Assessing Gender and Child Budget Statements of Indian States

Purpose– This paper aims to provide an overview of recent research on accountability of local and state governments in India.Design/methodology/approach– The Downsian theory of electoral competition is used as a departure point for classifying different sources of government accountability failures. Subsequent sections deal with each of these sources in turn: limited voter participation and awareness; ideology, honesty and competence of political parties and electoral candidates; capture by elites; clientelism and vote-buying. Each section starts by explaining the relevant departure from the Downsian framework and then reviews available empirical evidence in the Indian context for each of these possible “distortions”, besides effects of related policy interventions. The final section summarizes the lessons learnt, and the fresh questions that they raise.Findings– The paper describes a range of possible reasons that limit the effectiveness of elections as a mechanism inducing governments to be accountable to their citizens and reviews the evidence available from the Indian context concerning each of these.Originality/value– The contribution of the paper is to provide an overview and perspective of recent literature on political economy problems affecting performance of state and local governments in India.

Public trust in government is crucial for good governance, encompassing economic and social development of the region in a representative democratic setup. This study uses India Human Development Survey (2004–2005 and 2011–2012) data to examine the changing pattern of household confidence in state governments in India. Using a logit model analysis, we examine how the level of household confidence in the state government changes with households’ socioeconomic status, personal experiences, and benefits received from government programs and direct social benefit schemes. We find that households with a low socioeconomic status (such as Scheduled Castes/Scheduled Tribes, and low-income and less educated households) are more likely to trust the state government. In addition, households that have had a positive experience or have received benefits from a government program and/or social scheme are more likely to exhibit high levels of trust in the state government. We also find that residents of less developed states are more likely to have high levels of trust in their state government than residents of highly developed states.

India provides an excellent laboratory within which to address the question of why and when governments choose to bring about democratic change at the local level. This is because, as described in Chapter 3, the decision of whether to establish or to maintain elected government at the village level has been largely left in the hands of Indian state governments. This feature of the Indian context makes it possible to examine the variation in the implementation of local democratization within the same national context across space and time. Explaining this variation provides a unique opportunity to understand the causes of local democracy while holding several confounding factors constant.

PurposeIn this paper, the author develops a game theoretical model to understand why Union Government of India, as a third party, has used different schemes at different times in history to assist the State Governments in fighting the Naxalite insurgency. Comparing across schemes, it was found that though Matching Security Grants scheme was preferred in general, during asymmetric information scenario it led to an emergency situation wherein the Union Government had to provide the less preferred Bulk Security Grants. Later, it became difficult to withdraw these grants as the State Governments free rode by reducing own security contribution. The author finds that instead, in this scenario, Matching Development Grants are more suitable, as they incentivize the State Governments to reveal private information and help the Union Government exit its third-party role. For a practitioner involved in conflict resolution, these conclusions imply that as the desirability of policies can change diametrically overtime, Union Government must spend resources only on those heads of expenditure that provide both security and development benefits provided they aid in preventing flow of resources to Naxalites. Further, to end its assistance, the Union Government’s expenditures should also complement the capabilities of the State Government rather than substituting them. These results can also guide policy in other protracted civil wars with substantial third-party intervention, which are common these days.Design/methodology/approachThe paper is an historical analysis of strategies used by Union and State Governments and Naxalites. The analysis is based on game theoretic tools supported with examples.FindingsThe Union Government must provide matching grants instead of bulk grants such as Central Armed Police Forces, and the grants should be aimed at building complementarities with the state governments’ security contributions. Under asymmetric information scenario, the Union and State Governments reduce their expenses incurred to fight the Naxalites. A Matching Development Grants scheme would have done better. Union Government must spend resources on heads of expenditure that provides both Development and Security benefits, to curb flow of resources to Naxalites, besides complementing the Security Contributions of the State Government.Research limitations/implicationsThe research is limited by disaggregated data to test the hypotheses. It is also limited by the data on hidden variables like the contribution of the Naxalites to fighting. The research is also limited to the extent that individual groups in the war like police commanders, politicians and Naxalite commanders are not incorporated. Multiple asymmetric parties are also not considered; that may generalize the model to other theaters of insurgency.Practical implicationsCertain heads of expenditure such as roads, mobile communication, improving quality of investigation, preventing human rights violations by the security forces, etc. are both security and development enhancing. The Union Government's expenditures must be directed toward this end. Therefore, from a practitioner's perspective, the debate between greed and grievances exists not as a limitation but as a guide. The relevant articles of Constitution of India must be redrafted on these principles. Third-party interventions in other insurgencies may be revisited under these conclusions.Social implicationsSecurity and Development policies are tools for controlling Naxalite insurgency, which can also be used to prevent flow of resources to Naxalites. Security and development policies to resolving insurgencies are useful at different information scenarios. Therefore, information neutral policies should be preferred.Originality/valueThis paper has contributed theoretically in modeling continuing conflicts like Naxalite insurgency, explicitly. The author also shows that though the field of civil wars may have evolved along the Greed vs Grievance debate (Collier and Hoeffler, 2004), for a practitioner, the lines blur when it comes to solutions, as many heads of expenditures have features of both security and development. This paper also shows that when the Union Government faced asymmetric information scenario, the policy of matching development grants would be beneficial in long run though of limited value in short run. This is an important conclusion as the most intense period of violence was preceded by the asymmetric information scenario. Besides, it has relevance for the other civil wars with third-party intervention, such as NATO in Afghanistan.

The finances of state governments in India have been facing a hard budget constraint as there is a legislative mandate to run the finances with a ceiling on fiscal deficit at 3% of gross state domestic product (GSDP) and the debt-to-GSDP ratio at 20%. In this paper, we have elucidated the limitations of fiscal deficit as the sole target, particularly in the context of availability of resources to the state budgets. These include: (a) tax devolution and grants based on finance commission awards, (b) discretionary transfers in terms of grants from the union government and (c) borrowings from the market. . Keeping in view the constitutional and institutional flow of resources to the state budget, a resource gap model has been designed in this paper. This is named as Basic Resource Gap (BRG) with three variants (BRG 1, BRG 2 and BRG 3). Based on the BRG, fiscal dependency ratio (FDR) and fiscal stress ratio (FSR) have been worked out in this paper. The empirical findings broadly suggest that in respect of the consolidated position (all states together) nearly 50% of the total resource originated from the dependent and stressed sources. A further breakup of this reveals that while resources from dependent sources were 22%, the resources from stressed source were 28% of the total available resources. This analysis is an analytical improvement over the conventional approach of fiscal deficit. BRG model, besides filling the gap in the literature of fiscal federalism, will be operationally helpful to the state governments in terms of a holistic picture of the resource gap incorporating the constitutional and institutional resource flows to the state budgets based on the accounting arrangements in conformity with consolidated fund and public accounts. In essence, BRG along with FSR and FDR will add analytical rigor to the analysis of hard budget constraints in terms of resource availability to the state governments.

The present document contains our comments on the The Delhi Health Bill, 2019 (Bill) proposed by the government of NCT of Delhi (Delhi govern- ment). Under the Constitutional arrangement, hospitals are governed by the state governments in India. Currently, nursing homes in Delhi are regulated under the Delhi Nursing Homes Registration Act, 1953. This law contains provisions for registration and inspection of nursing homes. Nursing homes are defined as any premises used or intended to be used for reception of persons suffering from sickness, injury or infirmity in order to provide treatment and nursing to them. With time, the health care services offered to the population have changed. With a view to regulate health care received by an individual, the Clinical Establishments (Registration and Regulation) Act, 2010 was enacted by the union government under Articles 47 and 252 of the Constitution. Laboratories, pharmaceutical shops, dentist clinics and out-patient clinics were included in the scope of regulation of Clinical Establishments (CEs). Since regulation of CEs is a state subject, the union law is not applicable unless it is notified by the state government. The Bill, as proposed by the Delhi government contains provisions to regulate CEs in Delhi. The Bill seeks to set up regulators for CEs in Delhi. Our comments focus on the regulatory structure under the Bill.


 This study examines the sustainability and the threshold level of public debt of the Centre and all State Governments in India, using the latest data from 1990-91 to 2020-21, and using statistical methods and threshold regression method. The results suggest that the current levels of public debt of both the Centre and all States are unsustainable, and the debt sustainability threshold is about 40% for the Centre and 22% for all States. There is a greater need for the Centre and all States to control their debt levels as they are currently growth reducing. The simulation exercises based on the debt dynamics suggest that the Indian economy (nominal GDP) should grow at 12%, and the fiscal deficit target should be 2% each for the Centre and all States from 2023-24 onwards, for the Centre to attain the debt sustainability target before 2027-28 and all States to do so in 2030-31. The relevant policy strategy for all governments is revenue augmentation and containing public expenditures, including unproductive subsidies.
 

Although various theoretical as well as empirical studies have emerged to analyze the interjurisdictional tax competition, most of them concern developed nations. This study analyzes the sales tax choice interaction among the State governments in India during 1990–91 to 1998–99. In the first exercise, it uses the effective sales tax rate for 16 States and the Union Territory of Pondicherry and in the second, it uses the actual rates for ten selected commodities in Southern States. In both cases, tax reaction functions are specified and estimated using the panel data methodologies. The results provide strong evidence for the existence of interstate competition in choosing the actual/effective sales tax rates during the study period. The results favor for region and commodity specific tax coordination policies.

In a federal set up, the effective working of the whole system is fundamentally contingent upon perfect understanding, co-operation and coordination between the federating units of the government.In addition to text books on the subject of Public Finance I have been able to review the studies so as to develop an insight on the subject relating to various aspects of the financial relations between Union government and State governments in India.

Purpose: Entities from the public finance sector are required to function effectively. This translates significantly into the shape of public sector accounting. Achieving this goal requires relevant information, and the main sources of information about results are financial and budget statements, which are the basic products of accounting. This information is used by various users, including councillors, who are the decision-making and controlling body of communes. Therefore, the purpose of this study is to assess the usefulness of the information provided by financial and budget statements for management purposes from the point of view of councillors Method/approach: The article uses the survey method. A questionnaire was emailed to 800 councillors of rural, urban and urban-rural municipalities. The survey was conducted in 2020, and 65 completed questionnaires were received. Findings: The information provided by public sector accounting supports decision-making in municipalities. Both budget reports and financial reports are essential for management purposes. The annual report on the implementation of the budget is transparent for councillors, and the information contained therein allows for effective management of the finances of communes. Originality/value: The article provides information about the usefulness of financial and budget statements to the management of the commune. It shows the viewpoint of one group of stakeholders – councillors.

The frequent changes in the political parties in power in states have influenced the revenue mobilisation and expenditure policies of the state governments in India. Economic and political factors over a period of time are responsible for leading the state government to a fiscal crisis. Rapid deterioration of state governments finances in India has been a serious issue in recent decades in India. The deterioration of State governments finances is mainly due to increase of committed revenue expenditure and implementation of too many welfare schemes and freebies. As per RBI report 2022-23, the state governments debt to GDP ratio is 29.5 percent in India in 2022-23. But it is more than the FRBM limit of 20 percent. The state governments total expenditure is about one and half times more than the Centre expenditure. After implementation of GST in 2017 in India, GST is the major source of revenue (42 %) for state governments. This paper examines a comprehensive analysis of trends in state finances in India during the last 30 years period. KEYWORDS: State Finances, Fiscal Imbalances, Revenue, Expenditure, Deficits.

COVID-19 and socioeconomic impact in Asia: The case of India

Objectives: To improve the knowledge and skills of government medical officers in the management of hypertension and related complications using a multiple stakeholder model for capacity building. Methods: Public Health Foundation of India, International Society of Hypertension, British Hypertension Society and Centre for Chronic Disease Control jointly developed and delivered a countrywide program for primary care physicians. The course was later adopted by three state governments in India (Madhya Pradesh, Meghalaya and Tripura) under the National Health Mission for training of their respective medical officers. The curriculum was developed by international societies and contextualized by a panel of national experts. This was later delivered by faculty nominated by the state. The course had a strong built-in monitoring and evaluation component that assured standardized delivery and quality of the program. Results: A total of 213 participants were trained in the state of Madhya Pradesh and were posted at their respective health centres as NCD nodal officers post-training. Over 90% of the medical officers trained felt that the course improved their knowledge and confidence in the management of hypertension. In the state of Meghalaya, 20 medical officers are currently undergoing training. The state government of Tripura will nominate 40 medical officers to be trained in the course. Conclusion: Building capacity of primary care physicians could help reduce the burden on the government tertiary care system and also help strengthen state primary health systems. The model presented can be easily adopted by other state governments as well as low and middle income countries that have similar health system settings.

The differences among the states in terms of Human Development Index (HDI) can be an outcome of the performance of the regional governments. The components of HDI can be taken as services produced by the state governments while some variables like tax collection of states, population, etc. can be considered as inputs of the states. The differences in the capacity of states in the utilization of grants and revenue of the states are important determinants in explaining the disparities among the states. The objective of the central government is to go for balanced development of different regions. The ICT is expected to improve social indicators like performances in health, education, etc., by effective utilization of social expenditure by states, and can potentially reduce the regional disparity in India. Identifying some services as output produced by some inputs in the different state governments in India, we rank the states according to their performances using Data Envelope Analysis (DEA). We have further estimated the target output that a state government should emphasize for its overall development. We have identified that the ICT, defined as a composite of teledensity, internet and mobile use, has been a responsible factor for the variation of performance of the state governments in terms of improvement of social indicators.

ABSTRACTThis paper analyses the implications of political factors on provision of public goods by state governments in India. Using data on state governments’ expenditure and constituency results of states' Legislative Assembly elections during the period 1971–2005, it demonstrates that the greater the spread of ruling party's strength across legislative constituencies in a state, the higher the share of developmental expenditure in revenue budget. It also documents that the share of developmental expenditure in revenue budgets is positively associated with voter turnout and with a change in the political party in power. Interestingly, delivery of public goods in a state does not appear to have any significant relation to the form of the government – single party or coalition. It also shows that economic liberalization has reduced governments’ responsiveness to provision of public goods.