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

Fiscal PolicySubscribe to Fiscal Policy

Taxation and Poverty Eradication

Development, Poverty and Fiscal Policy: Decentralisation of Institutions edited by M Govinda Rao; Oxford University Press, New Delhi, 2002; pp xvi+358, Rs 595 .

Twelfth Finance Commission and States' Debt Burden

Both the Tenth and the Eleventh Finance Commissions formulated certain schemes for debt relief to the states which, however, were not sufficient to deal with the magnitude of the problem. It is necessary that this issue be addressed more seriously while drafting the terms of reference of the Twelfth Finance Commission.

State Finances in India: Issues and Challenges

Sharp deterioration in state finances during the last decade - as evidenced by sharp increases in revenue, fiscal and primary deficits, increases in their indebtedness and contingent liabilities, and decline in capital and maintenance expenditures - has been a matter of serious concern to policy-makers. Low buoyancy of central transfers and spillover of central pay revisions have had the most adverse impact on state finances. However, the states' own fiscal performance has also seen sharp deterioration. On the transfer system, the scheme proposed by the ministry of finance attempts to link a portion of transfers to fiscal reforms. There are serious design issues in the scheme. It is not certain whether the scheme will be effective either. The paper details the areas of reform the states should focus on to impart efficiency and improve revenue productivity and prioritisation and compression of unproductive expenditures.

Fiscal Policy and Growth

Can fiscal policy play a key role in the revival of the economy? The problem is that this question has had to be posed in the context of deteriorating fiscal balances of the centre and the states, whose combined deficit is today slightly worse after 10 years of reform. The states' gross fiscal deficit has deteriorated significantly. It is absolutely necessary, therefore, for the centre to be seen to be fiscally prudent, which will be a signal to the states of the centre's seriousness in regard to fiscal management. A contrary signal will undermine any restraint that the centre can bring to bear on the states.

Volatility of Stock Returns

This paper investigates the volatility of stock returns in some Asian emerging markets in terms of the volatility of domestic and external factors. We found that both domestic macroeconomic variables and international variables are found to have explanatory power for stock return volatility. The evidence strongly suggests the presence of a significant contagion effect and integration of capital markets in this region. We also document that the role of government in terms of fiscal and monetary policy in the smooth functioning of the stock market is crucial in this region.

Fiscal Policy Rules for India?

This paper assesses the potential usefulness of fiscal policy rules for India, in the light of rapidly growing international experience in this area. As part of this assessment, it explores various design options and institutional arrangements that seem relevant for India, in the context of the Fiscal Responsibility and Budget Management Bill. To conclude, the paper outlines preparatory steps for successful implementatio

Fiscal Deficits and Fiscal Responsibility Act

Fiscal authority should make a distinction between cyclical and structural movements in the fiscal deficit, for otherwise its policy actions may lead to an increase in the amplitude of cycles experienced by the economy.

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