State Finances in India with Reference to Punjab: “A Relook In View of Globalized Scenario"

Abstract

State Government Finances is one of the areas in Macroeconomic Management of Finances in general and public finance in particular. Political philosophy of the Government is always reflected through its budgets.Centre-State financial relations have created a tension for both the governments. Scientific studies are necessary for better management of developing countries like India. Now-a-days every State has financial problem to manage its budget deficit. This study provides a self contained overview of present problem of State finance in India and Punjab. It begins with overview of State finances and Punjab, political aspects and aspects of India‟s state government finances and Punjab finances going on to consider various developments that have shape the states current fiscal situation, including the roles of national economic reform, the intergovernmental transfer system, tax reform. Policy options for reforming institutions of fiscal federalism system, borrowing mechanisms for the states, and governance are then discussed, with an emphasis on the principle that states should have appropriate incentives for fiscal discipline at the margins of revenue and expenditure.