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

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Fifteenth Finance Commission Recommendations

While trying to balance the competing demands from the union and the states, the Fifteenth Finance Commission has done a commendable job, but has also sacrificed objectivity at times.

Experiences with Government-sponsored Health Insurance Schemes in Indian States

The implications of expanding government-sponsored health insurance schemes in India are analysed from a fiscal perspective. The experiences of two of the earliest and largest GSHI schemes of the country implemented in Andhra Pradesh and Tamil Nadu are examined. The results suggest that the expansion of the GSHI schemes may skew expenditure away from primary and secondary care towards tertiary care if the fiscal space is limited. A competitive public health system may help in containing costs and the corresponding fiscal burden. The effectiveness of public spending through such schemes is ambiguous.

Utilisation of Government Borrowings in Major Indian States

Fiscal sustainability is a key element for subnational governments in India as fiscal policy is the only instrument that can be used to correct economic malady. As far as state government finances are concerned, subnational financial stability can be understood as the capacity to generate adequate resources to afford their expenses on a sustained basis. An analysis of subnational fiscal sustainability, through a study of utilisation patterns of total debt receipts of state governments, is undertaken for 17 major Indian states during 1980–81 to 2014–15. The results indicate wide fluctuations among the states. While Kerala, Punjab, and West Bengal have shown poor and unproductive utilisation of debt receipts, Punjab has witnessed maximum instability.

Political Economy of Brihanmumbai Municipal Corporation Budgets

The paper focuses on the changing trends in budget allocations of the Brihanmumbai Municipal Corporation, especially since the structural adjustment programme that came to be implemented from 1990 and how it has affected civic services, especially health and education. The paper concludes that it has increasingly directed public resources to the private sector and reduced access adversely access to both healthcare and school education for Mumbaikars.

How to Make Budgets with a Dearth of Data

Given that the reliability of official data has come into question, there is no way to understand the full extent of the issues that various sectors are facing without accurate data.

Priorities of Uttar Pradesh Budget: As Infrastructure Expenditure Rises, Health and Education Face Neglect

Successive state governments in Uttar Pradesh have tended to neglect the social sector and this is reflected in the budgetary allocation to the sector. In the 2018 –2019 budget, t he increase in budgetary allocation for sectors like power, transport, and irrigation has been much higher than that for health or education.

Erroneous Understanding of Macroeconomic Challenges

The government chose not to adequately expand budgetary expenditure to stimulate aggregate demand due to an erroneous understanding of India’s macroeconomic challenges. It relies heavily on imagined fiscal gains from demonetisation and the introduction of the Goods and Services Tax regime. The Union Budget 2017–18 was a missed opportunity for the government and our economy.

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.

What Does the Rural Economy Need?

The agricultural sector has performed worse than the other sectors over the years. The shares of non-agricultural employment and output have increased, while70% of agricultural householdscannot meet their low consumptionneeds even after diversification of sources of income. An analysis of budgetary provisions for the rural economy suggests that the government has not done enough to address some of these well-documented problems, and does not have the required vision to substantially increase rural employment opportunities.

An Examination of Revenue Generation

The revenue side of the budget is scrutinised to understand if the government is being realistic about revenue generation in 2017–18. Clearly, there is over-optimism, given that economic growth will be slow. Too much is expected from voluntary disclosure and penalties, while incentives are not in place. It would make sense to allow some slippage in the deficit targets in order to revive the economy. In addition, the increasing problem of cesses is discussed with reference to the Krishi Kalyan Cess to assess whether cesses serve the purpose for which they are introduced.

Underutilised Fiscal Space

The hike in tax devolution to states by the Fourteenth Finance Commission to give a larger fiscal space to the states has meant sharp cuts for centrally-sponsored schemes. Studying the case of Maharashtra, it is found that without adequate norms and yardsticks of development expenditure, the state has failed to exploit its fiscal potentials.

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