Articles by Lekha Chakraborty

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.

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.

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.