A centre for advanced applied research in public finance and public policy, NIPFP was established in 1976 as an autonomous society, with the main aim to contribute to policy making in spheres relating to public economics.
The Institute's Governing Body is responsible for providing general policy direction. It comprises of a Chairman, three representatives of the Ministry of Finance (Government of India), one representative each of the Planning Commission of India, Reserve Bank of India and ICICI Bank Ltd., three eminent economists and taxation experts and twelve other members representing state governments, research institutions, scientific societies and special invitees. Dr. C. Rangarajan is the Chairman of the Governing Body, and Dr. M. Govinda Rao, Director of the Institute is its Member Secretary and Chief Executive. The administrative set up of NIPFP is headed by the Director, assisted by the faculty, administration and accounts divisions of the Institute.
The NIPFP receives an annual grant-in-aid from the Ministry of Finance (Government of India), and from various state governments. This grant is supplemented by funds from its sponsoring, corporate, permanent, and ordinary members. Furthermore, the NIPFP undertakes commissioned studies for national, international, and bilateral agencies. It also undertakes capacity building programmes in fiscal policy, budget management, fiscal decentralisation and tax policy reforms for various national and international government officials and academicians.
The NIPFP maintains close functional links with the Central and State Governments in India, and actively collaborates with bilateral and multilateral donor agencies in pursuing its research and training agenda. It serves as a nodal agency for the State Finance Commissions. It has research partnership arrangements with the Indira Gandhi National Open University, Delhi, International Centre for Taxation and Development, IDS, Sussex, UK, University of Surrey, UK, Columbia University, New York, Australian National University, Canberra, and Hitotsubashi University at Tokyo. The Reserve Bank of India (RBI) has established a professorial chair at NIPFP for advancing research frontiers in the fields of macroeconomic and fiscal policy. The NIPFP faculty members are associated with world-wide research networks and serve as members on national and state-level commissions, professional organisations, and management boards of various institutions.