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Indian Subnational Finances: Recent Performance
Author:
Mr. Ananthakrishnan Prasad
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and
Mr. Adarsh Kishore
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Series:
IMF Working Papers
Volume/Issue:
Volume 2007: Issue 205
Language:
English
Publication Date:
01 Aug 2007
DOI:
https://doi.org/10.5089/9781451867695.001
ISBN:
9781451867695
ISSN:
1018-5941
Pages:
30
Keywords:
WP; GDP; deficit; revenue
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund