Chapter

The Political Economy of Centre—state Transfers

M. Govinda Rao and Nirvikar Singh

in The Political Economy of Federalism in India

Published in print November 2006 | ISBN: 9780195686937
Published online October 2012 | e-ISBN: 9780199080571 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780195686937.003.0011

Series: Oxford India Paperbacks

The Political Economy of Centre—state Transfers

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This chapter analyses political economy elements in intergovernmental transfers in India. It examines in some detail the issue of incentives and the implications of the intergovernmental fiscal system on the states’ finances. It validates the hypothesis that the political and economic influence or the importance of the states affect the transfers they receive from the Centre, in ways that are not necessarily captured in transfer formulae. It also discusses the political economy models of federalism and the political elements of India’s transfer systems.

Keywords: intergovernmental transfers; political economy; India; Centre–state transfers; fiscal system; states’ finances; William Riker’s view of federalism; federalism

Chapter.  10134 words. 

Subjects: Economic Development and Growth

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