"Determining Gender Equity in Fiscal Federalism-- Analytical Issues and Empirical Evidence from India"

Despite the policy realm’s growing recognition of fiscal devolution in gender development, there have been relatively few attempts to translate gender commitments into fiscal commitments. This paper aims to engage in this significant debate, focusing on the plausibility of incorporating gender into financial devolution, with the Thirteenth Finance Commission of India as backdrop. Given the disturbing demographics--the monotonous decline in the juvenile sex ratio, especially in some of the prosperous states of India--there can be no valid objection to using Finance Commission transfers for this purpose. A simple method for accomplishing this could be to introduce some weight in favor of the female population of the states in the Commission’s fiscal devolution formula. The message would be even stronger and more appropriate if the population of girl children only--that is, the number of girls in the 0–6 age cohort--is adopted as the basis for determining the states’ relative shares of the amount to be disbursed by applying the allotted weight. A special dispensation for girls would also be justifiable in a scheme of need-based equalization transfers. While social mores cannot be changed by fiscal fiats, particularly when prejudices run deep, a proactive approach by a high constitutional body like the Finance Commission is called for, especially when the prejudices are blatantly oppressive. Indeed, such action is imperative. The intergovernmental transfer system can and should play a role in upholding the right to life for India’s girl children. That being said, it needs to be mentioned that it is not plausible to incorporate more gender variables in the Finance Commission’s already complex transfer formula. In other words, inclusion of a "gender inequality index" in the formula may not result in the intended results, as the variables included in the index may cancel one another out. Accepting the fact that incorporating gender criteria in fiscal devolution could only be the second-best principle for engendering fiscal policy, the paper argues that newfound policy space for the feminization of local governance, coupled with an engendered fiscal devolution to the third tier, can lead to public expenditure decisions that correspond more closely to the revealed preferences ("voice") of women. With the 73rd and 74th constitutional amendments, this policy space is favorable at the local level for conducting gender responsive budgeting.Fiscal Decentralization; Federalism; Fiscal Transfers; Gender

"Deficient Public Infrastructure and Private Costs: Evidence from a Time-Use Survey for the Water Sector in India"

This paper presents new evidence on the links between public-infrastructure provisioning and time allocation related to the water sector in India. An analysis of time-use data reveals that worsening public infrastructure affects market work, with evident gender differentials. The results also suggest that access to public infrastructure can lead to substitution effects in time allocation between unpaid work and market work. The broad conclusion of the paper is that public-investment policy can redress intrahousehold inequalities, in terms of labor-supply decisions, by supporting initiatives that reduce the allocation of time in nonmarket work.

Fiscal decentralisation and gender responsive budgeting in Mexico: Some observations.

Fiscal decentralisation ; Gender ; Mexico

Gender responsive budgeting and fiscal decentralisation in India: A preliminary appraisal.

Fiscal decentralisation ; Gender

Is Fiscal Policy Contracyclical in India: An Empirical Analysis

The paper empirically examines the validity of Keynesian philosophy of contracyclical variation in fiscal policy to the macroeconomic activity in India. The macroeconomic activity is proxied by ‘output gap’ a concept defined to estimate the index of economic activity. Applying Johansen’s Full Information Maximum Likelihood test of cointegration, it was found that there exists a long run, stable relationship between fiscal policy stance and macroeconomic activity. Further, the causality detection in asymmetric vector autoregression model revealed that there exists feedback mechanism between fiscal policy stance and output gap, which reinforces the Keynesian theory that fiscal stance is contracyclical in nature. The policy implication of these results points to the fallacy of rule-based fiscal policy to contain fiscal deficit, based on the neo-classical assumption that fiscal deficit has detrimental effects through financial crowding out. The results reinforced the role of fiscal deficit not as an evil but as an instrument of short run demand management and also the significance of pump priming.Fiscal stance, Output gap, Contracyclical fiscal policy, Stationarity, Cointegration, Asymmetric vector autoregression

Public infrastructure investment and non-market work in India: Selective evidence from time use data.

Theory of allocation of time revealed that historically market-time has never consistently been greater than the non-market time and herefore the allocation and efficiency of latter may be equally important, if not more, to economic growth than that of former. The time budget data challenged the existing theories on allocation of time where nonmarket time aggregates leisure and work at home. The time budget findings revealed that unpaid work at home and leisure are not affected in the same way by changes in socio-economic variables. Tricotomising the allocation of time into work in market, unpaid work at home and leisure has important policy implications; in integrating the care economy into economic modeling and in turn in macropolicy making. This is particularly important in the context of developing countries, where public infrastructure deficit induces locking of time in unpaid work spurting a trade off with the time otherwise spent in the market economy activities or eroding leisure. Against this backdrop,this paper examined the link between public infrastructure investment and time allocation across gender in the context of selected states in India. The direction of regression coefficients suggests that public infrastructure investment affects market work, non-market work and leisure time in different ways with evident gender differentials. The time allocation in SNA activity of women is found significant and inversely related to the public infrastructure related to water supply. But there is no evidence that the release of time locked up in unpaid SNA work through better infrastructure can have substitution effect towards market work. This gets reinforced by the significant positive link between infrastructure and time allocation in Non-SNA activity, which manifests forced leisure. This in turn implies that though infrastructure investment lessens the time stress in unpaid SNA activity; complementary employment policies are required along with infrastructure investment to ensure substitution effect of unpaid work with market work, which in turn can have impact on household poverty. In particular,the analysis of time budget statistics enables the identification of the complementary fiscal services required for better gender sensitive human development. The overall onclusion of the paper is that fiscal policies designed to redress income poverty can be partial if it does not take in to account aspects of time poverty.Infrastructure ; Investment

Fiscal decentralisation and gender responsive budgeting in South Africa: An appraisal.

Fiscal decentralisation ; Gender ; South Africa

Fiscal decentralisation and local level gender responsive budgeting in Morocco: Some observations.

Fiscal decentralisation ; Gender ; Morocco

Fiscal deficit, capital formation, and crowding out: Evidence from India.

Theoretical literature identifies two variants of crowding out in an economy-real and financial. The real (direct) crowding out occurs when the increase in public investment displaces private capital formation broadly on a dollar-for-dollar basis, irrespective of the mode of financing the fiscal deficit. The financial crowding out is the phenomenon of partial loss of private capital formation, due to the increase in the interest rates emanating from the pre-emption of real and financial resources by the government through bond-financing of fiscal deficit. The paper analysed the real and financial crowding out in India during 1970-71 to 2002-03. Using asymmetric vector autoregressive model, the paper finds no real crowding out between public (in particular, infrastructure) and private investment; rather complementarily is observed between the two. The dynamics of financial crowding out is captured through the dual transmission mechanism via real rate of interest; that is, whether private capital formation is interest rate sensitive and in turn whether the rise in real rate of interest is induced by fiscal deficit. The study found empirical evidence for the former, but not the latter, reinforcing no financial crowding out in India.Fiscal deficit ; Capital formation