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

A+| A| A-

Emerging Issues in Union–State Fiscal Relations

The restructuring of non-Finance Commission Grants is an improvement when it comes to scheme-related transfers. However, when 10 schemes constitute 90% of core grants, there is further scope for rationalisation of these schemes. The implications of following a sustainable debt path under the new Fiscal Responsibility and Budget Management framework in the budget indicate a larger fi scal correction at the state level vis-à-vis the union government.

The author gratefully acknowledges the invaluable research assistance provided by Shatakshi Garg.

In a multilevel fiscal system, the federal dimensions of the Union Budget cannot be ignored. Though discussions have so far concentrated on the macro-stabilisation aspects of the budget in terms of levels of deficits, debt and allocations for key sectors, including infrastructure, nothing much has been said about the implications of the Union Budget 201718 on transfers to states and on unionstate fiscal relations. There are two specific aspects I would like to address in this article: First, what is the big picture emerging in unionstate fiscal relations and the quantum of transfer with the abolition of the plan and non-plan distinction in the budget? Second, what are the likely implications of new Fiscal Responsibility and Budget Management (FRBM) framework indicated in the budget for states borrowings?

Quantum of Transfers

Dear Reader,

To continue reading, become a subscriber.

Explore our attractive subscription offers.

Click here


To gain instant access to this article (download).

INR 59

(Readers in India)

$ 6

(Readers outside India)

Published On : 20th Jan, 2024

Support Us

Your Support will ensure EPW’s financial viability and sustainability.

The EPW produces independent and public-spirited scholarship and analyses of contemporary affairs every week. EPW is one of the few publications that keep alive the spirit of intellectual inquiry in the Indian media.

Often described as a publication with a “social conscience,” EPW has never shied away from taking strong editorial positions. Our publication is free from political pressure, or commercial interests. Our editorial independence is our pride.

We rely on your support to continue the endeavour of highlighting the challenges faced by the disadvantaged, writings from the margins, and scholarship on the most pertinent issues that concern contemporary Indian society.

Every contribution is valuable for our future.