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

Articles By Pinaki Chakraborty

Beyond Fiscal Prudence and Consolidation

Since sustainable deficit could be different than the numeric fiscal rule, a review of the Fiscal Responsibility and Budget Management Act is timely and important. However, such a review should bear in mind that macro-stabilisation is a central function and the burden of fiscal adjustment should squarely fall on the union government keeping state debt and deficits withinFRBM limits. Maintaining the higher tax to gross domestic product ratio of last year will be key for fiscal prudence in 2016-17.

Deficit Fundamentalism vs Fiscal Federalism: Implications of 13th Finance Commission's Recommendations

The Thirteenth Finance Commission's recommendation to increase the vertical share of tax devolution to states will help, but its horizontal distribution formula leaves much to be desired. One, its design is such that two of the four key indicators are in conflict with each other. Two, the commission's revised road map for fiscal consolidation at the centre and the states, which recommends state-specific, year-wise, fiscal adjustment paths, not only limits the fiscal manoeuvrability of states but also impinges on their fiscal autonomy. Three, its design of the grant for elementary education has the potential to reduce the expenditure of states rather than augment it. The need to look at intergovernmental transfers from the right perspective of federalism, where the states and the centre are seen as equal partners in development and not from a narrow technocratic viewpoint, cannot be stressed more.

Report of the 13th Finance Commission: Introduction and Overview

This special issue on the Report of the Thirteenth Finance Commission has eight experts evaluating its recommendations from different perspectives. While acknowledging the many plus points of the report, the writers also draw attention to its numerous drawbacks, ranging from a lack of proper attention and omissions to faulty logic. There is little doubt that some of the recommendations, if implemented in the right spirit, will benefit the management of public finances in the country. However, an awareness of the report's limitations could serve as an antidote to not slipping up again.

Goods and Services Tax in India:An Assessment of the Base

One of the most contentious issues in the discussions surrounding goods and services tax is the likely and feasible rates at which the new regime can be implemented. There have been a number of attempts at estimating the size of the tax base and the corresponding revenue neutral rate. The latest in the series is the report of the Task Force on gst of the Thirteenth Finance Commission. Most of these exercises throw up incredibly low revenue neutral rates resulting in apprehensions about the validity of these estimates and the consequent revenue risk. This paper seeks to estimate the base for the proposed gst on conservative assumptions to arrive at a more realistic estimate of the revenue neutral rates across states.

Intra-Regional Inequality and the Role of Public Policy: Lessons Learnt from Kerala

Despite an accentuation of consumption inequality in recent years in Kerala, development in the social sector has been more or less equitable across districts. Kerala's achievements in human development have been primarily due to the active intervention of the government in the social sector. The high priority to social sector spending has posed serious challenges to the state in terms of upkeep and also in tackling second generation problems of its model of development. It has also contributed to a large fiscal imbalance. Decentralisation is a step that was introduced in the mid-1990s to sustain the path of Kerala's development through local-level planning incorporating local needs and preferences.