Public Finance Management in India in the Time of COVID-19 Pandemic

Abstract

Due to the COVID-19 pandemic, public finance management (PFM) in the FY 2020–2021 and 2021–2022 have become extremely challenging. The economic contraction has created pressures on PFM in India in terms of lower revenue mobilisation and higher expenditure needs. Both the union and state governments are facing dual problem of arresting economic contraction and managing public finance with limited resources. The present article analyses public finance management of the union as well as 16 major Indian states during the time of COVID-19 pandemic. For comparison, we have also analysed pre-COVID public finance monthly data of state governments. The shock to PFM came from both the revenue as well as expenditure side. Apart from aggregate analysis of state finances of 16 major states, we present state-wise analysis to highlight measures adopted by states to deal with the unprecedented fiscal crisis. JEL Codes: H20, H61, H62, H63