Economics at your fingertips  

What do we know about fiscal sustainability across Indian states?

Vaseem Akram and Badri Rath ()

Economic Modelling, 2020, vol. 87, issue C, 307-321

Abstract: This study examines fiscal sustainability using Indian state-level data from 1980-81 to 2017-18. The results, derived from cointegration and dynamic ordinary least squares techniques, show strong fiscal sustainability for the majority of states. Our results also confirm that northern, western, and southern states are more fiscally sustainable as compared to eastern states. Further, we find fiscal sustainability for both revenue and capital accounts. Moreover, political alignment does not affect fiscal sustainability, except in a few states. From a policy perspective, state governments need to revisit their expenditure patterns to minimize non-developmental expenditure, particularly for those states with weak sustainability.

Keywords: Fiscal sustainability; Intertemporal budget constraint; Cointegration; Indian states (search for similar items in EconPapers)
JEL-codes: C33 H30 H72 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

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:

DOI: 10.1016/j.econmod.2019.08.005

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2022-06-25
Handle: RePEc:eee:ecmode:v:87:y:2020:i:c:p:307-321