A Critique of Indian Public Finances

Public finances in India are at a turning point. Analysis of the past data, however, shows no improvement in any of the major fiscal indicators. Restructure of debt, reforms in power sector and implementation of other issues under MTFRP, GST hold promise for future. The main objective of this paper is to suggest restructuring of public finances of the Centre and state governments to provide macroeconomic stability, equitable growth in the country and improve efficiency of resources. The paper also suggests ways to augment revenue resources and contraction in expenditure. On the contrary, other fiscal indicators have shown significant deterioration. Thus the claims about fiscal adjustment are illusory. Fiscal consolidation in India perhaps needs more attention and commitment. The objective of the present study is to examine the background and to identify the major problem areas at state and central level. The another objective of the paper is to study the deficits of the government of India whether fiscal reforms taken by the government of India for resources mobilization led to reduction in deficits.