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'Engendering' Intergovernmental Transfers: Is There a Case for Gender-sensitive Horizontal Fiscal Equalization?

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  • Abhishek Anand
  • Lekha S. Chakraborty

Abstract

This paper seeks to evaluate whether a gender-sensitive formula for the inter se devolution of union taxes to the states makes the process more progressive. We have used the state-specific child sex ratio (the number of females per thousand males in the age group 0-6 years) as one of the criteria for the tax devolution. The composite devolution formula as constructed provides maximum rewards to the state with the most favorable child-sex ratio, and the rewards progressively decline along with the declining sex ratio. In this formulation, the state with the most unfavorable child-sex ratio is penalized the most in terms of its share in the horizontal devolution. It is observed that the inclusion of gender criteria makes the intergovernmental fiscal transfers formula more equitable across states. This is not surprising given the monotonic decline in the sex ratio in some of the most high-income states in India.

Suggested Citation

  • 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.
    • Handle: RePEc:lev:wrkpap:wp_874
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    References listed on IDEAS

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    1. Le, Tuan Minh & Moreno-Dodson, Blanca & Bayraktar, Nihal, 2012. "Tax capacity and tax effort : extended cross-country analysis from 1994 to 2009," Policy Research Working Paper Series 6252, The World Bank.
    2. Singh, Nirvikar & Srinivasan, T.N., 2006. "Federalism and economic development in India: An assessment," MPRA Paper 12452, University Library of Munich, Germany, revised Aug 2008.
    3. 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.
    4. Nihal Bayraktar & Tuan Minh Le & Blanca Moreno-Dodson, 2012. "Tax Capacity and Tax Effort: Extended Cross-Country Analysis from 1994 to 2009," EcoMod2012 3858, EcoMod.
    5. Garg, Sandya & Ashima Goyal & Rupayan Pal, 2014. "Why tax effort falls short of capacity in Indian states: A Stochastic frontier approach," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2014-032, Indira Gandhi Institute of Development Research, Mumbai, India.
    6. M. Govinda Rao, 2003. "Incentivizing Fiscal Transfers in the Indian Federation," Publius: The Journal of Federalism, CSF Associates Inc., vol. 33(4), pages 43-62, Fall.
    Full references (including those not matched with items on IDEAS)

    Citations

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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. 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.
    5. Singh, Yadawendra & Chakraborty, Lekha, 2024. "Tax Transfers and Demographic Transition: Empirical Evidence for 16th Finance Commission," Working Papers 24/417, National Institute of Public Finance and Policy.
    6. Chakraborty, Lekha, 2024. "Gender Budgeting: Public Financial Management Tool for Accountability," Working Papers 24/409, National Institute of Public Finance and Policy.
    7. Chakraborty, Lekha S, 2018. "Analysing Justice Verma Committee’s “Bill of Rights”: Gender Budgeting in Law and Order," MPRA Paper 77226, University Library of Munich, Germany, revised 2016.

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    More about this item

    Keywords

    Fiscal Devolution; Gender; Equity; Intergovernmental Transfers;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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