Fiscal Federalism and Subnational Finance in India after the 2008 Financial Crises and Covid-19 Pandemic
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V N Alok [1]
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[1] Indian Institute of Public Administration
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- Localización: Revista "Cuadernos Manuel Giménez Abad", ISSN-e 2254-4445, Nº. Extra 9, 2023 (Ejemplar dedicado a: FISCAL FEDERALISM AND SUBNATIONAL FINANCE AFTER THE GREAT RECESSIOND AND COVID-19), págs. 98-126
- Idioma: inglés
- Enlaces
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Resumen
The world economies in the recent past were affected by two major crises. First, the 2008 global financial crisis and the second being the COVID-19 pandemic. The common effect of these crises was an increase in public spending and high fiscal deficits of all governments in a multi order federal structure. Likewise, Indian federation was no exception. However, the first crisis in India was largely addressed through monetary policy instruments. Though, fiscal deficit of both- the centre and state governments had risen from 2.5 to six percent of GDP and 1.5 to 2.4 percent of GDP from the fiscal year 2007-08 to 2008-09, respectively. The main factors of this rise were both internal and external. Though the internal factors outweigh the external ones in the rise of fiscal deficits of both the centre and states. The second crisis emanated from the medical emergency due to Covid-19 Pandemic The situation of pandemic was largely disruptive in terms of human lives and economic activity. As a result, the GDP in 2020-21 registered a nominal growth of (-) 7.3 per cent as compared to high positive growth in the previous years. In fact, all sectors declined except agriculture which continued to grow at three percent. The negative economic growth had limited the fiscal space of the governmentsboth the centre and states. But, later on, the situation fairly improved to the extent that India has again become the fifth largest economy in the world in the year 2022-23.
