Articles by D K Srivastava

This paper focuses on the identification of the key determinants of the interstate differences in the incidence of COVID-19. It finds that it is best to have a dynamic, transparent, and explicit formula for the interstate allocation of vaccines under conditions of deficient supply. This is ideally handled by an objective expert body.

With the lowering of global crude prices in recent months, the expectation was that this would benefi t the users of petroleum products, especially in the industry and transport sectors, and the consumers. This expectation has so far been belied. The central government has not only increased the taxes under its control but also focused on increasing relatively more, the non-shareable portion of excise duty, thereby constraining the fi scal space for the state governments. The continued high retail prices have implications for infl ation as well as potential growth. This situation needs to be carefully monitored.

Public Economics: Theory and Policy: Essays in Honor of Amaresh Bagchi edited by M Govinda Rao and Mihir Rakshit (New Delhi: Sage Publications), 2011; pp 364, Rs 795.

Two 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.

This article argues that the time phasing problem highlighted in the approach paper to the Eleventh Plan is the outcome of specific assumptions used in the projections, which are not always justified. Following the fiscal correction path releases resources for the revenue plan through falling interest payments and increases capital expenditure by allowing the permissible fiscal deficit to be fully used for that purpose. It gives the required balance in resources available for the revenue plan and capital plan. The profiles of saving and investment make a growth rate of 8.5 to 9 per cent achievable within the plan period. These would be possible by adhering to the fiscal responsibility targets and not by compromising on them.