Indian fiscal federalism and resource gap of state governments: Measurement and analysis
By: Darshini, J. S. and Gayithri, K
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Material type: 
BookPublisher: Review of Development and Change Description: 29(1), Jun, 2024:p.44-66.Subject(s): Basic resource gap, Fiscal federalism, Fiscal dependency, Fiscal reforms
In:
Review of Development and ChangeSummary: This article examines the various forms of basic resource gap (BRG) and fiscal dependency in a long-term panel framework, comprising 14 major Indian states from 1981–82 to 2016–17. Further, it decomposes the level and extent of states’ fiscal dependence on transfers and borrowings, which together constitute the total non-own source of revenue on a disaggregated level into three different phases to gain a thorough understanding of the states’ vulnerability and the quality of dependence. The findings show that among the 14 states, Odisha, Karnataka, Tamil Nadu and Uttar Pradesh are leading the way in reducing the BRG during the third sub-period. Odisha’s fiscal dependency has decreased faster and has been sustained to a greater extent than in the other states. In contrast, the accumulation of unsustainably higher levels of debt and guarantees is an issue of concern in West Bengal, Punjab and Kerala, where discretionary sources of revenue have increased significantly in recent decades. The study finds that, despite several incentive-based reform measures, the BRG persists, with mounting fiscal challenges besides a decline in non-debt capital receipts across the Indian states.- Reproduced
https://journals.sagepub.com/doi/full/10.1177/09722661241260627
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | 29(1), Jun, 2024:p.44-66 | Available | AR133147 |
This article examines the various forms of basic resource gap (BRG) and fiscal dependency in a long-term panel framework, comprising 14 major Indian states from 1981–82 to 2016–17. Further, it decomposes the level and extent of states’ fiscal dependence on transfers and borrowings, which together constitute the total non-own source of revenue on a disaggregated level into three different phases to gain a thorough understanding of the states’ vulnerability and the quality of dependence. The findings show that among the 14 states, Odisha, Karnataka, Tamil Nadu and Uttar Pradesh are leading the way in reducing the BRG during the third sub-period. Odisha’s fiscal dependency has decreased faster and has been sustained to a greater extent than in the other states. In contrast, the accumulation of unsustainably higher levels of debt and guarantees is an issue of concern in West Bengal, Punjab and Kerala, where discretionary sources of revenue have increased significantly in recent decades. The study finds that, despite several incentive-based reform measures, the BRG persists, with mounting fiscal challenges besides a decline in non-debt capital receipts across the Indian states.- Reproduced
https://journals.sagepub.com/doi/full/10.1177/09722661241260627
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