Rao, M. Govinda and Choudhury, Mita and Anand, Mukesh (2005): Resource Devolution from the Centre to States: Enhancing the Revenue Capacity of States for Implementation of Essential Health Interventions. Published in: NCMH Background Papers-Health Systems in India: Delivery and Financing of Services (September 2005): pp. 297-318.
Download (533kB) | Preview
Access to adequate health care services is an important component of empowering people with human capital. This, however, can be achieved only when the spending on health care is adequate and delivery systems efficient. Improving health indicators is an important component of the Millennium Development Goals (MDGs) set by the United Nations. There are also important targets on health status achievements set for the Tenth Plan. The Common Minimum Programme of the ruling UPA government also seeks to increase the public expenditure by the Centre and States on health and family welfare schemes from the present level of less than 1% to 2%-3% of the gross domestic product (GDP). The provision of health and family welfare services falls in the realm of concurrent responsibility of the Centre and the States, but the latter have a predominant role in the delivery of these services. However, fiscal pressures at the State level lead to compression of expenditures by the State Governments resulting in an increase in Central financing of these services, particularly for some prioritized programmes implemented through the Centre and Centrally sponsored schemes. Thus, over 85% of the public expenditure on medical and public health is incurred by the State Governments, though the proportion of financing the expenditure by the State Governments is lower. This paper identifies the resource gap between the desired and the actual health expenditure in 15 major States in India (14 large, non-special category States and Assam), and highlights the extent to which the gap can be reduced by augmenting resources at the State level. Further, it estimates the resource gap that cannot be met through States’ own resources and therefore, requires Central transfers. The design of Central transfers needed for meeting the required health expenditure of various States is also discussed.
|Item Type:||MPRA Paper|
|Original Title:||Resource Devolution from the Centre to States: Enhancing the Revenue Capacity of States for Implementation of Essential Health Interventions|
|Keywords:||Federal Transfers to Provinces; Public Expenditure on Health|
|Subjects:||H - Public Economics > H4 - Publicly Provided Goods > H42 - Publicly Provided Private Goods
H - Public Economics > H5 - National Government Expenditures and Related Policies > H51 - Government Expenditures and Health
H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations > H75 - State and Local Government: Health ; Education ; Welfare ; Public Pensions
|Depositing User:||Mukesh Anand|
|Date Deposited:||13. Aug 2010 14:06|
|Last Modified:||14. Feb 2013 02:34|
Bahl Roy W. A regression approach to tax effort and tax ratio analysis. International Monetary Fund Staff Papers 1971;18:570-611.
Bahl Roy W. A representative tax system approach to measuring tax effort in developing countries. International Monetary Fund Staff Papers 1972;19:87-124.
Chelliah Raja J, Sinha N. Measurement of tax effort of state governments 1973-76. New Delhi: National Institute of Public Finance and Policy; 1982.
Coondoo D, Majumdar A, Neogi C. Tax capacity function: A note on specification, estimation and application. In: Srivastav DK (ed). Fiscal federalism in India: Contemporary challenges: Issues before the 11th Finance Commission. New Delhi: National Institute of Public Finance and Policy; 2000.
Deolalikar A. Attaining the Millennium Development Goals in India: Role of public policy and service delivery. Washington: The World Bank; 2004.
Dev MS, Mooij J. Patterns in social sector expenditure: Pre- and postreform periods. In: Parikh KS, Radhakrishna R (eds). India development report 2004-05. New Delhi: Oxford University Press; 2005.
Feldstein M. Wealth neutrality and local choice in public education. American Economic Review 1975;65:75-89.
Government of India (GOI). First Report of the Ninth Finance Commission (for 1989-90), July 1988.
GOI. Second Report of the Ninth Finance Commission (for 1989-90), December 1989.
GOI. Expert Group Report on Financial Requirements for Making Elementary Education a Fundamental Right. New Delhi: Department of Education, Ministry of Human Resource Development, Government of India; 1999.
GOI. Report of the Twelfth Finance Commission (2005-2010), 2004.
Jha R, et al. Tax efficiency in selected Indian states. Empirical Economics 1999;24:641-54.
Reddy KN. Inter-state tax effort. Economic and Political Weekly 1975.
Lotz Jorgen R, Elliot RM. Measuring ‘tax effort’ in developing countries. International Monetary Fund Staff Papers 1967;14:478-99.
Musgrave RA. The theory of public finance: A study in public economy. New York: McGraw-Hill; 1959.
Musgrave RA. Fiscal systems. Yale University Press; 1973.
Nambiar KV, Govinda Rao M. Tax performance of states. Economic and Political Weekly 1972;1036-8.
Oommen MA. Relative tax effort of states. Economic and Political Weekly 1987;XXII.
Govinda Rao M. India: Intergovernmental fiscal relations in a planned economy. In: Bird RM, Van’llaucourt F (eds). Fiscal decentralisation in developing countries. Cambridge University Press; 1998:78-115.
Govinda Rao M, Singh N. Political economy of federalism in India. New Delhi: Oxford University Press; 2005.
Sarma JVM. Panel data models and measurement of states’ tax effort in India. Working Paper No.9/89. New Delhi: National Institute of Public Finance and Policy;1989.
Sen T. Relative tax capacity and tax effort of Indian states. Working Paper. New Delhi: National Institute of Public Finance and Policy; 1983.
Sen T. Relative tax effort of Indian states. Working Paper. New Delhi: National Institute of Public Finance and Policy; 1997.
Sen T, Tulasidhar VB. Taxable capacity and tax effort of states of India. Working Paper. New Delhi: National Institute of Public Finance and Policy; 1988.
Sen Abhijit and Himanshu. Poverty and inequality in India-I. Economic and Political Weekly 2004.
Shiva Kumar AK. Budgeting for health: Some considerations. Economic and Political Weekly 2005:1391-6.
Thimmaiah G. Revenue potential and revenue efforts of southern states. (A study sponsored by the Planning Commission of India). New Delhi: Oxford and IBH Publishing Co; 1979.