The Norm and the Tilt: First Report of the Finance Commission

This paper evaluates the Ninth Finance Commission's award for 1989-90 in the plan framework, i e, in terms of the contribution of its transfers to plan financing in the 14 major states. The commission's scheme is shown to be regressive because of a priori entitlement-based tax-sharing exac...

Full description

Saved in:
Bibliographic Details
Published in:Economic and political weekly 1989-01, Vol.24 (2), p.86-94
Main Author: Guhan, S.
Format: Article
Language:English
Subjects:
Estimated taxes
Excise taxes
Grants
Income taxes
Normativity
Receipts
Revenue
Special Articles
State income tax
Surplus
Taxes
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper evaluates the Ninth Finance Commission's award for 1989-90 in the plan framework, i e, in terms of the contribution of its transfers to plan financing in the 14 major states. The commission's scheme is shown to be regressive because of a priori entitlement-based tax-sharing exacerbated by the commission's specific grants which are tilted toward middle- and high-income surplus states. The paper argues that the commission's approach to its main award for 1990-95 and its target of phasing out revenue deficits at all levels by 1994-95 are bound to adversely affect equity, welfare and growth. It then outlines the elements of an integrated normative approach to non-plan and plan financing in the states' revenue account.
ISSN:0012-9976
2349-8846