Fiscal reforms and performance of state finances a comparative study of Punjab and Haryana

Abstract

The present research work analysed the fiscal reforms and performance of Punjab and Haryana during 1990-91 to 2014-15 period. For this, all the relevant indicators have been examined in detail to get an in-depth information about the fiscal performance of the two states along with the consolidated position of all the non-special category states. Receipts of the Central and state governments comprise revenue and capital receipts. The revenue receipts are further divided into receipts from tax revenue and non-tax revenue and capital receipts as non-debt capital receipts and debt receipts. Revenue position of the Central government during the pre-FRBMA period shows that total receipts of the Central government grew at a CAGR of 13.48 percent where revenue receipts grew at 12.63 percent and capital receipts at 14.56 percent. During this period, non-tax receipts increased at a faster pace as compared to the tax receipts. Within tax revenue, growth of indirect taxes was lower than direct taxes. The Tax Reforms Committee (1991) suggested bringing down the share of indirect taxes and increasing the share of direct taxes in total tax receipts but, during the pre-FRBMA period, share of indirect taxes remained more than the direct taxes, however, the gap started narrowing during the later years of this period. newline