Political Impact on Fiscal Management

Journal Name: 
Journal of Management Outlook
Vol. 6 - No. 1
Author Name Designation Organization
I. Annapurna

During colonial periods and after success of Independence movements the main purpose of Political administrators, Civil servants or Civil administrators is to pacify the people regarding the existing functioning of Political administration and its impact on Fiscal management in principle. Though there should be transformation in the attitude of Political and Civil administrations, the unfortunate entry of Colonial Psychologies of subject countries into political and fiscal managements the basic motive of attaining political transparency and Fiscal stability are crushed. The future of Political administration and Fiscal management would mainly depend upon the following developments. First, fiscal management can be a powerful tool for accelerating growth, provided resources are raised efficiently without causing distortions and utilized for delivering public goods and services, including physical and social infrastructure and helping the underprivileged. Total government expenditure as proportion of GDP needs to be maintained, and raised at the State level and Local administrative level, in order to ensure the maintenance of existing infrastructural facilities and innovate scientific new ones. Second, adherence to fiscal legislation, both at Centre and State level, is critical for macroeconomic, financial, external sector and budgetary sustainability. Third, fiscal empowerment i.e, expanding the scope and size of revenue external and internal flows into the budget, through tax reforms appropriate user charges and restructuring of public sector undertakings assumes critical importance. Fourth, as the Indian economy becomes more open and integrated with the rest of the world, fiscal management would have to face greater challenges at par with Global standards. Fifth, the approach to fiscal federalism, both in terms of addressing the vertical and horizontal imbalances, would have to focus on institutional reforms which align needs with revenue capacities. Sixth, the changing demographic profile would make designing an appropriate fiscal policy more complex