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The present paper examines the causal nexus between public debt and economic growth for 15 NSC states of India for the period 1991-2015 using Dumitrescu Hurlin causality test. The panel causality test identified the endogeneity issue as it revealed the bidirectional causality between these two variables. Further, we revisited the effect of public debt on economic growth for NSC states for the same period by incorporating other controlled variables in the model. Understanding the potential endogeneity issue, we employed FMOLS which solves the endogeneity as well as serial autocorrelation problem in the model. The results of the present study revealed that public debt, total revenue receipts and total credit have favorable effect on economic growth. As regards policy implications, the government should adopt proper tax reform strategies to minimize tax leakages. Further, it should implement effective credit and risk management practices to improve the asset quality. Lastly, suitable debt management strategy should be adopted to utilize debt in the most effective and proficient way to expand productivity capacity of the economy. This, in turn, will sustain high economic growth in India.

This paper evaluates the revenue effort of Indian states during the 13th and 14th Finance Commission periods and estimates the impact of central transfers recommended by the Finance Commission on the relative revenue effort of states. Using panel data the study finds that Bihar, Uttar Pradesh, Madhya Pradesh, Assam and Kerala are the top five states with the greatest relative revenue effort. Further, the impact of central transfers on revenue effort was found to be negative, suggesting that greater devolution encourages laxity in the state's tax collection efficiency by providing perverse incentives.

This article evaluates the sales tax effort for tax revenues of 18 Indian states from 2011-12 to 2016-17, exclusive and inclusive of petroleum tax revenues, using stochastic frontier analysis. From empirical analysis, it is observed that sales tax revenue is significantly influenced by higher non-agriculture GSDP, greater supply of bank credit and higher urbanization. The calculation of Sales tax effort is found to be overstated when petroleum tax revenue is included in sales tax. States' sales tax effort tends to become lower when the influence of petroleum tax revenue is factored out. It is found that Assam, Andhra Pradesh, Gujarat, Kerala and Haryana are the top five states with greater sales tax effort, inclusive of petroleum tax revenue, during the said period. The West Bengal, Maharashtra, Bihar, Goa and Madhya Pradesh are the bottom five states. Further, it is observed that only half of the states in India have shown improvement in their tax effort between 2011-12 and 2016-17, indicating no uniform improvement across the states.From the robustness analysis, a regression model exhibit similar results. Therefore, it can be suggested that assessment of the sales tax effort of Indian states should be made after having excluded the petroleum tax revenues from sales tax.

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