000			01730pab a2200193 454500
008			180718b2008 xxu||||| |||| 00| 0 eng d
100			_aRangarajan, C.
245			_aReforming India's fiscal transfer system: resolving vertical and horizontal imbalances
260			_c2008
300			_ap.47-60.
362			_a7 Jun
520			_aTwo central problems in a fiscal transfer system relate to resolving vertical and horizontal imbalances. This paper looks at the methodological background of fiscal transfers followed by recent Finance Commissions, particularly the Twelfth Finance Commission. It is noted that in India, there is long-term stability in the share of states after transfers in the combined centre and state revenues. This stability depends on linking the share of states in the transfers, particularly tax devolution, with the difference in the buoyancies of central and state taxes. In the context of horizontal imbalance, it is argued that some of the recent finance commissions have implicitly followed an axiomatic approach to tax devolution and brought in some normative elements in determining grants. In spite of large differences in fiscal capacities, a high degree of equalisation has been achieved. It is shown that for TFC recommended transfers, nearly 88 per cent of the needed equalisation was achieved while devoting 50 per cent of transfers to resolving vertical imbalance. A methodology is also developed to determine the weights of the vertical and equalising components of transfers through devolution. - Reproduced.
650			_aPublic finance - India
650			_aPublic finance
700			_aSrivastava, D.K.
773			_aEconomic and Political Weekly
908			_aN
909			_a78473
999			_c78473 _d78473