Expenditure implications of India's state-level fiscal crisis
Date
Authors
Howes, Stephen
Murgai, Rinku
Wes, Marina
Journal Title
Journal ISSN
Volume Title
Publisher
Palgrave Macmillan Ltd
Abstract
Indias states have significant developmental expenditure responsibilities. While the fiscal crisis which engulfed Indias states in the late nineties led to higher deficits and debt levels, it was also associated with a rapid increase in expenditure levels, and it might be thought that this would have increased the development effectiveness of the state governments. However, a closer look at the data reveals that this is not the case. The main positive fiscal development in the post 1996/97 period is a pick up in real growth in government capital expenditure. In other respects, the fiscal crisis weakened the developmental and poverty impact of state governments especially in the poor states. Real growth of expenditure in health and education slowed, in some cases halted, and the efficiency of government expenditure fell as liquidity constraints tightened and non-salary expenditures were crowded out.
Description
Keywords
state governments, fiscal crisis, India, government capital expenditure, health and education, deficits, debt levels, poverty reduction, human development
Citation
Collections
Source
Type
Working/Technical Paper
Book Title
Economic Growth, Economic Performance and Welfare in South Asia