ISSN (Online) - 2349-8846
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‘Fiscal Federalism’ in India since 1991

Infirmities of Sound Finance Paradigm

Chirashree Das Gupta (chirashree@gmail.com) teaches at the Centre for the Study of Law and Governance, Jawaharlal Nehru University, New Delhi. Surajit Mazumdar (surajit.mazumdar@gmail.com) teaches at the Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi.

The “reforms” in 1991 laid out a new trajectory in which federalism was dichotomised into two parts—political and fiscal. The fiscal was privileged and used to undermine the political. Fiscal federalism in India since 1991 rests on the contradictions generated by the theoretical infirmities of the sound finance paradigm along with a concerted undermining of federal provisions. This political drive is in keeping with the agenda since 1991, eroding the relative autonomy of the state to turn it into a facilitator of a macroeconomic expansion process in which the wage–surplus distribution becomes more and more favourable to capital.

The authors gratefully acknowledge Mohit Kumar Gupta’s assistance for this article.

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