An autonomous research institute under the Ministry of Finance

 

Ongoing projects

Fiscal Federalism in Global South

  • Start date Aug., 2019
  • Completion date Dec., 2021
  • Sponsor Bill and Melinda Gates Foundation under the Innovation in Public Finance project
  • Project leader Lekha Chakraborty
  • Consultants/Other authors Gurleen Kaur, Amandeep Kaur, Jannet Farida Jacob, Anindita Ghosh, Divy Rangan
  • Focus

    Preparation of conference proceedings of Federalism in Global South. The fiscal federalism – revenue assignment, expenditure assignment, intergovernmental fiscal transfers - of Kenya, Ethiopia, South Africa, Nepal and India are discussed in this project.


Public Finance for Children: State-level Analysis of Gujarat, Odisha, Karnataka, Telangana

  • Start date Aug., 2019
  • Completion date Dec., 2021
  • Sponsor Bill and Melinda Gates Foundation under the Innovation in Public Finance project
  • Project leader Lekha Chakraborty and Amandeep Kaur (with Anindita Ghosh (till December 2020) and Jannet Farida Jacob)
  • Focus
    Around 60 per cent of school-age children are now in the category termed as ‘effectively out-of-school’. They are deprived of education due to the ‘digital divide’ (lack of access to internet) — a situation that has emerged because of the pandemic. 
    In this study, we explore child budgeting in the specific context of India’s Central and sub-national government responses to the pandemic, with a focus on the states of Karnataka, Gujarat, Odisha and Telangana. The inferences from our study on child budgeting of these specific states will help the Ministry of Finance to strengthen child budgeting as a public financial management tool for accountability, at the Central and state government levels.
     

Environmental/Ecological Fiscal Transfers

  • Start date Aug., 2019
  • Completion date Aug., 2021
  • Sponsor Self-initiated
  • Project leader Lekha Chakraborty, Amandeep Kaur, Divy Rangan
  • Focus

    Against the backdrop of the Covid-19 pandemic, the paper explores the empirical evidence for flypaper effects in the ecological fiscal space in India. Using the panel data models, we analyse whether the impact of intergovernmental fiscal transfers or state’s own revenue determines the expenditure commitments on ecology at the state level. The econometric analysis shows that the aggregate intergovernmental fiscal transfers rather than state’s own income determines the ecological expenditure at sub-national government levels. The evidence for the efficacy of flypaper effects either stem from bureaucratic fiscal behaviour or the fiscal illusion of the economic agents about the exogeneity of ecological fiscal space. The results hold, when the models are controlled for ecological outcomes and demographic variables. However, at the disaggregated levels of intergovernmental fiscal transfers - grants and tax devolution - the evidence for flypaper effects is mixed. This result has policy implications and provides empirical evidence to Ministry to Finance about the efficacy of intergovernmental transfers on ecological expenditure at the state government level. 


Fiscal Policy for the Unpaid Care Economy

  • Start date Feb., 2019
  • Completion date Dec., 2021
  • Sponsor Self-initiative (research collaboration with American University, Washington DC)
  • Project leader Lekha Chakraborty
  • Focus

    The statistical invisibility of the care economy is a matter of concern. The time use survey published by the National Statistical Office in 2020 for all states is an innovative dataset to understand the economic activities under the Systems of National Accounts, 1993, which extended the production boundary to incorporate the household and societal levels of unpaid economic activities. These inferences have policy implications for gender budgeting. The paper will provide analytical backup (on the care economy) to the ongoing gender budgeting initiatives by the Ministry of Finance. 


Seeds of Labour (Dis)Contentment in India

  • Start date May, 2020
  • Sponsor Self-initiated
  • Project leader Mukesh Anand and Rahul Chakraborty
  • Focus

    A higher rate of (effective) tax on employees’ compensation (return to labour) than on operating surplus (return to composite capital) not only affects labour demand adversely, but also reinforces the nudge to deepen capital. Moreover, a narrow applicability of the recent amendments to the Minimum Wage Act 1948 unhinges the wage expectation of workers and adversely affects labour supply. To facilitate stable growth of GDP in accordance with competitive advantage, this paper suggests (a) rebalancing the tax arena that currently favours value addition from capital to that from labour, (b) eliminating labour-input thresholds to enforce laws and smoothen labour demand schedule, and (c) rationalizing the procedure for right-sizing the minimum remuneration to anchor wage expectations and promote labour supply.