Integrating Time in Public Policy: Any Evidence from Gender Diagnosis and Budgeting

NIPFP Working Paper 127
[PDF]

Lekha Chakraborty
October 2013

Abstract

Incorporating time in public policy making is an elusive area of research. Despite the fact that gender budgeting is emerging as a significant socio-economic tool to analyze the fiscal policies to identify its effect on gender equity, the integration of time use statistics into this process remain partial or even nil across countries. If gender budgeting is predominantly based on the indexbased gender diagnosis, a relook into the construction of the gender (inequality) index is relevant. This is significant to avoid a partial capture of gender diagnosis in the budget policy making. The “Hard-to-Price” services are hardly analysed for public policy making. The issue is all the more revealing, as the available gender (inequality) index so far has not integrated time use statistics in its calculations. From a public finance perspective, gender budgeting process often rest on the assumption that mainstream expenditure such as public infrastructure is non rival in nature and applying gender lens to these is not feasible. This argument is refuted by the time budget statistics. The time budget data revealed that this argument is often flawed, as there is intrinsic gender dimension to the non-rival expenditure.

Fiscal Multipliers for India

NIPFP Working Paper 125
[PDF]

Sukanya Bose and N R Bhanumurthy
September 2013

Abstract

This paper attempts to present a framework for the estimation of fiscal multipliers for the Indian economy in the structural macroeconomic modelling tradition. Empirical estimates of short-run multipliers are obtained by giving shocks to a range of fiscal instruments - expenditures and taxes. As per our estimates, the values of capital expenditure multiplier, transfer payments multiplier and other revenue expenditure multiplier are 2.45, 0.98, and 0.99, respectively, while the tax multipliers are in the range of -1. Expenditure multipliers were also obtained in the presence of fiscal consolidation targets. These estimates again point to the strong multiplier effect of capital expenditure on output, and underscore the need to prioritize capital expenditure.

Foreign investment in the Indian Government bond market

NIPFP Working Paper 126
[Link]

Ila Patnaik, Sarat Malik, Radhika Pandey and Prateek
September 2013

Abstract

A country witnesses currency exposure when locals hold a large amount of unhedged foreign currency denominated debt. However, India's capital controls continue to be guided by concerns about debt and its maturity, rather than its currency denomination. Even though the there is foreign appetite for rupee denominated debt, India has placed many restrictions on foreign investment in rupee denominated bonds. These include caps on the total as well as limits by investor class, maturity and issuer and have been implemented through a complicated mechanism for allocation and reinvestment. This paper presents the logic and rationale for why these restrictions fail to meet the objectives of economic policy today. It recommends removal of quantative restrictions on foreign holding of Indian rupee denominated debt and suggests ways to move to a more efficient framework.

The investment technology of foreign and domestic institutional investors in an emerging market

NIPFP Working Paper 124
[Link]

Ila Patnaik and Ajay Shah
June 2013

Abstract

We compare the investment technology of foreign versus domestic investors with a focus on decomposing outcomes attributable to asset allocation and security selection. We document significant differences in exposure to systematic asset pricing factors between foreign and domestic investors. A quasi-experimental strategy is introduced, for comparing security selection after controlling for differences in asset allocation. Our results show that foreign investors in India fare poorly at security selection, while domestic investors fare well.

Improving Public Financial Management in India: Opportunities to Move Forward

NIPFP Working Paper 123
[PDF]

Pratap Ranjan Jena
April 2013

Abstract

In recent years the role of a sound PFM system to achieve the objectives of fiscal discipline, strategic planning, and improved service delivery has been getting increasing public attention in India. Since public financial management reforms undertaken intermittently over the years, have not delivered anticipated results in these areas, studies and recommendations of Government appointed committees and expert bodies have identified gaps that need attention to strengthen the PFM institutional framework and to improve the efficiency of government spending. This paper examines key PFM reform measures undertaken in India over the past few years and provides suggestions to enhance the effectiveness of these PFM systems.

Fiscal Reforms, Fiscal Rule and Development Spending: How Indian States have Performed?

NIPFP Working Paper 122
[PDF]

Pinaki Chakraborty and Bharatee Bhusana Dash
April 2013

Credit constraints, productivity shocks and consumption volatility in emerging economies

NIPFP Working Paper 121
[Link]

Rudrani Bhattacharya and Ila Patnaik
March 2013

Abstract

How does access to credit impact consumption volatility? Theory and evidence from advanced economies suggests that greater household access to finance smooths consumption. Evidence from emerging markets, where consumption is usually more volatile than income, indicates that financial reform further increases the volatility of consumption relative to output. We address this puzzle in the framework of an emerging economy model in which households face shocks to trend growth rate, and a fraction of them are credit constrained. Unconstrained households can respond to shocks to trend growth by raising current consumption more than rise in current income. Financial reform increases the share of such households, leading to greater relative consumption volatility. Calibration of the model for pre and post financial reform in India provides support for the model's key predictions.