Inter-State Imbalances in Essential Services : Some Perspectives

This paper analyzes the inter-state imbalances in three major sectors of the economy, namely, education, health and family welfare, and water supply and sanitation for fifteen major states. It uses two principal indicators namely the per capita GSDP (reflecting the disparity in fiscal capacity in various states) and per capita government expenditures on priority sectors, reflecting how fiscal capacities are translated into differences in government fiscal intervention in providing services. The study shows that the GSDP of six major states - Bihar, Uttar Pradesh, Orissa, Assam, Madhya Pradesh and Rajasthan grew only at below 5 percent during the study period 1993-94 to 2005-06. While Tamil Nadu, Maharashtra, West Bengal and Andhra Pradesh grew at 5-6 percent, the remaining states at 6-7 percent. The ratio of maximum (Punjab) to minimum (Bihar) per capita GSDP rose from 3.17 in 1993-94 to 5.37 in 2000-01 and thereafter fluctuated between 3.64 to 3.90. The ratio of maximum (Kerala) to minimum (Bihar) per capita expenditure on education fell from 2.52 to 2.22. In the case of health, the ratio of maximum (Punjab) and minimum (Bihar) widened from 2.11 to 3.59 and in the case of water and sanitation, the ratio of maximum (Tamil Nadu) and minimum (Bihar) increased dramatically from 5.75 to 15.8 during the study period.Inter-State imbalances, health, education, family welfare

Measuring Accuracy of Projections of Central Taxes by the Finance Commission

This paper looks at the quality of forecasts/assessments made by some of the recent Finance Commissions for the shareable central taxes and own tax revenues of selected states. The Commissions covered under this analysis are Ninth to Twelfth Finance Commissions. It is observed that while direct taxes are underestimated in general, revenues from indirect taxes partially Union excise duties and custom duties have been over estimated. In respect of states, four selected states viz., Andhra Pradesh, Gujarat, Orissa and Assam are examined. While there is similarity between the approaches of Ninth, Tenth and Twelfth Finance Commissions in regard to middle and high income states, the Eleventh Finance Commission required that they raise tax revenues higher than what they were able to achieve.Central Taxes, Own Tax Revenues, Finance Commission

Reforming Indirect Taxes in India : Role of Environmental Taxes

Extensive reforms of Indias indirect taxes at the central and the state levels has prepared the necessary ground for the implementation of a comprehensive goods and services tax (GST). The Empowered Committee of the State Finance Ministers in their First Discussion Paper and the Thirteenth Finance Commission in their recently submitted report have suggested GST models which are quite different in many respects. This paper identifies these differences and argues that within the regime of taxation of goods and services in India environmental tax reform should also be incorporated to make the tax regime play a significant role in managing environment. The environment tax reforms will yield both a fiscal double dividend and an economic double dividend making the Indian economy pursue a path of sustainable development.Taxes, Environment

Reforming Indirect Taxes in India: Role of Environmental Taxes

Extensive reforms of India‟s indirect taxes at the central and the state levels has prepared the necessary ground for the implementation of a comprehensive goods and services tax (GST). The Empowered Committee of the State Finance Ministers in their First Discussion Paper and the Thirteenth Finance Commission in their recently submitted report have suggested GST models which are quite different in many respects. This paper identifies these differences and argues that within the regime of taxation of goods and services in India environmental tax reform should also be incorporated to make the tax regime play a significant role in managing environment. The environment tax reforms will yield both a fiscal double dividend and an economic double dividend making the Indian economy pursue a path of sustainable development.Taxes, environment

Measuring Accuracy of Projections of Central Taxes by the Finance Commission

This paper looks at the quality of forecasts/assessments made by some of the recent Finance Commissions for the shareable central taxes and own tax revenues of selected states. The Commissions covered under this analysis are Ninth to Twelfth Finance Commissions. It is observed that while direct taxes are underestimated in general, revenues from indirect taxes partially Union excise duties and custom duties have been over estimated. In respect of states, four selected states viz., Andhra Pradesh, Gujarat, Orissa and Assam are examined. While there is similarity between the approaches of Ninth, Tenth and Twelfth Finance Commissions in regard to middle and high income states, the Eleventh Finance Commission required that they raise tax revenues higher than what they were able to achieve.Central Taxes, Own Tax Revenues, Finance Commission

May 2012A Macro-Fiscal Modeling Framework for Forecasting and Policy Simulations

Website: www.mse.ac.in ii Acknowledgements We are thankful to the Thirteenth Finance Commission for entrusting this study to us. We have benefited considerably from discussions with the Hon‟ble Chairman of th