This post presents our monthly curation of developments in the policy landscape – highlighting I4I content pertaining to state budgets, gender gaps in time use, and mitigating the impact of natural calamities.

Season of state budgets

While the announcement of the Union Budget by the Minister of Finance on 1 February every year is a subject of intense media reporting and analyses by experts, what receives relatively less attention is the budgetary exercise at the state level. In the past couple of months the budgets for 2025-26 have been released by the states of Andhra Pradesh, Assam, Gujarat, Haryana, Jharkhand, Kerala, Odisha, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal. As underlined by Kishan Narayan in his I4I post, “In India's federal fiscal structure, states shoulder significant responsibilities for delivering public services and welfare benefits to citizens.”  Hence, there is a need for greater focus on the annual budgets of state governments. 

Narayan, along with co-authors at the National Institute of Public Finance and Policy (NIPFP), examines data from seven Indian states for the years between 2018-19 and 2022-23. They find that burgeoning subsidy bills are impinging on the fiscal space for developmental expenditure. An important insight from this work is that the method of categorising subsidies in government accounts – such as classifying subsidy-like expenditures as grants-in-aid or assistance to public sector units – masks their true fiscal impact.  

A day in the life of…

At the end of February, findings from the latest Time Use Survey (TUS) were released by the Ministry of Statistics and Programme Implementation. Covering the period January-December 2024, this is the second time – after 2019 – that a national-level TUS has been conducted in India.¹ Once again, the TUS reveals gender gaps in time use, with women bearing a disproportionate burden of unpaid domestic and care work: while almost 20% of women’s time in a day is devoted to these activities, the corresponding figure is under 3% for men. In the working age group of 15-59 years, 41% of females engage in caregiving for household members including children and elders, as against 21% of males. The differences in the way women and men go about their daily lives is reflective of longstanding social and cultural norms governing gender roles within households. 

In an I4I article – published as part of the International Women’s Day 2025 collection – Aakash Dev and Ratna Sahay of the National Council of Applied Economic Research (NCAER) put forth that unpaid domestic responsibilities and the absence of formal part-time work options act as barriers on female labour force participation (FLFP) in the country. In their research, they simulate the impact of redistributing care work among men and women and formalising part-time employment and show these changes can enhance India’s FLFP by six percentage points, from 37% to 43%. Further, the authors reiterate that boosting women’s work participation is not just a matter of gender equality but also an economic imperative, terming the female workforce as an “obvious but underrated lever” for fast economic growth. 

Nature’s fury

Did you know that hydro-meteorological disasters took the lives of 2,936 people in India last year? The hilly state of Himachal Pradesh was the worst affected, followed by Madhya Pradesh, Kerala, Gujarat, Maharashtra, Karnataka, Rajasthan, Assam and Chhattisgarh. In addition to deaths, there has been loss of homes and cattle, particularly in the Northeast region of the country. While the Union Home Ministry does not maintain any central data repository of damages on account of natural calamities, this information was gathered from states and union territories and reported to the Parliament by the Ministry recently. 

Studying the case of the 2018 floods in the coastal state of Kerala, Beyer et al. (2023) show that while economic activity was lower by 7.7% during the flooding months, it was almost 15% higher than normal in the post-disaster period. One factor contributing to this boom was government assistance in the form of immediate relief as well as reconstruction efforts. Based on this evidence, the authors call for a targeted disaster management strategy not only in the aftermath of the event but for a longer period – from the perspective of normalising economic activity. 

Exploring the financial aspects of natural calamities, Kumar and Pattanayak (2024) note that fiscal transfers from the Centre to the state governments serve as a significant mechanism in managing the fallouts. Their empirical analysis demonstrates that states that are politically aligned with the Centre receive a greater amount of grants. Further, the type of disaster matters: slow onset ones like droughts provide greater scope for such partisan politics relative to sudden events such as floods. The researchers conclude that fund allocation induced by partisan politics may exacerbate the negative impacts of climate risks and the development of states.

Note:

1. In 1998-99, a pilot survey was carried out in six states.