EPW Journal Article - Karnataka’s Changing Fiscal Landscape after FFC

Economic Policy
Written By Guest User

This paper was originally published in the journal Economic & Political Weekly.

Abstract

Analysing the second Karnataka budget since the Fourteenth Finance Commission award, it is noted that, as assured, more fiscal space is made available to the state government. With greater untied funds, the state has budgeted for higher capital expenditure in some key areas— urban development, police, and tribal welfare—even as it failed to build capacity for power generation, and has introduced too many schemes with too little funds allocated to each.

The research publication analyses in detail the impact of FFC’s recommendations on budget allocation in Karnataka. The greater fiscal autonomy provided by the FFC Award marks a new phase in the union-state relations of India. Although there are concerns about cuts by the union in the social sector, Karnataka has countered this by increasing its spend in the social sector.

The research also takes into account some of the potential actions required to reduce ill-targeted subsidies and transfers in the power, social welfare and agricultural sector.

Authors

Featured
Pranay Kotasthane
Pranay Kotasthane

Pranay Kotasthane is deputy director of the Takshashila Institution. Pranay’s current research includes high tech geopolitics and the politics of radically networked societies. Pranay teaches public policy, international relations, and public finance at Takshashila’s graduate and post-graduate programmes.

Varun Ramachandra
Varun Ramachandra

Varun Ramachandra is currently a PhD candidate in the political science department at the University of Rochester. His research interests include observational causal inference, bayesian inference, statistical inference etc. He previously worked as a Research Analyst with Takshashila from 2014 to 2016 where he focused on using econometrics, causal inference and data science techniques to tackle public policy issues.

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