Impact of Fiscal Responsibility and Budget Management act (FRBM) in Bihar

Abstract

The need for fiscal consolidation and sustainability is one of the key macroeconomic issues confronting Indian economy. This paper discussed the effectiveness of FRBM before and after implementing its on India and Bihar. Here also examines the structure of government spending and its sources of revenue receipts, tax system, and government allocation of resources to state government. This paper looks into the current fiscal situation of Bihar. It is likely future development, and its impact on the economy in the context of a weak global recovery from the current crisis. Government aimed at continuing the momentum of aiding the growth revival of the economy and institutionalizing the co-operative federal fiscal relations while at the same time continuing on the path of fiscal consolidation. After the adoption of the Fiscal Responsibility and Budget Management Act in 2003, fiscal discipline has significantly improved in Bihar.