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

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Impact of Pay Revision on State Governments' Finances

The gross fiscal deficit of state governments has been about 3 per cent of GDP in the 1990s. But this is likely to increase substantially as a result of the implementation of the recommendations of the Pay Commission for central government employees. According to one estimate, if the salaries of the employees of state governments, state financial and aided educational institutions, local bodies and state-owned enterprises are revised to the level of central government employees, the revenue expenditure of the state governments will increase by Rs 20,000-30,000 crore a year. This would create a major imbalance in their resources. How the state governments plan to finance this expenditure is an important question. This paper studies the impact of pay revision on the finances of the governments of Uttar Pradesh, Madhya Pradesh and Maharashtra.

Improving Government Delivery Systems-Some Issues and Prospects

Some Issues and Prospects J L Bajaj Rita Sharma Government delivery systems with respect to rural development are currently under scrutiny. This article examines the extent to which rural underdevelopment can he attributed to the failure of government delivery systems. What is examined are the causes of the inefficiencies of such systems which deliver government programmes to the community.

Divesting State Ownership-A Tele of Two Companies

A Tele of Two Companies J L Bajaj As many state governments are contemplating sale of equity in their public enterprises, the contrasting experience of privatisation of two state government enterprises in UP may hold some valuable lessons.

Financial Management in States-Role of Finance Commission

This paper compares the actual fiscal behaviour of the states as against that envisaged for them by the Finance Commission. It looks at deviations from the commission's projections of revenue receipts of 14 non-special category states. Deficits/surpluses that actually emerged as against those that were expected are analysed, A closer look is taken of tax revenue by comparing the actual growth rates of four major state taxes with the rates adopted by the Eighth Finance Commission. The methodology adopted by the Ninth Finance Commission is evaluated from the point of view of its responsibility of promoting resource mobilisation and economy in expenditure. Some approaches to building up an incentive/disincentive structure that would reward financial discipline and penalise profligacy are examined.

Electricity Pricing in Uttar Pradesh

S Ramesh J L Bajaj The State Electricity Board of Uttar Pradesh, like the Boards in other states, has evolved a tariff structure which aims to cover costs and earn a net rate of return of three per cent on capital. In practice a number of other considerations, too, have determined rates. The result is a complicated tariff structure which is not too clearly governed by any pricing principles nor is based on any accurate calculation of costs. In fact, the Board does not have any data on the various categories of costs, and does not keep separate accounts on generation costs from the different stations. Moreover, its finances are in the red with deficits increasing every year.
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