Background
Overview
Crucial for understanding the financial autonomy and sustainability of states, their capacity to deliver public services, and the overall fiscal health of the Indian federation. PFM reforms are vital for good governance, transparency, and efficient resource allocation, directly impacting economic development and welfare.
State fiscal health refers to the financial sustainability and capacity of state governments to meet their expenditure obligations and fund development initiatives, primarily through own-tax and non-tax revenues, central transfers, and prudent borrowing. Public Financial Management (PFM) reforms aim to enhance the efficiency, transparency, and accountability of government financial operations, including revenue collection, budgeting, expenditure management, and reporting.