The National Institute of Public Finance and Policy, New Delhi, in partnership with the Wold Bank is organising the first edition of STATE FORUM during 2-3 November 2023 at NIPFP, New Delhi.

This paper presents a preliminary assessment of the nature and extent of the financial impact of the mitigation policies centred on deep decarbonization of India’s electricity sector on the budget deficits of the states with relatively low endowments of solar and wind power. The impact could be quite substantial, adding 8.66% to the combined deficits of the VRE poor states under fairly conservative assumptions. The impact is most severe on the three coal-rich states of Jharkhand, Odisha and Chhattisgarh. Absent an acceptable framework for an equitable sharing of costs and benefits across the states and with the centre, these developments could impede the realization of the national goals for climate change mitigation. India’s ambitious targets call for a  deep decarbonization of the electricity sector through an accelerated deployment of renewable energy and reduced use of coal. This could exacerbate existing regional inequalities, between the states in the west and the south and those in the north and east. While variable renewable energy (VRE) sources namely, solar and wind are concentrated in a few states in the western and southern parts of the country, coal reserves occur mainly in the eastern part that also happen to have the lowest VRE endowments. As the share of VRE in electricity production and consumption rises, these locational characteristics and the dominant role of state  ownership in the electricity sector together play into the finances of the VRE poor states through higher expenditure and lower revenues.

The National Institute of Public Finance and Policy (NIPFP) cordially invites you for discussion on "How India is doing?” August 11, 2023 at NIPFP. Kindly refer to the flyer for details. Please send your confirmation of participation to rudrani.bhattacharya@nipfp.org.in and kavita.issar@nipfp.org.in.

https://www.youtube.com/watch?v=J1wF5BCS6Lk

Gurbachan Singh is visiting professor at Department of Economics, Ashoka University. He was previously visiting the Indian Statistical Institute (ISI), Delhi Centre. Earlier, he was in Jawaharlal Nehru University (JNU). He received his PhD from ISI, Delhi Centre, and MA from Delhi School of Economics. His main teaching is on a post-graduate elective course on Finance and Volatility. He writes a regular column for Business Standard. He has previously contributed significantly to the portal, Ideas for India. His research is primarily on macro-financial stability. The work is in simple theory to explain the difficult real world and to find policy solutions. 

The central bank faces a trade-off while using its interest rate policy for the purpose of macroeconomic stability. So, the policy is not very effective. Also,the prevailing interest rate policy includes a quasi tax-subsidy scheme. In, say, a recession when the central bank lowers the interest rate it gives a quasi subsidy to borrowers and it imposes a quasi tax on savers. So, the policy is redistributive. Also, the changes in interest rates affect asset prices. So, ceteris paribus, it has adverse side-effects for asset price stability (this can, in turn, affect banking stability as well e.g. the recent Silicon Valley Bank case in the US). So, the prevailing policy is also blunt besides being non-transparent. Is it possible to have an alternative interest rate policy that is effective, transparent and well-targeted? Yes.

V. Srinivas (IAS) is presently Secretary, Ministry of Personnel, Public Grievances and Pensions. Previously, he served as Advisor to Executive Director (India) in the International Monetary Fund, Washington DC, from 2003-2006.

To relieve the pressure on the outdated international corporate tax system, an ambitious reform was agreed at the Inclusive Framework (IF) on Base Erosion and Profit Shifting in 2021, with now 138 jurisdictions joining. It complements previous efforts to mitigate profit shifting by addressing the challenges of the digitalization of the economy through a new allocation of taxing rights to market economies (Pillar 1) and tax competition through a global minimum corporate tax (Pillar 2). This paper concludes that the agreement makes the international tax system more robust to tax spillovers, better equipped to address digitalization, and modestly raises global tax revenues. Implementation of the agreement requires an active approach by all countries and calls for rethinking domestic policy. The international tax framework will likely continue to evolve beyond the IF agreement by responding to emerging challenges and pressures from fiscal spillovers.

The National Institute of Public Finance and Policy (NIPFP) is organizing a conference on Consumer Protection and Grievance Redress in Financial Markets. The objective of the Conference is to bring together researchers, policy practitioners, and industry experts in the consumer protection space

Anwita Mahajan is a Ph.D. student at Georgetown University. After receiving her B.A. in Economics from Dartmouth College, she worked with Professor Jonathan Gruber at Massachusetts Institute of Technology on microsimulation of health policy in India.  Anwita has a publication in the Journal of the American Medical Association on the effects of managed care organizations on physician outcomes. She has works in progress in the fields of health economics, labor economics and public finance. She has taught undergraduate Statistics and been teaching assistant for several courses.

The Congressional Budget Office estimates that a rise in income from a minimum wage increase will make some low wage workers ineligible for welfare benefits and reduce welfare participation. On the other hand, a minimum wage increase will result in unemployment for some workers who will begin participating in welfare. Overall, they estimate a net increase in government expenditure on Medicaid (Health Insurance) solely from the newly unemployed workers and a reduction in expenditure on SNAP (Food Stamps). I use the Survey of Income and Program Participation to empirically examine how state level minimum wage increases between 2013 and 2016 affect participation in Medicaid and SNAP. From my preliminary findings, I suggest that welfare exits after a minimum wage increase are negligible and welfare take up might increase even amongst employed workers. I examine the extent of income gains from a minimum wage increase and adjustment behavior by firms as potential explanations for these findings. I also suggest that some welfare programs are stickier than others, and that these findings have implications on optimal policy design and policy coordination.

The workshop includes presentations and discussions on how and why households access credit markets, how firms are accessing credit markets, what has been the change in firm financing over the last few years and how are central and state governments accessing credit markets.

Colonel Pankaj Dikshit has rich and varied experience in the domain of technology driven strategic digital transformations at the national level. He majored in Computer Tech from IIT Delhi and over the course of two decades has designed technology solutions for transforming and digitizing the Army’s messaging and communication systems. He led the GST System program implementation including important rollouts such as the e-invoice, national e-Way Bill system and RFID based vehicle movement tracking through the national highway tolls. He has also created GST-centric eco-systems with the leading fintech companies of India like the GSP eco system and the e-invoice IRP eco-system. Previously, he worked in IBM India and since 2015 is with the GSTN as the Senior Vice President and on the academic side, he has submitted his thesis for a doctorate from IIT Delhi.

This research studies the largest e-governance initiative of India that used a single information system to transform its taxation system. The study assesses the success of the Goods and Service Tax (GST) e-governance information system using the DeLone and McLean model. The model is also expanded to assess this very large and transformative reform from the perspective of policy intervention by the government and to examine the induction of technostress on users. The structural equation modelling (SEM) technique is used to analyse the responses of 937 companies. The findings demonstrate the acceptance and success of this gigantic reform, validating that frequent policy intervention positively contributed to the successful rollout. The research finds that service quality had the least influence in the use of the e-government system and also studies whether the swift transformation triggered technostress factors in users of the system. 

NIPFP is organising a two-weeks training program for officials of Govt. of Bangladesh from 21st March to 1st April, 2022. Lectures will be held in-person in the classroom (R&T Building) 

Farm debt waivers which are meant to be a one-time settlement of loans have become common in India. This paper finds that the timing of waiver announcements by state governments between 2001-02 and 2018-19 is associated with the timing of elections after controlling for variables related to farming distress. This points towards a pattern of policy manipulation that suggests election-year targeting of the largest special interest group in India, namely farming households. The waivers, either announced prior to elections by incumbent governments or election pledges which are fulfilled after the election win, are unanticipated shocks to government revenue expenditure. We find that the waivers are associated with an increased revenue deficit, which is accommodated by a nearly 1/3rd cut in capital outlay to control the fiscal deficit, given the fiscal rule. Given its path dependence, lower capital expenditure also reduces the quality of government spending in subsequent years.  

Chinmay N Korgaonkar belongs to the 2010 batch of Indian Revenue Service (Income Tax). He is currently serving as the faculty at the National Academy of Direct Taxes, Nagpur, the training academy for the IRS (IT) officers. Before joining the academy, he worked in the field offices of the Income tax department, gaining experience in taxpayer services and investigation of tax evasion.

This is a study of tax morale in India. The concept of tax morale or the citizens’ attitude towards tax compliance is vital for the design and implementation of fiscal policy. Tax morale can foster voluntary compliance and hence support the enforcement and deterrence-driven approaches of the tax agencies. However, limited literature regarding the tax morale of Indian citizens is available. The present paper tries to bridge the gap by analyzing the available data for India from the 5 waves of the World Values Survey (1990-2014). Treating tax morale as a dependent variable, this study estimates the factors influencing it. We show that the trust in government, parliament, and civil services positively affects the tax morale of Indian citizens. The correlation between trust in the legal system and tax morale was also positive but not significant. Among the socio-economic variables, education improves the intrinsic motivation of individuals towards tax compliance. Interestingly, the full-time/salaried persons have lower tax morale as compared to the self-employed employees. This finding has important policy implications, given that the full-time/salaried class contributes a significant share of the total taxes paid by the individual taxpayers in India.