Fiscal Policy Reforms in India Since 1991
Fiscal Policy Reforms in India Since 1991 In India, the external payments crisis of 1991, which led to the initiation of economic reforms, was the result of deteriorating fiscal situation during the…
Specifikacia Fiscal Policy Reforms in India Since 1991
Fiscal Policy Reforms in India Since 1991
In India, the external payments crisis of 1991, which led to the initiation of economic reforms, was the result of deteriorating fiscal situation during the latter half of 1980s. Hence, fiscal consolidation constituted a major objective of the policy response. Fiscal imbalance was identified as the underlying cause of the twin problems of inflation and the difficult balance of payments position.
For this purpose, it became necessary to: (a) enhance tax and non-tax revenue, (b) curtail current expenditure growth, (c) restructure public sector undertakings, including disinvestment, (d) improve fiscal-monetary co-ordination, and (e) deregulate financial system. This consolidation was planned through reduction in the size of budget deficit and public debt in relation to the India's Gross Domestic Product (GDP). The need for improvements in budgetary practices led to the enactment of India's