This issue consists of five research papers. Joan Pasqual, Evans Jadotte and
Emilio Padilla in the paper, "Efficiency and Equity in the Location of Indivisible
Local Public Goods" shows that unlike the typical issue in which
optimality requires some amount of local public good is provided in every town/locality,
determining the best location for an indivisible local collective good is not straightforward by
merely appealing to the Pareto efficiency criterion. The authors show that if we consider
two cities, the welfare possibilities frontier associated with the location of a particular
good in one city not always dominates or is dominated by its counterpart in the other
city. They suggest three alternatives to solve this indeterminacy issuedisregard the
equity criterion, shun the Pareto efficiency criterion, or complement the latter with
some distributive criterion. In their paper, several approaches to deciding on this issue
are evaluated, viz., a social welfare function, Kaldor and Rawls criteria, unanimity,
simple majority and despotism.
Tapan Kumar Ghosh and Paramita Dasgupta in the paper, "Finances of Local
Self-Governments in West Bengal", examine the existing status of Panchayati Raj
(PR) finances in West Bengal with reference to their composition and trends (both
receipts and expenditure) and to assess the revenue mobilization effort of the Panchayati
Raj Institutions (PRIs) on both tax and non-tax spheres. The study then tries to
suggest measures to improve the financial administration of PRIs. Further, it focuses on
some newer sources of revenue, which could possibly be utilized by the PRIs with
political will. In their analysis, the authors have mostly dealt with the third-tier of the
PRIs, viz., the Gram Panchayats (GPs). It shows that one of the greatest weaknesses
of erstwhile PRIs was that they were starved of funds. They had very little resources
of their own and they were usually dependent on the government for their funds. If
the local bodies are to fulfill the functions expected of them, there is a need for
mobilization of substantial resources.
Bheemanagouda and J Madegowda in the paper, "Union Budget, 2009-10:
Balanced and Growth-Oriented", examines the highlights of Union Budget for 2009-10 and
its implications in the current business environment. Global economic
slowdown/meltdown, decline in the GDP growth rate, retrenchment of employees by a few large
scale organizations, etc., posed a number of challenges to the government in the form
of revival of the economy to achieve at least 9% growth in GDP, broadening and
deepening of the policies and programs for inclusive growth, and to improve the effectiveness
of the delivery mechanism of the government. Based on the analysis, the authors
point out that fiscal consolidation should be the mantra of the government to carry on
the reform process to achieve higher economic growth.
Ratna Vadra in the paper, "State of Finances of Uttar Pradesh: Retrospect
and Prospect", focuses on the trends of the revenues, expenditures and fiscal indications
of Uttar Pradesh during the period 1990-91 to 2008-09. The paper also studies the
major fiscal reforms taken by Uttar Pradesh in recent years. More and more states are
now turning to fiscal reforms as the only way out of the financial crisis they are
facing. Among them, UP is not far behind. Uttar Pradesh, the most populous state of
India, with16% of India's population offers the country the largest market. The state is
passing through fiscal crisis as there is a lack of financial prudence. It has taken an
initiative to bring about reforms in the coming years.
Berardino Cesi in the paper, "Local Public Education and Childless Voting:
The Arising of an `Ends with the Middle' Coalition", shows that the house
price capitalization may provide a sufficient alternative mechanism to encourage
childless households to support local public education.
-- C S Shylajan,
Consulting Editor
