An Analysis of Fiscal Policy in an Emerging Economy: Innovative and Sustainable Fiscal Rules in India

Abstract

Fiscal management is considered to be effective only if fiscal imbalances do not create any macroeconomic instability in an economy. In a federal structure, the performance of sub-national constituents as well as the national government is significant for growth and development. Fiscal imbalances set in the Indian economy both at the national and sub-national levels during 1980s and became a matter of concern by the end of the last century. Accordingly, fiscal responsibility legislations (FRLs) were enacted by the two layers (union and state) of the government. It is not the enactment but the effective implementation leading to fiscal discipline and consolidation which is important. This article seeks to examine the Fiscal Responsibility and Budget Management Act, 2003 of a developed Indian state situated in the northwest of India, that is, Punjab. Various fiscal consolidation targets are reviewed against the actual outcomes of those fiscal parameters which are outlined in the FRL of the State. Some policy pre-scriptions for innovative and sustainable fiscal rules have been suggested.

Keywords

Fiscal imbalances fiscal responsibility budget management public debt committed expenditure

I. Introduction

Economic policies are the guiding principles and procedures for the growth and development of the economies. Fiscal and monetary policies are the main policy approaches used by the governments to manage the broad aspects of the economy. Fiscal policy is an important constituent of the overall economic framework of a country and is therefore intimately linked with its general economic policy strategy. However, fiscal and monetary policies cannot function independent of each other. To meet the gap between income and expenditure, the governments either borrow from internal (notably the Central Bank) or external sources which amounts to public debt or resort to deficit financing. Each has its own perils and in emerging economies the developmental needs of a nation lead to, more often than not, budgetary deficits. Building infrastructure as also providing healthcare, education and meeting the committed obligations of the government’s results in situations where the public expenditure far out strips the revenues/income of the government. A prudent fiscal policy demands managing the expenditure in a manner where the demands of development are not compromised as also the public authority depends minimally on public debt.

Fiscal policy assumes centre stage in policy discourse as the continuous fiscal imbalances and rising levels of public debt pose risk to the prospects for macroeconomic stability, and accelerating and sustaining growth. Appropriate and timely fiscal policy measures can promote growth by setting efficient and effective use of scarce resources. A well-designed fiscal strategy would help to move an economy towards a higher growth trajectory without high inflation or intergenerational transfers of the burden of public debt. Most countries, world-wide, are resorting to public debt on a regular basis and the debt is assuming unmanageable proportions. Emerging economies spend a considerable amount of their resources on meeting committed expenditure including debt servicing leaving little for infrastructure building and social welfare among other necessary expenses. Unbridled reliance on debt leads to excessive debt accumulation which becomes unsustainable and governments fall into a debt trap. In the last couple of decades, many countries, including developed and developing, have been resorting to fiscal responsibility legislations (FRLs) in order to deal with severe fiscal crisis as such legislations impose a commitment on the governments to follow a defined path to reduce deficits/debt and some of them also provide for some action against the governments if the targets are not achieved within a specific timeframe. Each government designs its own FRL.

The economic crisis of 1991 in India was triggered, inter alia, due to fiscal mismanagement including huge public debt and the fiscal deficit (FD) of the Government of India (GoI) exceeded 8 per cent of GDP. The government had to borrow from the International Monetary Fund (IMF) in order to prevent default on repayment of external debt. The IMF saved the situation by lending to India but imposed certain conditions on the GoI where the major focus was on moving from a controlled economy towards a market-oriented economy. Accordingly, fiscal reforms aimed at reducing deficits were an important component of the Economic Reform Programme of the GoI in 1991 along with the monetary and other structural reforms. The Indian economy witnessed some fiscal consolidation in the early reform cycle but the deterioration in both federal and state finances set in towards late 1990s once again. This is when the GoI had to deal with the management of federal and state finances even more rigorously in order to avoid fiscal crisis. The government responded by instituting a fiscal discipline framework in the form of an FRL in the early 2000s. The present article looks into the initiation of FRL framework in India and focuses on the effectiveness of Fiscal Responsibility and Budget Management Act (FRBMA) in one of the developed states of India, that is, Punjab. This article reviews the state of fiscal management in the state of Indian Punjab and attempts to suggest some innovative and sustainable fiscal policy prescriptions also as guidelines to improve the functioning of fiscal rules.

Section II gives a brief overview of relevance of fiscal rules. Section III discusses the need for the enactment of the FRBMA in Punjab and its design. Section IV analyses the compliance status of the Act by examining different fiscal indicators stated in the Act for attaining fiscal consolidation. Section V looks into the manner in which fiscal consolidation has been attempted by Punjab, and Section VI concludes the major observations of the study on Punjab Fiscal Responsibility and Budget Management Act (PFRBMA).

II. Relevance of Fiscal Rules

The adoption of FRLs as an institutional measure has been believed to be an effective tool in restoring fiscal balance both at national and sub-national levels. The structure of these fiscal rules is shaped in accordance with the requirement and economic and political environment of a country. In general, fiscal rules are considered as ‘a permanent (or long lasting) constraint on fiscal policy, expressed in terms of a summary indicator of fiscal performance, such as the government budget deficit, borrowing, debt or a major component thereof’ (Kopits & Symansky, 1998). These rules are also identified (Ter-Minassian, 2006) as the fiscal restraints which ‘are typically enshrined in constitutional or legal provisions and are intended to influence policy design and anchor economic agents’ expectations about a government’s commitment to fiscal discipline over a relatively long horizon’ (p. 2). Wherever these rules are implemented through constitutional or legal provisions, they act as ‘legal agreements that promote the fiscal discipline “tying the hands” of policy makers in order to constrain the decisions regarding the scheduling of the budgetary revenues and expenditures’ (Bergman, Hutchison, & Jensen, 2013, p. 4).

Highlighting the importance of fiscal rules, Afonso and Strauch (2007) asserted that

both the political as well as the academic sphere seems to be very optimistic that numerical restrictions of fiscal policy can have a positive impact on the market participants’ confidence. However, for generating an immediate increase of trust among investors in a more sustainable fiscal policy, rules have to be regarded as strong and credible by the market participants (pp. 7–8).

To ensure the effectiveness of such rules, it is imperative that they target such core variables that can be directly controlled by the policy makers. As stated by Bernanke (2010) for the rules to have a high degree of efficiency, they should depend on four main factors, that is, transparency, addressing the basic problem, focusing on variables that can be directly controlled by policy makers and the rules should not be modified as per the political whims and fancies. This suggests that fiscal efficiency must be objectively pursued and all stakeholders must refrain from populism.

In 1990, only five countries (Germany, Indonesia, Japan, Luxembourg and the United States) had fiscal rules in place that covered at least the federal government level. Since then, the number of countries with national and/or supranational fiscal rules surged to 76 by mid-2012 (Schaechter, Kinda, Budina, & Weber, 2012).

In the backdrop of fiscal deterioration in government finances, the GoI introduced Fiscal Responsibility and Budget Management Bill in 2000 and after certain modifications, it was passed by the Parliament in 2003, which became effective from July, 2004. Later, the sub-national governments in India also enacted their own FRLs which broadly conformed to the FRBMA of the GoI. In India, the initial ground for fiscal rules at the state level was prepared by the State Fiscal Reform Facility (SFRF) for the period 2000–2001 to 2004–2005. The SFRF was created by the GoI in pursuance with the recommendations of the Eleventh Finance Commission (EFC)¹ (GoI, 2000) to incentivize the state governments for better fiscal management. To avail this facility, the state governments were encouraged to draw up a Medium Term Fiscal Reform Programme (MTFRP) with the objectives of bringing down

the consolidated FD to sustainable levels by 2005;

the consolidated revenue deficit (RD), so that in the aggregate, the RD is eliminated altogether by 2005; and

the debt/GDP ratio including contingent liabilities to sustainable levels, both in terms of stability and solvency (GoI, 2002a).

This was the first attempt to encourage the sub-national governments to implement fiscal consolidation, even though, ‘sustainable levels’ of FD and debt lacked clarity. This step was taken forward by the Planning Commission of India and report of the Tenth Five Year Plan while suggesting policy imperatives, recommended the ‘enactment of a Fiscal Responsibility and Budget Management Bill under which borrowings shall be restricted to attain a non-rising debt to GDP ratio from current levels in order to reduce the burden of interest payments’ (GoI, 2002b, p. 83). Later, report of the Twelfth Finance Commission (TwFC; GoI, 2004) made it mandatory for the states to implement the FRBMA in order to avail debt relief and fiscal consolidation. Analysing this period of policy focus on fiscal reforms at the state level, Ganguly (2009) observed that over a period of a decade, the fiscal position of the state governments underwent a sea change with a plethora of fiscal consolidation and restructuring measures being undertaken, many of these at the behest of the TwFC. The most noteworthy among these has been the introduction of FRBMA at the sub-national level.

Punjab is pre-dominantly an agricultural state situated in the north-western part of India and shares a live border with Pakistan. Punjab is known as the food bowl of the country in view of its contribution of food grains to the national stock. Punjab underwent a decade long civil strife during 1980s leading to accumulation of debt on account of borrowings from the federal government to maintain law and order in the state. Further, there was substantial revenue loss as economic activity almost came to a halt as a result of political turmoil in the state during that period. The successive state governments, after the restoration of popular government in the state in early 1990s, paid scant attention to revenue mobilization or expenditure management. The fiscal profligacy of the state resulted in serious deterioration of its fiscal parameters and high indebtedness. It is pertinent to examine the outcomes of fiscal indicators in the state after the enactment of FRBMA in 2003, in which the Government of Punjab (GoP) committed itself to fiscal discipline.

III. Need for Fiscal Responsibility and Budget Management Act (FRBMA) in Punjab and Its Design

Punjab had been under fiscal stress since 1984–1985, when it became a RD state. In 1990–1991, Punjab had the dubious distinction of being amongst the states with the highest FD. There was minor fiscal consolidation in the mid-1990s but the position in the late-1990s once again deteriorated. The Government of Punjab during the later years of 1990s followed the populist path and allowed free power to the farm sector and abolished octroi, house tax and land revenue. Enormous losses incurred by the State Electricity Board, low irrigation charges, unprofitable transport fares, all combined to produce unduly low returns on decades of past investments, which in turn adversely affected further investments in infrastructure and have also hurt the required expansion in education, health and other social services. According to the Government of Punjab (2002), the factors which adversely impacted the state’s fiscal situation during the 1990s were ever-increasing salaries and wage bills of the employees, mounting debt burden, heavily subsidized social and economic services, slow growth of revenue and loss-making public sector undertakings.

Fiscal Imbalances in Punjab

Table 1 presents the major fiscal indicators which depict a clear picture of worsening state finances in the period prior to the enactment of the FRBMA. In 1997–1998, gross fiscal deficit (GFD) was 5.09 per cent of gross state domestic product (GSDP), which showed a significant surge in 1998–1999 and became 6.78 per cent. This steep rise is attributable to the implementation of the awards of Fifth Pay Commission² by the GoI followed by the Fourth Punjab Pay Commission. Although state government successfully reduced the GFD in 1999–2000 to 4.76 per cent of GSDP, this reduction proved to be short lived and in 2000–2001, GFD increased significantly to 5.23 per cent and in 2001–2002, it was almost at the same level as it was in 1998–1999. However, GFD registered a decline in 2002–2003 but still it stood at a very high level of 5.35 per cent of GSDP. Similar trend can be seen in RD which increased from 3.05 per cent of GSDP to 4.72 per cent in 1998–1999 over the previous year. RD of the state declined for the next two years, only to rise again in 2001–2002. By the end of 2002–2003, RD was an alarming 4.56 per cent of GSDP.

Table 1.
Major Fiscal Indicators of Punjab in the Pre-FRBMA Period (Percentage to GSDP)

Year 1997–1998 1998–1999 1999–2000 2000–2001 2001–2002 2002–2003

Gross fiscal deficit (GFD) 5.09 6.78 4.76 5.23 6.22 5.35

Revenue deficit (RD) 3.05 4.72 4.06 3.13 4.74 4.56

Primary deficit (PD) 1.29 2.62 0.83 2.09 2.23 1.18

Outstanding liabilities (OL) 36.76 39.15 39.62 41.17 44.83 48.78

Outstanding guarantees 10.29 6.08 14.82 12.03 13.28 16.70

Interest payments (IP) 3.80 4.16 3.93 3.14 3.99 4.18

Interest Burden IP/RR (percentage) 29.11 40.25 35.31 24.99 35.59 31.02

IP/RE (percentage) 23.60 27.64 25.87 20.00 25.00 23.16

Year	1997–1998	1998–1999	1999–2000	2000–2001	2001–2002	2002–2003
Gross fiscal deficit (GFD)	5.09	6.78	4.76	5.23	6.22	5.35
Revenue deficit (RD)	3.05	4.72	4.06	3.13	4.74	4.56
Primary deficit (PD)	1.29	2.62	0.83	2.09	2.23	1.18
Outstanding liabilities (OL)	36.76	39.15	39.62	41.17	44.83	48.78
Outstanding guarantees	10.29	6.08	14.82	12.03	13.28	16.70
Interest payments (IP)	3.80	4.16	3.93	3.14	3.99	4.18
Interest Burden	IP/RR (percentage)	29.11	40.25	35.31	24.99	35.59	31.02
IP/RE (percentage)	23.60	27.64	25.87	20.00	25.00	23.16

Source: RBI state finances: A study of state budget (RBI, 2010).

Notes: Revenue receipts (RR); revenue expenditure (RE)).

Deficits have a direct bearing upon the public debt of any economy. Rising deficits in Punjab led to a huge accumulation of debt during the pre-FRBMA period. This is clearly visible in Table 1 that in 1997–1998 outstanding liabilities of the state were nearly 36.76 per cent of its GSDP. From 1997–1998 onwards, these experienced a massive surge and by the end of 2002–2003, increased to 48.78 per cent of GSDP. Table 1 shows the major fiscal indicators in Punjab prior to the enactment of the FRL in the state.

This increasing debt burden was accompanied by an increasing amount of contingent liabilities or outstanding guarantees of the state. Although contingent liabilities or outstanding guarantees³ do not form a part of the debt burden of the states, the states will be required to meet the debt service obligations in the event of default by the borrowing entity. It implies that fiscal risk of the state government guarantees may turn out to be very high in case these enterprises fail to generate adequate revenues of their own to meet their repayment obligations (RBI, 2013). During the pre-FRBMA period, outstanding guarantees increased nearly three times. In 1997–1998, outstanding guarantees, as a proportion to GSDP, were 10.29 per cent, which fell to 6.08 per cent in 1998–1999. In the very next year, that is, in 2000–2001, a substantial surge was noticed in the outstanding guarantees which persisted thereafter.

A rise in debt accumulation resulted in an increasing burden of interest payments. Interest payments by the state increased as percentage of GSDP during 1997–1998 to 2002–2003. The ratio of interest payment to revenue receipts indicates that a major part of the revenue receipts of the state has been eaten up by the interest payments. This ratio varied from 24.99 per cent to 40.25 per cent during the period signifying that more than one fourth revenue receipts were spent to pay the interest on debt.

Similarly, ratio of interest payment to revenue expenditure varied from 20 per cent to 27.64 per cent implying that a substantial proportion of expenditure was on debt servicing leaving lesser resources for the government to allocate for other developmental activities. A similar trend was observed in the ratio of interest payment to GSDP of the state which hovered around 4 per cent. In their study, Rangarajan and Prasad (2012) categorized the states as high debt stressed whose debt/GSDP ratio lies between 30 and 50 per cent and ratio of interest payment to revenue receipt is between 15 and 25 per cent. Accordingly, Punjab could be categorized as a high debt stressed state in the pre-PFRBMA period. In a study by Rao and Chakraborty (2006), the analysis of revenue and FDs shows significant interstate variations. It concludes that West Bengal, Punjab and Gujarat have shown poor fiscal performance vis-à-vis other states. This corroborates the above analysis of poor fiscal parameters in the case of Punjab.

FRBMA in Punjab

The above analysis of major fiscal indicators along with debt and interest burden clearly depicts a stressful fiscal situation of Punjab. Rigidity of the deficits and increasing debt burden made the fiscal situation highly unsustainable. This critical fiscal situation of the state demanded some concrete policy action to attain fiscal balance. Report of the TwFC also emphasised on the fiscal discipline of the sates and stated, ’Debt Relief often underwrites lack of fiscal discipline of the past so it is clear that any debt relief will have to be linked to a desired path of fiscal adjustment including targets for revenue and fiscal deficit.’ Thus, the relief under the debt consolidation and relief facility provided by the TwFC was linked to the implementation of the FRBMA as it stated,

only those states can avail this facility which have implemented the FRBMA for their respective states. We recommend that each state should enact fiscal responsibility legislation. This has been stipulated as a precondition for availing the debt-relief scheme as recommended by us. This legislation should, at a minimum, provide for

eliminating revenue deficit by 2008–09;

reducing fiscal deficit to 3% of GSDP or its equivalent defined as ratio of interest payment to revenue receipts;

bringing out annual reduction targets of revenue and fiscal deficits;

bringing out annual statement giving prospects for the state economy and related fiscal strategy;

bringing out special statements along with the budget giving in detail number of employees in government, public sector, and aided institutions and related salaries. GoI, 2004, p. 87)

The deteriorating fiscal performance of Punjab along with the recommendations of the TwFC and enactment of FRBMA by the GoI and by some other states prepared the necessary ground for the PFRBMA, 2003.

Punjab Fiscal Responsibility and Budget Management Act

As per the Gazette notification, PUNJAB ACT 11 OF 2003 defined the PFRBMA as,

An Act to provide for the responsibility of the State Government to ensure inter-generational equity in fiscal management and long-term financial stability by achieving sufficient revenue surplus, containing fiscal deficit and prudential debt management consistent with fiscal sustainability through limits on the State Government borrowings, debt and deficits, greater transparency in fiscal operations of the State Government and conducting fiscal policy in a medium-term framework and for matters connected therewith or incidental thereto. (FRBM Act, GoP, 2011, p. 3)

The PFRBMA, 2003 was amended twice, first in 2005 and second time in 2011. The second amendment was in line with the recommendations of the Thirteenth Finance Commission. Table 2 below highlights the major provisions of the Act along with the subsequent amendments and revised targets.

Table 2.

Punjab Fiscal Responsibility and Budget Management Act and Its Amendments

PFRBM Act and Amendments → Parameters↓	PFRBMA, 2003	PFRBM (Amendment) Act, 2005	PFRBM (Amendment) Act, 2011
Fiscal deficit	PFRBMA, 2003	PFRBM (Amendment) Act, 2005	PFRBM (Amendment) Act, 2011		Containing the rate of growth of fiscal deficit to 2% per annum in nominal terms until the fiscal deficit is brought down to 3% of GSDP	To reduce the fiscal deficit from 2005–2006 to bring it down to 3% by the year 2008–2009*	To reduce the fiscal deficit (as percentage to GSDP)
Fiscal deficit	2010–2011 2011–2012 2012–2013 2013–2014 2014–2015 and onwards	3.5 3.5 3.5 3.0 3.0
Revenue deficit	Reduction in revenue deficit as percentage of total revenue receipts, by at least five percentage points, from the previous year	To reduce the revenue deficit from 2005–2006 to bring it down to zero of GSDP by the year 2008–2009 and surplus thereafter	To reduce the revenue deficit
Revenue deficit			2011–2012 2012–2013 2013–2014 2014–2015 2014–2015 onwards	1.8 1.2 0.6 0 ( + )
Debt	Cap the ratio of debt to GSDP at 40% to be achieved by 2006–2007	To bring the ratio of debt including contingent liabilities to GSDP down to 28% within a period of five years from 2005–2006 to 2009–2010	To bring down its debt as percentage of GSDP
Debt			2010–2011 2011–2012 2012–2013 2013–2014 2014–2015	42.5 41.8 41.0 39.8 38.7
Outstanding guarantees	Cap outstanding guarantees on long-term debt to 80% of revenue receipts of the previous year	Unchanged	Unchanged

Source: CAG Reports, various issues.

Note: * Target of achieving 3% GFD/GSDP, postponed from 2008–2009 to 2009–2010 by Punjab Fiscal Responsibility and Budget Management Rules in December 2006.

As far the structure of the Act is concerned, Punjab did a commendable job. Clause 2 of the Act unambiguously defined the fiscal targets and accountability to clarify that the position in the Legislative Assembly was fixed on the part of the government and minister-in-charge of the department of finance as per Clause 6, subsection 2 of the Act. Further, the Act has been amended twice on the recommendations of the Twelfth and Thirteenth Finance Commissions.

IV. Compliance Status of the PFRBM Act: An Evaluation

Implementation of the PFRBM Act, 2003 was considered as a deterrent to the imprudent fiscal behaviour of the state government which would facilitate fiscal consolidation. The original PFRBM Act, 2003 provisioned that the ratio of RD to revenue receipts should be reduced by 5 percentage points compared to previous years and containing the rate of growth of FD to 2 per cent per annum in nominal terms until the FD is brought down to 3 per cent of GSDP. Analysis of this period is shown in Table 3, which indicates the targets and the compliance status of the Act of 2003.

Table 3.
FRBMA Compliance Status of the State (From 2003–2004 to 2005–2006)

Year RD/RR (Percentage) FD (Reduce 2% in Nominal Terms) (Rs Millions) Debt/GSDP (Percentage) Guarantees/RR* (Percentage)

Target (Reduce 5%) Achieved Target Achieved Target Achieved Target Achieved

2002–2003 – 33.90 – 44010 – 48.78 – 153.81

2003–2004 ↓ by 5 29.35
(↓ 4.55) 43130 48800 40 47.53 80 110.58

2004–2005 ↓ by 5 24.56
(↓ 4.79) 42270 40360 40 48.61 80 73.19

2005–2006 ↓ by 5 7.32
(↓ 17.24) 41430 26560 40 47.07 80 64.10

Year	RD/RR	(Percentage)	FD (Reduce 2% in Nominal Terms)	(Rs Millions)	Debt/GSDP	(Percentage)	Guarantees/RR*	(Percentage)
Target (Reduce 5%)	Achieved	Target	Achieved	Target	Achieved	Target	Achieved
2002–2003	–	33.90	–	44010	–	48.78	–	153.81
2003–2004	↓ by 5	29.35 (↓ 4.55)	43130	48800	40	47.53	80	110.58
2004–2005	↓ by 5	24.56 (↓ 4.79)	42270	40360	40	48.61	80	73.19
2005–2006	↓ by 5	7.32 (↓ 17.24)	41430	26560	40	47.07	80	64.10

Source: Targets—Punjab Fiscal Responsibility and Budget Management Act; Achieved—RBI State Finances: A Study of State Budget, various issues.

Note: *Revenue receipts of the previous year.

Table 3 shows that the state had achieved the target of RD as it declined from 29.35 to 24.56 per cent in 2004–2005 and further to 7.32 per cent in 2005–2006. FD also reduced during this period but the reduction in 2004–2005 was less than 2 per cent as mandated by the Act and the target was not achieved in 2004–2005, however the state government succeeded in achieving it in 2005–2006. Target of debt/GSDP ratio was to be reduced to 40 per cent but the state failed to achieve this target. The guarantees were capped to 80 per cent of the previous years’ revenue receipts and state government achieved this target successfully.

In exercise of the powers conferred by Section 7 of the Act, as amended, the state government framed the Punjab Fiscal Responsibility and Budget Management Rules in December 2006 with a sole target to reduce the FD from the financial year 2005–2006 so as to bring it down to 3 per cent of GSDP by the year 2009–2010.

Table 4 highlights the compliance status of the revised fiscal targets set under the amended Act and the actual position of the major indicators.

Table 4.

FRBMA Compliance Status of the State (From 2005–2006 to 2013–2014)

First Amendment of PFRBMA, 2003 in 2005
Year	GFD/GSDP (Percentage)		RD/GSDP (Percentage)		OL/GSDP (Percentage)		Guarantees/RR* (Percentage)
Year	Target	Actuals	Target	Actuals	Target	Actuals	Target	Actuals
2005–2006	↓	2.44	↓	1.14	↓	55.22	80	64.10
2006–2007	↓	3.46	↓	1.38	↓	51.21	80	82.04
2007–2008	↓	3.01	↓	2.50	↓	43.73	80	65.58
2008–2009**	↓	3.84	0	2.22	↓	50.22	80	134.47
2009–2010	3.0	3.12	Surplus	2.66	28	51.18	80	160.75
Second Amendment of PFRBMA, 2003 in 2011
2010–2011	3.5	3.15	2.9	2.33	42.5	32.96	80	182.03
2011–2012	3.5	3.28	1.8	2.63	41.8	32.12	80	165.58
2012–2013	3.5	3.18	1.2	2.52	41.0	31.50	80	221.46
2013–2014	3.0	2.77	0.6	2.06	39.8	32.19	80	211.56

Source: Targets—Punjab Fiscal Responsibility and Budget Management Act; Achieved—RBI State Finances: A Study of State Budget, various issues.

Note: * Revenue receipts of the previous year. **Target of achieving 3 per cent GFD/GSDP, postponed from 2008–2009 to 2009–2010 by Punjab Fiscal Responsibility and Budget Management Rules in December 2006.

The target of FD was achieved for the period from 2005–2006 to 2007–2008 but later the FD started rising again and targets of 2008–2010 period were not achieved. After the second amendment of the Act, targets were revised upwards for FD. Therefore, it remained within the limit by the end of the financial year 2013–2014.

FRLs, normally, expect governments to perform with revenue surpluses and wipe out deficits, if any, within a specified period. The PFRBM (Amendment) Act, 2005 provisioned that RD should decline continuously from 2005 to 2006 and it should be in surplus by the end of the year 2009–2010. The state failed to comply with these targets completely and RD never reduced for the period 2005–2010 to the expected level. In fact, RD continued to increase during this period. Second amendment of the Act in 2011 prescribed a limit of 2.9 per cent for 2010–2011 and state was able to achieve this target but it again failed in 2011–2012 to keep the RD within the prescribed limit of 1.80 per cent. It was 2.63 per cent in 2011–2012 and 2.06 per cent in 2013–2014, much higher than it was mandated by PFRBMA as amended in 2011.

PFRBM (Amendment) Act, 2005 prescribed that outstanding debt including guarantees should decline over time, and by the end of 2009–2010, it should be 28 per cent of GSDP. State government never achieved this during the period 2005–2010, except for 2007–2008, it remained more than 50 per cent of GSDP. This showed that state had absolutely failed to achieve the debt targets of the Act. Second Amendment of 2011 did not specify whether debt included contingent liabilities or not and it fixed the target of 41.8 per cent and 41 per cent for the years 2010–2011 and 2011–2012, respectively. If the contingent liabilities of the state are excluded then the debt/GP ratio remained around 32% and the targets are supposed to have been achieved.

The cap on long-term guarantees was fixed at 80 per cent of the revenue receipts of the previous year and it remained unchanged in both the Amendments. The state complied with these targets until 2007–2008 but after that, guarantees showed a very steep rise and guarantees as percentage to revenue receipts doubled in 2008–2009 to 134.47 per cent from 65.58 per cent in 2007–2008. This ratio increased continuously and in 2010–2011, it reached 182.03 per cent. However, in 2011–2012, it declined to 165.58 per cent only to rise again in the next year and by the end of the financial year 2013–2014, it stood at 211.56 per cent which is alarmingly high more than two and half times the limit of 80 per cent prescribed by the Act.

The above analysis indicates the mixed performance as far as fiscal consolidation targets in the PFRBMA are concerned. The state government has complied with the targets of GFD and outstanding liabilities prescribed in the Act and successfully contained them within limits. However, as far as RD and outstanding guarantees are concerned, the Punjab Government failed to comply with the targets given in the Act. State achieved the debt targets during 2012–2014, however contingent liabilities (guarantees) have been excluded from the total debt. If contingent liabilities are included in the total outstanding debt/liabilities, the ratio increases to 50.74 per cent in 2010–2011 and 53.55 per cent in 2013–2014, respectively, which is significantly higher than the accepted levels of outstanding liabilities as percentage of GSDP.

Apart from this mixed performance, another major aspect is to measure the strength of fiscal correction, which means to identify the source of fiscal consolidation and its sustainability. To measure the strength of fiscal correction, some other aspects of fiscal consolidation must be looked into.

V. Strategy to Reduce Deficit

In order to bring fiscal adjustment in the short term, major policy actions by the governments, usually, come from the expenditure side only. It is because in short term, it is much easier to curtail the public expenditure through budgetary actions rather than increasing revenue by revising tax structure and imposing user charges. As expenditure on the revenue side is constituted largely by the expenditure of committed nature with a rigid character, the axe normally falls on capital expenditure. Sen (2003) pointed out, ‘ever since the state budgets as a whole went into the red, capital expenditures have borne the brunt of the inevitable budgetary adjustments’ (p. 147). Table 5 brings out the path of fiscal adjustment adopted by the Government of Punjab to achieve fiscal balance. It shows that capital outlay in Punjab was the highest in 1998–1999, a year which coincides with the year in which GFD was the highest and stood at 6.78 per cent and RD was 3.05 per cent. During the next year, that is, 1999–2000, a drastic reduction is visible in the capital outlay from 2.05 to 0.65 per cent. It is clear that reduction in GFD, from 6.78 to 4.76 per cent, largely came from a drastic reduction in capital outlay only because revenue expenditure increased marginally from 15.04 to 15.18 per cent. For the next three years, revenue expenditure kept on increasing and compression of expenditure on the capital side remained the major strategy of the government to decrease the GFD.

Table 5.
Deficit Reduction: Expenditure Contraction or Revenue Augmentation (as Percentage to GSDP)

Year Revenue Expenditure Capital Outlay GFD RD Revenue Receipts

1997–1998 16.09 1.99 5.09 3.05 13.04

1998–1999 15.04 2.05 6.78 4.72 10.33

1999–2000 15.18 0.65 4.76 4.06 11.12

2000–2001 15.68 1.86 5.23 3.13 12.55

2001–2002 15.95 1.24 6.22 4.74 11.20

2002–2003 18.02 0.50 5.35 4.56 13.46

Post-FRBMA Period

2003–2004 17.43 0.74 5.42 3.95 13.47

2004–2005 17.76 0.70 4.17 3.50 14.26

2005–2006 16.76 1.40 2.44 1.14 15.62

2006–2007 14.63 2.04 3.46 1.38 13.25

2007–2008 15.09 1.43 3.01 2.50 12.59

2008–2009 14.12 1.64 3.84 2.22 11.90

2009–2010 13.88 1.10 3.12 2.66 11.22

2010–2011 14.50 1.05 3.15 2.33 12.17

2011–2012 12.75 0.62 3.28 2.63 10.12

2012–2013 13.43 0.65 3.18 2.52 10.91

2013–2014 13.11 0.69 2.77 2.06 11.05

Year	Revenue Expenditure	Capital Outlay	GFD	RD	Revenue Receipts
1997–1998	16.09	1.99	5.09	3.05	13.04
1998–1999	15.04	2.05	6.78	4.72	10.33
1999–2000	15.18	0.65	4.76	4.06	11.12
2000–2001	15.68	1.86	5.23	3.13	12.55
2001–2002	15.95	1.24	6.22	4.74	11.20
2002–2003	18.02	0.50	5.35	4.56	13.46
Post-FRBMA Period
2003–2004	17.43	0.74	5.42	3.95	13.47
2004–2005	17.76	0.70	4.17	3.50	14.26
2005–2006	16.76	1.40	2.44	1.14	15.62
2006–2007	14.63	2.04	3.46	1.38	13.25
2007–2008	15.09	1.43	3.01	2.50	12.59
2008–2009	14.12	1.64	3.84	2.22	11.90
2009–2010	13.88	1.10	3.12	2.66	11.22
2010–2011	14.50	1.05	3.15	2.33	12.17
2011–2012	12.75	0.62	3.28	2.63	10.12
2012–2013	13.43	0.65	3.18	2.52	10.91
2013–2014	13.11	0.69	2.77	2.06	11.05

Source: RBI State Finances: A Study of State Budgets; Budget Documents, Government of Punjab.

In the post-FRBMA period, the biggest challenge was to abide by the PFRBMA targets without compromising the growth enhancing capital expenditure. From 2003–2004 onwards, reduction on the expenditure side is also visible. In 2006–2007, capital outlay was maximum and RD was also comparatively lower than the previous trend. In 2007–2008, GFD declined to 3.01 per cent from 3.46 per cent in 2006–2007, however, this decline was at the cost of capital outlay only, because revenue expenditure and RD, both were higher than the previous year. For the next five years, in order to keep the GFD within limits, the government again resorted to the compression of capital expenditure and kept it at a very low level, that is, less than 1 per cent of GSDP.

Revenue augmentation strategy is nowhere visible in the post-PFRBMA period. Revenue receipts declined considerably from 15.62 per cent in 2005–2006 to 10.91 per cent in 2012–2013 and increased only marginally in 2013–2014 to 11.05 per cent. The major decline came from the own non-tax revenue of the GOP which grew at a negative rate (–4.30 per cent) during the 2005–2006 to 2013–2014 period (CAG, 2015). This trend of declining revenue receipts and rigidity of the RD left the government with no other option but to trim down the capital outlay. Unfortunately, this is the area where the expenditure reduction should not have taken place in the interest of economic development. This tendency of reducing the capital outlay without any concrete policy to raise additional revenue or to restrain the revenue expenditure is the evidence of lack of prudent, innovative and sustainable fiscal policy in Punjab.

Committed Expenditure

Committed liabilities of the governments are that part of the non-plan expenditure which governments have to incur without an option of avoidance. Such expenditure includes the salaries and wages, pension liabilities, interest payments and expenditure incurred on administrative services. This sum of expenditure is non-developmental in nature and due to its rigid and inevitable nature, it drains a major share of government revenues. If the share of committed expenditure is large, it implies that most of the government resources are drained towards these non-plan and -developmental commitments with lesser amount left to be spent on productive activities. Table 6 analyses the magnitude of the committed expenditure and estimates its burden on the exchequer.

Table 6.

Committed Expenditure of the GOP—Pre- and Post-FRBMA (Percentage)

Year	Interest Payments/Total Committed Expenditure	Pensions/Total Committed Expenditure	Administrative Services/Total Committed Expenditure	Subsidy/Total Committed Expenditure	Total Committed Expenditure	Total Committed Expenditure/Revenue Expenditure	Total Committed Expenditure/Revenue Receipts
1997–1998	56.93	13.36	29.65	0.06	100.00	41.46	51.14
1998–1999	56.03	17.39	26.48	0.10	100.00	49.32	71.84
1999–2000	50.01	21.62	20.69	7.68	100.00	51.72	70.61
2000–2001	44.69	21.30	22.47	11.54	100.00	44.76	55.91
2001–2002	53.95	17.57	20.88	7.60	100.00	46.35	65.98
2002–2003	49.23	19.44	20.34	10.99	100.00	47.06	63.01
Post-FRBMA Period
2003–2004	46.48	17.39	19.11	17.02	100.00	50.86	65.79
2004–2005	43.80	16.65	15.53	24.01	100.00	52.86	65.84
2005–2006	43.02	19.18	19.57	18.23	100.00	47.42	50.89
2006–2007	43.95	20.17	19.45	16.44	100.00	50.94	56.25
2007–2008	37.59	20.20	17.12	25.09	100.00	52.22	62.60
2008–2009	38.07	21.97	18.16	21.79	100.00	52.40	62.16
2009–2010	24.09	35.95	19.02	20.94	100.00	50.85	62.90
2010–2011	31.36	30.19	18.66	19.79	100.00	53.45	63.69
2011–2012	32.92	29.66	20.57	16.85	100.00	57.72	72.71
2012–2013	30.06	26.25	21.11	22.58	100.00	57.60	70.91
2013–2014	32.38	25.99	21.33	20.30	100.00	58.01	68.81

Source: RBI State Finances: A Study of State Budgets; Budget Documents, Government of Punjab.

Table 6 shows that share of committed expenditure in total revenue expenditure is very large and fluctuated between 41.46 and 51.72 per cent in the pre-FRBMA period. In the post-FRBMA period, the share of total committed expenditure increased even further and varied between 47.42 and 58.01 per cent in the post-FRBMA period. This implies that most of the expenditure on revenue account is devoted to these committed liabilities and only a small proportion is left for other developmental activities. Ratio of total committed expenditure to revenue receipts shows that a major share of the total revenue receipts of the state is allocated to committed expenditure and the state has to resort to borrowed funds even to finance the current expenditure requirements of the state. This ratio of total committed expenditure to revenue receipts jumped from 51.14 per cent in 1997–1998 to 71.84 per cent in 1998–1999 and later declined to 55.91 per cent in 2000–2001. From 2001–2002 to 2004–2005, this ratio remained nearly 65 per cent and fell to 56.25 per cent in 2006–2007. From 2007–2008 onwards, the ratio of committed expenditure consistently remained more than 60 per cent of revenue receipts and fluctuated between 62.16 per cent and 72.71 per cent during the period from 2007–08 to 2013–14.

Another major area of concern is the increasing subsidy by the government which is also a part of committed expenditure. Table 6 clearly indicates that in the pre-PFRBMA period expenditure on subsidies was very low. In the post-FRBMA period, expenditure on subsidies increased very rapidly and power sector subsidies constituted a major share of these subsidies. It may be noted that share of power sector subsidy varied between 91 per cent and 99 per cent during the last 10 years, that is, from 2003–2004 to 2013–2014. The state is providing a huge amount to power utilities as power subsidy for providing free electricity to the farm sector. The remaining subsidies go for the welfare schemes for schedule castes and schedule tribes, civil supplies, industries, soil and conservation, animal husbandry, dairy development, crop husbandry and fisheries, etc.

Poor Return on Investment

The return on invested funds by the government is another indicator of flow of revenue to the public exchequer. Table 7 depicts that a huge amount is invested by the government in various state undertakings which yields insignificant returns. The situation remained almost the same in the pre- and post-PFRBMA period. Rather, the situation in the post-FRBMA period worsened even further.

Table 7.

Return on Investment to GOP—pre- and post-FRBMA

Pre-FRBMA Period
Year	1997–1998	1998–1999	1999–2000	2000–2001	2001–2002	2002–2003
(1) Percentage return on investment	0.9	0.5	4.0	1.0	0.5	0.4
(2) Rate of interest on govt borrowing (Percentage)	–(13.05 and 12.30)	11.71	11.34	8.72	10.11	9.51
(3) Difference
(1 = 3–2)	–	11.66	10.94	8.62	10.06	9.47

Post-FRBMA Period
Year	2003–2004	2004–2005	2005–2006	2006–2007	2007–2008	2008–2009	2009–2010	2010–2011	2011–2012	2012–2013	2013–2014
(1) Percentage Return on Investment	0.08	0.02	0.03	0.05	0.01	0.02	0.02	0.02	0.05	0.01	0.04
(2) Rate of interest on Govt Borrowing	9.11	8.79	7.52	8.11	8.46	8.32	7.72	7.73	7.96	7.79	8.04
(percentage)	9.11	8.79	7.52	8.11	8.46	8.32	7.72	7.73	7.96	7.79	8.04
(3) Difference (3 = 3–2)	9.03	8.77	7.49	8.06	8.06	8.30	7.70	7.71	7.91	7.78	8.00

Source: CAG Audit Reports Punjab, various issues.

The return on investment by the GOP in state-level public undertakings has been negligible even though the rate of interest on government borrowings has been very high. The return on investment cannot even, partially, service the debt. No action has been taken to improve the non-tax revenue of the state by rationalizing the investment decisions during the period of study.

VI. Conclusion

Persistent imbalances in state finances and mounting pressure from successive finance commissions for fiscal discipline led to the enactment of FRBMA in India in 2003. It was later enacted by the sub-national governments and Punjab was among the leading states, preceded only by Karnataka, Tamil Nadu and Kerala.

A well-designed legislation is a necessary but not a sufficient condition to achieve the desired objectives of fiscal consolidation. With a well-structured act, the fiscal performance of the Government of Punjab remained unenthusiastic for most of the period, which is clear from the compliance status of the Act (Table 4). The government successfully managed to restrict the target of FD within the prescribed limits and that also when the cap on FD was revised to 3.5 per cent of GSDP in the Second Amendment in 2011. The only positive feature of the Act is the compliance of GFD targets. Barring three years (2004–2005, 2005–2006 and 2010–2011), the targets of RD were never achieved by the state government. It never attained zero deficit, as prescribed in the Act, or generated a surplus and create more fiscal space for capital spending. For the last six years, RD consistently remained more than 2 per cent of GSDP, rendering government with no option but to trim the capital expenditure.

Targets for outstanding liabilities were also not met except for two years (2006–2007 and 2007–2008), rather the outstanding liabilities remained much higher than the prescribed cap of 80 per cent of revenue receipts of the previous year. However, the state claims to achieve this target since 2010–2011 but interpreting one of the PFRBMA clauses in a devious way made it possible for the state. The subsection 2 (c) of Clause 4, of the PFRBM (Amendment) Act, 2011, prescribes to bring down the debt-GSDP ratio to 42.5 in 2010–2011 and finally by the end of the financial year 2014–2015, the target of 38.7 per cent can be attained. However, the same clause before amendment stated ‘the ratio of debt, including contingent liabilities to GSDP’ instead of ‘debt-GSDP’ ratio. Thus, in order to reduce the ratio and to comply with the Act, Amendment of 2011 removed the word ‘contingent liabilities’ and the compliance status claimed to meet the targets.

The analysis of contingent liabilities reveals that except for four years, the state never achieved the terms of the Act. During the last five years from 2009–2010 to 2013–2014, it remained much higher than the level of the cap, 80 per cent to previous year’s revenue receipts, prescribed in the Act. For the year 2012–2013 and 2013–2014, this ratio was 221.46 and 211.56 per cent, respectively. Major part of these guarantees are accounted for by power sector and state public undertakings. The fiscal indicators point to the fact that the state failed to take appropriate policy actions to implement the Act effectively.

Another noticeable feature of this fiscal consolidation effort is that fiscal correction, to a major extent, was made through expenditure contraction. However, revenue receipts also increased from 10.33 per cent in 1998–1999 to 15.62 per cent in 2005–2006 but these started declining thereafter and major decline came from the state’s own non-tax revenue side. The government also failed to generate adequate returns on its investment and income from such investments remained negligible for most of the period and performance remained almost same even in the post-PFRBMA period. State-level public enterprises (SLPEs) are facing consistent losses year by year. This clearly indicates that the state government did not make a sincere effort to raise additional revenue by imposing user charges effectively. Government needs to initiate measures to yield sufficient return on its investments and recover the cost of borrowings rather than bearing the same on its budget.

The lack of resource mobilization led to a severe contraction of capital outlay during the years of huge fiscal stress. Capital outlay should have been increased while simultaneously implementing institutional reforms so that adequate social and economic asset base could be created for providing further impetus to growth. Expenditure on subsidies also registered a major surge in the post-PFRBMA period only and remained at a very high level throughout the post-FRBMA period. Steps should have been taken to rationalize the expenditure on subsidies as reiterated by the GoI since the initiation of fiscal reforms both at the national and sub-national levels.

Innovative and Sustainable Fiscal Rules

FRL requires targeted deficits to be met in a responsible manner and without delay, deferral or denial of committed expenditures. It has been observed that fiscal rules, in general, are flouted with impunity across governments both in developed and developing economies. However, most emerging countries were unsuccessful in meeting the quantitative targets imposed by their FRLs. Several countries had to amend their FRLs 2–3 years after their initial adoption (Budina, Schaechter, Weber, Kinda, 2012). Amendments in FRLs usually tinkered with the fiscal targets or changed the deadline for attaining them. A similar lack of success was seen in India and Sri Lanka (Lienert, 2010). Therefore, in order to ensure a robust and sustainable fiscal consolidation, some practices, which hitherto are not included in fiscal correction efforts, must be incorporated in policies.

The Indian economy has undergone a substantial structural transformation and the tertiary sector, which is technology and knowledge based, has been the growth driver in the last two decades both at the aggregate level as also in case of most of the sub-national constituents. Thus, a new economy has emerged which calls for a new paradigm in fiscal policy discourse as several new sources of revenue (e.g., service tax) and expenditure (on upgrading technology) have emerged in the recent past. Fiscal consolidation with a macroeconomic development function can serve as a significant catalyst of the transformation into the new technology-driven economy. Fiscal policy should aim at resorting to fiscal consolidation which takes into account the current economic and social structure and constructs its composition accordingly and not confines it to numerical targets alone. That limits and binds the policy discourse, which in turn inhibits the developmental function of the nation state to emerge in the course of attaining fiscal balances. Fiscal restructuring must include the main features (i.e., consider the main drivers of growth and competitiveness) of the knowledge-based economy, which is largely built upon the central role of information and communication technology while being dominated by service sector at large.

Emphasizing that there is no common development path in order, however, as one of the greatest grandfathers of the endogenous growth theory, Robert Lucas accentuated in his seminal work: the theory should concentrate on those forces that tend to trigger the changes in the growth and development paths (Lucas, 1988). The emerging economies like India must spend substantially on innovation as well as research and development (R&D) as in the new techno-economic paradigm knowledge, created through innovation and R&D, has become a fundamental input factor. Accordingly, new ways of financing new functions of the state must be identified and included in the budgetary exercises.

The fiscal rules are normally framed in a ‘mechanical’ manner and assigning numerical values with incremental changes over the previous ones. The numbers allocated to different parameters in fiscal rules are sought to be achieved by the governments, for example, reducing FD to 3 per cent of GDP or RD to zero, etc. The rules do not say how to achieve these targets, even though medium-term fiscal policies are spelt out in FRBMAs in India, both at the national and sub-national levels. The realization of targets through expenditure compression at the cost of development and social welfare is counter-productive, especially in emerging economies where infrastructure and societal well-being are critical for growth and development. Secondly, most governments are circumventing the budget rules and do not bring certain incomes and expenditure and work with off-budget resources. This practice masks the, otherwise, burgeoning deficits. These kind of rules are not sustainable as the governments keep on changing targets to suit their objectives. The Fourteenth Finance Commission (GoI, 2015) clearly mentions, ‘for any evaluation of public finances to be meaningful, it should consider the government’s risk exposure to its public sector in the form of guarantees, off-budget borrowings and accumulated losses of financially weak public sector enterprises’ (p. 182). Accordingly, the Fourteenth Finance Commission looked into redefining the concept of debt by including the debt and guarantees of public sector enterprises.

An innovative and sustainable set of rules must, inter alia, focus on the following:

Effective fiscal rules must have a constitutional backing so that tampering with them is not ‘easy’ and these have to go through a policy debate to be changed. There is a need for in-built checks and balances mechanism—maybe an autonomous body/judiciary to take an action on non-compliance of the legislated commitments as those involve use of public money/resources.

The prerequisite to achieve the above is an aware public or alert electorate. Therefore, creation of awareness amongst the public about the utilization of their resources must be created and citizen groups have an important role to play in agenda setting for the purpose. The political bosses must be answerable to the electorate in the event of misutilization of public funds. This could be a major challenge in emerging economies and in a democracy like India where majority of the people are illiterate, ignorant and unaware about major policy issues.

FRLs must address the issue whether the outstanding public debt and its projected path are consistent with those of the government’s revenues and expenditures, that is, whether fiscal solvency conditions hold. Deficits must be reduced but a certain defined proportion of expenditure must be marked for development. This implies that non-development expenditure must be compressed and this must form a part of fiscal rules. The management of the burden of loss-making public enterprises and their contingent liabilities must find a clear place in fiscal rules and the design of FRLs must ensure that there is no possibility of subverting any type of revenue and expenditure out of the budgetary exercise. Targets and sources of revenue mobilization as well as the revenue capacity of the government must be estimated and included in fiscal rules as, hitherto, most FRLs focus on expenditure reduction and ignore revenue augmentation.

A strict limit on borrowings of any nature must be imposed and a mechanism put in place to ensure how borrowed funds are utilized. Only a certain percentage of borrowings may be spent on debt servicing in order to make public debt sustainable and to maintain intergenerational equity. There should be a statutory limit on borrowing by the governments from the market. The borrowings from the Central Bank, for example, in the form of ways and means advances from the Reserve Bank of India, by the governments must also be restricted and explicitly stated in the fiscal rules. Borrowings must be made a function of the repayment capacity, that is, debt to revenue ratio must be clearly a part of the fiscal rules. All incomes of the governments must form a part of the budget. The governments must have no discretion in collecting or disbursing resources without scrutiny of the parliament/legislature.

To conclude, it may be mentioned that there are huge challenges in attaining even half of what ‘ought to be’ rather than ‘what is’ in FRLs the world over. Punitive actions are necessary in case of default by the governments. Lack of transparency and accountability in public finances, off-budget transactions by the governments, pursuing populist agenda at the cost of public exchequer, and modifications in fiscal rules as per the whims and fancies of the governments must be refrained by all stakeholders in order that FRLs succeed in bringing about fiscal discipline and help attain/retain fiscal solvency in state finances. The governments must strive to accomplish certain degree of fiscal balance and then enact fiscal rules for maintaining sustainable fiscal stability. Fiscal marksmanship must be the hallmark of governments which are the custodians of public money. Any kind of discretion in the use of public funds must be done away with to ensure fiscal sustainability.

The state’s fiscal sustainability is a pre-requisite to the broader concept of sustainability because unsustainable public finances undermine and endanger the fulfilment of the state’s development functions required to deal with social and environmental issues. Fiscal governance should cultivate its ability to identify fields that seem to be more promising from the fiscal policy intervention point of view, whereby the successful transition into the new techno-economic paradigm—eventually the longer term sustained growth—can be a real perspective.

Declaration of Conflicting Interests

The author declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The author received no financial support for the research, authorship and/or publication of this article.

Footnotes

Notes

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