By Dr. M Govinda Rao
Given the political inclination to indulge in fiscal profligacy, it is important to ensure calibration of rule based fiscal policy to provide space to conduct monetary policies. Although there has been considerable progress in the conduct of rule based fiscal policy and ensuring fiscal transparency and discipline in India, additional institutional mechanism to impart effectiveness may be necessary.
This essay by Dr. Rao addresses the institutional innovations in the pursuit of a sustainable, rule-based fiscal policy and the challenges of fiscal adjustments in India. It also traces the performance of the union government in achieving fiscal targets. The essay is part of a lecture held in honour of the eminent economist, Professor K Venkatagiri Gowda, at the Indian Institute of World Culture on 26 June 2016.
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