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

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National issues in Sales Tax Structure

National issues in Sales Tax Structure G Thimmaiah IN his article

Financial Resources for Sixth Plan

Financial Resources for Sixth Plan G Thimmaiah IN their paper (October 3, 1981, pp 1619-1623), D R Gupta and Ram N Lal have presented the rationale for the Planning Commission's estimates of financial resources for the Sixth Plan (1980-85), They have also attempted to answer the criticisms levelled against the estimates (without, of course, specifying the critics). The purpose of this note is to show the unrealism of some of their arguments and also the methods which they report to have been used to estimate the financial resources for the Sixth Plan.

Federal Fiscal Transfers in India-A Comment

some places they have also started undertaking social work. There have been active discussions about placement of older children in farms, factories or other work-places for the summer or winter vacations. In a few states the Government is helping the schools to identify the articles to be manufactured and it is also helping in the sale of what the schools produce. Financial benefits have started accruing to both the schools and the children. But the teachers have yet to master how these activities can be turned into the learning of health science, or agriculture or sociology or mathematics, etc. An entirely new approach to implementing the syllabus is involved and teachers have just begun to learn this. To say at this stage that unless much more time is made available Gandhiji's concept of basic education will not be fulfilled is to ask for the impossible, and it is therefore to discourage even the small change which is being brought about. Incidentally, the Gandhian institutions themselves, in all the decades that have gone by, have not produced any concrete literature by which the teachers upto the secondary level may IN his article, 'Federal Fiscal Transfers in India: Performance of Six Finance Commissions', (July 30, 1977, pp 1126- 1233), M Govinda Rao has raised certain issues relating to the role of the Finance Commission in achieving federal fiscal equity in the Indian federation through federal fiscal transfers. The purpose of this note is to examine a question he has raised about the scope of the Finance Commission's recommendations.

Inter-State Tax Effort-A Comment

A Comment G Thimmaiah IN a recent article1 K N Reddy has used some indices of tax efforts to highlight the relative tax efforts of the different states. The purpose of this note is to point out certain methodological mis-interpretations and to indicate an alternative approach which is better suited for the purpose. This note will also attempt to show the reasons for the failure of the Finance Commissions to take into account the relative tax efforts of the stares while determining the grants-in-aid to the states, Reddy has used 'Frank-Bird' indices and multivariate regression analysis to estimate the relative tax efforts of the states. Besides, he has also compared he elasticity of the states' tax revenue and marginal tax ratios. He has rightly concluded that "Frank-Bird' indices are very crude indicators of relative tax efforts of the states as they ultimately boil down to the ratio of states' tax revenue to states' income. For the same reason he has maintained that income-elasticity of tax revenue is an inadequate index of relative tax efforts of the states. Therefore, he has used the methodology adopted by Charles Montrie Kenneth J Fedor and Harlan Davis.2 These three authors have used what is now known as the 'Aggregate Regression Approach' to measure the relative tax performance of the Latin American countries which are members of the Alliance for Progress, They have used both univariate and bivariate regression analysis and the elasticity of tax revenue and marginal tax ratios to find out the relative self-reliance of these countries. They have regressed the ratio of total taxation of the Central government to the GNP on per capita income and also on the ratio of foreign trade to GNP, the ratio of total revenue of the Central government on per capita income and on the ratio of foreign trade to GNP, and the total revenue of all levels of government on per capita income. They have compared these results with the ex post elasticity (buoyancy) of the tax revenue and the marginal tax ratios.

Taxable Capacity of Agricultural Sector-A Comment

February 8, 1969 Taxable Capacity of Agricultural Sector A Comment G Thimmaiah IN his article 'Taxable Capacity of Agricultural Sector", (December 14, 1968), D N Dwivedi claims to measure the taxable capacity of the agricultural sector in Uttar Pradesh. However, Dwivedi has misinterpreted the concept of taxable capacity. The concept of taxable capacity which he has used is unrealistic in a mixed economy and static in the context of a developing economy.

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