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

Public ExpenditureSubscribe to Public Expenditure

Inclusive Fiscal Adjustment for Reviving Growth

Unrealistic revenue projections leading to strong expenditure compression is primarily responsible for India’s growth deceleration. Growth will decelerate further without a programme of deep fiscal adjustment. How a fiscal space, amounting to over 6% of the gross domestic product, can be freed through such an adjustment programme is demonstrated. This space can be potentially used for an inclusive public expenditure-led strategy for reviving growth.

State-Adjusted Public Expenditure on Social Sector and Poverty Alleviation Programmes

This paper presents trends in public expenditures on social sector and poverty alleviation programmes from 1990-91. A considerable proportion of these expenditures is undertaken by the states but the central share seems to be increasing over time. This paper analyses trends in state expenditure, expenditure by the central government and central and state adjusted combined expenditures. Overall, expenditure on social sector schemes is increasing in real terms but mainly through increased expenditure of the central government. The state governments seem to be easing out of their constitutional commitment to sustain programmes in the social sectors, which is a matter of concern. Secondly, there are large inter-sectoral reallocations of funds in the poverty alleviation sectors. One major development has been that large funds that were allocated to employment generation have now been diverted to the rural road construction programme. This reallocation may have serious implications for employment generation.

Technological Innovation and Economic Development

This paper examines the trends in R and D expenditure in different areas between 1994-95 and 1999-2000 linking this expenditure with the economic importance of the areas. Based on this assessment some suggestions are made for fostering and supporting technological innovation that can lead to accelerated economic growth. A clear policy imperative is that proper measures must be taken to make Indian firms and industries more competitive in a global context. The analysis indicates that agriculture and mainstream industries are the major current drivers of the Indian economy. These are the areas where technology inputs can make India globally more competitive. Bridging the gaps between needs and technology and creating the right conditions for large-scale diffusion of such technologies is one of the great challenges facing Indian R and D.
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