It is also important to note that following the recommendations of the Twelfth Finance Commission (TFC), it has been decided by the Government of India to provide specific grants for education and health to those States which are unable to spend adequately in these sectors because of deficiencies in fiscal capacity.
Since the bubble burst, people have tended to think the collapse was simply a fleeting nightmare and that we will eventually be back to the old normal, just as before. That may be true. However, if we recognize the problems arising from acute balance sheet adjustments when the population is ageing, there is the distinct possibility that this time may truly be different.