Template-type: ReDIF-Paper 1.0 Author-Name: Roy Bahl Author-Email: rbahl@gsu.edu Author-Homepage: http://aysps.gsu.edu/BahlR.html Author-Workplace-Name: Andrew Young School of Policy Studies, Georgia State University Author-Workplace-Homepage: http://aysps.gsu.edu/index.html Author-Name: Eunice Heredia-Ortiz Author-Email: eheredia@gsu.edu Author-Homepage: http://aysps.gsu.edu/isp/Heredia-OrtizE.html Author-Workplace-Name: International Studies Program. Andrew Young School of Policy Studies, Georgia State University Author-Workplace-Homepage: https://icepp.gsu.edu/ Author-Name: Jorge Martinez-Vazquez Author-Email: jorgemartinez@gsu.edu Author-Homepage: https://icepp.gsu.edu/profile/jorge-martinez-vazquez/ Author-Workplace-Name: International Studies Program. Andrew Young School of Policy Studies, Georgia State University Author-Workplace-Homepage: https://icepp.gsu.edu/ Author-Name: Mark Rider Author-Email: mrider@gsu.edu Author-Homepage: http://aysps.gsu.edu/RiderM.html Author-Workplace-Name: Andrew Young School of Policy Studies, Georgia State University Author-Workplace-Homepage: http://aysps.gsu.edu/index.html Title: India: Fiscal Condition of the States, International Experience,and Options for Reform: Volume 1 (2005) Abstract:India is a Union of 28 States, two Union Territories with legislatures, and five Union Territories without legislatures. The 7th Schedule of India’s Constitution provides for a separate State List, which enumerates exclusive legislative and executive authority that lies with state governments. The State List entrusts major responsibilities in the areas of human and physical development to the states. These responsibilities require major expenditures by the states, but the tax revenue sources assigned to the states, although they have not been fully used, are not sufficient to meet these expenditure responsibilities. The resulting fiscal imbalances of the states is addressed through a complex system of intergovernmental transfers in various forms and through several other channels, including borrowings. Over the years, in practice, the States of India have sought to finance their increasing needs for expenditures through different forms of transfers from the Union Government and loans, rather than by raising additional tax revenues and/or charging for services delivered. This has resulted in the states running large revenue and fiscal deficits and accumulating potentially unsustainable debt burdens. In this process, most states have compromised budgetary discipline, resorted to off-budget forms of borrowings, and accumulated large contingent liabilities, with the attendant risks of default. The lack of fiscal discipline among the states is symptomatic of a flawed intergovernmental fiscal system. In addition to the lack of aggregate fiscal discipline, the level and quality of services delivered by the states are well below where they ought to be with the money actually spent. There is much evidence of inefficient service delivery. For example, many states have high rates of illiteracy, particularly among women, and high infant and maternal mortality rates. In addition, the quality of economic services provided by the states, particularly electricity and transportation, is poor. Keywords:india,intergovernmetnal, fiscal transfers, government expenditures Length: 162 pages Creation-Date: 2005-06-01 File-URL: http://icepp.gsu.edu/files/2017/09/ispwp-05141.pdf File-Format:application/pdf Handle: RePEc:ays:ispwps:paper05141