* Views expressed in the chapter of the author and may not be attributed in any way to the Ministry or the Government of India.
1 The conduct of the fiscal policy in India has been within a federal framework enshrined in the constitution which delimits the powers of the centre and the states in taxation and expenditure. However this chapter does not cover issues relating to the centre-state fiscal transfers or the trends in the state finances for reasons of limitation of scope.
2 Government of India, First Five Year Plan Document.
3 The fiscal situation also impacted the financial sector. In order to contain the debt-service obligations, the government had to tap financial surpluses of the household sector through statutory pre-emption ...