STATE FINANCE AND ECONOMIC GROWTH: UNDERSTANDING CERTAIN DISPARITIES AND IMBALANCES

Pitamber Singh Chauhan

doi:10.29121/granthaalayah.v13.i3.2025.6161

STATE FINANCE AND ECONOMIC GROWTH: UNDERSTANDING CERTAIN DISPARITIES AND IMBALANCES

Authors

Dr. Pitamber Singh Chauhan Associate Professor, Department of Economics, L. R. College, Sahibabad, Ghaziabad, UP

DOI:

https://doi.org/10.29121/granthaalayah.v13.i3.2025.6161

Keywords:

Economics, Fiscal Deficit, Budget Constraint, Liability, Debt, Revenue, State Finance

Abstract [English]

The significant decline in state finances over the past decade, marked by sharp increases in revenue, fiscal and primary deficits, rising debt levels, contingent liabilities, and cuts in capital and maintenance spending, has raised considerable concerns among policymakers. The limited growth of central transfers and the impact of central pay revisions have been particularly damaging to state finances. Additionally, the states' own fiscal performance has worsened considerably. Regarding the transfer system, the Ministry of Finance's proposed scheme aims to tie part of the transfers to fiscal reforms. However, the design of the scheme presents serious issues, and its effectiveness remains uncertain. The paper outlines the key areas of reform that states should prioritize to enhance efficiency, boost revenue generation, and focus on reducing unproductive expenditures.

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References

Anand, M., Bagchi, A., & Sen, T. K. (2024). Fiscal Discipline at the State Level: Perverse Incentives and Paths to Reform (Working Paper No. 1).

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Gayathri, K. (2025). Housing Subsidies in Karnataka. Institute for Social and Economic Change.

Government of India. (2024). Report of the Finance Commission. Ministry of Finance.

Government of India. (2025). Approach to Tenth Five-Year Plan. Planning Commission.

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Narayana, M. R. (2024). Volume and Composition of Budgetary Subsidies to Higher Education in Karnataka State. Institute for Social and Economic Change.

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Published

2024-03-31

How to Cite

Chauhan, P. S. (2024). STATE FINANCE AND ECONOMIC GROWTH: UNDERSTANDING CERTAIN DISPARITIES AND IMBALANCES. International Journal of Research -GRANTHAALAYAH, 13(3), 456–463. https://doi.org/10.29121/granthaalayah.v13.i3.2025.6161

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Issue

Vol. 13 No. 3 (2025): Volume 13 Issue 3 March 2025 Edition

Section

Articles

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