Karnataka is the first Indian State to enact Fiscal Responsibility Act (KFRA) in 2002. The experience from USAID-India Fiscal REFORM Project (2003-2008) brought out need for Fiscal Policy Institute (FPI) in the State. Government of Karnataka (GoK) established FPI in 2007, with an initial plan grant from Government of India. Setting up FPI signifies the commitment of the State to institutionalise the process of implementing the Act in letter and spirit. Thus, FPI is set up to assist GoK to;

  • enhance “informed” decision-making in state government and local bodies;
  • ensure that decision-making processes follow consistent and transparent principles, leading to greater accountability and transparency in economic governance;
  • sustain the fiscal correction course by constantly upgrading the capacity of relevant institutions