Articles by Abhay Pethe

In addition to the three-pillar framework suggested by the Fifteenth Finance Commission, we suggest four constituents, namely the finance commission, NITI Aayog, goods and services tax, and de facto decentralisation, which will help strengthen the “cooperative” element—a key factor for Indian federation to work effectively. Further, the article focuses on finance commissions empowering the local governments and, in particular, assesses the Fifteenth Finance Commission’s thrust to empower the local bodies.

The paper estimates the impact of various neighbourhood, spatial, and externality factors on residential prices in Mumbai. We find that distance from the central business district, proximity to the west coast, presence of slums, proportion of residential and commercial built-up areas, and proximity to the railway station have a significant impact on residential prices. Amenities and open spaces do not have any significant impact on prices. Further, we model the impact of the upcoming metro line on the residential prices. We find that the upcoming metro has no significant effect on prices. These findings have strong implications for policy decisions regarding introduction of land-based fiscal tools such as betterment levies for capturing land value appreciation that is expected to arise from new infrastructure.

This paper takes the position that a useful governance perspective must be informed by the socio-economiccultural milieu, and in the specific Indian context must sit on a tripod of "political reality", "state of decentralisation" and "basic economic principles". The Mumbai Metropolitan Region is one of the most important growth engines for India as it accrues tremendous revenues to the central and the Maharashtra state governments. The paper assesses the performance of the governance system in mmr which resembles a polycentric governance system - a system that has been heralded as being greatly suited to metropolitan regions by several scholars. It recognises that metropolitan governance is but a concept, since in reality it comprises a loose bundle of multiple actors and organisations. For sharper focus, the paper studies the interactions between the only two (dominant) public organisations in governance - Municipal Corporation of Greater Mumbai and the Mumbai Metropolitan Region Development Authority. The assessment reveals that the institutions - rules of the game - which are essential for the efficient functioning of polycentric governance system are missing in the region. It emphasises the need to bring about micro reforms in the institutional framework for polycentric governance to be successful in mmr.

Scarcity of resources for urban infrastructure is a universal concern in developing economies. Also, prudent mandate of macroeconomic management has led to a reduction in hand-downs from higher governments. The sub-national governments have had to look at several alternatives with a sense of urgency. In this paper we focus on the possibilities of the sub-national governments accessing, the financial markets in general and the debt market in particular. Our paper focuses on the need to create virtual entities - self-help groups amongst the urban local bodies - that could expand the domain of eligible ULBs. We visualise a scheme for capital market access by ULBs, which would work without the state acting as an intermediary and also without any new institution being set up. We provide the theoretical underpinnings, illustrate and operationalise the idea with the help of data related to ULBs in the state of Maharashtra.

This paper attempts to construct a 'composite leading indicator' for tracking the future path of inflation rate in India. For doing so, partial information about future inflation rate provided by a number of basic series is analysed first. Based on the correlation analysis, a few of these basic series are chosen for construction of composite indicator. Empirical results show that the percentage change in manufacturing output, money stock, exchange rate, bank credit to commercial sector, raw materials prices, are important leading indicators for inflation rate in India. Accordingly, based on monthly data on these basic series, one composite indicator is constructed which contains information about behaviour of inflation rate six months in advance. It is seen that out-of-sample forecast error of the composite indicator is quite impressive, the magnitude of error in six-months ahead forecast is only 1.2 percentage point.