On Developing Macro-Diagnostics For Evaluating The Fiscal Health Of The Indian States: The Case Of Madhya Pradesh

The context of this paper is given by the parametric environment defined by the political reality on one hand and the process of decentralisation which has gained impetus post 73rd and 74th Constitutional Amendment Acts, on the other. Keeping in view the process of globalisation and privatisation in the Indian economy it suggests a conceptual framework for developing Macro-Diagnostics for evaluating the fiscal health of the Indian states. Specifically this paper looks at the state of Madhya Pradesh. It provides an overview of key fiscal variables and their dynamics in recent times. It also tries to operationalise the conceptual framework by way of constructing various indices. It thus provides an entrée – by way of providing macro benchmarks – into the rather stiff problem of development of Madhya Pradesh’s economy.