Finance Commission of India’s Assessments: A Political Economy Contention between Expectations and Outcomes

Rathin Roy

Working Papers from eSocialSciences

Abstract: The objective of this study is to examine the structural basis on which Finance Commissions make their awards rather than examining the predictability of the forecasts. The story of Finance Commissions assessments reflects an interesting political economy theatre of contention between aspirations and outcomes. Our key findings are as follows: Firstly, source of errors for assessments of tax revenue, non-tax revenue, interest payments, defence revenue expenditure, plan revenue expenditure and fiscal deficit is principally due to random component. However the errors in the remaining economic parameters originate due to systemic components i.e. mean and slope errors. Secondly, the expenditure side predictability is lower than the revenue side predictability.

Keywords: Forecast Evaluation; Fiscal Marksmanship; Fiscal Federalism; India; Finance Commission; central government; macroeconomic stability; tax powers; Income; Centre and States; public policy; commission; outcomes; expectations. (search for similar items in EconPapers)
Date: 2015-03
Note: Institutional Papers
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.esocialsciences.org/Download/repecDownl ... &AId=6581&fref=repec

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ess:wpaper:id:6581

Access Statistics for this paper

More papers in Working Papers from eSocialSciences
Bibliographic data for series maintained by Padma Prakash ().