Budgetary Advocacy and Public Finance Management for North-Eastern Region in India

Shrabani Mukherjee (), Vivek Jadhav and Debdulal Thakur
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Shrabani Mukherjee: Associate Professor, Economics, Shiv Nadar University, Chennai
Vivek Jadhav: Ph.D. Scholar, Madras School of Economics, Chennai

Working Papers from Madras School of Economics,Chennai,India

Abstract: Democracy across the world has witnessed the evolution of the electoral This paper analyses the budgetary effectiveness of the northeast states in India by exploring the causality between realised gap in budget estimates with states’ degree of self-reliance, socio-economic and political constancy for a decade period, 2006-07 to 2015-16. There has been a trend in the gap between budgetary estimates. This paper constructs fractionalisation index, polarisation index, effective number of party index to judge the role of the central assistance in the standpoint of fiscal issues and governance accountability at the sub-national level. The panel ordered logistic model claims that the political concentration, ethnic diversity, state’s own revenue capacity play an important role in determining the ineptitude of the states in fiscal management. The provision of states' expenditure tends to be inconclusive with high ethnic diversity or polarization for multiple decision making units which affects the growth pace of the state. The paper claims that the adverse impact is more vibrant in case of planned expenditure which is considered as key to long run development for the states.

Keywords: Public Financial Management; Political Federalism; Fractionalization; Polarization; Ethnic Diversity. (search for similar items in EconPapers)
JEL-codes: E60 H61 H72 P48 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2022-07
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