Fiscal rules and debt dynamics in India

Moharir, Advait (2022) Fiscal rules and debt dynamics in India. Macroeconomics and Finance in Emerging Market Economies, 15 (1). pp. 23-46. ISSN 1752-0843

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Abstract

Using an accounting framework, I examine the evolution of national and sub-national public debt in India from 1981 to 2017, with reference to the FRBM Review Committee Report, which stipulates the debt targets at 60% and 20%, respectively. I find that a larger share of debt movement is explained by changes in interest rate, growth and inflation, than by accumulation of new debt, for both national and sub-national debt. Simulations show that a strict perusal of the debt targets will force the government to run surpluses, while relaxing the targets generates fiscal space up to 4% of the GDP.

Item Type:	Article
Authors:	Moharir, Advait
Document Language:	Language English
Uncontrolled Keywords:	Fisher dynamics, debt sustainability, fiscal rules, accounting framework
Subjects:	Social sciences > Economics > Public finance Social sciences > Economics > Macroeconomics & related topics > Factors affecting income and wealth
Divisions:	Azim Premji University - Bengaluru > School of Arts and Sciences
Full Text Status:	None
URI:	http://publications.azimpremjiuniversity.edu.in/id/eprint/7048
Publisher URL:	https://doi.org/10.1080/17520843.2020.1796733

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