Social spending and fiscal policy in India: Towards an alternate macro-fiscal framework

Bose, Sukanya and Banerjee, Saikat (2026) Social spending and fiscal policy in India: Towards an alternate macro-fiscal framework. Economic & Political Weekly, 61 (26-27). pp. 58-65. ISSN 0012-9976

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Abstract

India's performance in accelerating human development has been pale when compared to its growth performance, a structural feature considering how long it has persisted. Behind the divergence between macroeconomic and human development outcomes lies social spending, a key variable linking the two. The normative distances, international comparisons, and lack of progress vis-a-vis past positions, all seem to indicate underperformance in social spending and the need for higher expenditure. Fiscal policy determines the scope of social policy and human development outcomes through its control over fiscal space. In policy formulation, the growth potential of social spending is ignored while concerns about fiscal implications of social spending are overstated. This paper argues for a shift towards a macroeconomic framework that integrates growth, distribution and human development with social spending as a crucial link. In doing so, it presents an alternative view of conceptualizing fiscal policy for India, addressing problems in the present framework.

Item Type:	Article
Authors:	Bose, Sukanya and Banerjee, Saikat
Document Language:	Language English
Subjects:	Social sciences > Economics > Public finance Social sciences > Economics > Production > Economic policy, economic development, economic growth
Divisions:	Azim Premji University - Bhopal > Arts and Sciences
Full Text Status:	Restricted
URI:	http://publications.azimpremjiuniversity.edu.in/id/eprint/7925
Publisher URL:	https://doi.org/10.71279/epw.v61i26-27.47954

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