No. 358

January 2010

Vol XC

ISSN 0019-5170

The Indian Journal of

University of Allahabad


Globalization, Poverty and Injustices: in Indian Perspective

I. D. Gupta 1

Twenty First Century is an era of globalization Where as the Nineteenth Century was the turning point in economic history, for Industrial Revolution changed the course of time the Twentieth Century will be remembered for two World Wars, Great Depression, and clash of Capitalist and Communist or Socialist ideologies, the new millennium will be known for revolution in Information and Communication technology (ICT) and globalization well as rising inequalities, poverty, hunger, environmental pollution and international terrorism.

Forces of Globalization gathered momentum after disintegration of the USSR with which Communist challenge came to an end near about 1980s. Globalization is looked upon with lesser role of the state and increased role of the private enterprises and market mechanism, and liberalization of international trade.

In the Less Developed Countries where problems of poverty, inequality, hunger and injustices prevail, the global competition with MNCs is looked upon as competition among the unequal and sweeping away of small enterprises with devastating results which may exacerbate poverty at a rapid rate and cause inequality of unimaginable proportion. The present paper on Globalization, Poverty and Injustices attempts to study the situation arisen in the Indian subcontinent after economic reforms were introduced in 1991 on a large scale to fulfil the agenda of globalization. It has been found by the researchers that, as against the official proclamation of poverty reduction after reforms, it has increased substantially and the depth of poverty too has escalated. Some other studies have found that around 77 per cent of the Indians are "poor and vulnerable" even today The apprehension is that with a lesser role of the state control, market in the hands of private entrepreneurs, who work in 'self-interest' for profit maximization only, may lead to even more exploitation of the consumers and the labourers, in both the consumer market as well as labour market. It is hard to conceive that market mechanism may take up the cause of poverty alleviation through its higher economic growth potential. However, as is understood by the economic thinkers of the day market mechanism is not a 'morally free zone' as it is a part of social institution which has concern with the social issues including morality and injustices.

The paper is divided in three parts. The first part introduction the topic. The Second part takes a bird's eye view of poverty in India in the post reform period. It has been found that poverty is not merely an economic problem to be addressed by raising the rate of growth of the economy, its roots lie deeper in the injustices prevailing in the social system for hundred and thousands of years. In a feudal society, it was in the interest of the society that some people should remain illiterate and poor to serve the interest of the upper classes. It has been found in Utopian writings that "To make the society happy… it is requisite that great number should be ignorant as well as poor". (Fable of the Bess. Bernard Mandeville). At this point, the paper in the third part takes up the issues of Poverty and Injustices; Role of Justice; Discrimination and Poverty in India. Globalization, Poverty and Market, market and Discrimination, Free Market and Good and Bad in International Trade; and in the concluding part it recommends a Middle Path, away from extremes, as prescribed by Lord Buddha, some two thousand five hundred years back (in some other context and certainly not in the context of market system).

1. Professor of Economics, Lucknow

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Agricultural Growth in Two Major Rice Producing States in India

A Comparative Study of West Bengal and Andhra Pradesh

Chandralekha Ghosh 1
Ajitava Raychaudhuri 2

West Bengal and Andhra Pradesh are two large producers of rice but they followed very different agricultural reforms. West Bengal followed institutional reforms for agricultural growth where as Andhra Pradesh opted for technological reforms. Behind this context we have examined total factor productivity growth of rice in these two states estimating translog cost function. Seemingly Unrelated Regression Estimation Technique (SURE) has been used for estimation. We decomposed TFPG into two components; economies of scale and technological progress. It is observed that TFPG for the period 1971-1999 is having a strong positive trend in AP whereas in West Bengal it is showing a marginal increase in trend. The main driving forse behind the strong positive trend of TFPG in AP is economies of scale.

Keywords: Land Reforms, Technological Reforms, Total Factor Productivity Growth, Technical Change, Economies of Scale

1 Lecturer, Department of Economics, West Bengal State University, Barasat, West Bengal.

2 Professor, Department of Economics, Jadavpur University, Kolkata-700032

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Income Inequality and Poverty among Scheduled Castes and Scheduled Tribes in Selected States

Maniklal Adhikary1 and Ritwik Mazumder2

This paper examines the relative positions of SCs and STs vis-à-vis other social groups in nine selected states employing some standard measures of poverty and income inequality. The NCAER/HDI survey data (1994) on rural household income are used for this purpose. The study shows that SCs and STs are generally economically backward vis-à-vis other social groups considered collectively: Poverty is found to be most severe in Orissa followed by West Bengal, Bihar and Uttar Pradesh. But inequalities are smaller within the SCs and STs vis-à-vis that within the non-SC/STs; the same is also true for those lying below the line of poverty covering all communities. Further, a strong positive correlation is observed between the intensity of poverty and its incidence.

I Professor, Department of Economics, University of Burdwan, West Bengal, E-mail :

2 Assistant Professor, Department of Economics, Assam University, Silchar, Assam, E-mail:

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Are Water Pollution Control Programs Regressive? A Case Study of Yamuna River in Delhi

Rupa Basu1 and R. R. Nautiyal2

It is in general assumed that all the costs of environmental programs are ultimately borne by households. They must pay for the costs incurred by the government through the process of taxation and expenditure cuts and those incurred by business by a shifting mechanism which includes higher prices, lower dividends and changed job opportunities. An important issue -in this context is whether this 'tax' on society is progressive, regressive or neutral.

This paper presents a study of the distributional impact of the water pollution control programs that are being carried out to tackle the pollution problem of Yamuna River in Delhi. The objectives of this study are: (I) to test the hypothesis that environmental protection programs are regressive; (2) to study the conceptual and methodological issues associated with the estimation of the incidence of costs of water pollution control programs; and (3) to determine the overall distributional impact of Yamuna pollution control programs in Delhi.

1 Kamala Nehru College, Delhi University. Email:

2 Economics Department, HNB Garhwal University, India

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An Empirical Analysis of Foreign Institutional Investment and Stock Market Returns in India

P. Srinivasan 1 and K. Sham Bhat 2

Instantaneous Granger Causality test was employed to examine the contemporaneous relationship between net foreign institutional investment flows and equity market returns in India for the daily data series from 1st July, 1999 to 29th February, 2008. By and large, our analysis reveals that there is an evidence of positive feedback and negative feedback trading hypothesis in the short-run and long-run respectively. This implies that foreign institutional investment acts as destabilizing force in the short-run and smoothening effect in the long-run.

1 Professor, Department of Economics, Pondicherry University, Kalapet, Pondicherry 605014, India. E-mail:

2 Professor, Department of Economics, Pondicherry University, Kalapet, Pondicherry-605014, India. E-mail:

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Efficiency and Productivity in West Bengal Agriculture: A Non-Parametric Approach

Atanu Sengupta1 and Dr. Subrata Kundu2

In this paper, we have focused on district level agricultural growth in the Indian state of West Bengal. Using a panel data for twenty years covering all the major districts of the state, we have estimated efficiency and total factor productivity growth (TFPG) for agriculture as a whole using non-parametric techniques. Our result shows that there exist wide variations in district wise efficiency and productivity indices. An interesting thing is that the catch up component of the index dominates. It implies that the source of productivity growth in West Bengal agriculture mainly was increase in efficiency rather than technological progress. In West Bengal, thus there is considerably scope in improving productivity through better technological enhancement.

1 Department of Economics, Burdwan University, Burdwan, West Bengal, India.

2 Department of Economics with Rural Development, Vidyasagar University, West Bengal. India.

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Income Distribution, Central Bank Independence and Reliance on Seigniorage in Nigeria

Elijah Udoh 1 and Festus O. Egwaikhide 2

Seigniorage revenue has gained wide recognition as a source of government revenue especially in developing countries. Central Banks usually find it difficult to resist political pressure from the ruling government to print more money. In addition, inequality and poverty also have been identified as variables responsible for underdevelopment of the tax system and dependence on seigniorage in developing countries. This paper provides a review of the Seigniorage-Inequality nexus in Nigeria. It specifically examines the relationship between income inequality and the reliance on seigniorage revenue in Nigeria and tests the Bhattacharya et al (2004)'s inverted U-shaped seigniorage - income distribution hypothesis. Findings show that unequal income distribution in Nigeria significantly explains why there is high dependence on seigniorage. However, the inverted U-shaped hypothesis cannot be accepted. The findings imply that the failure of the political process to ensure that the electorates wishes are transform into policy decisions can affect the development of the tax system and create a regressive structure.

1 University of Calabar, Calabar, Nigeria, E-mail:

2 University of Ibadan, Ibadan, Nigeria, E-mail:

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A Study of Inter-Regional Migration in India during Pre-Reform and Reform Period (1981-2001)

Shampa Kundu 1
Debesh Chakraborty 2

Economics Reforms introduced in 1991 in India have impacted the different aspects of social, economics and demographic pattern on India. The pattern of population movement among the different regions of India is likely to change. The current paper aims at investigating the pattern of change in inter-regional migration during pre-reform and reform period (1981-2001) in India based on census data.

The net volume of inter-regional migration in India increased at a higher rate in the reform period (43.4%) than the pre-reform (7.6%). Northern and Western region gained where the Central and Eastern region lost more in proportion than the South. North-Eastern region also lost after introducing reforms.

The North and the West gained mostly from the Central and the East. However the paper primarily focuses on the rural-urban pattern of migration from the East to the North and Western region during the pre-reform and reform period. The paper also offers' reasons for migration.

I Ph.D Student, Department of Economics, Jadavpur University, Kolkata-700 032.

2 Former Professor of Economics, Department of Economics, Jadavpur University, Kolkata- 700032.

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Business Fixed Investment in Manufacturing Firms: Experience from First Phase of Reforms in India

Surajit Bhattacharyya

The paper models investment-accelerator relationships within Jorgenson's neoclassical theory of capital accumulation. Apart from highlighting the importance of sales accelerator, it extends to empirical test for other determinants of business fixed investment e.g., liquidity, profitability, and firms' credit worthiness. Earlier studies on Indian data claimed that internal liquidity had replaced market demand in firm level investment; research also indicates presence of finance constraints in investment activities. Therefore, in the immediate aftermath of liberalization whether market demand had still not been important when availability of internal liquidity, firms' profitability and creditworthiness are considered. We consider Indian manufacturing firms in the post-reform period of 1990s. There is significant support for the investment – accelerator relationship. Internal liquidity is relatively more important than profitability when it comes to firms' investment decisions and credit worthiness of firms to outside creditors is also important for firm level investment decision.

* Assistant Professor of Economics, Department of Humaninies & Social Sciences. Indian Institute of Technology Bombay, Powai, Mumbai 400 076. Maharashtra.

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Productivity Growth, Technical Progress and Efficiency Change in Price Crop of India: A State-Level Analysis

Sanjeev Kumar l and N. K. Taneja 2

This paper examines total factor productivity growth and its components i.e. technical efficiency change and technological change in rice crop in India at a disaggregated state level for the reform period i.e. 190-91 to 2004-05. The study uses data envelopment analysis (DEA) to derive the Malmquist productivity indices. The result indicates that the total factor productivity change (TFPCH) in rice production average at 1.2 per cent during the study period. The decomposition of TFPCH shows the mean technical progress increased at 1.0 per cent and technical efficiency shows a marginal increase of 0.2 per cent during that period. The state-level reveal that the majority 'of the states have recorded productivity improvement over the years. This impressive growth was entirely due to the technical progress in these states. The inter-period comparison results of Malmquist productivity, index show that there has been a significant deceleration in growth of TFP during the later period. It expresses serious concerns about India's food security because of the strong relationship between rice production and food security of the country. To increase rice production through improving the level of technical progress and technical efficiency is more viable and potential option.

Keywords: Malmquist Index, Technical Efficiency Change, Technical Progress, Food Security.

1 Assistant Professor, Department of Economic, Dayal Singh College, Delhi University, Delhi-03 Email:

2 Professor, Department of Economics, Ch. Charan Singh University, Meerut (UP) 250004, Email:

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University of Allahabad