PFM Articles 
Fiscal Sustainability in India at State Level
ANTHONY J. MAKIN and RASHMI ARORA
PFM, Vol. 12 No. 4,
(2012)
The consolidated measures of budget deficits and public debt levels for India’s central and state governments are well above the average of other emerging economies. In contrast to previous studies of India’s budgetary position, which focus on the central government’s budget, this paper examines fiscal sustainability at the level of India’s states, which differ widely in terms of their level of economic development. After comparing fiscal performance in the states, key formulae for examining public debt sustainability at the sub-national level in India are derived. These formulae are then applied, firstly to identify states where public debt has stabilized as a percent of Gross State Domestic Product, and secondly to gauge the size of the primary budget balances needed to achieve a 25% public debt to GSDP ratio within three, five and ten year horizons.
Subscribers: Login to read this article
Guests: Subscribe to PFM, or purchase individual article access for $10.
The article is not available for automatic download. We will email the article to you as a PDF file upon receiving your payment, typically within 24 hours.
