An autonomous research institute under the Ministry of Finance

 

Ongoing projects

Review and Assessment of the Functioning of State Finance Commissions in Indian States

  • Start date Dec., 2021
  • Completion date March, 2023
  • Sponsor UNICEF India
  • Project leader Manish Gupta
  • Consultants/Other authors Smriti Behl, Sonal Agarwal, Devyani Gupta and Priyanshi Garg
  • Focus
    The objective of the study is to review the functioning of SFCs and effectiveness of their recommendations in strengthening the process of decentralization in India.

Public Expenditure on Old-Age Income Support System in India: Pussyfooting on Reform

  • Completion date May, 2022
  • Sponsor Self-Initiated
  • Project leader Mukesh Kumar Anand
  • Consultants/Other authors Rahul Chakraborty
  • Focus
    Subsequent to inputs received on an earlier version, the paper is under revision to include a sub-section that works out a proposal to rationalize defined benefits under the ‘old pension system’. We propose to curtail ‘terminal benefits’, namely: (i) leave encashment, and (ii) commutation of pension. It is argued that these ‘terminal benefits’ work against the rationale for ‘work-life balance’ intended by the provision of ‘earned leaves’, while ‘commutation of pension’ is a largesse pre-empting a stream of conditional future benefits. The resources thus released may be utilized to adequately finance the annual government contribution of INR 1,000 into the Atal Pension Yojana (APY) accounts for all extant unorganized sector workers less than 40 years of age. Further, it is proposed that this unrequited contribution (by the Government) must be continued for the worker with an APY account until age 60, as well as into the APY accounts for eligible entrants that newly join the labour force. Portability of accounts across occupations and geographies must be ensured.

Change in Structure of Revenue Expenditure: Some Inter- and Intra- Generational Concerns

  • Completion date May, 2022
  • Sponsor Self-Initiated
  • Project leader Mukesh Kumar Anand
  • Consultants/Other authors Rahul Chakraborty
  • Focus
    The proposed study/ chapter would undertake a disaggregated analysis of object-wise classification of revenue expenditure for a few (select) states of India. Expenditure on subsidies, interest payments, wages and pension carries differing implications for different cohorts in the population. Some distributional (inter- and intra-generational) aspects of public expenditure with implications for equity and sustainability would be discussed.

Impact of Fossil Fuel Price Change

  • Completion date June, 2022
  • Sponsor Self-Initiated
  • Project leader Mukesh Kumar Anand
  • Consultants/Other authors Rahul Chakraborty
  • Focus
    Supplemental information from National Income Accounts on final consumption expenditure, indirect taxes, and value addition are utilized to generate an updated set of Input-Output (I-O) coefficients for the year 2018-19. For this update the RAS method is applied on two starting solutions, one each using I-O transactions tables for 1998-99 and 2007-08. The analysis reveals little change in intensity of cost-push inflation from forward transmission of the rise in fossil fuel prices.

Declining Labour Force Participation in India: Are Certain Policies Misaligned?

  • Completion date July, 2022
  • Sponsor Self-Initiated
  • Project leader Mukesh Kumar Anand
  • Consultants/Other authors Rahul Chakraborty
  • Focus
    The paper argues that there is weak, negligible or conjectural evidence to support several of the reasons offered by commentators pertaining to the Indian labour market, e.g., on lower female labour-force participation due to: (i) increased within-household demand on available time for care work (including fetching water) or (ii) improvement in spousal income. Further, in the absence of objectively designed metrics, there is only anecdotal evidence on mismatch in skills or so-called skill-deficit. The paper proposes that: (a) labour demand is depressed due to (i) threshold centric approach to labour legislations, that result in steep changes in marginal cost of labour, and (ii) unequal tax treatment of returns to factors that motivates allocating higher value addition to capital (to minimize one’s tax liability), whereas (b) labour supply is adversely affected by loosely anchored expectations from: (i) segmented labour markets that, in turn, are an outcome of thresholds in labour legislations, and (ii) a minimum wage determination process that ignores both the job description and the desired worker profile for an entry-level worker.