ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Articles by Atul SarmaSubscribe to Atul Sarma

Legitimate versus Distortionary Freebies

This article argues that based on constitutional provisions and prudent fi scal management principles, freebies can be classifi ed into two broad categories, namely legitimate freebies and distortionary freebies. Legitimate freebies have a signifi cant positive impact on the well-being of vulnerable sections of the population. In contrast, distortionary freebies have an adverse impact on fi scal health, resource utilisation, and resource allocation and can distort economic development.

The Role of Finance Commissions in Intergovernmental Fiscal Management

Fiscal imbalances, both vertical and horizontal, are common to federations and India is no exception. The Indian Constitution provides for instruments—shared taxes and grants-in-aid—to address such imbalances and an institutional mechanism—the finance commissions with specified terms of reference—to negotiate such imbalances. The paper addresses how 14 different FCs have dealt with their constitutionally assigned roles and strengthened the fabric of fiscal federalism in India. It further examines how the role of FCs were enlarged with additional terms in the interest of sound finance. It discusses, as an illustration, how FCs have addressed one of the major fiscal concerns, restoring budgetary balance and maintaining macroeconomic stability in the economy.


Macroeconomic Impact of Social Protection Programmes in India

Generally, the fiscal implications of social protection programmes are evaluated, but not so much on the economic impacts these schemes have on macro aggregates such as output, employment, income and revenue. This motivated us to evaluate the economic impact of three major social protection programmes, namely, the Mahatma Gandhi National Rural Employment Guarantee Act, Indira Awaas Yojana, and the National Social Assistance Programme in 2011-12 using a social accounting matrix. It is found that these programmes have significant impacts on output across different sectors of the economy, on income generation and distribution of different household classes in urban and rural areas, on employment across different sectors of the economy, and even on government revenue generation.

Do Not Dilute NREGA

[An Open Letter to the Prime Minister on NREGA by economists based in India and elsewhere in the world.]

We are writing to express our deep concern about the future of India’s National Rural Employment Guarantee Act (NREGA).

Delink Entitlements

We the undersigned economists do not consider the official national poverty lines set by the Planning Commission, at Rs 32 and Rs 26 per capita per day for urban and rural areas, respectively, to be acceptable benchmarks to measure the extent of poverty in India.

Regulating Tobacco Use

The design of tax instruments for controlling tobacco consumption is a complex process impacting as it does on the livelihoods of millions of people engaged in activities related to tobacco production, sale and distribution. Tax instruments can only be one component of a broad-based approach to controlling tobacco use.

Gujarat Finances

This paper examines the performance of Gujarat's revenue and expenditure systems. It attempts to identify the basic weaknesses of the existing revenue sources and indicates a broad direction of future reforms. Its major thrust, however, is on identifying the sources of inefficiencies of budgetary and expenditure policy and management, and preparing reform proposals for enhancing expenditure effectiveness.

Price Subsidies and Irrigation Investment in India-Macro Implications

in India Macro Implications D K Ratha Atul Sarma An applied general equilibrium model is used to analyse macro effects of three policy instruments, namely, fertiliser and food subsidies and investment on irrigation, for agricultural development in India. The results show that if a choice has to be made among these policy instruments, investment on irrigation has the potential of tackling two persistent problems of the Indian economy

Union Budget, 1989-90

Atul Sarma While the 1989-90 budget claims to further the objectives of growth and modernisation, the same can hardly be said about the goals of self reliance and social justice. There is nothing in the budget to even slow down the growing dependence on external borrowing. Similarly, the budget does no more than pay lip service to dealing with the two basic problems of the economy, viz, skewed income and asset distribution and mass poverty.


The concept of health planning has become grossly distorted over successive five year plans; the Draft Five Year Plan, 1978-83, is no exception.

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