The study presents the estimate of implicit subsidy at the aggregate (sectoral) level for four sectors mely, drinking water, irrigation, power, and road transport. Specific services in power and road transportation sectors have also been alysed to draw practicable reform directions to the Fince Department, Government of Rajasthan.

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A draft memorandum for submission to the Thirteenth Fince Commission was prepared at the instance of the Government of Punjab.

This study, undertaken for the Tax Research Unit set up at NIPFP by the Department of Revenue, Ministry of Fince, focuses on the exemptions accorded to small scale units within the central excise regime. The objective of the study is to assess the impact of these exemptions on the units. The conclusion drawn first is that while there is agreement on the need for an exemption threshold, the form and level should be based on the ratiole for providing the exemption, and second, the costs to the exchequer of this exemption clearly exceed the benefits derived by the intended beneficiaries, although they might fall short of the benefits derived by all beneficiaries.

The project, funded by Administrative Reform Commission, Government of India, outlines a coherent approach to expenditure magement, with a view to bring about a systemic change in the process of expenditure decision making and control, both at central and state levels so that reforms in various components relating to fincial magement fall in place and reinforce each other within an overarching concept and philosophy. The report contains recommendations on strengthening budgetary process by taking programme-based approach with a multi-year perspective to become more performance-oriented. The report also examines the institutiol aspects relating to budgetary process, fincial magement systems, smooth flow of funds for programmes, interl audit and control systems, exterl audit systems, to recommend suitable reform measures. In this context, strengthening state treasury system through use of information technology for better budgetary control in an integrated fincial magement framework is also emphasised.

Using actual tax receipts up to Dec. 31, 2007, the earlier projections of CT and IT receipts at the end of the FY 2007-08, and the forecast of persol income tax and corporation tax were revised and submitted to the Ministry of Fince.

The report estimates (a) tax collection from petroleum products and tural gas by the central and state governments; and (b) subsidies on individual petroleum products. Petroleum products considered in the study include motor spirit; high speed diesel; aviation turbine fuel; superior kerosene oil; liquefied petroleum gas; phtha; bitumen; compressed tural gas; and liquefied tural gas. The study explicitly examines the tax structure and projects future revenues from taxation of petroleum products and tural gas by the central government and state governments for the year’s upto 2011-12.

This study attempts to design a scheme for transfer of resources from the centre to states to eble them to provide certain minimum standards of health services. Specifically, two altertive approaches are being explored using data from 15 major states in India. The first approach involves estimation of the expenditure requirements according to the physical norms prescribed by the Ministry of Health and Family Welfare along with other policy goals. The second approach attempts to estimate an expenditure function and use it to alyse the differences in the required expenditure of the health sector across states.

The study deals with decentralisation in Sri Lanka primarily with respect to provincial councils, the second tier of government. It examines the pattern of expenditures and their fincing at the provincial level, the assignment of revenue (tax) handles, and the system of intergovernmental transfers in order to provide suggestions for improving the equity and efficiency of the system. It argues for a better defined role of provincial councils in the delivery of services, a more ratiol and predictable system of intergovernmental transfers that constitute the primary source of funds for the provinces, and suggests altertives to the present tax system – particularly with reference to indirect taxation – that would be more efficient. The study does not recommend borrowing powers for provinces at the present juncture owing to fincial weaknesses.

As part of the work for this study, two training programmes for Sri Lankan officials including those from the provincial councils as also from the Fince Commission were conducted at the Institute during November-December, 2007.

The primary objectives of the project were to compute expenditure needs (estimated in the case of Kolkata, but computed in the case of other cities due to lack of data), revenue capacities and come up with fiscal gaps faced by these cities in the provision of core urban services such as water supply, sewerage, sanitation, solid waste, municipal roads, and street lights for all local governments within these urban agglomerations. For estimating revenue capacities, the non-agricultural district domestic products for the districts in which the local governments were located, were used. For computing expenditure needs, standard norms on what is acceptable for expenditure on various public services were used, and gaps between desired and actual expenditure were arrived at. The difference between the actual expenditure gaps and the potential revenue capacity was computed as the fiscal gap. Six reports were submitted to the World Bank for each of the cities -- Kolkata (in June 2007), Delhi, Pune, Hyderabad (in December 2007), Cheni, in addition to a synthesis report (in February 2008).

NIPFP, in collaboration with the American University, Washington DC and University of Kwazulu-tal, South Africa, is part of this multi-country research team and has conducted research on gender dimension of taxation for both direct and indirect taxes in India. Gender dimension of direct tax has been alysed by detailed alysis of the direct tax codes through a gender lens, while for indirect taxes an alysis of household level tax incidence is undertaken.

The Jawaharlal Nehru tiol Urban Renewal Mission (JnNURM) requires cities applying for assistance to lay down a time schedule for implementing the proposed reform agenda. The reform agenda consists of reforms that (i) are to be undertaken by urban local bodies (ULBs), and (ii) those to be undertaken by the state governments. The time schedule (together with the milestones to be achieved) is incorporated in the Memorandum of Agreements (MoAs) which are signed by the state governments, ULBs, and the Ministry of Urban Development.

The work involved assessing progress of the state government in achieving the targets under the FRBM Act in the state of Goa and preparing a medium term fiscal plan for the year 2007-08 to 2010-11.

The Vision statement alludes that the region should usher in peace and prosperity for the region. By 2020, the region should have a per capita income which should at least be equal to the tiol average and poverty should be banished from the region. To achieve these goals, the document puts forth six interdependent components of the strategy mely (empowerment of the people through participatory governce; (ii) focus on rural development through increase in agricultural productivity and creation of non-farm employment opportunities; (iii) development of sectors with comparative advantage; (iv) maximising self governce and participatory planning and diplomatic initiatives to foster trade with neighboring countries; (v) augmenting physical and social infrastructure in the region; and (vi) ensuring adequate flow of resources for infrastructure from the governments and fostering public private partnerships in infrastructure, wherever feasible.

The paper aims to assess the fiscal health of five urban agglomerations (UAs) in India viz. Delhi, Hyderabad, Kolkata, Cheni, and Pune. The main objective of the paper is twofold First, to review the status of revenue generation and expenditure responsibilities of the constituent ULBs. Second, to assess the magnitudes of their fiscal gaps by estimating the expenditure needs and revenue capacities and give some useful recommendations to reduce these gaps. The main findings suggest that excepting five small ULBs in Hyderabad, others are not in a position to cover their expenditure needs through their present revenue collections. All UAs have unutilised potentials for revenue generation with the exception of one UA i.e, Hyderabad. All others would fail to cover their expenditure needs, even if they realise their revenue potentials. In all UAs, except Cheni, bigger corporations are more constrained than the smaller ULBs. The paper recommends better utilisation of ’own revenue’ handles of the cities, by improved administration of property taxes, implementation of other taxes, and collection of user charges.

The objective of this project was to investigate various aspects of tobacco products such as its consumption, effect on health, optimal level of taxation to curb consumption of these harmful products while raising revenue out of these products.

This study at NIPFP discusses various taxes that are imposed on different tobacco products. While alysing the effect of taxation on the consumption of tobacco, the report reflects the affordability index and trend in relative prices of various tobacco products over the years. The study also emphasises the issue of progressivity of the tax structure of tobacco products. It is also clear from the alysis that the tobacco tax structure is somewhat regressive in ture.

The work involved assessing progress of the state government in achieving the targets under the FRBM Act in the state of Harya.

This paper is an attempt to set up a 3-equation structural model for the Indian economy 1987-88 to 2002-03 linking three endogenous variables GDP per capita; life expectancy at birth (LE); and CO2 (Carbon dioxide emissions) with 28 predetermined variables. To overcome the problem of degrees of freedom (undersized samples), the predetermined variables by their principal components are replaced.

The study examined the fiscal decentralisation process through a gender lens in selected five countries; viz., Mexico, Morocco, Philippines, South Africa, and India. The study noted that if the budgetary process is to yield significant benefits for women, gender budgeting in the rrow sense of earmarking a minimum fraction of expenditure of every government department might not be very helpful. Given that most of the public services that concern women or address their needs are by and large delivered at the local level, the first requirement for gender orientation of a government budget is to empower local governments adequately to take care of these concerns, that in turn implies decentralisation in the true sense and not just as a matter of form. While all the countries surveyed have attempted to move in the direction of gender budgeting, progress in the matter of fiscal decentralisation and women’s empowerment has been uneven across countries. The message reflected through these studies is that if gender concerns are to be effectively attended through the budget process, decentralisation in the true form must be followed i.e., without any problems of unfunded mandates and with adequate feminisation of local governce and effective voice in public expenditure decisions.

This project has developed indicators of good governce for the electricity sector that span legislative, executive, and regulatory processes. The indicators have been tested in four Asian countries India, Indonesia, Philippines, and Thailand. The results are being dissemited to intertiol agencies, governments, regulators and civil society. The project is in collaboration with the World Resources Institute (USA), and Prayas-Pune.

Estimation of demand of petroleum products for the period upto 2025. The demand estimates have taken into consideration the substitution of liquid petroleum products by tural gas, CNG, etc. The demand projections reflect a change in the structure of product mix. Demand for high speed diesel and superior kerosene oil is likely to decrease due to high rate of substitution, while demand for aviation turbine fuel is likely to grow at a higher rate. Demand for phtha, liquified petroleum gas, motor spirit and furce oil is likely to follow the trend rate. The study uses multiple correlation forecasting and vector autoregression (VAR) methods for estimating the demand.

The objectives of the study were to develop norms and standards for core civic services comprising safe drinking water, sanitation, including sewerage, road maintence and street lights for urban areas; work out fincial implications of these norms; and study the existing octroi system in the Andaman and Nicobar Islands and filly recommend specific actions for restructuring the invoice-based octroi. The average consumption of water at the time of the survey was 90 litre per capita daily (LPCD). The results of the household survey (desired 130 LPCD) broadly concur with the ideal supply standard (of 135 LPCD) proposed by the tiol Commission on Urbanisation for urban areas. Two scerios for norms regarding PBMC's water supply increase water supply by 50 LPCD; increase water supply by 100 LPCD are considered. If increases in Operations and Maintence and establishment expenditure alone were to be finced by user charges, then the increase required in the user charge is an average increase of Rs.73 per month per household (for an extra 50 LPCD) or an increase of Rs.146 per month per household (for an extra 100 LPCD). The recommendations list five proposals for restructuring octroi. The study team found that all proposals for octroi restructuring yield greater net revenue to the PBMC than its net current revenue (for 2004-05) which was Rs.223 million.

Fourteen years after the mandating of a third tier of government at local level by a constitutiol amendment in 1993, this study reports on how decentralised government is functioning in the rural areas of four states (pre-selected by the terms of the UNDP mandate) Chhattisgarh, Madhya Pradesh, Orissa, and Rajasthan. The report quantifies the present state of functiol devolution from figures of expenditure assignment using Budget Estimates of the four states for the fiscal year 2006-07; fund flows from the centre based on the central budget for fiscal year 2006-07; and the utilisation of these receipts by PRIs, along with own revenues collected and the state of fiscal monitoring, based on a field survey of 780 sample gram panchayats, 78 janpad panchayats, and 17 zilla panchayats. The seventeen districts covered comprise the initial set of nine backward districts pre-selected by UNDP and an additiol eight districts with lower deprivation characteristics.

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The report seeks to assess the problems and identify potential directions for development of the state. It identifies jhum based cultivation as one of the important economic and cultural parameters of the state, and seeks to incorporate implications of the same for developing a strategy. The proposed strategy involves two-pronged approach  i.e. through primary and tertiary sectors. For the primary sector, the suggested approach deals both with organisatiol issues and consolidation of a diverse portfolio of activities. In the tertiary sector, the strength of the state is located in the relatively higher levels of education in the state. The strategy therefore is to encourage development of a health hub in the state, with a vision to cater to the needs of all states in the north east, since these services are rather limited to this region, and Mizoram has the requisite climate and the political atmosphere for such an activity. This would require not just investment in physical infrastructure, but also gradual evolution in markets, especially labour market, for the transition to become effective.

The project aimed to develop a medium-term fiscal policy plan for the period from 2006-07 to 2008-09 with rolling targets for various deficits and stock of state debt. Having alysed the recent trend in Goa State Finces and after examining in detail the FRBM Act of Goa, fiscal restructuring paths with detailed prescriptive targets of revenues and expenditures to adhere to the FRBM targets had been suggested.

The objective was to examine the extent of fiscal space required to carry out a pay revision. Based on plausible assumption of salary hike across scales and group of employees, and future revenues and expenditures, the study examined the fiscal implications of salary hike. The study had also examined the impact of salary hike within MTFP framework of Kartaka Government and the question of fiscal sustaibility thereon.

This programme was designed to eble the GoMP to strengthen performance magement in a sustaible manner for effective poverty reduction and human development. The objective of the programme design was to develop a comprehensive framework for Public Expenditure Magement by devising a Medium Term Expenditure Framework (MTEF) and link it to annual budgets.

This paper provided revised forecasts on CT and IT for FY 2007-08. The revised forecasts are based on actual tax collection upto the end of the third quarter (i.e., upto Dec. 31, 2006) and projection for the fourth quarter.

As part of the annual exercise of forecasting direct tax receipts, this paper provided tax projections for CT and IT for FY 2006-07. The forecasts are based on actual tax collection upto the end of second quarter (i.e., upto September 30, 2006) and projections for the third and fourth quarters.

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The specific objectives of the project are the following six (i) to identify the access and utilisation patterns of microfince programmes across gender; (ii) to alyse the structure of interest rates, loan portfolio, pattern of collateral (if any), frequency of repayment terms, any evidence of Ponzi fince across gender; (iii) to alyse whether ‘peer monitoring’ instead of tangible asset-based collateral ensure better welfare of women borrowers; (iv) to alyse the determints of the Self Help Group formation process and their participatory magement in microfince programme in reducing the transaction costs of both banks and borrowers; (v) to alyse the feedback mechanism of microfince and economic activity, whether microfince is a strategic tool for income generating activities and poverty alleviation; (vi) to alyse whether access to microfince leads to economic empowerment of women through improving the bargaining power of poor women in intrahousehold and societal decision making processes; and (vii) to alyse that the fincial implications of microfince on bank branch business as attaining fincial viability and sustaibility are the two institutiol challenges of microfince programmes.

The methodology adopted is Control Group Methodology through longitudil surveys across six banking zones of India in 12 blocks (out of which 6 are control blocks) to alyse the SGSY, the largest poverty linked microfince programme.

The overall conclusion of the study is that any kind of subsidy targeted at the individual level must be stopped; instead the entire amount of central and state grant must be utilised for the development of human capital, viz., formation of SHG, training. This is based on the empirical evidence that subsidy seemed to be the major motivation factor for SHGs functioning under SGSY; therefore majority of SHGs have not generated economic surplus from their credit led assets. The recovery rate is barely 42 percent. The study emphasised that government machinery must take only a development role and leave credit decisions to banks. The gender lens applied to the study revealed that micro credit is not a pacea for economic underdevelopment; and it has not led to the economic and social empowerment of women in totality.

The project intended to take into account various aspects of development in Sikkim. It successfully locates major gaps in the process and finds out the causes for such gaps. Some constructive recommendations to overcome the difficulties faced by the state to achieve its desired developmental goals are suggested. The study is based on secondary data collected from state and central government documents, followed by extensive surveys in different parts of the state.

The study examines the effectiveness of direct tax administration in India through an econometric model, taking into account the tax collections. It constructs a tax enforcement index treating enforcement as a latent variable through principal component alysis, and attempts policy recommendations for improving the efficiency and effectiveness of tax administration. The paper takes tax rates as given. It does not attempt designing the tax administration; rather focuses only on the effectiveness of tax administration.

Submitted to the Committee to Examine the Impact of Overall Imposts on Petroleum Crude and tural Gas set up in the Ministry of Petroleum and tural Gas, this study takes a comprehensive look at the taxation of upstream petroleum sector as also tural gas starting with a review of the theoretical aspects and selected empirical research. It then focuses on the taxation element in the finces of two tiolised oil companies in the context of the Indian system of taxation of this sub-sector. For reference, it compiles some information on taxation of this sector in several oil-producing tions, and discusses related issues in fiscal federalism. Filly it makes suggestions in regard to possible reforms in the system of taxation of crude petroleum and tural gas.

The report initiated at the behest of the Planning Commission takes stock of the prevailing economic and social conditions in the Andaman and Nicobar islands, and assesses the critical bottlenecks in its development. Based on detailed sectoral alysis, it recommends policy changes and institutiol mechanisms for sustaible development of this ecologically sensitive region. The report makes a number of suggestions in respect of sustaible exploitation of marine products, and high value agricultural and horticulture products; strengthening social infrastructure in keeping with the requirements of the thrust areas; developing physical infrastructure including connectivity between dispersed islands in the union territory, and with mainland India and neighbouring countries; fiscal consolidation and reform; and reducing risk factors by preventing/reducing the negative impact in the event of a tural phenomenon.

The NIPFP jointly coordited this project sponsored by the Asian Development Bank as part of its technical assistance programme. Under this, selective policy oriented research under the overall theme of \"State Government Budget Constraints and Social Services\" was carried out by experts in their respective fields.

The study conducted for the Planning Commission covering the period 1991-2003, alyses the problems and reform issues in state finces. The study provides an alysis of states’ revenue expenditure on public goods, merit goods, non-merit goods and non-goods highlighting changes taking place. The alysis brings out fluctuating ture of the tax revenues and decline in the contribution from non-tax revenues. The alysis concludes that states’ fiscal balance deteriorated sharply from mid-nineties which led to states’ aggregate debt ballooning to constitute over 300 % of its total revenues. This study also presents a comprehensive alysis of central transfers to states. The study makes a number of recommendations for achieving sustained improvement in state finces.

This project was directed at preparing a fiscal responsibility and budget magement bill for Rajasthan, embedded in a larger study of state and municipal finces, so as to eble funding of infrastructure needs of the state while at the same time preserving the fiscal correction path projected in the Bill.

The objective of this workshop was to identify and arrive at policy recommendations to overcome various constraints to implementation of the recently ected tiol Rural Employment Guarantee Act. A group consisting of academicians, policymakers and executive authorities from the central and state governments and ground level activists participated in this workshop. A report titled, Implementation Issues of tiol Rural Employment Guarantee Act has been subsequently submitted to the Administrative Reforms Commission.

Prima facie, budgets appear to be gender neutral. But the budgetary policies can have differential impacts on men and women due to systemic differences in their access to public services. Gender budgeting aims at examining the expenditure allocation through a gender lens. The project critically examines the approach and methodology of sensitising fincial allocations through gender budgeting initiatives in India. The alysis revealed that visible gender allocations in the recent budget — both specifically targeted programmes for women and pro-women allocations — constituted only 5 percent of the total budget; sectoral alysis revealed that higher budgetary allocations per se do not mean higher spending; there exist significant deviations in budget estimates and actual spending. Expenditure tracking surveys are required to alyse these deviations. There is also an urgent need to strengthen the system of unit cost and units utilised across gender to undertake periodic gender disaggregated benefit incidence alysis (BIA) to alyse impact of skewed gender differentials in the distributiol impacts of public expenditure. Policy implications arising from the alyses are that transparency of gender sensitive budgetary allocations needs to be ensured for accountability; however, earmarking public expenditure for women is only the second best principle of gender budgeting.

This research study examined the costs of providing urban infrastructure services. The margil costs of providing water supply are estimated, using data from several cities of India. The findings suggest that the supply of every additiol kilolitre of water imposes extra burden on the cities in the Rs. 2.62 to Rs. 5.05 range, as margil operating costs. Even based on these short-run margil cost estimates, some Indian cities such as, Jaipur and Pune, are found to be undercharging their water. As far as the other urban services are concerned, cities’ per capita expenditure on basic services such as street lights and toilets appeared to be abysmally low, let alone adequate, in any sense, to meet the demands of an increasing population. The study finds weak municipal finces still the core of the issue.