Journal article
Nonlinear analysis of government expenditure and tax rate on income inequality in India
Journal of public affairs, v 22(3), pn/a
Aug 2022
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
Using annual data for India, we examine the impact of taxation and government expenditure on income inequality by endogenizing GDP, urbanization, economic globalization, remittances inflows and net FDI flows. For the empirical analysis, we use the nonlinear autoregressive distributed lag model, which indicates a long‐run interplay between government expenditure and taxation on income inequality. Further, the results show that a rise in taxation increases the income inequality, while government expenditure reduces the income inequality in the long‐run. Contrastingly, the findings reveal that GDP, urbanization and economic globalization worsen and remittance inflows and net FDI flows exacerbate income inequality. Therefore, the study suggests that the active policy makers in India can curb rising income inequality by looking at both government expenditure and the sources of taxation before framing any policies related to income distribution. Our results also underscore the close interlinkages between development strategies pursued by India and the wealth gap, which have facilitated the redistribution of gains among those already enjoying high income levels.
Metrics
Details
- Title
- Nonlinear analysis of government expenditure and tax rate on income inequality in India
- Creators
- Hemachandra Padhan - Indian Institute of Technology MadrasIlham Haouas - Abu Dhabi UniversityShawkat Hammoudeh - Drexel UniversityAviral Kumar Tiwari - South Ural State University
- Publication Details
- Journal of public affairs, v 22(3), pn/a
- Publisher
- Wiley
- Number of pages
- 14
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000578304600001
- Scopus ID
- 2-s2.0-85092591083
- Other Identifier
- 991019167747604721
UN Sustainable Development Goals (SDGs)
This publication has contributed to the advancement of the following goals:
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Public Administration