An autonomous research institute under the Ministry of Finance


Uttar Pradesh: Medium Term Expenditure Policy

Publication date

Nov, 2005


Report submitted to the Resource and Expenditure Commission of Uttar Pradesh


D. K. Srivastava, C. Bhujanga Rao, Manish Gupta


This study examines appropriate structure of expenditure in terms of size and composition and formulates a medium-term expenditure policy for Uttar Pradesh. The study outlines the dimensions required for restructuring of expenditure in Uttar Pradesh. The study broadly covers the following areas: basic considerations in formulation of medium-term expenditure policy; trends and structure of expenditure in Uttar Pradesh; expenditure policy; link between expenditure and its financing; and measures to improve efficiency of government expenditure.:

The fiscal situation of the state calls for multi-dimensional reforms, augmenting tax revenues with distortion-minimising tax reforms, reducing interest payments, curbing growth of government employment, introducing a new strategy for handling pension liabilities, revamping state level public enterprises, curbing contingent liabilities and bringing debt within sustainable limits. To achieve a greater control and more effective intervention, the Fiscal Responsibility and Budget Management Act [FRBMA] provides for reducing revenue deficit to zero by 2008-09, among other targets. This would help the state take benefits of the debt consolidation and relief facility based on the recommendations of the Twelfth Finance Commission.

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