Fiscal reforms at the sub-national level: The case of Punjab

Upinder Sawhney
Additional contact information
Upinder Sawhney: National Institute of Public Finance and Policy

Working Papers from National Institute of Public Finance and Policy

Abstract: The importance and need for sub-national fiscal reforms is all too obvious in India where the States are facing severe fiscal imbalances since the beginning of the nineties. A decade of political strife in the eighties, followed by populist economic policies in the nineties led to a massive fiscal deterioration in Punjab, hampering its overall growth process. The Fiscal Reform Programme in the state was initiated in 1999 with the signing of a Memorandum of Understanding between the Government of India and the Punjab government. This was followed by the setting up of various committees and commissions to look into the problems of revenue mobilisation, expenditure management, public enterprises and the power sector. The more recent effort towards fiscal consolidation has been the enactment of Fiscal Responsibility and Budget Management Act, 2003. The assessment of the entire fiscal reform effort of the state reveals that the Punjab government is seized of the seriousness of the situation, admits the gravity of consequences but lacks the grit and determination to implement certain hard decisions for fiscal restructuring. The government is very much caught up in the web of populist policies and succumbs readily to political pressure against certain unpopular decisions for attaining fiscal stability. The success of the fiscal reform programme depends only on the administrative competence and political will of the government towards achieving longterm fiscal consolidation and restoration of fiscal balances in the state.

Keywords: Fiscal reforms; Punjab (search for similar items in EconPapers)
Pages: 37
Date: 2005-02
Note: Working Paper 26, 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.nipfp.org.in/working_paper/wp05_nipfp_026.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:npf:wpaper:05/26

Access Statistics for this paper

More papers in Working Papers from National Institute of Public Finance and Policy
Bibliographic data for series maintained by S.Siva Chidambaram ( this e-mail address is bad, please contact ).