An autonomous research institute under the Ministry of Finance


Fiscal performance of the Central government and the States of India

Publication date

Jun, 2024


NIPFP Working Paper No. 412


Sudipto Mundle and Manish Gupta


The paper analyses the fiscal performance of the Central Government and the States of India. It addresses the question of whether the central and state governments have fully recovered from the mega fiscal shock of the Covid 19 pandemic of 2020-22 by examining their fiscal performance today (i.e., 2023-24, 2024-25) as compared to a baseline before the pandemic shock (2019-20). With state governments accounting for about two-thirds of public spending and a third of total revenue, the fiscal performance of states has always been an important component of India’s overall fiscal performance. It turns out that of late there are signs of lax fiscal discipline at the state level. The paper develops a particular developmental taxonomy of States as a lens through which to assess their fiscal performance. This lens is used to compare the intra-group and inter-group fiscal performance of States to assess whether their fiscal performance is related to their development orientation as also how the fiscal behavior of individual States in the different groups has evolved over time. 

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