangalore.

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    Keywords

    WP; GDP; deficit; revenue;
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