For quite sometime the financial position of the Uttar Pradesh government has been in the doldrums, as in many other states. The fiscal profligacy of successive governments, facing short and uncertain tenures, combined with a singular lack of political will to tax the rural and the urban rich has landed the state into an unmanageable fiscal crisis. This is reflected in unsustainable and high levels of revenue and fiscal deficits, mounting debts and interest burden, and increasing resort to withdrawals from the ‘public account’ including reserves and employees’ provident funds.
