Abstract

http://ssrn.com/abstract=1233184
 
 

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Compensation for Environmental Services and Intergovernmental Fiscal Transfers in India


Shunsuke Managi


Tohoku University

Surender Kumar


University of Delhi - Department of Business Economics

September 19, 2008


Abstract:     
The paper analyzes the role of intergovernmental fiscal transfers in achieving environmental sustainability. Generally, genesis of environmental degradation can be found in the incentive structure of governance in India. About 35 percent of total grants-in-aid recommended by the 12th Finance Commission are used for the provision of environmental services and are predominantly given for developing end-of-pipe infrastructure. Earmarked grants are better suited for environmental clean-up activities. Lump-sum transfers based on a predefined formula are good candidates for precautionary activities. Financial acknowledgements of the environmental services provide incentives for enhancing environmental services. The inclusion of environmental services in the allocation of fiscal transfers would also help in reducing poverty and regional disparities.

Number of Pages in PDF File: 19

Keywords: Environmental services, Fiscal federalism, spatial externalities, environmental expenditure, India

JEL Classification: H77, Q01

working papers series


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Date posted: September 21, 2008 ; Last revised: July 15, 2009

Suggested Citation

Managi, Shunsuke and Kumar, Surender, Compensation for Environmental Services and Intergovernmental Fiscal Transfers in India (September 19, 2008). Available at SSRN: http://ssrn.com/abstract=1233184 or http://dx.doi.org/10.2139/ssrn.1233184

Contact Information

Shunsuke Managi
Tohoku University ( email )
6-6-20 Aramaki-Aza Aoba,
Aoba-Ku
Sendai, Miyagi 980-8579
Japan
HOME PAGE: http://www.managi-lab.com/english.html
Surender Kumar (Contact Author)
University of Delhi - Department of Business Economics ( email )
New Dehli
India
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