Fiscal Performance and the FRBM Act: Special focus on Assam

Abstract

Objectives: The primary objective of the study is to evaluate the fiscal efficacy of the North Eastern states, with a particular focus on Assam, a special category state, and to examine the effects of the FRBM Act on the state’s performance for a time frame of 40 years, from 1980–1981 to 2019–2020. Methods: The ordinary Least Square method has been used to examine the impact of the
FRBM Act and other fiscal indicators on fiscal deficit. Further, trend Analysis has been employed to check the growth performance of the North Eastern states of India. Findings: The state of Assam is performing better than the majority of the other North Eastern states in terms of deficit indicators, while for the other fiscal indicators, the state’s performance is not up to the mark. Further, the trend analysis and regression analysis results demonstrate that the state of Assam has had a beneficial and statistically significant impact of the FRBM Act. Novelty: The present study tries to analyse the fiscal performance of the North Eastern states with a special focus on Assam, which has not been covered by existing literature. As the state of Assam is fiscally prudent after the FRBM Act, this will be beneficial for the state with a goal-oriented and time-bound framework with adequate transparency and monitoring mechanisms, may encourage growth and prosperity.