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South Asia Economic Journal
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Articles

Internal Trade Barriers in India

Fiscal Check-posts

Arindam Das-Gupta

Arindam Das-Gupta is Faculty Member, Lee Kuan Yew School of Public Policy, National University of Singapore, Singapore. E-mail: oldmonk87{at}yahoo.com.

A sub-set of the costs and benefits of sub-national fiscal autonomy in federations is examined with the major focus being on road check-posts. The examination is done with reference to Indian states and using a partial equilibrium, diagrammatic analysis. Empirical analyses of the revenue impact of abolition of ‘fiscal frontiers’ in the European Union in 1993, and the revenue performance of the state of Maharashtra in India, which has no check-posts, relative to other Indian states, point to the preliminary conclusion that road check-posts have positive revenue benefits that cannot be made good by other, information based, enforcement mechanisms. Possible ways of mitigating road check-post costs are reviewed and some issues relating to fiscal barriers requiring further analysis are identified.

Key Words: JEL: E62 • JEL: F13 • JEL: H2 • JEL: H77 • JEL: H26 • JEL: O1 • JEL: O52 • JEL: O53 • Road Check-posts • Fiscal Frontiers • Federal Finance • Fiscal Autonomy • India • European Union

South Asia Economic Journal, Vol. 7, No. 2, 231-254 (2006)
DOI: 10.1177/139156140600700205
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