ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Articles by Lekha ChakrabortySubscribe to Lekha Chakraborty

Will UDAY Brighten Up Rajasthan’s Finances?

Fiscal prudence in most countries, including India, is focused on general government deficit. Though there is strong merit in focusing on the public sector borrowing requirement (PSBR) to judge fiscal health, paucity of data and its timeliness always prevented having a consolidated view of public...

New FRBM Framework

The structural inability to control revenue deficits needs different solutions from the usual argument that the utilisation of government expenditure is inefficient and that the government should spend less. It is time to relook at the way the union government spends.

State Level Debt–Deficit Dynamics

An analysis of the debt and deficit of states based on the budget estimates of 2016–17 shows that almost half of them have a fiscal deficit target higher than the limit set in the Fiscal Responsibility and Budget Management Act. These states need to focus on the quality of expenditure and elimination of revenue deficit as per the framework proposed by the Fourteenth Finance Commission to enhance state-level capital spending.

Beyond Fiscal Prudence and Consolidation

Since sustainable deficit could be different than the numeric fiscal rule, a review of the Fiscal Responsibility and Budget Management Act is timely and important. However, such a review should bear in mind that macro-stabilisation is a central function and the burden of fiscal adjustment should squarely fall on the union government keeping state debt and deficits withinFRBM limits. Maintaining the higher tax to gross domestic product ratio of last year will be key for fiscal prudence in 2016-17.

Fiscal Consolidation, Macro Fundamentals and Growthin Budget 2013-14

Due to the tight monetary policy stance adopted by the Reserve Bank of India for a sustained period of time to control infl ation, the burden of correcting macroeconomic imbalances and reviving growth seems to have fallen entirely on the Union Budget and fi scal policy. The fi scal consolidation proposed in the Union Budget for 2013-14 is a combination of a marginal reduction in aggregate non-Plan expenditure and buoyant revenue growth. If revenue targets are not met, fi scal consolidation can go off the track as the scope for expenditure contraction is limited.

Subnational Public Finance in Times of Recession

The recession of 2008-09 resulted in a decline in fiscal transfers and stagnant revenue buoyancy, compressing the fiscal space of the states. A critical review of the findings of the Reserve Bank of India's State Finances: A Study of Budgets of 2009-10 that attempted to understand how the crisis-induced economic downturn affected state-level fiscal imbalances and subnational expenditures.

Analysing the Raghuram Rajan Committee Report on Financial Sector Reforms

The Raghuram Rajan Committee has articulated "GenNext" reforms for fixing the problems of the financial sector. This note questions the relevance of the macroeconomic framework of the committee and argues that moving towards price determinacy via interest rate pegging is fallacious in the Indian context.

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