Strengthening fiscal legislation through extrinsic and intrinsic incentives

Ashima Goyal

Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India

Abstract: Sovereigns can always find ways to escape or to dilute rules, so incentives and commitment are essential complements to fiscal responsibility acts. Government expenditure is required for growth in India, especially education, health, creating human and physical capital, but the combined fiscal deficit is already among the highest in the world. High borrowing costs imply a large share of revenues is committed for debt service. Borrowing only for investment, including in human capital, is the way to sustain growth while reducing debt ratios. The paper examines the experience of national and sub-national Indian governments and explores ways to improve intrinsic as well as extrinsic incentives for productive expenditure within the structure of Indian fiscal federalism.

Keywords: Fiscal responsibility; intrinsic and extrinsic incentives; debt and deficit ratios; fiscal federalism (search for similar items in EconPapers)
JEL-codes: H61 H63 H70 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2026-05
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.igidr.ac.in/pdf/publication/WP-2026-012.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ind:igiwpp:2026-012

Access Statistics for this paper

More papers in Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India Contact information at EDIRC.
Bibliographic data for series maintained by Shamprasad M. Pujar ().