Review of Fiscal Federalism in India
Publication dateJan, 2009
DetailsReport submitted to the Center-State Relations Commission
AuthorsM. Govinda Rao
The project involves preparing a survey article on fiscal federalism in India and identifying areas of reform. The study highlights the policy and institutional shortcomings in Indian fiscal federalism in terms of the assignment system and intergovernmental transfers. Focus areas include impediments to internal trade and allocative distortions, sources of tax and expenditure inefficiency and multiplicity of transferring agencies, poor structure of incentives, and inability of the transfer system to offset disabilities of poorer states.