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Impact of the Recommendations of the 14th FC: Central Transfers and Social Sector Expenditures in the 1st Year

Author

Listed:
  • Choudhury, Mita

    (National Institute of Public Finance and Policy)

  • Mohanty, Ranjan K.

    (National Institute of Public Finance and Policy)

  • Dubey, Jay Dev

    (National Institute of Public Finance and Policy)

Abstract

Recent evidence on the impact of the recommendations of the Fourteenth Finance Commission (FFC) suggests that there has been an increase in Central transfers and social sector expenditures in a number of States in 2015-16, the first year of the FFC award period. We argue that the evidence on gains through Central transfers and increases in social sector expenditures is biased upwards because of two factors. First, much of the gains have been measured with respect to alow base year, and secondly, inferences have been drawn based on comparisons between Actuals and Revised Estimates or Revised Estimates and Budget Estimates. Comparing Revised Estimates for the same years for fifteen major States, we find that Central transfers and expenditures on Social Services as per cent of Gross State Domestic Product (GSDP) are likely to fall in a number of States. Besides, in most States, Social Services have received a lower priority than Economic Services in the first year of the FFC award period.

Suggested Citation

  • Choudhury, Mita & Mohanty, Ranjan K. & Dubey, Jay Dev, 2016. "Impact of the Recommendations of the 14th FC: Central Transfers and Social Sector Expenditures in the 1st Year," Working Papers 16/183, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:16/183
    Note: Working Paper 183, 2016
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    File URL: http://www.nipfp.org.in/media/medialibrary/2016/11/WP_2016_183.pdf
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    Citations

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    Cited by:

    1. Anna A. Mikhaylova & Vladimir V. Klimanov, 2018. "The Model of Budgetary Federalism in India: Similarities and Differences Comparing to Russia," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 1, pages 61-70, February.
    2. Jena, Pratap Ranjan, 2017. "Indian Variant of MTEF: The Scope and Opportunities to Develop an Effective Budget Planning Process," Working Papers 17/185, National Institute of Public Finance and Policy.
    3. Das, Nimai, 2016. "Federal Fiscal Transfers on Health: Implications of Fourteenth Finance Commission Recommendations at Subnational Level," MPRA Paper 79627, University Library of Munich, Germany.

    More about this item

    Keywords

    Fourteenth Finance Commission ; Central Transfers ; Social Sector Expenditures;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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