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Impact of Intergovernmental Fiscal Transfers on Gender Equality in India: An Empirical Analysis

Author

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  • Stotsky, Janet G.

    (American University)

  • Chakraborty, Lekha

    (National Institute of Public Finance and Policy)

  • Gandhi, Piyush

    (Oxford University)

Abstract

Intergovernmental fiscal transfers (IGFT) are, in theory, neither good nor bad for tackling gender inequalities. Fiscal federalism with asymmetry in revenue and expenditure assignments inevitably leads to vertical and horizontal imbalances in public service provisioning. Intergovernmental transfers can play a role in equalization of fis-cal capacities because the states of India have different tax raising capacities and ca-pacities for funding public expenditure. Do higher per capita fiscal transfers help in reducing gender inequalities across states in India? Using data from the Finance Accounts of various states, we analyse the impact of fiscal transfers - both conditional and unconditional fiscal transfers - on the gender parity index in education, using panel data models. We find that unconditional transfers have a significant and positive impact on gender parity outcomes in the education sector at the primary and secondary levels, in contrast to tied transfers. The models also control for gender budgeting initiatives across states and find that gender budgeting has a beneficial effect on education equality. The policy implication of these results for the recently constituted Fifteenth Finance Commission in India is to strengthen the gender equality criteria in intergovernmental transfers in India.

Suggested Citation

  • Stotsky, Janet G. & Chakraborty, Lekha & Gandhi, Piyush, 2018. "Impact of Intergovernmental Fiscal Transfers on Gender Equality in India: An Empirical Analysis," Working Papers 18/240, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:18/240
    Note: Working Paper 240, 2018
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    Cited by:

    1. Chakraborty, Lekha, 2021. "Fiscal Federalism, Expenditure Assignments and Gender Equality," Working Papers 21/334, National Institute of Public Finance and Policy.
    2. Chakraborty, Lekha S, 2021. "Fiscal Federalism, Expenditure Assignments and Gender Equality," MPRA Paper 111949, University Library of Munich, Germany.
    3. Chakraborty, Lekha & Nayyar, Veena & Jain, Komal, 2019. "The Political Economy of Gender Budgeting: Empirical Evidence from India," Working Papers 19/256, National Institute of Public Finance and Policy.
    4. Krishnan, Supriya & Patnaik, Ila, 2018. "Health and Disaster Risk Management in India," Working Papers 18/241, National Institute of Public Finance and Policy.
    5. Sidra Naeem & Rana Ejaz Ali Khan, 2021. "Fiscal Decentralization and Gender Equality in Developing Economies: Dynamics of Income Groups in Economies and Corruption," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(9), pages 745-761, September.
    6. Bailey, Rishab & Parsheera, Smriti, 2018. "Data localisation in India: Questioning the means and ends," Working Papers 18/242, National Institute of Public Finance and Policy.

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    More about this item

    Keywords

    intergovernmental fiscal transfers (IGFT) ; gender equality ; fiscal federalism ; gender budgeting ; panel data;
    All these keywords.

    JEL classification:

    • H00 - Public Economics - - General - - - General
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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