Navigating GST revenue efficiency challenges: a solution to dilemma of policy makers for enhancing revenue efficiency

IF 2.1 Q3 BUSINESS
Shubham Garg, Sangeeta Mittal, Aman Garg
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Abstract

Purpose

This study aims to investigate the determinants of GSTefficiency of the Indian states to assist the policymakers, government and GST council to devise their policies and strategies to boost the GSTefficiency of the Indian states.

Design/methodology/approach

The analysis has used the panel data set of 27 Indian states and 3 UTs with a time span of 2017–18 to 2022–23. The study has used the Generalized Method of Moment regression for exploring the determinants of GSTefficiency of the state governments in India.

Findings

The findings depict that sectoral composition, inflation rate, financial development, state’s self-reliance, per capita income and gross fiscal deficit have a significant effect on GSTefficiency of the state governments. The findings support the Tanzi effect 1977 and claim that the rise in the inflation level erodes GSTefficiency of the state governments. The rise in the self-reliance of the state government will make the Indian states self-dependent and will reduce their reliance on central transfers.

Practical implications

The government should make efforts to make the Indian states self-reliant by increasing the share of OTR (Own Tax Revenue) instead of increasing their revenue efficiency in short-run through devolution and central transfers. Moreover, the Indian government should devise their macro-economic policies to curb the inflation level and gross fiscal deficit of the state governments in the country.

Originality/value

To the best of the authors’ knowledge, this may be the first study to explore the determinants of GSTefficiency of the state governments in India.

应对消费税收入效率挑战:解决决策者提高收入效率两难问题的办法
目的本研究旨在调查印度各邦消费税效率的决定因素,以帮助决策者、政府和消费税委员会制定政策和战略,提高印度各邦的消费税效率。研究采用广义矩回归法探讨印度各邦政府消费税效率的决定因素。研究结果研究结果表明,部门构成、通货膨胀率、金融发展、邦的自力更生程度、人均收入和财政赤字总额对邦政府的消费税效率有显著影响。研究结果支持 1977 年的坦齐效应,认为通胀水平的上升会削弱州政府的消费税效率。实际意义印度政府应努力通过增加 OTR(自有税收)份额来实现邦政府的自力更生,而不是通过权力下放和中央转移支付来在短期内提高邦政府的税收效率。此外,印度政府应制定宏观经济政策,抑制通货膨胀水平和邦政府的财政赤字总额。原创性/价值据作者所知,这可能是第一项探讨印度邦政府消费税效率决定因素的研究。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
5.30
自引率
0.00%
发文量
25
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