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Centre-State Spending on Elementary Education: Is it Complementary or Substitutionary?

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  • Bose, Sukanya

    (National Institute of Public Finance and Policy)

  • Bera, Manasi

    (National Institute of Public Finance and Policy)

  • Ghosh, Priyanta

    (National Institute of Public Finance and Policy)

Abstract

The objective of this paper is to empirically address the question of Centre-State relation in financing elementary education. The idea of financial concurrency in financing education and the experience of various centrally sponsored schemes provides the historical context for the analysis. The empirical question focuses on the impact of SSA's central grants on States' spending behaviour. Is the relationship complementary or substitutionary? The paper also explores the impact of the 13th Finance Commission's grants for elementary education. The results indicate that the central grants for SSA (and the 13th FC grants) has a complementary impact on State's spending, though the incremental effect varies across states. The results are particularly pertinent for the 16 focus States, which have large additional financial requirements. It is important to restore financial concurrency between the Centre and the States, for universalization of elementary education of an equitable quality, a task that is far from over. We also argue for a specific purpose grant by the 15th Finance Commission based on equalisation principle.

Suggested Citation

  • Bose, Sukanya & Bera, Manasi & Ghosh, Priyanta, 2020. "Centre-State Spending on Elementary Education: Is it Complementary or Substitutionary?," Working Papers 20/320, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:20/320
    Note: Working Paper 320, 2020
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    References listed on IDEAS

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    2. Amarnath, H.K. & Singh, Alka, 2019. "Impact of Changes in Fiscal Federalism and Fourteenth Finance Commission Recommendations: Scenarios on States Autonomy and Social Sector Priorities," Working Papers 19/257, National Institute of Public Finance and Policy.
    3. Amarnath H. K. & Alka Singh, 2019. "Impact of Changes in Fiscal Federalism and Fourteenth Finance Commission Recommendations Scenarios on States Autonomy and Social Sector Priorities," Working Papers id:13029, eSocialSciences.
    4. Kochar, Anjini & Singh, Kesar & Singh, Sukhwinder, 2009. "Targeting public goods to the poor in a segregated economy: An empirical analysis of central mandates in rural India," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 917-930, August.
    5. Rao, M. Govinda, 2017. "The Effect of Intergovernmental Transfers on Public Services in India," Working Papers 17/218, National Institute of Public Finance and Policy.
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    1. Pandey, Radhika & Sapre, Amey & Sinha, Pramod, 2020. "What do we gain from Seasonal Adjustment of the Indian Index of Industrial Production (IIP)?," Working Papers 20/322, National Institute of Public Finance and Policy.

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