What do we know about fiscal sustainability across Indian states?

Akram, Vaseem and Rath, Badri Narayan (2019) What do we know about fiscal sustainability across Indian states? Economic Modelling. ISSN 02649993

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Abstract

This study examines fiscal sustainability using Indian state-level data from 1980 to 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.

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IITH Creators:
IITH CreatorsORCiD
Rath, Badri Narayanhttp://orcid.org/0000-0001-7211-0952
Item Type: Article
Subjects: Arts > Liberal arts
Divisions: Department of Liberal Arts
Depositing User: Team Library
Date Deposited: 21 Aug 2019 04:48
Last Modified: 21 Aug 2019 04:48
URI: http://raiith.iith.ac.in/id/eprint/5977
Publisher URL: http://doi.org/10.1016/j.econmod.2019.08.005
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