Impact of restricted and unrestricted fiscal grants on tax efforts of rural local governments in India

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dc.contributor.authorBinswanger-Mkhize, Hans P.
dc.contributor.authorNagarajan, Hari K.
dc.contributor.authorPradhan, Kailash C.
dc.date.accessioned2014-03-06T17:47:55Z
dc.date.available2014-03-06T17:47:55Z
dc.date.issued2012-12
dc.description.abstractThis paper examined the impact of restricted and unrestricted fiscal grants on tax efforts of Rural Local Governments in India using ARIS/REDS panel data. We estimated the system as a whole via three stage least squares, where the first stage equations are the ones predicting the grants in order to deal with the simultaneities of grants received and taxation. The results have shown that a wage impacts on taxation exists, but is very small and, the productivity impact of grants on taxes is either zero or negligible. This means that incentives effects associated with the specifics of the intergovernmental fiscal system in the states is the main determinant of village taxation. We find that a bolder approach to shift about a third of the tied grants to block grants could lead own taxation to rise almost four fold. In the papers which analyze the services of education, health care and water supply we find the positive impacts of the village expenditures on these three services on choices, reduced private expenditures and outcomes.en
dc.formatTexten
dc.format.extent1 digital file (29 p.)en
dc.format.mimetypeApplication/pdf
dc.identifier.urihttp://hdl.handle.net/10625/52488
dc.identifier.urihttp://www.ruralgov-ncaer.org/publications.php?cPath=2
dc.language.isoen
dc.publisherNational Council of Applied Economic Research (NCAER), New Delhi, INen
dc.relation.ispartofNCAER working papers on decentralisation and rural governance in India; no. 12, December 2012en
dc.subjectDEVOLUTIONen
dc.subjectINCENTIVE EFFECTSen
dc.subjectRESTRICTED AND UNRESTRICTED GRANTSen
dc.subjectPANCHAYATS AND LOCAL GOVERNMENTen
dc.subjectFISCAL POLICYen
dc.subjectDECENTRALIZATIONen
dc.subjectINCENTIVESen
dc.subjectLOCAL GOVERNMENTen
dc.subjectPUBLIC EXPENDITUREen
dc.subjectRURAL AREASen
dc.subjectINDIAen
dc.titleImpact of restricted and unrestricted fiscal grants on tax efforts of rural local governments in Indiaen
dc.typeWorking Paperen
idrc.dspace.accessIDRC Onlyen
idrc.project.componentnumber105223001
idrc.project.number105223
idrc.project.titleBuilding Policy Research Capacity for Rural Governance and Growth in Indiaen
idrc.recordsserver.bcsnumberIC01-1339-27
idrc.rims.adhocgroupIDRC SUPPORTEDen

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