ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Avijit DebnathSubscribe to Avijit Debnath

Central Transfers and Tax Generation Efforts of Indian States

The impact of federal transfers on revenue collection by state governments in India in 1992–2013 is re-examined. Several overlooked aspects in previous studies that tested the asymmetric effect of transfers in India are addressed. When we disaggregate total transfers into conditional and unconditional transfers, we find that while tax collection decreases with an increase in unconditional transfers, conditional transfers seem to exert a positive influence on tax collection. The findings raise serious concerns regarding the pattern of intergovernmental transfers in India.

Structural Change and Inter-sectoral Linkages

This article analyses the trend in sectoral shares in state domestic product and inter-sectoral linkages in north-east India for the period 1981 to 2007. The causality test reveals that there exists bidirectional causality among the sectoral output of north-eastern states, at least in the short run. In the long run, there exists a unidirectional causality running from the agricultural sector and industrial sector to services sector.
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