Literature review
| Name(s) and year of study | Title of study | Methodology used | Results |
|---|---|---|---|
| Indian studies | |||
| Panda (2009) | “Central Fiscal Transfers and States' Own-Revenue Efforts in India: Panel Data Models” | Fixed and random effects panel regression | Central fiscal transfer weakens the motivation of states to generate their own revenues. As their dependency on central fiscal transfer increases, their motivation to generate their own revenues weakens. Also, revenue expenditure with a one-time-period lag is found to be highly significant, and positively affects the various components of states' revenue |
| Garg et al. (2023a) | “Goods and Service Tax and its Implications on Revenue Efficiency of Sub-National Governments in India: An Empirical Analysis” | Panel regression model | The implementation of GST has also adversely affected the revenue efficiency of the Indian states. Further, it has been found that the service sector's share of the state's Net State Domestic Product, the credit-deposit ratio and the state's outstanding net bank credit of scheduled commercial banks have a positive effect on revenue efficiency, whereas the dependence of states on central transfers negatively impacts the revenue effort of the states |
| Jain and Singh (2025) | “An Impact Analysis of Structural Changes and Government Expenditure on Indirect Taxes Post-GST in India: An ARDL Cointegration Approach” | ARDL cointegration model | The expansion of the service sector and the spending of the government have a positive impact on indirect tax revenue. On the contrary, trade openness and the adoption of the Goods and Services Tax have a negative impact on indirect tax revenue |
| Jain and Singh (2025a) | “From Traditional Tax to GST: Analysing the Tax Revenue and Economic Growth of Haryana” | Paired sample t-test and regression analysis | The adoption of GST has significantly increased the revenue receipts of the state of Haryana. A positive relationship is observed between GST revenue and the economic output of the state. The positive impact of GST revenue is a confirmation of the effectiveness of GST |
| Rajak and Khan (2025) | “An Analytical Study of Goods and Services Tax and Its Impact on Agricultural Industry” | Analytical and descriptive study | GST is expected to result in both positive and negative impacts on the agricultural sector. For instance, the introduction of the single rate of tax on services and goods is expected to ease the national sale of agricultural commodities by all farmers and traders. However, the imposition of different tax rates on various agricultural commodities is likely to present an obstacle |
| Swaroop et al. (2025) | “Fiscal Federalism in the GST Era: Challenges and the Road Ahead” | Conceptual and policy analysis | GST has led to the centralization of power, with the states becoming more dependent on the central government. This has created a situation where fiscal autonomy has been eroded, leading to the redefinition of fiscal federalism. Additionally, in the Indian context, GST has created disequilibrium in fiscal federalism by centralizing power in the hands of the central government |
| Global studies | |||
| De Mello Jr (2000) | “Fiscal Decentralization and Intergovernmental Fiscal Relations: A Cross-Country Analysis” | Cross-country econometric analysis | Fiscal decentralization influences the efficiency of the government as well as the mobilization of revenues. The results are determined by the institutional arrangements that are in place and the relationship that exists between the central government and the local authorities |
| Gupta (2007) | “Determinants of Tax Revenue Efforts in Developing Countries” | Cross-country panel regression | The structural determinants, such as per capita GDP, the agricultural sector's share in the country's GDP and trade openness, have a significant impact on revenue mobilization in developing countries. Foreign aid has a positive effect on revenue mobilization. Corruption is an obstacle to revenue mobilization. Countries that depend mostly on income tax, profits tax, and capital gains tax have better revenue mobilization performance compared to those that depend mostly on indirect taxes, such as taxes paid on the supply of goods and services |
| Castro & Camarillo (2014) | “Determinants of Tax Revenue in OECD Countries Over the Period 2001–2011” | Static and dynamic panel data analysis | GDP per capita and the growth of the industrial sector are positively linked to the revenue generated. On the other hand, the share of the agricultural sector in the economy and foreign direct investment are negatively linked to the revenue generated |
| Mawejje and Munyambonera (2016) | “Tax Revenue Effects of Sectoral Growth and Public Expenditure in Uganda” | ARDL bounds testing | Agricultural dominance in the economy and the large informal sector negatively influence the revenue generated. On the other hand, the growth of the industrial sector and the level of expenditure are positively linked to the revenue generated |
| Epaphra and Kaaya (2020) | “Tax Revenue Effect of Sectoral Growth and Public Expenditure in Tanzania: An Application of Autoregressive Distributed Lag Model” | ARDL bounds testing | A strong and positive relationship is present between tax revenue and the major sectors of the economy in both the short-run and long-run. Recurring public expenditures and development public expenditures, together with trade openness, are likely to have a positive impact on the performance of the tax revenue in the short-run and long-run. Free trade is likely to have a negative impact on the tax revenue ratio |
| Name(s) and year of study | Title of study | Methodology used | Results |
|---|---|---|---|
| “Central Fiscal Transfers and States' Own-Revenue Efforts in India: Panel Data Models” | Fixed and random effects panel regression | Central fiscal transfer weakens the motivation of states to generate their own revenues. As their dependency on central fiscal transfer increases, their motivation to generate their own revenues weakens. Also, revenue expenditure with a one-time-period lag is found to be highly significant, and positively affects the various components of states' revenue | |
| “Goods and Service Tax and its Implications on Revenue Efficiency of Sub-National Governments in India: An Empirical Analysis” | Panel regression model | The implementation of GST has also adversely affected the revenue efficiency of the Indian states. Further, it has been found that the service sector's share of the state's Net State Domestic Product, the credit-deposit ratio and the state's outstanding net bank credit of scheduled commercial banks have a positive effect on revenue efficiency, whereas the dependence of states on central transfers negatively impacts the revenue effort of the states | |
| “An Impact Analysis of Structural Changes and Government Expenditure on Indirect Taxes Post-GST in India: An ARDL Cointegration Approach” | ARDL cointegration model | The expansion of the service sector and the spending of the government have a positive impact on indirect tax revenue. On the contrary, trade openness and the adoption of the Goods and Services Tax have a negative impact on indirect tax revenue | |
| “From Traditional Tax to GST: Analysing the Tax Revenue and Economic Growth of Haryana” | Paired sample | The adoption of GST has significantly increased the revenue receipts of the state of Haryana. A positive relationship is observed between GST revenue and the economic output of the state. The positive impact of GST revenue is a confirmation of the effectiveness of GST | |
| “An Analytical Study of Goods and Services Tax and Its Impact on Agricultural Industry” | Analytical and descriptive study | GST is expected to result in both positive and negative impacts on the agricultural sector. For instance, the introduction of the single rate of tax on services and goods is expected to ease the national sale of agricultural commodities by all farmers and traders. However, the imposition of different tax rates on various agricultural commodities is likely to present an obstacle | |
| “Fiscal Federalism in the GST Era: Challenges and the Road Ahead” | Conceptual and policy analysis | GST has led to the centralization of power, with the states becoming more dependent on the central government. This has created a situation where fiscal autonomy has been eroded, leading to the redefinition of fiscal federalism. Additionally, in the Indian context, GST has created disequilibrium in fiscal federalism by centralizing power in the hands of the central government | |
| “Fiscal Decentralization and Intergovernmental Fiscal Relations: A Cross-Country Analysis” | Cross-country econometric analysis | Fiscal decentralization influences the efficiency of the government as well as the mobilization of revenues. The results are determined by the institutional arrangements that are in place and the relationship that exists between the central government and the local authorities | |
| “Determinants of Tax Revenue Efforts in Developing Countries” | Cross-country panel regression | The structural determinants, such as per capita GDP, the agricultural sector's share in the country's GDP and trade openness, have a significant impact on revenue mobilization in developing countries. Foreign aid has a positive effect on revenue mobilization. Corruption is an obstacle to revenue mobilization. Countries that depend mostly on income tax, profits tax, and capital gains tax have better revenue mobilization performance compared to those that depend mostly on indirect taxes, such as taxes paid on the supply of goods and services | |
| “Determinants of Tax Revenue in OECD Countries Over the Period 2001–2011” | Static and dynamic panel data analysis | GDP per capita and the growth of the industrial sector are positively linked to the revenue generated. On the other hand, the share of the agricultural sector in the economy and foreign direct investment are negatively linked to the revenue generated | |
| “Tax Revenue Effects of Sectoral Growth and Public Expenditure in Uganda” | ARDL bounds testing | Agricultural dominance in the economy and the large informal sector negatively influence the revenue generated. On the other hand, the growth of the industrial sector and the level of expenditure are positively linked to the revenue generated | |
| “Tax Revenue Effect of Sectoral Growth and Public Expenditure in Tanzania: An Application of Autoregressive Distributed Lag Model” | ARDL bounds testing | A strong and positive relationship is present between tax revenue and the major sectors of the economy in both the short-run and long-run. Recurring public expenditures and development public expenditures, together with trade openness, are likely to have a positive impact on the performance of the tax revenue in the short-run and long-run. Free trade is likely to have a negative impact on the tax revenue ratio | |
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