Can flying geese-Gujarat, Maharashtra, Tamil Nadu-Power India’s growth with stability?

State government performance is going to matter in the coming months of fiscal and economic stress. The national performance will depend in the near term, crucially, on how the better-performing states pull their weight. One criterion of state performance is the budget allocations for fiscal 2023-24 starting April 1st and the outlook on fiscal rectitude. […]

Indian Economy: Reading the Tea Leaves

In India, the Union government takes on a much broader fiscal mandate than is necessary. Some of this is driven by the constitutional allocation of tax mandates, which favor tax flows to the Union government. Nearly 20 per cent, on an average, of a state government’s revenue flows in a “waterfall arrangement” from the Centre […]

Budget Bounties 2023-24

Our garden is full of goodies come and get what you need. This is what Finance Minister Sitharaman conveyed to the people (and voters) of India in her 2023-24 budget speech. Adding to the ever deepening gift bag that the Modi administration has held out to voters since 2015, the budget not only slashed income […]

A Fiscal Council for India

Fifty-one countries have legislated a publicly financed Independent Fiscal Institution (IFI) to provide unbiased analysis of public spending, forecast the economic outcomes thereof and review government performance versus fiscal rules (targets) to improve fiscal and financial stability. Supreme audit institutions (like the Comptroller and Auditor General in India) do this regularly ex post facto and […]

Fiscal Options for Budget 2023-24

Between spending and saving, governments are generally better at the former. High growth comes with the advantage that government revenue expands and gets spent, as is happening this fiscal. But this is also habit forming. If growth tapers down – as is expected in FY 2024- cutting back government spending will be politically rocky just […]

Indian Economy between A Rock and A Hard space

Growth is slowing in India. In July to September this year there were six major economies- Malaysia, Greece, Philippines, Israel, Colombia, Argentina (The Economist December 1) with growth higher than the 6.3 percent India achieved in the April to September quarter of this fiscal. Growth by year end is unlikely to be vastly different. Is […]

Public Spending: Cut The Fat finance Growth Enablers

Governments are the biggest spenders in national economies. Global expenditure per the IFPRI SPEED 2019 database, in agriculture, communications, education, defense, health, mining, social protection, fuel and energy, and transport for 110 countries in 2015 is estimated at US$ 19.3 trillion in current terms or 26 percent of global GDP. By 2022 the average spend […]

Bridging The Public Policy gaps

In the noticeably short term, say less than five years, decision paths and trade-offs are clearer than in the long term, say more than ten years. This is why governments make sensible short-term bets but like most individuals, flounder whilst taking decisions from the long-term perspective. Covid-19 management – a triumph of short-term decision making […]

Being optimistic on India

India has changed. Gone is the earlier hesitation about being coldly pragmatic while keeping the public interest in mind. Foggy Post-Colonial and Cold-War ideological baggage is being stowed away, appropriately. The clear guard rails developed for dealing with the Ukrainian crisis do the country proud—extending principled support for the continuation of the international mediation effort, […]

Budet FY 2023- Good intentions but short on specifics

A fiscal deficit of 6.4 per cent of GDP on top of a revised fiscal deficit of 6.9 per cent of GDP in the current year and 9.5 per cent the year before is a strong endorsement of what finance minister Nirmala Sitharaman, in her Union Budget speech on February 1, called “the need to nurture growth […]

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