The Decentralization Dilemma in India

Already in precarious shape, the financial health of India’s states took a turn for the worse in the late 1990s when state deficits and debt rose sharply. While India is among the world’s most decentralized economies, greater decentralization is not the root cause of this situation. Panel estimation techniques find evidence that the trend rise in deficits reflects problems of transfer dependence and moral hazard that undermine states’ incentives to control deficits. Those states that rely more on central government transfers and have easier borrowing access run higher deficits.

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Year of publication:	2004-02-01
Authors:	Purfield, Catriona
Institutions:	International Monetary Fund (IMF)
Subject:	Intergovernmental fiscal relations \| Fiscal reforms \| Borrowing \| decentralization \| fiscal performance \| government expenditure \| government deficit \| fiscal discipline \| budget constraints \| government revenue \| general government expenditure \| fiscal decentralization \| fiscal federalism \| fiscal relations \| central government deficit \| tax revenue \| fiscal deficits \| fiscal imbalances \| intergovernmental fiscal \| debt burden \| fiscal indicators \| fiscal behavior \| government loans \| expenditure ratio \| debt service \| government guarantees \| government spending \| tax share \| government finances \| state budgets \| fiscal stress \| fiscal problems \| fiscal policy \| fiscal situation \| fiscal adjustment \| tax bases \| government grants \| tax base \| tax collections \| fiscal risk \| budget constraint \| contingent liabilities \| fiscal responsibility \| high spending \| tax collection \| budget activity \| budget deficit \| central government expenditure \| budget implementation \| fiscal indiscipline \| tax incentives \| governmental fiscal relations \| fiscal imbalance \| fiscal problem \| budget rule \| level of indebtedness \| fiscal activities \| fiscal position \| fiscal deficit \| budget institutions \| fiscal system \| primary deficit \| tax effort \| interest expenditure \| government policy \| fiscal activity \| fiscal reform

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Extent:	application/pdf
Series:	IMF Working Papers.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series IMF Working Papers Number 04/32 3 pages long
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005605318