Author:
Chakraborty Lekha,Kaur Amandeep,Mohanty Ranjan Kumar,Rangan Divy,Das Sanjana
Abstract
Abstract
This chapter investigates the impact of intergovernmental fiscal transfers (IGFT) on climate change commitments in India. Within the analytical framework of environmental federalism, we test the evidence for environmental Kuznets curve (EKC) using a panel model covering 27 Indian States from 2003 to 2020. The results suggest a positive and significant relationship between IGFT and the net forest cover (NFC) across Indian states. The analysis also suggests an inverse-U relationship between gross state domestic product (GSDP) and environmental quality, indicating a potential environmental Kuznets curve (EKC) for India. The findings substantiate the fiscal policy impacts for climate change commitments within the fiscal federal frameworks of India, and the significance of IGFT in increasing forest cover in India. This has policy implications for the 16th Finance Commission of India for the integration of a climate change-related criterion in the tax-transfer formula in a sustainable manner.
Publisher
Oxford University PressOxford
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