State Finances in India: A Critical Review
There has been a sharp decline in the fiscal fortunes of the States during the last decade. Low buoyancy of central transfers and spill over of central pay revisions have had the most adverse impact on State finances. What is more worrisome, the States’ own fiscal performance has also seen sharp deterioration. The paper brings out the trend in State finances, highlights the factors contributing to the decline and identifies areas of reform.
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