Dependence of States on Central Transfers: Aggregate and State-wise Analysis

D K Srivastava () and C Bhujanga Rao ()
Additional contact information
D K Srivastava: Madras School of Economics
C Bhujanga Rao: Madras School of Economics

Working Papers from Madras School of Economics,Chennai,India

Abstract: This paper examines the dependence of states on central fiscal transfers. It particularly focuses on the role of transfers through tax devolution under the recommendation of the Finance Commissions. The analysis of dependence is then extended to total transfers that are given in the form of share in central taxes, Finance Commission grants, plan grants and other grants. The analysis with respect to states covers the period 1950-51 to 2007-08. In addition, pattern of dependence of states on central transfers is also studied with respect to five groups of states, namely, high, middle and low income general category states and two groups of special category states. The analysis covers the period from 1990-91 to 2007-08. We find that the dependence of the states on their share in central taxes has increased both because of high buoyancy of total central taxes and a progressive increase in their share recommended by successive Finance Commissions. In terms of groups of states, the extent of dependence is relatively quite high for the special category states.

Keywords: Central Transfers; Tax Devolution (search for similar items in EconPapers)
JEL-codes: H11 H77 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2011-08
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.mse.ac.in/wp-content/uploads/2016/09/Working-Paper-59.pdf (application/pdf)

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:mad:wpaper:2011-059

Access Statistics for this paper

More papers in Working Papers from Madras School of Economics,Chennai,India Contact information at EDIRC.
Bibliographic data for series maintained by Geetha G ().