Ecological Fiscal Transfers and State-Level Budgetary Spending in India: Analyzing the Flypaper Effects

Amandeep Kaur (), Ranjan Kumar Mohanty, Lekha Chakraborty and Divy Rangan
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Amandeep Kaur: National Institute of Public Finance and Policy
Ranjan Kumar Mohanty: Xavier Institute of Management, XIM University
Lekha Chakraborty: National Institute of Public Finance and Policy
Divy Rangan: The Convergence Foundation

Chapter Chapter 18 in India’s Contemporary Macroeconomic Themes, 2023, pp 421-435 from Springer

Abstract: Abstract This paper examines the empirical evidence of flypaper effects on the ecological fiscal spending in India. Using the panel data models, we analyze whether the intergovernmental fiscal transfers, or the states’ own income determine the expenditure commitments on ecology at the State level. The econometric results show that the intergovernmental fiscal transfers rather than the states’ own income determines ecological expenditure at subnational levels in India. The results hold, when the models are controlled for ecological outcomes and demographic variables.

Keywords: Intergovernmental transfers; Flypaper effect; Environmental economics; Macroeconomic policy; National government expenditures; E6; H5; H7; Q5 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isbchp:978-981-99-5728-6_18

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DOI: 10.1007/978-981-99-5728-6_18

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