The-Evolution-of-Indias-Welfare-System-From-2008-2023
To put this in historical perspective, we note that the type and size of grants-in-aid have varied over a period of time. There have been five different types of grants: (a) revenue deficit grants, (b) grants for local governments, (c) grants for disaster management, (d) sector-specific grants and (e) State-specific grants. Except for the revenue d
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The distinction between revenue and capital accounts is, in fact, rooted in the history of budget making process, and in the Constitution of India. Revenue deficit grants emanate from the requirement to meet the fiscal needs of the States on their revenue accounts that remain to be met, even after considering their own tax and non-tax resources and
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Real private final consumption expenditure has been averaging at 3.5-4 per cent over the past five years despite the exuberant leveraged spending. And while the contraction in financial savings was seen as a sign of improving household confidence, it ironically accompanied a languid actual consumption, indicating faltering real incomes.
Indeed, the
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Besides revenue deficit grants, we have recommended grants and incentives for various sectors. These grants revolve around four main themes. The first is social sector, where we have focused on health and education critical to a large and particularly vulnerable subset of the population. Both these sectors face unprecedented challenges with the pan
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In practice, except for the revenue deficit grants, the actual flow of funds remained generally less than recommended amounts by the end of the award period, which indicates that the revenue deficit grants were predictable and assured while others were not. Some conditional grants for local governments faced challenges of conditionalities and timel
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The RBI’s report highlights three priorities for states:
Control Subsidies: States need to rethink their freebies and focus on sustainable spending.
Rationalize Expenditure: Invest more in future development rather than daily operations.
Improve Transparency: Standardized reporting and robust data systems are essential.