Indian Policy Makers Research Articles

Relationship between GDP & Inflation in India and China

This paper explores the relation between inflation and Gross Domestic Product (GDP) in India and China during the time period from 1991 to 2021. The study analyzes time-series data from the World Development Indicators database and employs Autoregressive distributed Lag model (ARDL) and error correction models to examine the short-term and long-term dynamics. The research uses the Augmented Dickey-Fuller (ADF), Phillips-Perron (PP), and Kwiatkowski-Phillips-Schmidt-Shin (KPSS) tests to check for stationarity in the variables (including GDP, GCF, Inflation, Male and Female labor force participation, and FDI). Bounds F and T tests are used to check for cointegration, and a Granger causality test is conducted to identify any causal relationships between the variables. The findings reveal that there is a positive short-term relationship between GDP and inflation in India, whereas in China, there is a positive short-term and negative long-term relationship between GDP and Inflation. Additionally, the study reveals that there is no causal relationship between GDP and inflation in India, while in China, the causality runs unidirectionally from GDP to inflation. Policymakers in India may need to adopt measures that balance the need for economic expansion with the need to maintain inflation within a manageable range to ensure sustainable economic growth. In China policymakers may need to focus on long-term strategies to manage inflation and maintain sustainable economic growth at the same time prioritizing strategies that promote economic growth as a means of managing inflation.. Key Word: Inflation; GDP; India; China; ARDL

Impact of fiscal deficit and trade openness on current account deficit in India: new evidence on twin deficits hypothesis

PurposeThis study aims to examine the impact of fiscal deficit, exchange rate and trade openness on current account deficit (CAD). The study tried to empirically investigate the ‘twin deficits hypothesis’ and ‘compensation hypothesis’ in the Indian context.Design/methodology/approachAutoregressive distributed lagARDL) bound test approach was used by taking annual time series data from 1978 to 2021. The estimates confirm a significant long-run and short-run relationship between dependent variables, i.e. CAD and independent variables such as the fiscal deficit, exchange rate and trade openness.FindingsThe results show that positive shocks of all explanatory variables significantly affect the CAD. CAD and fiscal deficit are significantly associated, as the coefficient of fiscal deficit is positive and significant. The study also found that exchange rate and trade openness significantly affect the CAD. The coefficients of exchange rate and trade openness are positive and significant. The findings show that an increase in CADs results from liberal trade policies that help domestic industries grow their trade and expansionary fiscal policy, leading to a higher fiscal deficit. The negative and significant error correction term suggests that short-run disequilibrium converges to long-run equilibrium at a speed of 19.2%. The findings validate the ‘twin deficits hypothesis’ and ‘compensation hypothesis’ in the Indian context.Practical implicationsIt can be inferred from the study that liberal policy to promote economic growth and trade openness should be designed and promoted judiciously. An excessive liberalised approach may impact other macroeconomic variables such as current account balances. Integrating the domestic market with global markets poses a big challenge for countries like India that aspire to penetrate global markets. Furthermore, the Indian policy makers should rigorously work and promote the policies such as Fiscal Responsibility and Budget Management (FRBM) as reduction in fiscal deficits, trade imbalances will also be reduced.Originality/valueThis study contributes to the existing literature on ‘twin deficit’ and trade openness by giving new evidence on the trilemma between designing sustainable fiscal policy by spending wisely without imperilling the country's global presence and CAD.

Can green tribunals help to resist neo-liberalism in environmental governance – The case of India

Establishing the environmental rule of law has been identified as a precondition to achieving sustainable development. Increasingly however norms around environmental sustainability are being eroded by rising neoliberalism. Within countries, especially developing countries these trends are creating tensions for environmental policy-making that often require adjudication/judicial intervention. In this paper, we use the case of the National Green Tribunal (NGT), situated in a rising economy - India to understand how it operates amidst these tensions, restricting our analysis to pre-COVID-19 to minimise confounding effects of the pandemic. We find that the limited jurisdiction allows the NGT to continue to uphold the principles of environmental sustainability. The NGT is able to serve as an indicator of the kinds of environmental issues cropping up, deliver environmental justice and improve governance. However, there are visible tensions driven by the larger political economy of environmental policymaking in India that pose a significant systemic challenge to the effectiveness of the NGT. Given the resurgence of economic imperatives in post-pandemic policymaking, the NGT and other similar environmental courts/tribunals across the globe, need to draw on sources of strength established pre-pandemic to uphold environmental rule of law going forward.

Analyzing the Impact of Organizational Culture on Performance: A Study of Public and Private Hospitals in India

This study aimed to analyze the impact of organizational culture on performance in public and private hospitals in India. A mixed-methods research design was used, involving a survey of hospital employees and interviews with hospital managers. The Organizational Culture Assessment Instrument (OCAI) was used to measure the four types of organizational cultures: clan, adhocracy, market, and hierarchy. Performance was measured using a composite score of patient satisfaction, clinical outcomes, financial performance, and employee satisfaction. The results showed that hierarchical culture was predominant in both types of hospitals, followed by clan, market, and adhocracy cultures. Private hospitals outperformed public hospitals in terms of overall hospital performance and employee satisfaction with the organizational culture. The findings suggest that healthcare managers and policymakers in India need to adopt more flexible and collaborative approaches to management, address the systemic issues facing public hospitals, and improve the work environment and employee engagement in public hospitals. Further research is needed to explore the relationship between organizational culture and other outcomes, such as patient satisfaction and clinical outcomes. The study adds to the growing body of literature on organizational culture in healthcare and provides valuable insights for healthcare managers and policymakers in India.

Role of management education in adapting the Indian public sector to market-based economic reforms

PurposeIn 1991, India embarked on market-based economic reforms initiatives pillared on liberalization, privatization and globalization (LPG). The reforms exposed the public sector enterprises to competitive market forces, raising the need to identify and develop the competencies necessary for survival. Executive training programs were initiated to prepare public enterprises for the market-based reforms. Three decades later, the reforms especially privatization is witnessing renewed interest under the current administration. In this context, the article takes a closer look at the structure of management education provided to public sector officers in India. The article also identifies barriers for implementing the learnings from the management courses in the workplaces and suggests approaches for closing the gap.Design/methodology/approachThe study follows a thematic approach based on unstructured interviews of senior executives of Indian public sector enterprises covering oil and gas, aeronautical, power and transportation sectors. New public management (NPM) is used as a yardstick of “business-like” characteristics of public sector enterprises.FindingsDespite heavy investment, trainings have had only partial success in implementing the core objective of NPM, i.e. to provide quality services in a professional manner to meet citizen requirements. The study found that though concepts of NPM are introduced at multiple management training programs, the public enterprises lag in the implementation of NPM. The ingrained hierarchical and procedural culture of the enterprises was often highlighted as the challenge to its implementation.Practical implicationsThe study will be of significance to Indian policymakers in designing management education programs to public sector employees. It brings out – (1) various models of management education provided to public servants across industries, (2) provide evidence on the extent of NPM implementation, (3) identify barriers for transitioning the learnings from the management courses to workplace and (4) suggest changes for improving effectiveness.Originality/valueThe existing research on LPG in India covers the economic transformation post-implementation and the factors contributing to the success of its implementation. This study adds to the limited literature available on the management education of public servants in the country.

Eliciting “health” as a priority among policymakers in India: A paradigm shift in focus postpandemic

Background: Many legislatures allow for written or in-person questions to be directed to members of the administration, which is a common feature of legislatures. The parliamentary probes usually generate a lot of media attention and public interest. The types of questions that are asked in parliament and the outcomes are still unknown, despite their significance and interest. Aim and Objectives: The study aimed to assess the interest of Indian parliamentarians (Lok Sabha) in health issues by screening the questions raised in the Lok Sabha related to health. Methodology: A cross-sectional study using records from the 17th Lok Sabha from 2014 to 2022 was done to identify “health-related” inquiries made by parliamentarians between 2014 and 2022. Results: The Ministry of Health and Family Welfare explicitly responded to questions in the Lok Sabha from 2014 to 2022, making up 5.41% of all questions (starred and unstarred) raised during that time. Of the total 117,967 questions raised in the Lok Sabha from 2014 to 2022, these 6389 questions were related to “health.” Conclusion: In India, the COVID-19 pandemic has sparked worries about several issues, including the quality of health care, institutional and governmental responses, and challenges with law and order. The constitutional and statutory framework ought to be useful in answering these problems.

Net energy analysis of sugarcane based ethanol production

Ethanol is being projected as a renewable future biofuel to be a total substitute for gasoline by policymakers in India. Today it is used in blended form with gasoline. Ethanol in India is produced from sugarcane in distilleries and most of those are integrated with sugar industries. Anecdotal evidence suggests that sugarcane production in India consumes lot of water and for irrigating the crop electricity is consumed. Electricity is produced from fossil fuel mainly coal in India. Quantifying the energy input that goes into sugarcane production and ethanol processing is therefore relevant. This paper reports the findings from field investigations into the energy use practices of sugarcane production in a sugarcane belt of Maharashtra and a study of energy use in sugar industry. Net energy value is reported in MJ per litre of Ethanol and is found to be 40% surplus. Similar studies are reported for Brazilian Ethanol by investigators. The key differences in net energy value in India and Brazil arise from the assumptions regarding cane growing practices including power required in pumped irrigation and fertilizer application per litre of ethanol production. Net energy analysis of biofuels depends on the data assumed by the researchers regarding input of energy use, source of energy, energy value of co-products and land and water productivity of sugar cane. Sensitivity analysis is therefore included to account for all these parameters.

Capital controls and capital flow volatility during global shocks: Indian experience

This paper examines the issue of capital controls in India and their effectiveness in stabilizing the capital flow volatility in the economy. It documents the evolution of the capital controls regime in India since its economic liberalization in 1991 and focuses on India’s experience with capital controls in the period leading up to the Global Financial Crisis (GFC) of 2008 until the taper tantrum aftermath in 2013. We construct a capital controls index based on data from the IMF’s Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER). The index shows careful ease of capital controls by Indian policymakers in the financial sectors, i.e., the capital market, money market and direct investment, over the 2001–2008 period. The index further shows that the process of decontrol in the capital market stagnated during 2009–2014 due to the GFC to insulate the Indian economy from global shocks. This paper further explores the impact of capital controls in managing capital flow volatility in the context of the GFC. Using the tobit estimation approach, we show that capital controls effectively reduce capital flow volatility in the pre-GFC period followed by a limited impact post-GFC. This complements the capital account liberalization process during pre-GFC period. Our findings support India’s prudent approach to capital account management as financial markets evolve to manage risk efficiently in a large economy.

The Problem of Regional Disparities: An Overview in Indian Context

The contemporary world is growing rapidly in the field of urbanization, liberalization, globalisation and modernization, but on the other hand, all this development has emerged a worldwide phenomenon regarding regional disparity. Regional disparity is a common fact in both developing and developed economies. Across India's different regions and states, development and growth has not been distributed fairly and has given rise to the threat of regional inequality. In India, each of 28 states has its own disparities regarding socio-economic indicators with other states; among them few states e.g. Punjab, Gujarat, Maharashtra and Tamil Nadu, etc. have already attained rapid economic development Whereas, other regions or states e.g. Bihar, Odisha and Jharkhand, etc. have attained less development. India is a diverse nation with a massive population disparity in social and economic development, employment, and infrastructure facilities across the regions and within regions that have been a major challenge to policymakers and economists. Main objective of the study is to understand the concept of regional imbalances. The paper highlights the causes and consequences of disparities in inter-regions, inter-state and intra-regions in India. The paper describes also the measurements implemented by Indian policy makers in India to reduce the problem. The paper reveals suggestions to reduce the disparities in Indian context.

Informal Financial Arrangements: Types, Recent Shift and Arguments

Most developing countries across the world exhibit a duality of formal and informal economies. The current scenario is evidence that policymakers in India have made efforts to restrict various forms of informal finance by categorizing them as usurious and replacing them with newer banking concepts and practices. However, it is clear that the formal financial system is not exempt from theoretical and implementation flaws, leading to a significant demand and relevance for informal financial arrangements. This paper provides a concise overview of informal finance, its categorization, the shift of focus from credit supply to collective arrangements, and its enduring prevalence. The paper aims to emphasize the contributions of informal finance in promoting savings, facilitating credit provision, and sharing economic risks in the Indian market. Additionally, it critically examines the strengths, weaknesses, and the role of informal financial arrangements in the Indian economy

The Indian Health and Demographic Surveillance System Network: Opportunity to Generate Evidence for Public Health Policy.

The Health and Demographic Surveillance System (HDSS) is a valuable longitudinal cohort study that tracks the health and demographic changes of a geographically defined population, serving as a platform for research and evidence-based policymaking. In India, there are nearly 20 HDSS sites covering diverse areas and populations totaling around two million. To foster collaboration, the Indian HDSS Network (IHN) was formed, comprising 19 sites from 16 institutes, covering a population of 1.5 million. The IHN aims to standardize data collection processes while allowing site-specific autonomy, generating high-quality longitudinal health, and demographic data. To ensure effective coordination, a governance structure with a rotating secretariat and working committee was proposed. The IHN envisions conducting robust multicentric research, supporting data-driven efforts to improve population health, and promoting research-policy synergy. The network's outcomes have the potential to optimize health research funding, generate epidemiological data, and provide evidence for public health policy. Collaboration within the IHN strengthens HDSS sites in newer technologies and community-based research, fostering capacity building. Seed funding is being sought to formalize and support the day-to-day functioning of the network, which holds promise for advancing population health and informing policymaking in India.

Loneliness and social isolation among the elderly: Are we doing enough?

Loneliness and social isolation among the elderly: Are we doing enough?

Economic Cooperation And Integration Among BIMSTEC: A Study On Organic Agricultural Products

The study on the economic benefits of India BIMSTEC sub-regional trade alignments for Indian organic products focuses on regional alliances among south and southeast Asia. This sub-regional trading bloc is most important for Indian policymakers to enhance economic cooperation through trade on organic Agri products among these regions. This research wants to highlight major tradeable organic Agri Products and identify potentiality in trade among these regions. Study also identifies the possible scope of trade and future welfare creation among BIMSTEC members through the formation of regional trade agreement (RTA) particularly, based on the organic Agri products basket. In this research, researcher restricts the scope of organic Agri products, grown under system of agriculture without the use of chemical fertilizers and pesticides. Researchers identify a list of 23 major organic Agri products under Harmonized System (HS) of classification under 4-digit codes for preliminary analysis of trade potentiality among these regions. This research has been established based on different econometric parameters commonly used for analyzing trade-related data. Basically, WITS (World Bank) data has been used for our analysis purposes. For identifying of intra-industry trade (IIT) researchers use the GrubelLloyd index and, for comparative evaluation of import effects in various forms of trade alignment namely, bi-lateral and sub-regional alignment, particularly in BIMSTEC countries researcher uses AI based Gravity model on trade

Globalization and Indian Negotiation on Agriculture

The socio-economic regulation has significant impact in shaping foreign policy choices ofany country. This paper tries to analyze one major thrust in Indian foreign policy: trade withspecific reference to agriculture. It focuses on the domestic factors and compulsions in shapingthe foreign policy of India on specific issues related to social welfare of the common people.Ideational liberalism one of the important variant of liberalism makes an important assumptionthat socio-economic regulations play an important role in framing the foreign policy of anycountry. It is significant to identify how the Indian foreign policy makers have decoded thesedomestic compulsions and incorporated demands into government policies. An investigation isbased on the premises that socio-economic domestic compulsions have significant capability toinfluence the choices of Indian foreign policy.

The impact of Covid-19 on the capital structure in emerging economies: evidence from India

PurposeCapital structure is an important corporate financing decision, particularly for companies in emerging economies. This paper attempts to understand whether the pandemic had any significant impact on the capital structure of companies in emerging economies. India being a prominent emerging economy is an ideal candidate for the analysis.Design/methodology/approachThe study utilizes three leverage ratios in an extended market index, BSE500, for the period 2015–2021. The ratios considered are short-term leverage ratio (STLR), long-term leverage ratio (LTLR) and total leverage ratio (TLR). A dummy variable differentiates the pre-epidemic (2015–2019) and pandemic (2020–2021) period. Control variables are used to represent firm characteristics such as growth, tangibility, profit, size and liquidity. Dynamic panel data regression is employed to address endogeneity.FindingsThe findings point out that Covid-19 has had a significant, negative effect on LTLR, while the impact on STLR and TLR was insignificant. The findings indicate that companies based in a culturally risk-averse environment, such as India, would reduce the long-term debt to avoid bankruptcy in times of uncertainty.Research limitations/implicationsThe study covers the impact of the pandemic on Indian companies. Hence, generalization of the findings to global context might not be valid.Practical implicationsTo maintain economic growth in the post-crisis period, Indian policymakers should ensure accessibility to low-cost capital. The findings provide impetus to deepen the insignificant corporate bond market in India for future economic revival.Originality/valueDeveloping countries are struggling to revive the economies postpandemic. This is particularly true for Asian economies which are heavily reliant on banks for survival. This research finds evidence to utilize bond market as a source of raising capital for economic revival.

Does real interest rate reduce income inequality in India? Evidence from multivariate framework analysis.

This study empirically examines the impact of real interest rate on income inequality in India within a Kuznets Curve framework considering the role of economic growth, trade openness and technological innovation as the control variables. This study employs the ARDL bounds test for validating the long-run relationship over the annual data period 1995 to 2019. The results reveal the long-run relationship between the series in India. The findings suggest that the initial increase in interest rate significantly reduces income inequality. But, in a later stage, a threshold exists for such an increased interest rate to revert the prior beneficial impact. This finding further shows that Kuznets’ inverted U-shaped hypothesis is not valid for the relationship between income inequality and real interest rate in India. It shows that the real interest rate impedes income distribution in the long run. These findings are also found to be robust using FMOLS and DOLS estimators. We find that economic growth significantly reduces income inequality, whereas trade openness promotes it. Surprisingly, technological innovation enhances income inequality, but this effect vanishes in the long-run. However, these findings suggest that policymakers in India should not ignore the impeding role of real interest rates while aiming at achieving effective income distribution between haves and have-nots in the long run.

Understating emerging value chains and business performance: evidence from dairy industry in India

PurposeThe purpose of the study is to identify the factors affecting the entrepreneur's choice of the dairy value chain and evaluate the impact of the value chain on farm performance (profit).Design/methodology/approachPrimary data were collected from dairy entrepreneurs in India, covering nine states. A multinomial treatment effect model (controlling for selection bias and endogeneity) was used to evaluate the impact of the choice of the value chain on entrepreneurs' profit.FindingsDairy entrepreneurs operating in any recognized value chain other than the value chain driven by the consumer household realize a comparatively lesser profit. Dairy farmers have established direct linkages with customers in urban areas – who could pay premium prices for safe and quality milk. Food safety compliance is positively associated with profit and entrepreneurs (who have undergone formal training in dairying) preferred partnerships with a formal value chain. The prospects of starting a dairy enterprise are slightly higher in villages compared to urban areas.Research limitations/implicationsDairy entrepreneurs can make a shift in accordance with the study's findings and boost their profitability. It aids in comprehending how trainees (who obtained advice and training for raising dairy animals from R&D organizations) and non-trainee dairy farmers make value chain selections, which ultimately affect profitability. However, purposive sampling and a small sample size limit the universal implications of the study.Social implicationsDeveloping entrepreneurial behavior and startup culture is at the center of policymaking in India. The findings imply that the emerging value chain not only enhances the profit of dairy farmers by resolving consumer concerns about food safety and the quality of milk and milk products but also builds consumer trust.Originality/valueThis paper offers insight into how the benefits of dairy entrepreneurs vary with their participation in the different value chains. The impact of skill development/training programs on value chain selection and farm profitability has not yet been fully understood. Here is an attempt to fill this gap. This paper through light on how trained and educated dairy entrepreneurs are able to establish a territorial market by approaching premium customers – this is an addition to the existing literature.

Impact of Manufacturing Value Added on Environmental Degradation: empirical evidence from India

In recent years, the manufacturing sector in India has been witnessing a continuous growth in output production due to increase in investment in the sector and the government’s commitment to reduce reliance on imports and boost exports considering the country’s huge domestic market. However, this development is not environmentally friendly as increase in production entails increase in energy consumption, which result in an increased carbon emission that damage the environment. In view of the foregoing situation, this study is set out to investigate the impact of manufacturing value-added on environmental degradation in India over the 1965-2016 period. The study used autoregressive and distributed lag (ARDL) model to achieve its objective. Carbon dioxide emission was used to proxy environmental degradation in the model. In order to serve as control variables in the model, some selected relevant macroeconomic variables such as energy use, trade openness, and economic growth were employed. The estimated result showed that manufacturing value added has positive impact on environmental degradation in India. It infers that the increasing production in the manufacturing sector is degrading the environment through carbon emission. This suggests that an increase in manufacturing sector value added contributes to reducing the quality of environmental in India. Also, the environmental Kuznets curve (EKC) hypothesis was tested and found to be invalid and non-existent. Since the manufacturing sector consumes a lot of energy in its productive activities, the result does not come as a surprise. Thus, we suggest that policymakers in India should apply appropriate measures to improve the quality of the environment through adoption of new technology that will ensure energy efficiency and reduce carbon emission from the country’s manufacturing sector.

"Significant Insights, Value Orientation, Evolving Role of Entrepreneurship in India’s Overall Economic Development"

The driving force behind a nation's economic expansion is entrepreneurship. It boosts economic activity across all facets of peoples' economic lives. Examining the part that entrepreneurship plays in a nation's economic development is the major goal of the current study. One of the most populous nations, India, can benefit greatly from a rise in the economy thanks to entrepreneurship. Based on a survey of the literature on the historical elements of the rise of entrepreneurship in India as well as the most recent trends in this area. For the study, secondary data were consulted. It has been determined that India is ready for an entrepreneurial revolution and that entrepreneurship has significant potential for accelerating the country's economic growth. One of the most populous nations, India, can benefit greatly from a rise in the economy thanks to entrepreneurship. Based on a survey of the literature on the historical elements of the rise of entrepreneurship in India as well as the most recent trends in this area. For the study, secondary data were consulted. It has been determined that India is ready for an entrepreneurial revolution and that entrepreneurship has significant potential for accelerating the country's economic growth. For the growth of entrepreneurship in India, the government has periodically undertaken a number of initiatives. Policymakers in India are paying attention to entrepreneurship. To encourage the growth of the private sector, a number of important programs have been established, notably Startup India. Today, entrepreneurship is viewed as a key tool for industrialisation, development, and a solution to the enduring issue of unemployment. In this essay, an effort has been made to examine the growth of entrepreneurship in India as well as its role now in a country's progress.

Multidimensional Trade Facilitation in South Asia: Dynamics of Regional Integration

This study examined the impact of trade facilitation on intraregional trade in South Asia. By constructing five trade facilitation indicators and incorporating them in an ugmented anel ravity odel, the study estimated the impact of A P G M each of the five dimensions of trade facilitation in South Asia. The results indicated that the most significant gains in the region could be achieved by trade facilitation in the customs and regulatory environments, respectively. It also estimated the trade potential of the countries in the region for each other, and India and Bangladesh depicted the highest potential. The potential gains in intra-regional trade in South Asia resulting from trade facilitation were also quantified using the simulations technique and concluded that intra-regional trade could be increased tremendously through trade facilitation in the region in the five specific dimensions. The study suggested that policymakers in India, Pakistan and Bangladesh should take robust initiatives in trade facilitation.