Munich Personal RePEc ArchiveFiscal Federalism and Decentralization in IndiaNirvikarSinghauthorThis paper surveys the state of fiscal federalism in India, in the broader context of decentralization. We begin with an overview of the basic features and recent developments in intergovernmental fiscal relations, including the role of political institutions, the specifics of legislative and budgetary autonomy, assignments of expenditure responsibility and revenue authority, revenue collection mechanisms, the system of intergovernmental transfers, and institutions and mechanisms for borrowing by subnational units. We then provide a diagnosis of accountability mechanisms, examining their quality of functioning and distortions and constraints. In particular, we analyze to what extent, and through what mechanisms, lower-level governments are held accountable to higher-level governments, the extent to which policies of subnational governments are affected by the competition for mobile firms, taxpayers, and investment capital, the functioning of credit markets, including the responsiveness of subnational governments to credit ratings and bond yields, and the role of democratic electoral channels at national and subnational levels in providing accountability in the provision of subnational public goods. Next, we review the implications of the intergovernmental system and accountability mechanisms on the cooperation of subnational governments and the quality of service delivery. We examine the resources and capacity of the subnational entities that are responsible for key services such as water, sanitation, education and health care, and the impacts of decentralization on service quality and the distribution of benefits among elected officials, citizens and interest groups. Finally, we offer a concluding assessment with suggestions for reform priorities.P35 - Public EconomicsH2 - Taxation, Subsidies, and RevenueP26 - Political Economy ; Property RightsH7 - State and Local Government ; Intergovernmental RelationsH4 - Publicly Provided GoodsH1 - Structure and Scope of Government2007-01MPRA Paper

Copyright Agreement

1. The author hereby affirms that he or she accepts the editorial guidelines given at https://mpra.ub.uni-muenchen.de/information.html.

2. The author hereby grants to the University Library of the Ludwig-Maximilians-Universität (LMU) a non-exclusive licence to make the electronic version of the uploaded work publicly accessible through the "Munich Personal RePEc Archive" (MPRA) repository. This licence includes abstracts and metadata and is valid for the duration of the statutory protection period, without territorial limitation. The licence furthermore includes the right to replicate the work as required, especially for the purposes of including the work and/or abstracts and metadata in electronic databases and of employing digital or other transmission technology to make this data available to large numbers of users, using either services invoked by user request or services initiated by the repository, and encompassing all forms of transmission (cable, wireless, satellite etc.) and protocol (TCP/IP, http, ftp etc.).

3. This contract entitles the University Library to transfer the licence granted herein either partially or wholly to a third party and to grant non-exclusive rights to other repositories without requiring the authors explicit permission.

4. The author hereby affirms that no third-party rights are infringed by the electronic publication of the work and undertakes to indemnify the University Library of the LMU against any third-party claims relating to the infringement of copyright legislation or exclusive usage rights which may result from the publication of the work through the University Library repository. The author hereby undertakes to reimburse any charges resulting from a rights infringement caused by him or her.

5. In the event that the author is not the sole author of the work in question, he/she hereby declares that he/she has been empowered by his/her co-authors to grant the above-mentioned usage licence.

6. In the event that the person who is uploading the work in question is not the author of this work, he/she hereby declares that he/she has been empowered by the author(s) to grant the above-mentioned usage licence.

7. The author continues to retain the usage rights to his or her work and may also bestow these rights elsewhere provided this does not curtail the rights granted to the University Library of the LMU in this declaration.

Clicking on the deposit button below indicates your agreement to these terms.

As the submission cannot be modified once it is accepted, please submit only if you are absolutely sure that no further changes are needed. Otherwise select the "Save for Later" button and review your submission. By doing so, nothing you have entered will be lost and you can resume your submission any time in the future.