Abstract
Fiscal Policy intervention, in terms of changes in government spending or in taxes, or in taking recourse to borrowing from the central bank or from the market gained currency in the aftermath of Great Depression of 1930s, dominated the policy initiatives of the government world over for four decades. However, reliance on heavy government borrowing and spending to support economic growth had its own drawbacks resulting in vicious cycle of deficit and debt, high inflation rate, high interest rates, crowding out of private sector investment. As documented in the contemporary literature, there are evidences of deficit bias which are possibly contributed by political populist measures. With growing fiscal stress across countries, irrespective of the level of economic development, it is widely recognized that the discretionary fiscal policy would not always be effective in contributing to fiscal sustainability and stability. Consequently, many countries introduced medium-term fiscal consolidation programs, which were mostly followed by fiscal rules (with or without legislations).
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Alesina (2008) “Why is fiscal policy often procyclical?” In: Alesina A, Campante FR (ed) Guido tabellini http://scholar.harvard.edu/files/alesina/files/whyisfiscalpolicyoftenprocyclical.pdf
Alesina A, Bayoumi T (1996) The costs and benefits of fiscal rules: evidence from United States. NBER, Working Paper, No. 5614
Balassone F, Franco D (2001) EMU fiscal rules: a new answer to an old question. In: Banca d’Italia (ed)
Bayoumi T, Eichengreen B (1995) Restraining yourself: the implications of fiscal rules for economic stabilization, vol 42(1). IMF, Staff Papers
Bova E, Nathalie C, Martine G (2014) Fiscal rules and the procyclicality of fiscal policy in the developing world. IMF Working Paper WP/14/122 July 2014
Braun M, Tommasi M (2004) Fiscal rules for subnational governments. Some organizing principles and Latin American experiences. In Kopits G (ed) Rules and practice in intergovernmental fiscal relations. International Monetary Fund and World Bank, Washington, DC
Corbacho A, Schwartz G (2007) Fiscal responsibility laws. In: Kumar MS, Ter-Minassian T (eds) Promoting fiscal discipline. International Monetary Fund, Washington, DC
Corsetti G, Roubini N (1996) European versus American perspectives on balanced-budget rules
Curristine T, Aldunate E, Emery R, Krause P, Redonda A (2009) Budgeting in Mexico. OECD J Budg 2009(Supplement) (Paris)
Eichengreen and Bayoumi (1994) “Restraining yourself: Fiscal rules and stabilization”, IMF Working Paper, WP/94/82http://papers.ssrn.com/soL3/papers.cfm?abstract_id=883808
Gavin M, Perotti R (1997) “Fiscal policy in Latin America” NBER macroeconomics annual. MIT Press, Cambridge, pp 11–72 http://www.nber.org/chapters/c11036.pdf
Goldstein M, Woglom G (1992) Market-based fiscal discipline in monetary unions: evidence from the U.S. municipal bond market. In: Canzoneri M, Grilli V, Masson P (eds) Establishing a central bank. Cambridge University Press, Cambridge
Guerguil (2014) Fiscal rules and the procyclicality of fiscal policy in the developing world. IMF Working Paper, WP/14/122. https://www.imf.org/external/pubs/ft/wp/2014/wp14122.pdf
Hemming R, Kell M (2001) Promoting fiscal responsibility—transparency, rules and independent fiscal authorities. In: Banca d’Italia (ed) Fiscal rules, Roma
Ilzetzki, Vegh (2008) Procyclical fiscal policy in developing countries: truth or fiction?”, NBER Working Paper Series, 14191 http://www.nber.org/papers/w14191.pdf
Kaminsky GL, Reinhart CM, Végh CA (2004) When it rains, it pours: procyclical capital flows and macroeconomic policies. NBER Working Paper 10780. National Bureau of Economic Research, Cambridge
Kopits G (2001) Fiscal rules: useful policy framework or unnecessary ornament? IMF Working Paper 01/145
Kopits G, Symansky S (1998) Fiscal policy rules. IMF Occasional Paper 162. International Monetary Fund, Washington, DC
Lienert I (2010, Nov) Should advanced countries adopt a fiscal responsibility law? IMF Working Paper WP/10/254
Liu L, Webb SB (2011) Laws for fiscal responsibility for subnational discipline: international experience. In: Proceedings of the 13th Banca d’Italia public finance workshop (Perugia). Hemming and Kell (2001)
Lledó VD, Yackovlev I, Gadenne L (2011) A tale of cyclicality, aid flows and debt: government spending in Sub-Saharan Africa. J Afr Econ 20(5):823–849
Poterba J (1994) “State responses to fiscal crises” The effects of budgetary institutions and politics. J Polit Econ 102
Poterba JM (1997) Do budget rules work? In: Auerbach A (ed) Fiscal policy: lessons from economic research. MIT Press, Cambridge, pp 53–86
Poterba JM, Hagen JV (eds) (1998) Fiscal institutions and fiscal performance. The University of Chicago Press
Poterba JM, Rueben K (1999) State fiscal institutions and the U.S. municipal bond market. In: Poterba JM, von Hagen J (eds) Fiscal institutions and fiscal performance. The University of Chicago Press, Chicago, pp 181–207
Premchand A (2003) Ethical dimensions of public expenditure management. Working Paper, No. 03–14, Andrew Young School of Policy Studies, Georgia State University
Reischauer RD (1990, Sept) Taxes and spending under GrammRudman-Hollings. Natl Tax J
Scott GC (1996) Government reform in New Zealand. IMF Occasional Paper No. 140, IMF, Washington D.C
Schaechter A, Kinda T, Budina N, Weber A (2012) Fiscal rules in response to the crisis—toward the ‘next-generation’ rules. A New Dataset. IMF Working Paper 12/187. International Monetary Fund, Washington
Stansel D (1994) Taming leviathan: are tax and spending limits the answer? Policy Analysis, CATO Institute, No. 213
Von Hagen J (2002) “Fiscal rules, fiscal institutions, and fiscal performance”, Econ Soc Review 33
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer India
About this chapter
Cite this chapter
Pattnaik, R.K. (2016). Fiscal Responsibility and Budget Management Act: An Indian Perspective. In: Singh, C. (eds) Public Debt Management. India Studies in Business and Economics. Springer, New Delhi. https://doi.org/10.1007/978-81-322-3649-8_8
Download citation
DOI: https://doi.org/10.1007/978-81-322-3649-8_8
Published:
Publisher Name: Springer, New Delhi
Print ISBN: 978-81-322-3647-4
Online ISBN: 978-81-322-3649-8
eBook Packages: Economics and FinanceEconomics and Finance (R0)