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

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Building Fiscal Resilience

Budgets are the instruments of policy change and are sensitive to external forces. As per the McKinsey study, in the last 20 years, there were 12 years (60% of the time) wherein global, national and state government’s budget suffered from disruptive forces which resulted from geopolitical, technological, economic, and biological influences. Governments need to develop a resilient budget preparation and implementation mechanism which can absorb any external environment disruptions and consequently develop resilience.

The pandemic and non-strategic growth have shadowed the Indian states’ financial health. The Indian states look forward to union government’s help to come out of challenges. American states have practice keeping rainy day reserves, in real-time studying the revenue gaps, and developing new revenue streams. Indian states work on near-term cuts only, rather than scenario planning and creating new revenue streams. Hence, all the moves Indian states make prove to be insufficient.

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