Hi, Darshini,

The simplest way to estimate the dependency of the states is to take the share of intergovernmental grants (transfers) from the central budget in the total state revenue or expenditure.

For more comprehensive analysis you should consider net flows: grants and direct central budget expenditure on the territory of the state and taxes that came from the territory of the state to the central budget. However, usually these data are unavailable.

Best,

Natalia

 Natalia madam thanks for the reply . madam i found this formula also,  can it be used in calculation  madam ---

COD= 1- (B+C)/D, Where

A= Total revenue receipts excluding any grants & transfers;

 B= Transfers = Grants from state governments

C= Net Borrowing of the states = - (A-D);

D = Expenditure of the states = Total Expenditure & Lending – Repayments.

Paul Louangrath sir thanks for your reply. sir i am little confused about state budget (dependent variable). as independent variable i can take state own resources - tax,non tax etc along with central transfers.

or the state budget itself  tax, non tax revenue ? - i am confused sir.

i got priority concept

sir what is your opinion about the formula - 

COD= 1- (B+C)/D, Where

A= Total revenue receipts excluding any grants & transfers;

 B= Transfers = Grants from state governments

C= Net Borrowing of the states = - (A-D);

D = Expenditure of the states = Total Expenditure & Lending – Repayments.

sir do you have any article on this. or refer me any book or article sir. it will e useful for my research a lot in future.

The ratio of a State's own revenue to its total expenditures represents the coefficient of dependence.

The formula is incorrect.  I do not see the expression A in the formula.

You could have the formula as follows: COD = G/ (A+D) or  COD= G/E

where G = Trnsfers from the centre to the State and consists of share in central taxes, Finance Commission grants and plan grants.  A is total revenues (tax plus non-tax) of the state,D is the borrowings of the state and E is the total expenditure (revenue plus capital).  In other wordfs, the expression states the the coefficient of dependence is equal to the ratio of centtal transfers to total revenues including borrowings or totall expenditures including current and capital expenditures.  

I do nto recollect using the meausre in this for anywhere though the variants have been used by me in several studies.

Govinda Marapalli Rao thanks for your reply. sir i find this formula in a paper,they used this formula to estimate the dependency of the municipalities on state revenue. i too in a state of  confusion whether to use it or not. but i want to estimate dependency in a different method that is why i am trying to use this method. i will e very thankful to your guidance sir.