Munich Personal RePEc Archive

Fiscal Marksmanship of Education Expenditure in India: Analyzing Forecast Errors through a Gender lens

Chakraborty, Lekha S and Chowdhury, Samik (2005): Fiscal Marksmanship of Education Expenditure in India: Analyzing Forecast Errors through a Gender lens.

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Abstract

According to rational expectation hypothesis, information is scarce and the economic agents generally do not waste information and that expectations depend specifically on the structure of entire system. Fiscal marksmanship, the accuracy of budgetary forecasting, can be one important piece of such information the rational agents must consider in forming expectations. Using Theil’s inequality coefficient (U) based on the mean square prediction error, the paper estimates the magnitude of errors in the budgetary forecasts of gender-related expenditure in India, in particular the education sector. The results showed that degree of errors in forecasting gender-related expenditure in education sector is relatively less compared to other sectors. However there is no specific trend in the forecasting errors, which reveals that budgetary estimates of gender-related expenditure are made not based on adaptive expectations. The applicability of rational expectations hypothesis in fiscal estimates of gender-related expenditure, in particular education sector, also has limited scope in India. Fiscal marksmanship deals more with the ‘budget measures’ rather than ‘fiscal incidence’ measures, but the paper has taken into account the fiscal incidence measure through a gender disaggregated public expenditure benefit incidence analysis of education sector.

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