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Determining Gender Equity in Fiscal Federalism-- Analytical Issues and Empirical Evidence from India


  • Lekha S. Chakraborty


Despite the policy realm’s growing recognition of fiscal devolution in gender development, there have been relatively few attempts to translate gender commitments into fiscal commitments. This paper aims to engage in this significant debate, focusing on the plausibility of incorporating gender into financial devolution, with the Thirteenth Finance Commission of India as backdrop. Given the disturbing demographics--the monotonous decline in the juvenile sex ratio, especially in some of the prosperous states of India--there can be no valid objection to using Finance Commission transfers for this purpose. A simple method for accomplishing this could be to introduce some weight in favor of the female population of the states in the Commission’s fiscal devolution formula. The message would be even stronger and more appropriate if the population of girl children only--that is, the number of girls in the 0–6 age cohort--is adopted as the basis for determining the states’ relative shares of the amount to be disbursed by applying the allotted weight. A special dispensation for girls would also be justifiable in a scheme of need-based equalization transfers. While social mores cannot be changed by fiscal fiats, particularly when prejudices run deep, a proactive approach by a high constitutional body like the Finance Commission is called for, especially when the prejudices are blatantly oppressive. Indeed, such action is imperative. The intergovernmental transfer system can and should play a role in upholding the right to life for India’s girl children. That being said, it needs to be mentioned that it is not plausible to incorporate more gender variables in the Finance Commission’s already complex transfer formula. In other words, inclusion of a "gender inequality index" in the formula may not result in the intended results, as the variables included in the index may cancel one another out. Accepting the fact that incorporating gender criteria in fiscal devolution could only be the second-best principle for engendering fiscal policy, the paper argues that newfound policy space for the feminization of local governance, coupled with an engendered fiscal devolution to the third tier, can lead to public expenditure decisions that correspond more closely to the revealed preferences ("voice") of women. With the 73rd and 74th constitutional amendments, this policy space is favorable at the local level for conducting gender responsive budgeting.

Suggested Citation

  • Lekha S. Chakraborty, 2010. "Determining Gender Equity in Fiscal Federalism-- Analytical Issues and Empirical Evidence from India," Economics Working Paper Archive wp_590, Levy Economics Institute.
  • Handle: RePEc:lev:wrkpap:wp_590

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    References listed on IDEAS

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    Cited by:

    1. Janet Gale Stotsky, 2016. "Gender Budgeting; Fiscal Context and Current Outcomes," IMF Working Papers 16/149, International Monetary Fund.
    2. Janet Gale Stotsky & Asad Zaman, 2016. "The Influence of Gender Budgeting in Indian States on Gender Inequality and Fiscal Spending," IMF Working Papers 16/227, International Monetary Fund.
    3. Abhishek Anand & Lekha S. Chakraborty, 2016. "'Engendering' Intergovernmental Transfers: Is There a Case for Gender-sensitive Horizontal Fiscal Equalization?," Economics Working Paper Archive wp_874, Levy Economics Institute.
    4. Lekha Chakraborty, 2016. "Asia; A Survey of Gender Budgeting Efforts," IMF Working Papers 16/150, International Monetary Fund.
    5. Chakraborty, Lekha, 2013. "Integrating time in public policy: Any evidence from gender diagnosis and budgeting," Working Papers 13/127, National Institute of Public Finance and Policy.
    6. Janet G Stotsky & Asad Zaman, 2017. "The Influence of Gender Budgeting in Indian States on Gender Inequality and Fiscal Spending," Working Papers id:11587, eSocialSciences.

    More about this item


    Fiscal Decentralization; Federalism; Fiscal Transfers; Gender;

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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