Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/163136
Authors: 
Chakraborty, Pinaki
Year of Publication: 
2017
Series/Report no.: 
ADBI Working Paper Series 637
Abstract: 
The core emphasis of rules-based fiscal legislation at the subnational level in India is to achieve debt sustainability through a numerical ceiling on borrowing and the use of borrowed resources for public capital investment by phasing out revenue deficits. Using the Arellano Bond Panel estimation, this paper examines whether the application of fiscal rules has resulted in an increase in the fiscal space for public capital investment spending in major Indian states. This analysis shows that by controlling other factors, there is a negative relationship between fiscal rules and public capital investment spending at the state level during the rules-based fiscal regime.
Subjects: 
federalism
fiscal space
fiscal rules
public investment
public spending
fiscal rules
budget constraints
Arellano Bond Panel estimation
spending inertia
JEL: 
H00
H6
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/3.0/igo/
Document Type: 
Working Paper

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