An autonomous research institute under the Ministry of Finance


Fiscal Federalism, Expenditure Assignments and Gender Equality

Publication date

Mar, 2021


NIPFP Working Paper No. 334


Lekha Chakraborty


We analyse the theoretical and empirical constructs of federal fiscal relations and present a roadmap to integrate gender in fiscal federalism. Applying an “equally distributed equivalent” methodology, gender equality is measured for this purpose. This also involves an analysis of the institutional space through a  “gender lens”, especially in the tax and expenditure assignments as well as the intergovernmental fiscal transfers. We arrive at the following four inferences. One, fiscal federalism, theoretically, is neither good nor bad for gender equality. The impact of fiscal federalism on gender equality outcomes depend on the interface between institutional design and intergovernmental fiscal transfers. Two, with the progress of federal governance and fiscal decentralization, significant expenditure assignments that are important for gender equality including health care, labour and education are given importance in the gender budgeting design. Three, the fiscal allocations relate to eliminating the statistical invisibility of unmonetised care economy labour that may promote women’s economic empowerment need further emphasis. Four, the system of taxation and tax policy design are relevant to gender equality. However, evidence suggests that differential tax system and tax exemptions cannot correct gender inequalities. Five, in addition to integrating gender criteria in the tax-transfer formula, the fiscal federalism arrangements such as specific-purpose grants to subnational governments can promote gender equality. 
Keywords: Fiscal federalism, gender equality, intergovernmental fiscal transfers 
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