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Public Finance for Children: The case of Indian State of Karnataka

Jacob, Jannet Farida and Chakraborty, Lekha S (2021): Public Finance for Children: The case of Indian State of Karnataka.

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Abstract

We explore the efficacy of ‘child budgeting’ in public financial management (PFM) to deal with the COVID-19 pandemic in the context of Indian State of Karnataka. We argue that this should be an essential component of government fiscal stimulus responses. The ex-post analysis of public finance for children (PF4C) reveals that in 2020-21 PF4C constitutes15 per cent of total net expenditure, which is 1.68 per cent of GSDP. Of this, 80 per cent is spent on education. The State, despite having allocated 15 per cent of its total net expenditure on child specific programmes, the fiscal marksmanship ratio and the PEFA score for PF4C indicates that there is significant deviation between budget allocation and actual spending. . Growing digital divide and the fragile anthropometric status of children are matters of concern in the State. Karnataka though is a fiscally prudent State, with all its fiscal parameters well within the stipulated limits of “fiscal rules”, has resorted to episodic expenditure compression in social sector which in turn has consequences for PF4C. Given the impact of the COVID-19 pandemic on education, health and income, it is imperative for the State to look beyond the fiscal stimulus packages and strengthen the long term PFM tool like child budgeting.

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