3 Review(s)

We are witnessing a historic global trade rebalancing. With opportunities for expanding activity and living standards from increased trade integration diminishing, it is likely that domestic factors and policies will now be the differentiating factor in future growth performance. Fiscal policy, therefore, has a critical role to play, both in bolstering domestic demand and in providing the favourable conditions for private sector-led growth.However, with concerns about sustainability, given soaring global debt levels, there is a very limited overall budget envelope for such fiscal policies. As a result, the effectiveness of fiscal policy in driving activity, supporting the private sector, and bringing strategic objectives (such as climate goals) within the overall fiscal strategy will hinge on robust Public Financial Management (PFM) systems. These systems comprise the institutions, practices, and processes governing how governments collect, allocate, and monitor public funds, to ensure scarce fiscal resources have the maximum impact. Unfortunately, the quality of PFM globally varies considerably and leaves significant room for improvement.It is this scope for improvement that is the central topic of this volume and, in this context, it examines India’s experience in building the systems and practices of public finance management, and in integrating India’s climate goals with its overall fiscal strategy. The chapters in the volume focus on the steps that the central government has already taken to improve fiscal transparency and accountability, especially at the state level, and the challenges that remain in driving India’s PFM systems towards global best practices.