The subject did not attract the attention of policymakers or academicia because the major part of the municipal infrastructure in the past was financed out of grants extended to municipalities by the state governments. The state governments did not encourage debt financing of infrastructure even for those municipal bodies which were statutorily permitted to borrow for specified purposes.

Recent years have, however, witnessed significant changes in the country in the mode of municipal infrastructure financing. It is in this context that the NIPFP undertook with support from NIUA under the US AID-supported programme, a pilot study of municipal debt financing in 12 municipal corporations with a view to gain an initial understanding of issues concerning the subject of municipal debt. The study was designed to probe into issues, such as, the extent to which debt as an instrument is used for financing the infrastructure; the use to which debts have been generally put; and the impact of such debts on the revenue budget of municipalities.

This paper, presented at the 1997 Congress of the International Institute of Public Finance, Kyoto, analyses the scope of using pollution tax for inducing distilleries to undertake adequate pollution abatement. Using a non-linear programming model, the study examines various choices available to a distillery, including the use of clean water for dilution of the stream of waste water. The results of the study emphasise that pollution tax has to be coupled with appropriate pricing of ground water to ensure that pollution abatement is undertaken to the desired extent.

The conventional conclusion is that water charges should be revised upwards so that they reflect the social cost of water use. Effluent tax which addresses the issue in water conservation and environmental protection should also be implemented alongwith the rational price of water, for use of water as a receptacle for pollution. The paper was presented at the international seminar on Water as a Social Good.

Tax deduction at source (TDS) is an instrument designed for quick and smooth collection of tax and to enforce compliance with the tax laws. Enforcing a scheme of TDS requires evolving suitable procedures, and infrastructure for monitoring, cross-verification and quick disposal of refunds. Absence of adequate procedures or infrastructure leaves scope for misuse of the provisions of the scheme and/ or harassment of those claiming refunds. It is in this context that this study critically examines the operation of TDS.

This study assesses the extent of rationalization of tariff and non-tariff barriers by the year 1993-94. It found that there was a decline in the dispersion and in the average rate of tariff. While the nominal and effective rates of protection also declined, they were reversed when corrected for overvaluation for the exchange rate. The study also found little relation between collection rates and the official tariff rates, indicating the strong presence of exemptions.

The main objective of this study was to estimate the quantum of open and hidden subsidies given by the Union and the State governments in India. Subsidies were defined as unrecovered costs of providing various services. The estimation was done at a disaggregated level, both in terms of services and in terms of States. A three-way classification of government services into pure public goods, merit goods and non-merit goods was made and subsidies were estimated for the latter two categories. Surpluses and subsidies were estimated and reported separately.

The study, examines the administration of profession tax in three States - Andhra Pradesh, Kamataka and Maharashtra. After making a survey of the major legislative provisions and practices related to various aspects of tax administration, including tax structure, taxpayer identification, administrative structure and staffing, assessment and collection, it makes suggestions for improving the administration of this tax in terms of cost of collection, taxpayer convenience, and general economic efficiency.

The water sector comprising irrigation, rural water supply, and urban water supply is a major component of expenditure in India. In 1994-95, it accounted for approximately 25-­28 percent of the total capital expenditure of the states and between 1.5 - 8.7 percent of their revenue expenditures. What have been the trends in public expenditure on water? What are the recoveries on water account? Is the uncovered portion of expenditure rising or declining? What is the contribution of the water sector to the fiscal deficit of the states? Addressing these questions and based on the finance accounts of states, the study has highlighted that the uncovered portion of expenditure has risen in most states, which is not in the interest of the sound finance of states. The study has advocated the need to formulate appropriate pricing policies for the water sector.

This report was part of a larger research project conducted at the NIPFP. In suggesting measures to revamp customs administration, the report dealt with the broad categories of import-export licensing policy, structure of tariffs and some general aspects. The report is based on field visits to various collectorates of customs and central excise, meetings and discussions with officers at various levels and representatives of chambers of business and industry.