State of State Finances in India in the Present Decade

Mukherjee, Sacchidananda (2023): State of State Finances in India in the Present Decade. Published in: State Forum 2023: A Compendium (2 November 2023): pp. 17-41.

Abstract

The paper examines the evolution of state finance pre-GST and post-GST, focusing on 28 Indian states (18 Major and 10 minor). The findings reveal an average annual revenue deficit increase for major and minor states post-GST. Major states experienced a decline in overall Fiscal Deficit (FD). However, minor states faced an increase due to challenges in generating additional revenue resources. Grants-in-aid and the GST compensation receipts played significant roles in sustaining revenue streams for major states. The study emphasizes the importance of sustaining economic growth, exploring revenue potential within given constitutional powers, improving forecasting methods, and addressing challenges in reducing public debt.

• Item Type: MPRA Paper
• Language: English
• Keywords: State Finances, Public Debt, Revenue Deficit, Fiscal Policy, India
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue; H - Public Economics > H4 - Publicly Provided Goods; H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations

References

Ministry of Finance (2022), “Government Guarantee Policy, 2022”, Department of Economic Affairs, Ministry of Finance, New Delhi.

Mukherjee, Sacchidananda (2023a), "State Budget Analysis of 2023-24: State of Indian State Finances," MPRA Paper 117925, University Library of Munich, Germany.

Mukherjee, Sacchidananda (2023b), "Revenue Implications of GST on Indian State Finances," Working Papers 23/388, National Institute of Public Finance and Policy.