Gender budgeting is a public financial management (PFM) tool for transparency and accountability. Against the backdrop of covid-19 pandemic, this paper analyses the Union Budget 2021-22 through a “gender lens” to understand the intensity of gender in the budgetary allocations. The analysis of specifically targeted programmes for women and the intrinsic gender components in the mainstream spending revealed that the gen-der budgeting hovered around only 5 per cent of total budget. The sectoral analysis re-vealed that higher budgetary allocations per se do not ensure higher spending. The analy-sis of fiscal marksmanship – the deviation between what is budgeted and what is actual – revealed significant fiscal slippages in various sectoral spending. The economic stimulus package in India has given significance to gender budgeting in energy infrastructure and increased allocation on gender budgeting in a prima facie gender neutral ministry like Petroleum is welcome. However, the framework of gender budgeting as a PFM tool can be explored further to ensure sustainable gender equality outcomes, when economic stimulus packages are short run and there is fiscal normalization procedure. Given the accommodative fiscal stance in times of pandemic, reflected in the flexibility of deficit thresholds, prioritization of spending on gender budgeting can lessen widening inequalities. 

In this paper we have used our recently updated Factor Augmented Time Varying Coefficients Regression (FA-TVCR) model (Bhattacharya, Chakravartti and Mundle, 2019; Bhattacharya, Bhandari and Mundle 2021) to nowcast GDP growth for 2021–22 and forecast it for the year 2022-23. Our GDP growth nowcast for 2021-22 is 9.9 per cent, somewhat higher than the RBI projection of 9.5 per cent. The forecast for 2022-23 is 5.2 per cent. Factoring in an inflation rate of 5 per cent, this would translate to a nominal GDP growth rate of 10.2 per cent which is lower than the RBI projection of 12.3-13 percent but slightly higher than the 15th Finance Commission projection of 9.5 percent.

In this paper we consider an n-player simultaneous move game on a fixed network, in which each player chooses her investment level in each of m goods that are non-rivalrous and non-excludable across links in the network. We analyze the existence, stability and welfare properties of PSNEs of the game. Our results demonstrate that while every game necessarily has a specialized equilibrium, the stability of equilibrium profiles and the existence of specialized equilibria in which specialization is dispersed depend crucially on the network structure. We also provide some interesting welfare implications relating to concentration of specialization.

We present a welfare framework to evaluate the market effects of financial education interventions. Using this framework, we assess a new product-specific rules of thumb-driven consumer financial education program provided just before purchase decisions. While our intervention improves knowledge and outcomes for newly-educated consumers, it is a Pareto-improvement only under a narrow set of conditions, as are other interventions in the literature. Our findings suggest that positive treatment effects for a small fraction of consumers may come at the cost of other uninformed consumers in retail financial markets, making positive effects necessary but not sufficient to adopt financial education policies.

India was the first to integrate climate change criterion in the inter-governmental fiscal transfers. This analysis suggests that climate change criterion in the intergovernmental fiscal transfer mechanism in India is a significant step to incentivise the conservation of forests. However, the macropolicy channel of this link is through the public expenditure priorities related to climate change commitments by the state governments, to make a “just transition” towards a sustainable climate-resilent economy.

Extraordinary times require extraordinary policy responses. Against the backdrop of macroeconomic uncertainty due to the CoVID-19 pandemic, the union finance minister has announced a high fiscal deficit of 9.5% of gross domestic product (GDP) in revised estimates (RE) 2020–21. This is against the pegged deficit of 3.5% in budget estimates (BE) 2020–21. Simultaneously, the finance minister has also announced an excessive deficit procedure to bring down the high fiscal deficit to 4.5% of the GDP by financial year (FY) 2026. High deficit has no fiscal costs if it can be substantiated with increased public investment or “output gap” reduction. When the monetary policy stance has limitations in triggering growth through liquidity infusion and the status quo policy rates, “fiscal dominance” is crucial for sustained growth recovery.

The imposition of a nation-wide lockdown in India in response to the novel COVID-19 pandemic has appropriately been lauded as an effective pre-emptive strategy. However, a distressing pitfall has been the massive ‘reverse migration’ of migrant workers from the destination centres in an attempt to escape starvation brought on by sudden collapse of employment and lack of effective social protection mechanisms. The pandemic has brought to the forefront of policy discussions not only the immediate issues of this particularly vulnerable group but also the broader issues pertaining to their identification and informal employment conditions. Within the migrant workers, the inter-state migrant workers have been especially affected due to non-portability of entitlements. This paper aims to analyse the migration trends on the basis of available data from the Census of India 2001 and 2011 and to critically examine the current Public policies (Union and state governments) to address the new emerging challenges – provision of immediate relief to migrants, employment generation in source centres to sustain the in-migration and incentivising the ‘city makers’ to return to the destination centres. The paper, further, attempts to assess the issues of sufficiency and feasibility of the public policies in this regard.

The objective of this paper is to empirically address the question of Centre-State relation in financing elementary education.  The idea of financial concurrency in financing education and the experience of various centrally sponsored schemes provides the historical context for the analysis. The empirical question focuses on the impact of SSA’s central grants on States’ spending behaviour. Is the relationship complementary or substitutionary? The paper also explores the impact of the 13th Finance Commission’s grants for elementary education.  The results indicate that the central grants for SSA (and the 13th FC grants) has a complementary impact on State’s spending, though the incremental effect varies across states. The results are particularly pertinent for the 16 focus States, which have large additional financial requirements. It is important to restore financial concurrency between the Centre and the States, for universalization of elementary education of an equitable quality, a task that is far from over. We also argue for a specific purpose grant by the 15th Finance Commission based on equalisation principle.

The current phase of the National Health Mission is scheduled to end by 2021, and the next phase of the scheme is around the corner. This paper undertakes an analysis of the contributions of the scheme in health spending of States, and highlights specific factors affecting them. The analysis suggests that the scheme contributed to reduction of inequality in health spending across states and added funds to the lower tiers of the health pyramid. The contribution of the scheme was however, limited in strengthening health systems in relatively poor performing ‘high-focus’ states. Lack of complementary inputs in states, capacity issues and weak public financial management affected the performance of the scheme. The paper throws light on some of the issues that need attention in the next phase of the scheme. 

The macroeconomic uncertainty created by COVID-19 is hard to measure. The situation demands simultaneous policy intervention in terms of public health infrastructure and livelihood. Along with the global community, India too has announced its initial dose of fiscal and monetary policy responses. However, more fiscal–monetary policy coordination is required to scale up the policy response to the emerging crisis. Innovative sources of financing the deficit, including money financing of fiscal programmes, a variant of “helicopter money,” need to be explored.

Launching an “excessive deficit procedure” in India is inevitable for growth revival. This is crucial especially when there is considerable ambiguity about why the “escape clause” was invoked in the Union Budget 2020 - whether to meet the shortfall in tax revenue emanating from the unanticipated fiscal outcomes of structural reforms or to boost the capital formation in the economy.

Karnataka is the first state in India to have introduced a fiscal rules framework, even before the central government had enacted the Fiscal Responsibility and Budget Management (FRBM) Act, 2003. The Karnataka Fiscal Responsibility Act was enacted in 2002. Karnataka is consistently fiscally-prudent with its revenue deficit-to-GSDP ratio reducing to near-zero and the fiscal deficit-to-GSDP ratio below 3%. How the state has achieved fiscal prudence? Is it through revenue buoyancy or through expenditure compression? Our analysis shows that the tax-to-GSDP ratio of the state is not increasing and it is around 7% of GSDP. As around 70% of state finances come from own revenue resources, has the declining buoyancy in “own revenue” prompted the state to go for selective expenditure compression to maintain fiscal prudence? Examining the expenditure side, we found that the state has compressed its capital expenditure and marginally decreased its spending on education and social welfare and nutrition. This has its ramification on the outcomes of education, on the one hand, in terms of declining enrolment at the primary level and increasing dropout rates in secondary level, and on the other hand, rendering Karnataka as one of the most vulnerable states in terms of nutrition (anthropometric) indicators. There seems to be a shift in the focus of public spending from education and health to water and sanitation, within the social sector budget. At this juncture, it is intriguing that the state, with comfortable levels of fiscal consolidation since 2005, has resorted to heavy off-budget borrowing to finance state programmes.  This has added to the already increasing ratio of interest payment to own revenue receipt, albeit off budget borrowing being hardly one percent of GSDP. The fiscal marksmanship analysis showed systematic bias in the forecasting of own tax revenue, grants and capital expenditure. This calls for the reduction in the volatility of intergovernmental fiscal transfers to the state as well as improving the assumptions and forecasting methodologies of the macro-fiscal variables like own tax revenue and capital spending.