Impact of Grants on Tax Effort of Local Government

This paper examines the impact of state-local grants on tax effort of rural local governments (panchayats) for Kerala state using data for 1993-94. After controlling for tax capacity we find a negative impact on own tax revenue of lump sum `untied' grants that are predictable and unvarying. The...

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Bibliographic Details
Main Author: INDIRA RAJARAMAN, GARIMA VASISHTHA
Format: Printed Book
Published: Economic and Political Weekly August 12, 2000 2000
Online Access:http://10.26.1.76/ks/003778.pdf
LEADER 011130000a22001330004500
100 |a INDIRA RAJARAMAN, GARIMA VASISHTHA 
245 |a Impact of Grants on Tax Effort of Local Government 
260 |c 2000 
260 |b Economic and Political Weekly August 12, 2000 
520 |a This paper examines the impact of state-local grants on tax effort of rural local governments (panchayats) for Kerala state using data for 1993-94. After controlling for tax capacity we find a negative impact on own tax revenue of lump sum `untied' grants that are predictable and unvarying. The reduction in own tax revenue is the result of a selective slackening of tax effort. The post-grant pattern of tax incidence will therefore be less transparent than the nominal pattern, less preserving of voter preferences, and possibly driven by corruption towards greater regressivity. The data contradicts the flypaper effect and also theories of fiscal effects of ethnic fragmentation  
856 |u http://10.26.1.76/ks/003778.pdf 
942 |c KS 
999 |c 73166  |d 73166 
952 |0 0  |1 0  |4 0  |7 0  |9 65130  |a MGUL  |b MGUL  |d 2015-08-01  |l 0  |r 2015-08-01  |w 2015-08-01  |y KS 

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