Challenges of sub-national fiscal correction

News Today 30.08.2022

Recent concerns over excessive doling out of freebies by States are often interpreted as intrusion into the federal powers of the States. States push back on this issue on the grounds of welfare provisioning and protection of the vulnerable sections of the population. The Central government’s alarm has been on the mounting debt burden and the deteriorating fiscal situation in some States. As both the Union government and States are expected to work closely in a co-operative federal structure, frictions arising out of these exchanges might have repercussions on both resource sharing and expenditure prioritisation. Hence, it is important that the Centre and States are on the same page on these issues. (Read More)

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