EC 4804 – PUBLIC ECONOMICS – II

(Also equivalent to EC 4801)

Date & Time : 22-04-2006/9.00-12.00 Dept. No. Max. : 100 Marks

PART – A

Answer any FIVE questions in about 75 words each. (5 x 4 = 20 Marks)

What is fiscal dynamics? How does it differ from fiscal comparative statics?
Comment on weightage given to population as a criteria for sharing divisible pool of taxes with states by central government in the XII Finance commission.
Measure excess burden. How does it affect consumer or producer surplus?
What is state level value added tax? Why are some state government refusing to implement the same in their states?
What is the role of autonomous investment in Hicksian theory of trade cycle?
Distinguish between horizontal and vertical equity in tax sharing between centre and states.
What is pump priming expenditure? When is it required?

PART – B

Answer any FOUR questions in about 250 words each. (4 x 10 = 40 Marks)

Bring out the relevance of Security Transaction tax and Cash transaction tax in India.
“A tax on capital gains must be abolished” – Discuss.
Suggest some measures to over come the fiscal deficit of government of Tamil Nadu.
Why do we need highly centralized form of federal structure for India?
Explain the operation of fiscal stabilization with the help of Kenesian cross diagrams.
Derive balanced budget multiplier. Bring out the economic reasons for its value being equal to one always.
Comment on the strength of fiscal tools to bring about economic stabilization.

PART – C

Answer any TWO questions in about 900 words each. (2 x 20 = 40 Marks)

Bring out a suitable fiscal policy for India for sustaining 8% to 10% annual growth of G.D.P.
Comment on the reforms introduced in India regarding customs tariff since 1991. How far are they harmful or helpful to domestic manufactures?
Assess the salient features of personal and corporate income tax structure in India.
Explain the structure and composition of tax receipts of government of Tamil Nadu.