An Examination of Interdependence between Revenue and Expenditure of Government of Haryana

Abstract

The Government of Haryana (GoH) has been successful in keeping the budgetary deficits under tight control. Interestingly, whenever deficits breach certain limits, the GoH generally takes corrective measures to bring the situation under control. In this article, our endeavour has been to examine the process employed by the GoH to maintain fiscal balance in its account. We examined the interdependence between revenue and expenditure of GoH. The results show that GoH proceeds with revenue plans and then adjusts expenditure accordingly. This is not an optimum strategy as this might cause compression in certain useful expenditure. In fact, the fiscal policy of the GoH is arbitrary and lack strategic vision. It is suggested that GoH should identify and prioritise critical expenditure first, and then the resource mobilisation can be planned to achieve well-defined, important milestones in a time bound manner. JEL Classification: H2, H5, H62, C22, C32