Post-economic Reform Period Research Articles

A Comparative Study of Regional Disparities in the Districts of West Bengal

In the post-economic reform period, the overall economic growth of West Bengal has been increasing. However, agricultural growth has become sluggish since the 1990s. The relatively low contribution of the secondary sector reveals an absence of a strong manufacturing base in the state. The high contribution of the tertiary sector indicates diversification and expansion of services. The time dimension for district-level analysis has been constricted by data availability. The inequality among the district is increasing, with a divergence of growth. Three development indices and a composite index reveal a significant disparity in development outcomes across districts between 2001 and 2013. The developmental gap between districts in the southern and northern parts of West Bengal has become prominent. JEL Codes: R11, 047, D63

Dynamics of Investment, Economic Growth, and Employment in Contemporary India: Analyzing Patterns and Future Potential

Gross Fixed Capital Formation stands as the cornerstone of domestic investment, wielding the power to ignite economic growth and job creation. However, the relationship between investment and economic growth remains a subject of ongoing debate, characterized by a mosaic of conflicting findings within empirical studies. Similarly, the intricate interplay between employment and economic growth remains shrouded in uncertainty. Against the backdrop of these complexities, the Indian economy grapples with a paradox: despite a moderate rate of investment and economic growth, it grapples with a disproportionately high unemployment rate. Seeking clarity amidst this perplexity, our study delves into the contours of investment, economic growth, and employment in India. Guided by data sourced from the MoSPI, the Government of India, and other reputable outlets, our investigation is underpinned by the robust Johansen Cointegration and Vector Error Correction Model (VECM) framework. The crux of our findings reveals the existence of a lasting relationship among these variables, offering a glimpse of bi-directional causality connecting employment and economic growth. Counterintuitively, economic growth emerges as a precursor to investment, challenging conventional wisdom. Ultimately, our study underscores that, in the Indian context, economic growth emerges as the pivotal catalyst propelling investment and employment over the long haul. As we unlock the implications of our findings, a troubling revelation surfaces—jobless growth prevails in the post-economic reform period. To dispel this concerning trend, a concerted effort to engineer a more favorable economic landscape becomes imperative. We advocate for a multifaceted approach involving heightened investments in infrastructural enhancements and diversification of the economy. By bolstering labor-intensive sectors like agriculture and allied industries, we stand to invigorate investment levels, revitalizing the economic tapestry of our nation. In a world where uncertainty often veils the path forward, our study strives to illuminate the intricate relationship between investment, economic growth, and employment in India's postreform era. Armed with insights derived from rigorous analysis, we offer a clarion call for strategic interventions that can reshape the trajectory of our economy, ushering in an era of sustainable growth and equitable prosperity.

Identifying Inflation Dynamics in India in the Post Reform Period

The present study aims at examining the inflation dynamics in Indian context with a particular focus on its determinants from 1991–1992Q1 to 2017–2018Q4. The purpose of this study is to investigate the role of monetary, fiscal, structural and external variables in explaining inflationary tendencies in India in the post economic reform period. To identify the determinants fuelling the inflationary tendencies, the study employs ARDL bounds testing procedure followed by the VECM Granger causality test. The findings indicate that interest rate shock and output growth mitigates inflation while rupee depreciation, money supply generate inflationary pressures in the economy. Moreover, fiscal deficit has inflationary impact only in the short run. The positive link between inflation and openness refutes the applicability of Romer’s hypothesis in the Indian context. VECM based Granger causality indicates that money supply and interest rate causes both output and inflation, which suggests monetary policy in India has an important role to play in the process of economic growth and price stability. JEL Classification: E3, E4, F6, E620

Growth Determinants of India in Post-economic Reform Period

The economic reforms of the 90s had furnished two props liberalization and globalization, which later changed the growth strategies of the Indian economy. Contextually, the present study made an effort to comprehend the growth rate prevailed in the gross domestic product, gross fixed capital formation, exports and imports via compound growth rate from 1990 to 2017. Further, the study also investigated how well the growth determinants were cointegrated in the post-1990 era. Therefore, a restricted vector autoregressive model was applied. The compound growth rate results articulated that the Indian economy enjoyed a high growth in exports and imports in the post-liberalized era. The findings of the VAR model state that gross fixed capital formation and Export's had a positive and significant impact on India's gross domestic product in the long run. On the contrary, imports had a negative and significant impact, implying that an increase in imports will lead to a decline in India's gross domestic product, which is a well-observed fact in the economic domain. The study observed one-way causality from Gross Domestic Product and Exports. Additionally, a bidirectional causal relationship was observed among export and gross fixed capital formation. The policy perception that the study suggested that government should utilize gross fixed capital formation in those sectors which have preferably more social outreach and potential to strengthen the exports and at the same time also minimize country dependence on imports.

Analyses of land use land cover (LULC) change and built-up expansion in the suburb of a metropolitan city: Spatio-temporal analysis of Delhi NCR using landsat datasets

During past four decades, in post economic reforms period, Delhi and its surrounding regions has attracted a large number of populations which led to the rapid transformation of its LULC pattern. Therefore, this study is aimed to analyze the LULC changes during 1990–2018 as well as the growth and pattern of built-up surfaces in relation to the population growth and migration in the suburbs of Delhi metropolitan city which is also known as the National Capital Region (NCR). The Landsat 5 (TM) and Landsat 8 (OLI/TIRS) data has been used for the LU/LC classification of Delhi NCR. The K means clustering technique was applied on the Landsat data for the LULC classification and then the change detection technique was used to quantify the LULC change. The result shows that the considerable changes in LULC have occurred with continuous increase in built-up area and open/fallow land and decrease in agriculture land and vegetation over the study time period. Built-up area increased by about 326 percent and open/fallow land by 44 percent while the agricultural land and vegetation cover have decreased by 12 percent and 34 percent of the total area of study respectively during the study period. Built-up area has mostly increased at the expense of agricultural land and vegetation cover while vegetation cover has been transformed into Built-up area, Ridge and Agriculture. The statistical analysis shows that the association between built-up expansion and the population and migrants varies from weak to high but the coefficient of determination was always positive.

Exploring Rural–Urban Inequality in India in the Post-economic Reform Period

Structural reforms were adopted by India in the early 1990s. Despite a slowdown in the major economies of the world due to global financial crisis in 2008–2009, Indian economy has consistently performed better and achieved a growth rate of 8–9 per cent in the past decade. The proponents of the economic reforms thus believe that the measures of structural adjustment would bring about economic growth and narrow down the rural–urban gap in India. In this context, this article examines the impact of the reforms on rural–urban disparities with regard to select indicators of socio-economic development. This has been addressed by studying the pattern of education attainment levels, employment level and status, and the wage and consumption expenditures of rural and urban workers in India from 1993–1994 to 2011–2012. The results from the four rounds of the national sample survey (NSS) show that in the corresponding period, the gap between rural and urban areas has come down in the select indicators except employment.

Study on domestic savings in the Indian economy

An attempt has been made in the present study to examine the savings behaviour in the Indian Economy in terms of shift in the growth rates of domestic savings, and in magnitude of income elasticity of the domestic savings at the aggregate and disaggregate levels during post economic reform period. The results show that there is no shift in the growth rate of the domestic savings both at aggregate and disaggregate levels during post economic reform period. However there has been acceleration in the growth rates of domestic savings of household and private sectors and deceleration in public sector during 1950-2017. The estimate of constant income elasticity of household savings is found to be more than unity implying that the marginal propensity to save is higher than the average propensity to save, all else equal. Further the constant income elasticity of household savings is moderately higher than that of the income elasticities of domestic savings estimated for private and public sectors during pre-economic reform period. The results point out that there is no shift in the magnitude of income elasticity of savings of household, private and public sectors during post economic reform period showing the homogeneity in the size of the income elasticity of domestic savings. Thus the economic reforms that have been initiated in 1992 could not bump up the growth rate of savings and magnitude of the income elasticity of domestic savings both at aggregate and disaggregate levels in the Indian Economy during post economic reform period.

Study on domestic savings in the Indian economy

An attempt has been made in the present study to examine the savings behaviour in the Indian Economy in terms of shift in the growth rates of domestic savings, and in magnitude of income elasticity of the domestic savings at the aggregate and disaggregate levels during post economic reform period. The results show that there is no shift in the growth rate of the domestic savings both at aggregate and disaggregate levels during post economic reform period. However there has been acceleration in the growth rates of domestic savings of household and private sectors and deceleration in public sector during 1950-2017. The estimate of constant income elasticity of household savings is found to be more than unity implying that the marginal propensity to save is higher than the average propensity to save, all else equal. Further the constant income elasticity of household savings is moderately higher than that of the income elasticities of domestic savings estimated for private and public sectors during pre-economic reform period. The results point out that there is no shift in the magnitude of income elasticity of savings of household, private and public sectors during post economic reform period showing the homogeneity in the size of the income elasticity of domestic savings. Thus the economic reforms that have been initiated in 1992 could not bump up the growth rate of savings and magnitude of the income elasticity of domestic savings both at aggregate and disaggregate levels in the Indian Economy during post economic reform period.

Export performance of India and its impact on GDP during post economic-reforms period

Mindfulness is defined as the attentiveness that surfaces through awareness on reason, in the current moment, and non-judgmentally to the recitation of occurrence, instant by instant. It has been found to influence individual’s openness to experience, attention span, and creativity. Studies in the western context, have suggested the influence of mindfulness on several facets of an entrepreneur. The present study tests the influence of demography on the level of mindfulness among entrepreneurs in the Indian context. Data is collected using the survey method, from 114 entrepreneurs in Bengaluru. Snowballing sampling technique is used to conduct the study. The 14 item Freiburg Mindfulness Inventory scale developed by Walach et al. (2006), is used to measure the level of mindfulness among the entrepreneurs. The reliability of the instrument was found to be 0.75, which is acceptable. T- test and ANOVA were employed to test the hypothesized relationships between the study variables. The current research did not find any evidence of demography on the levels of mindfulness among entrepreneurs in the Indian context.The findings of this study reaffirms the limited role of demography on the mindfulness of individuals and suggests that mindfulness can be developed using mindfulness improvement techniques irrespective of their demography. The study was cross-sectional, so the inferences about causality are limited. Future studies can collect data at different points in the career of an entrepreneur and compare the same.

State - Wise Public Expenditure on Higher Education in India : An Empirical Analysis

Public expenditure is a major component of education expenditure in India. Though the higher-education expenditure in India increased significantly after Independence, budgetary allocations to higher education were squeezed off in the post economic reforms period and this sector also suffered significantly. The proportionate spending on the higher-education sector in India is much below the Central Advisory Board of Education (CABE) committee recommendation of 1% of gross domestic product for general higher education. The present study aimed to analyze state-wise disparity in public higher education expenditure in India by different parameters like per capita and per student higher education expenditure in terms of plan and non expenditure as well as revenue and capital expenditure. The regression results revealed that many states had elasticity of higher-education expenditure to gross state domestic product (GSDP) less than unity. Central and state governments of India should implement policies for more funding in the higher-education sector.

Green Revolution Model and Agrarian Crisis: Towards a Perspectival Critique

In the dominant interpretation, the agrarian crisis and farmers’ suicides have been viewed either as outcomes of individual decisions/actions of the farmers or as caused by vagaries of nature or certain policies. The present study views them as symptomatic of a deeper systemic crisis in agriculture in the post-Green Revolution and post-economic reform period. By examining the transformation of the agrarian question, especially consequent upon the generalisation of the Green Revolution model, this article highlights the importance of the changing dynamics between farm and non-farm sector in terms of accumulation and interaction and the changes in the class–caste relations internal to the rural society as the causes of the crisis.

Growth of metro cities in India: trends, patterns and determinants

Using city-level census data this paper examines the trends, patterns and determinants of metro city growth in India and finds that the post-economic reforms period has heralded a rapid pace of metropolitan development, causing a dispersed pattern of metropolitan growth in the last two decades. The empirical results show that metro cities located along a riverbank and situated in the northern, eastern and southern regions of India; cities with better quality public services and those which are state capitals are revealed to grow faster than others. A proximity to a large city also spurs on nearby urban centres to become larger, highlighting agglomeration effects. In contrast, initial city size has a negative impact on metro growth, reflecting some conditional convergence in population growth across cities. It is also found that the older cities have not grown at a rapid pace, with many of them flagging remarkably low demographic growth, suggesting a process of population drift towards the periphery from the core city areas, thereby leading to an ‘agglomerated trend’ of metropolitan development in India. Finally, we argue that diverting investment and development projects towards regressive regions as well as to secondary cities for strengthening their infrastructure and economic bases may herald sustainable and balanced metropolitan development.

Institutional Reforms in India and Dwindling Viability of Primary Cooperative Credit Societies

The present investigation was conducted in Kolhapur district of Maharashtra. The study showed a reduction in the operational efficiency of the selected PACS during the post-economic reform period as against the pre-economic reform period. The operational efficiency was measured in respect of various liquidity ratio, profitability ratios and financial leverage ratios. Not only the selected societies showed a decline in their current ratio, rate of return on assets, return on owner’s equity and marginal efficiency of capital (MEC) but also higher dependency on lender’s capital for their finances. This dependency was seen to be higher in the case of ‘A’ graded society. Nonetheless, ‘A’ graded society showed an improvement in its permanent capital during the latter period as against the former period. On the other hand, permanent capital position of ‘B’ graded society had declined during the latter period. Further, in the case of ‘A’ graded society there was not much improvement in the net worth, and in fact the share of net worth in its total liability had declined in the post-economic reform period. The declining share of net worth had caused an increase in debt-asset ratio of this society during the latter period as against the former period. In fact, among various ratios, the most important ratio estimated in this study was the return on owner’s equity. The estimated return on owner’s equity of the selected societies were seen to fall sharply during the post-economic reform period. Since the return on owner’s equity is a function of as to how efficiently a firm manages its assets, the net profit margin on sales and the degree of financial leverage, a reduction in return on equity of the selected societies could, therefore, be considered as a sign of reduction in the efficiency of the societies in managing their assets and liabilities, and also income and expenditure pattern during the latter period as against the former period.

Growth of Engineering Education in India

This article examines the growth of engineering education in India in the post-economic reform period using the secondary data published by Ministry of Human Resource Development, University Grants Commission and All India Council for Technical Education. Particularly, this article has focused on three important dimensions of engineering and technical education in India—institutional expansion, enrolment pattern and public financing. It finds that there has been a massive expansion of both institutions and enrolment in engineering education in India during the post-liberalization period, and this expansion has apparently taken place in the private sector. Also, as expected, the enrolment in engineering education has increased fast compared to other disciplines and overall enrolment growth of higher education. However, this massive expansion of engineering education has not been able to provide access to the disadvantaged groups, namely women, scheduled castes and scheduled tribes. The study also reveals that the public expenditure on engineering education has not increased at par with the increase in enrolment in this sector, which has resulted in the decline in per student public expenditure. The issues and concerns discussed in this article have brought up some promising avenues for future research in this area.

Macroeconomic fundamentals and dynamics of the Indian rupee-dollar exchange rate

Purpose – This paper aims to examine the relationship between Indian rupee-US dollar exchange rate and the macroeconomic fundamentals for the post-economic reform period. Design/methodology/approach – The authors have used an empirical model which includes a range of important macroeconomic variables based on the basic monetary theories of exchange rate determination. At the first stage of the analysis, they have tested structural break in the data. Subsequently, they have employed the fully modified ordinary least square, Wald’s coefficient restriction and impulse response functions (IRF) to estimate the monetary model in the long- and short-run horizons. Findings – Results of analyses indicate that the macroeconomic fundamentals determine exchange rate in a significant way, but their effect varies sizably across the periods. The IRF illustrate the importance of interest rate in controlling exchange rate volatility. Practical implications – The analysis of the behavior of inter-relationship among macroeconomic variables will help policymakers in a deep-rooted understanding of this complex and time-varying relationship. Originality/value – Most of the existing studies have tested the impact of a single or a few macroeconomic fundamentals on exchange rate. But in the present study, we have tested the impact of a range of important variables, i.e. money supply, real income or output, price level and trade balance. Further, considering the importance of structural breaks in data, they authors have employed standard tests of structural break and incorporated the issue in the cointegration analysis.

A nonparametric analysis of the growth process of Indian cities

We examine the growth process of the largest cities in India for the post economic reform period 1991–2011 to analyze Gibrat’s and Zipf’s laws by applying nonparametric estimation. The results from stochastic kernel, contour plots, and expected growth rate and variance conditional on city size establish that Gibrat’s law holds for largest cities in India, i.e., city growth is independent of population size, and the local Zipf exponent is around one and stable. Gibrat’s law is also confirmed by the parametric regression of the aggregate relationship of the growth rate on city size.

Energy Savings Potential and Policy for Energy Conservation in Selected Indian Manufacturing Industries

Minimisation of damage from the rising trend of global warming would warrant two kinds of action for a country like India: (i) abatement of Green House Gas (GHG) emissions, (ii) adaptation to climate change to reduce climate change related vulnerability of the people. The target of low-carbon economic growth in terms of declining energy and carbon intensity of gross domestic product (GDP) assumes special significance in such context. Industrial sector being the largest consumer of energy in India, the article estimates energy savings potential of major energy consuming industries using unit-level data for 2007–08. It further develops an econometric model admitting substitutability among energy and non-energy inputs and between different fuels for selected industries to study their behavioural response to changes in input prices and suggest policy instruments for conserving energy using time series data for post economic reform period 1991–92 to 2008–09. The results point mostly to the significant response of energy consumption to own price increases and to the insignificance of the responsiveness of corresponding capital requirement to effect such energy conservation. Besides, a large part of the growth of factor productivity as estimated by the model has been found to be induced by energy price changes, price neutral component of technical change being negligible.

An analysis of urban growth trends in the post-economic reforms period in India

Abstract Significant changes have been observed since 1991 in the nature and pattern of urban growth in India. Our cities are in the midst of restructuring space, in terms of both use and form. The paper addresses various complex urban issues associated with the present pattern of urban development through review of urban development of selected metropolitan cities of India which have experienced the impacts of LPG (Liberalization, Privatization and Globalization) process. Spatial trends, prevailing zoning, building bye laws (Floor Area Ratio and density) development control regulations, urban housing and transport are analyzed in the context of the current phenomenon of urban sprawl witnessed in India. The implications of such growth patterns of India are projected and the impacts analyzed. In conclusion, the need for an alternative sustainable urban development pattern is outlined for future metropolitan cities of India.

DIFFERENTIAL OUTPUT ELASTICITY OF EMPLOYMENT DURING POST-ECONOMIC REFORM PERIOD IN THE INDIAN ECONOMY

This paper investigates the sign and size of the differential output elasticity of employment for different industries in the private and public organized sectors of the Indian economy during post-economic reform period. A logarithmic form of demand function for employment, derived from the constant elasticity of substitution production function is estimated. An interaction variable is introduced after having ensured that the employment function has a structural shift by Chow break test. The results based on the time series data from the period 1969–1970 to 2004–2005, show that the positive magnitude of elasticity of employment with respect to output in transport, storage and communications industry is relatively very high, as the differential output elasticity of employment is not only positive but also more than unity followed by wholesale and retail trade and financing, insurance and real estate industries in the private organized sector during the post-economic reform period. This reflects the fact that the labor absorption capacity in the industries of transport, storage and communications, wholesale and retail, financing, insurance and real estate is relatively high. The magnitude of output elasticity of employment in financing, insurance and real estate is relatively high during the post-economic reform period as the differential output elasticity of employment is relatively small as compared to output elasticity of employment during the pre-economic reform period. The labor absorption capacity in private sector during the post-reform period is found to be relatively high as compared to public sector as the differential employment elasticity during the post-reform period in private sector is low. Further the results for the organized sector as a whole illustrate that the output elasticity of employment during the post-reform period is negative on account of negative differential output elasticity of employment showing that the economic growth during the post-reform period is not labor intensive in the Indian economy. Therefore, there is a need to review the sectoral policies to generate additional employment opportunities in the organised sector of the Indian economy.

Dwindling Viability of PACS During Period of Institutional Reforms

The study showed a reduction in the operational efficiency of the selected PACS during the post-economic reform period as against the pre-economic reform period. The operational efficiency was measured in respect of various liquidity ratio, profitability ratios and financial leverage ratios. Not only the selected societies showed a decline in their current ratio, rate of return on assets, return on owner's equity and marginal efficiency of capital (MEC) but also higher dependency on lender's capital for their finances. This dependency was seen to be higher in the case of 'A' graded society. Nonetheless, 'A' graded society showed an improvement in its permanent capital during the latter period as against the former period. On the other hand, permanent capital position of 'B' graded society had declined during the latter period. Further, in the case of 'A' graded society there was not much improvement in the net worth, and in fact the share of net worth in its total liability had declined in the post-economic reform period. The declining share of net worth had caused an increase in debt-asset ratio of this society during the latter period as against the former period. In fact, among various ratios, the most important ratio estimated in this study was the return on owner's equity. The estimated return on owner's equity of the selected societies were seen to fall sharply during the post-economic reform period. Since the return on owner's equity is a function of as to how efficiently a firm manages its assets, the net profit margin on sales and the degree of financial leverage, a reduction in return on equity of the selected societies could, therefore, be considered as a sign of reduction in the efficiency of the societies in managing their assets and liabilities, and also income and expenditure pattern during the latter period as against the former period.