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Fiscal Transparency and Budgetary Processes in India: Issues before the 16th Finance Commission

Author

Listed:
  • Sri Hari Nayudu A.

    (National Institute of Public Finance and Policy)

  • Chakraborty, Lekha

    (National Institute of Public Finance and Policy)

Abstract

Against the backdrop of Public Finance Management (PFM) reforms, we analyse the issues related to budgetary processes and fiscal transparency issues in India, at the national and subnational levels of government in India. The fiscal codes are built on the premise that fiscal transparency is crucial for financial stability, and the information asymmetries are a significant cause of financial-fiscal failures. The study identified various data gaps in the budgetary preparation and dissemination processes, and the need for the revised fiscal rules, and a comprehensive accounting and reporting processes. These inferences have policy implications for the recently constituted 16th Finance Commission. We suggest that constituting a Fiscal Council can improve fiscal transparency, efficiency and consistency.

Suggested Citation

  • Sri Hari Nayudu A. & Chakraborty, Lekha, 2025. "Fiscal Transparency and Budgetary Processes in India: Issues before the 16th Finance Commission," Working Papers 25/424, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:25/424
    Note: Working Paper 424, 2025
    as

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    File URL: https://www.nipfp.org.in/media/medialibrary/2025/03/WP_424_2025.pdf
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    References listed on IDEAS

    as
    1. Beetsma, Roel & Debrun, Xavier & Fang, Xiangming & Kim, Young & Lledó, Victor & Mbaye, Samba & Zhang, Xiaoxiao, 2019. "Independent fiscal councils: Recent trends and performance," European Journal of Political Economy, Elsevier, vol. 57(C), pages 53-69.
    2. Bose, Sukanya & Banerjee, Saikat, 2025. "Social Spending and Fiscal Policy in India: Towards an Alternate Macro-Fiscal Framework Integrating Human Development," Working Papers 25/422, National Institute of Public Finance and Policy.
    3. Lekha S. Chakraborty, 2022. "Fiscal Policy for Sustainable Development in Asia-Pacific," Springer Books, Springer, number 978-981-19-3281-6, December.
    4. Murray Petrie, 2021. "Environmental Governance and Greening Fiscal Policy," Palgrave Studies in Impact Finance, Palgrave Macmillan, number 978-3-030-83796-9, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Budget Systems ; Fiscal Transparency ; public expenditure management ; fiscal rules;
    All these keywords.

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H76 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Other Expenditure Categories

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