India, March 18 -- On Monday, Telangana chief minister Revanth Reddy admitted in the state assembly that the state cannot pay Dearness Allowance (DA) to its employees because of a fiscal crunch. Telangana is not the only state in country which is facing problems in finding funds for essential spending even as money is being spent on other things, including populist schemes that offer electoral dividends. What is the nature of crisis in state finances? What can be done to solve it?

Published by HT Digital Content Services with permission from Hindustan Times....