Articles by J V M Sarma

This study attempts to assess the progress of fiscal reform in Andhra Pradesh with a view to identifying appropriate measures and formulating strategies for fiscal correction. Section II of the paper presents a brief assessment of the fiscal situation in the state prior to the 1996 reforms and Section III examines some of the remedial measures suggested in the recent past. Section IV looks at some of the important steps taken by the government as part of the reform process and reviews the progress. Finally, an attempt is made to indicate what remains to be done and to identify strategies for further fiscal correction.

Issue of Horizontal Transfers J V M Sarma Devising optimal criteria for federal fiscal transfers to reduce fiscal imbalances across the states has always been a demanding job in India. In particular, two aspects that have become perennial sources of controversy are: the disintegrated componentwise approach, and the near-subjective assignment of weights to factors determining the horizontal shares of states. Given that the reduction of horizontal fiscal inequity is an important objective of the federal transfers, the study proposes a fiscal behavioural model to help identification of the criteria and derive weights for deciding the revenue shares, based on their observed degree of association with the fiscal balance of states. The approach is illustrated by estimating the model using panel data.

Resource Mobilisation for New Welfare Programmes in Andhra Pradesh J V M Sarma THE welfare schemes announced by the new government in Andhra Pradesh have raked up considerable controversy. The food subsidy scheme in particular, popularly known as the ' two-rupee-kilo-rice' scheme, is seen in some circles as an election stratagem used by the Telugu Desam party to capture political power. While it is debatable whether the election success can be entirely attributable to the promise of rice subsidy since the Congress Party had also promised a similar scheme albeit on a modest scale, in a broader sense, the outcome does reflect the popular mood to have such safety net schemes in the wake of the liberalisation and globalisation programmes taken up by the central government.

Measuring Tax Potential Some Clarifications M Govinda Rao J V M Sarma THE first report of the Ninth Finance Commission has evoked widespread interest. This is evident from the number of articles that have appeared in professional journals and newspapers in recent times. Many of these articles are of a general nature covering the entire canvas of the recommendations made by the commission for the year 1989-90. The recent article in EPW by N Krishnaji (Feburary 4), however, assumes a special significance as it concentrates on the specific issue of the approach to measuring tax potential adopted by the Ninth Finance Commission.