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How populist policies are straining state finances across India

Mobilising more revenue is an essential part of improving state finances and rejuvenating fiscal federalism

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hindustantimes.com

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hindustantimes.comStai leggendo6 g fa

How populist policies are straining state finances across India

12 out of 18 major Indian states' tax revenue-to-GDP ratio has declined since 2015 as populist welfare spending surges. State fiscal strain may constrain digital infrastructure investment and increase economic volatility, affecting tech companies' India market strategy.

originale

thehindubusinessline.com6 g fa

Normative shift in fiscal federalism

India's Finance Commission shifted devolution from redistribution to GDP-contribution, cutting transfers to weaker States. This constrains infrastructure investment where development is incomplete, marking a shift from equalisation toward competitive federalism.

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Timeline cronologica

lunedì 22 giugno 2026·thehindubusinessline.com
Normative shift in fiscal federalism
16th Finance Commission’s stress on States’ contribution to national GDP could widen inter-State disparities
lunedì 22 giugno 2026·hindustantimes.com
How populist policies are straining state finances across India
Mobilising more revenue is an essential part of improving state finances and rejuvenating fiscal federalism