State Level Fiscal Reforms in India: Issues and Remedies

The Indian economy has undergone a paradigm shift and moved towards market-oriented reforms through deregulation, liberalization and openness of the economy leading to a higher rate of economic growth. However, the sub-national fiscal reforms did not respond to the reform program with similar effort and enthusiasm. The present paper critically examines Indian states have approached the process of fiscal management reform. The main purpose of the paper is to study the major issues governing state level fiscal reforms in India. This paper aims both to share the major state-level fiscal reforms in India to date, and to suggest what more can be done to speed up the reforms.