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

Fiscal ReformSubscribe to Fiscal Reform

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.

EFC on States' Fiscal Reform : One-Sided and Impractical

While the Eleventh Finance Commission (EFC) did not itself draw up a state-specific fiscal reform agenda, it has gone to some length in working out and suggesting the lines on which fiscal reform at the state level could be undertaken and that too under the direction and supervision of an agency to be established by the centre as part of the monitorable fiscal reform programme designed by the commission.

Finance Commissions in a Cul-de-sac

The reports of successive finance commissions make it clear that the institution of the finance commission is progressively getting trapped in a cul-de-sac. The reports have become a ritual and for the most part have hardly anything new to contribute though the fiscal position of the states and the centre has deteriorated sharply over time. The elaborate quinquennial exercise, lasting over three years on each occasion and involving intensive discussion with all the state governments and central ministries, academics, representatives of trade and industry and other knowledgeable persons, has hardly thrown up any new idea. The successive commissions have instead merely tinkered with the percentages of horizontal distribution among the states along with effecting marginal increases in central devolution.

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