<abstract xmlns="http://www.w3.org/1999/xhtml">
<p>This study tries to empirically estimate the effects of the composition of intergovernmental transfers on tax collection across the Indian states by using panel regression model. As intergovernmental transfers constitute almost 47 per cent in total revenue of the states, it could play a vital role in states’ own tax collection. The impact of different channels of federal transfers on tax capacities is examined among 25 Indian states over the period from 1991-92 to 2017-18. The study also attempted to capture the asymmetric effect of various forms of transfers, but findings reveal that only state plan grant has a significant effect on its own tax collection. The empirical evidence suggests that the composition of intergovernmental transfers has a dampening effect on states’ own tax revenue. Apart from transfers’ variables, the study incorporates socio-economic and certain political variables to estimate states’ own tax collections.</p>
</abstract>

This study tries to empirically estimate the effects of the composition of intergovernmental transfers on tax collection across the Indian states by using panel regression model. As intergovernmental transfers constitute almost 47 per cent in total revenue of the states, it could play a vital role in states’ own tax collection. The impact of different channels of federal transfers on tax capacities is examined among 25 Indian states over the period from 1991-92 to 2017-18. The study also attempted to capture the asymmetric effect of various forms of transfers, but findings reveal that only state plan grant has a significant effect on its own tax collection. The empirical evidence suggests that the composition of intergovernmental transfers has a dampening effect on states’ own tax revenue. Apart from transfers’ variables, the study incorporates socio-economic and certain political variables to estimate states’ own tax collections.

Intergovernmental Fiscal Transfers and Tax Collection of Indian States: Estimation from Panel Data Models

Punjab School of Economics, Faculty of Economics and Business

Acta Universitatis Sapientiae, Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

This study tries to empirically estimate the effects of the composition of intergovernmental transfers on tax collection across the Indian states by using...

Intergovernmental Fiscal Transfers and Tax Collection of Indian States: Estimation from Panel Data Models

Published Online: Oct 19, 2023

Page range: 258 - 271

DOI: https://doi.org/10.2478/auseb-2023-0012

Keywords
intergovernmental transfers, political factors, state tax collection, Indian states

© 2023 Sumit Kumar et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Intergovernmental Fiscal Transfers and Tax Collection of Indian States: Estimation from Panel Data Models

Published Online: Oct 19, 2023

Page range: 258 - 271

DOI: https://doi.org/10.2478/auseb-2023-0012

Keywordsintergovernmental transfers, political factors, state tax collection, Indian states

© 2023 Sumit Kumar et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
intergovernmental transfers, political factors, state tax collection, Indian states