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

Articles By K Gayithri

Federal Transfers and States’ Own Spending on Development Activities in Fiscal Federalism in India

Intergovernmental transfers play an instrumental role in shaping the fiscal adjustments and fiscal performance at the subnational level in a federal system like India. Research evidence bears out substitutive or stimulatory effects of federal transfers depending on the nature of transfers. Taking into account the conditional and unconditional transfers, this paper empirically verifies the presence of substitution or stimulation effects on the state-level development spending for 14 major states. The panel cross-sectional–autoregressive distributed lag model test results revealed the area- and sector-specific conditional transfers being stimulative in nature, encouraging states to complement central transfers using their own sources of revenue, while the same is absent for unconditional transfers. Besides, the paper brings out the influence of identity-politics, pre-election tactics, and tactical redistribution to enhance political mileage.

National Pension Scheme: For Whose Benefit?

Pension reforms in India in the last decade have seen three major initiatives - a paradigmatic shift in the civil servants' pension scheme, the National Pension Scheme for all citizens and the New Pension System Lite for the economically disadvantaged sections with small savings. The NaPS has seen a lukewarm response so far, with a majority of subscribers being central and state government employees, for whom the scheme is mandatory. An analysis of the auto choice option under the NaPS and the demographic transition reveals potential future imbalances in the investment structure among the asset classes. Moreover, the NaPS does not even guarantee a minimum pension, thus defeating its "welfare" orientation.