No. 364

July 2011

Vol XIIC

ISSN 0019-5170

The Indian Journal of
Economics
 

University of Allahabad

Contents


Causality Between Total Expenditure On Education and Economic Growth: A Case Study of Haryana

Surat Singh1


In the present paper an attempt has been made to examine the interdependency between the total expenditure on education (TEE) and gross state domestic product (GSDP) for the Haryana State over the period of 1991-92 to 2007-08. The study takes into account the recent advances in econometric techniques. Using the co-integration test and the Granger causality test, we empirically find bilateral relationship between total expenditure on education and the growth of the economy. More specifically the study concludes that total expenditure on education (TEE) Granger causes the growth of the economy (GSDP) and the growth of the economy (GSDP) Granger causes the total expenditure on education (TEE), implying thereby a feedback relationship exists between total expenditure on education and the growth of the economy.

  1. Associate Professor, Post Graduate Dept. of Economics, S. A. Jain College, Ambala City.

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Exchange Rate Variations in Sri Lanka in the Independent Float Regime: The Role of Money Supply

Biswajit Maitra1 and C. K. Mukhopadhyay2


Monetary model of exchange rate determination holds that cheap monetary policy of the home country leads to depreciation of the national currency. The study attempts to enquire if the Rupee/Dollar exchange rate variation as observed in the period of independent float regime in Sri Lanka had any link with the domestic money supply. The study of cointegration testifies that exchange rate and M2 money supply are cointegrated at level. Causality from the VEC model reveals, that seven and nine month lagged money supplies cause depreciation of exchange rate. The intervention analysis shows that in the forecast periods ahead there is an increasing role of money supply in the variation of exchange rate.

  1. Lecturer in Economics, Surya Sen Mahavidyalaya, University of North Bengal, India

  2. Professor of Economics, Department of Economics, University of North Bengal, India

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Up-Scaling of Food Processing Industry: Implications for Agricultural Development

Shiv Kumar1, Khyali Ram Chaudhary2
and
J. P. S. Dabas3


Food processing industry in India has undergone a sea change in recent years. Up-scaling of food processing industry has given considerable scope not only to strengthen the synergy between agriculture and food processing but also to arrest the fall in agricultural growth in the country. The study analyses the performance of the food manufacturing sector and its implications for agricultural development. Results suggest that improvement in operational scaling up, contrasting trends in the growth of labour and capital productivities, and consistent rise in capital-labour ratio in the post reform period reveals capital biased technical progress in the food manufacturing sector. Growth in multifactor productivity deciphered significant differences and the gainers are fruits & vegetables and oils & fats industries but the losers are meat, starch, fish, dairy, feed, bakery and confectionery in post reform periods.

The growth of food processing industry is likely to accelerate agricultural growth through diversification and commercialization of agriculture and also create new direct and indirect avenues of income and employment for rural people.

  1. Senior Scientist, National Centre for Agricultural Economics and Policy Research, Dev Prakash Shastri Marg, Pusa, New Delhi-110012 (India)
    E-mail: shivkr@ncap.res.in
    E-mail: shivkumardull@gmail.com
  2. Technical Officer, National Centre for Agricultural Economics and Policy Research, Dev Prakash Shastri Marg, Pusa, New Delhi-110012 (India).
    E-mail: khyali@ncap.res.in
  3. Senior Scientist, Centre for Agricultural Technology Assessment and Transfer, Indian Agricultural Research Institute, Pusa, New Delhi-110012.
    E-mail: singh09j@gmail.com

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Understanding Fiscal Decentralization: Theoretical Foundations and Practical Implications

Soumyadip Chattopadhyay1


The paper has identified the key elements for an effective fiscal decentralization programme. As a first and fundamental step in the design of decentralization, each level of government should be^ clearly aware of their functional responsibilities. Then, it is important to ensure that local sources of revenue should be matched as closely as possible to local expenditure responsibilities. Given the insufficiency of own revenue sources of local governments for financing their expenditure responsibilities in developing countries, intergovernmental transfer system plays an important role to bridge the gap between revenue raising abilities and expenditure responsibilities of those governments. Here, the design of transfer and it's impact on local governments' incentives, both to mobilize local revenues and to use resources efficiently, is of critical importance to the success of fiscal decentralization.

  1. Lecturer, Department of Economics and Politics, Visva Bharati University, Santiniketan 731 235, West Bengal.
    E-mail: soumyadip.chattopadhyay@visva-bharati.ac.in

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Inward Investment and Market Structure in an Open Developing Economy: A Case of India's Manufacturing Sector

Jatinder Singh1, K. J. Joseph2
and
Vinoj Abraham 2


The objective of this paper is to analyze the impact of Foreign Direct Investment (FDI) on market concentration with special reference to India's manufacturing sector during the post-reform period. The study, using firm level data and panel regression techniques has shown that FDI does encourage market concentration. If the result of the study is any indication, the increased inflow of FDI is likely to make India's manufacturing sector more concentrated and calls for policy makers to mitigate undesirable outcomes of FDI.

  1. Centre for Economic Studies and Planning, Jawaharlal Nehru University, New Delhi
    E-mail: jatindercds@gmail.com
  2. Centre for Development Studies, Thiruvananthapuram, Kerala (INDIA)

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Engel Curve Analysis for Agricultural Households: A Case Study in Guntur District of Andhra Pradesh

Adusumalli Venkateswara Rao1


Consumer expenditure data collected in the budget surveys are useful for economic policies, which are, for imposing commodity taxes and also for working out the actual tax burden on different socio-economic groups. In this connection, it is to be noted that the methodology generally followed in the estimation of income elasticities is also subject to some limitations. The present study attempts to analyse the Household Expenditure Patterns of different sections of agricultural families of an agriculturally advanced district of Andhra Pradesh and to draw attention to some methodological issues arising in connection with the estimation of Engel elasticities, from the suitable functional forms selected on the basis of economic, statistical and econometric criteria. As the family budget data collected in Official Surveys are provided in reports by the specified per capita total expenditure classes or fractile classes, the impact of grouping the individual observations is also investigated in the present study. Thus, the study might be considered to be useful for the researchers and analysists in the field of consumer behavior.

  1. Department of Economics, Dr. B. R. Ambedkar University, Srikakulam, Etcherla-532 410, Andhra Pradesh.
    E-mail: adusumalli.venkat@yahoo.com

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Sino-India Intra-industry Trade In Agricultural sector

Nidhi Sharma 1
and
Pravin Kumar 2


This study presents disaggregated estimates of the levels and pattern of Growing Sino-India Intra-industry Trade in Agricultural sector. The analysis significant pattern of such trade is a large number of Food Regulation in 1998 to 2007 period (post-liberalization). Thus, the argument that liberalization would lead to the demise of India-China domestic market is, for the most part, untenable. Intra-lndustry trade and specialization between India and China enjoy a surplus of low cost labour. Exports of labour intensive products from both countries are growing rapidly and the two countries are bound to compete with each other in such products in global markets. In this process a new relationship of division of labour and vertical specialization between the two countries enterprises can be established for instance, competition between India and China in Agricultural product for related to food regulation. Present paper measures the pattern of India-China Intra-industry Trade in Agriculture sector on the basis of gravity model.

  1. Faculty of MMV, Department of Economics, Banaras Hindu University, Varanasi.
  2. Department of Economics, Faculty of Social Sciences, B.H.U., Varanasi.

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Impact of Swarnajayanti Gram Swarojgar Yojona (SGSY] on Women's Decision Making Agency Across Socio Religions Communities

Arghya Kusum Mukherjee 1


The paper has shown that decision making pattern widely varies across SRCs and decision making fields. The paper has described four areas of decision making: (i) Money management, (ii) What item to be cooked, (iii) Use of borrowed money (iv) Kinship and family matters. Regarding money management in programme participating households female members don't have any significant say compared to control group. In other three spheres women have greater say in programme participant's households. Regression analysis using multinomial logit model has shown that likelihood of taking 'female only' decision than 'male only' decision has increased among SGSY programme participating households irrespective of caste and creed compared to non participating control group. The benefit of greater decision making from programme participation has not been accrued evenly among Socio Religious Community.

  1. Assistant Professor, Department of Economics, Srikrishna College, Bagula, Pin-741502 Nadia, West Bengal.
    E-mail: arghya97@rediffinail.com, arghya_m2003@yahoo.co.in

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Education and Health Status of Females in Tripura: An Intertemporal Comparison of Garjanmura Village (2002-2010)

Ruma Saha1


Education and health of females are part of the development agenda both at international and national level. High drop outs at post-primary level and birth of the child at home are two specific areas of concern. The village study presented here offers a comparative view of a village of Tripura between two periods 2002 and 2010 to investigate the factors behind these inadequacies in education and health of females. This kind of study may contribute to policy debates in this field.

  1. Department of Economics, Netaji Subhas Mahavidyalaya, Vill. Dhawajanagar, Udaipur, P.O. Gakulpur- 799120, Tripura (South).

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Market-Based and Bank-Based Financial Structure on Economic Growth in Some Selected Ecowas Countries

Enoma Anthony1


There has been a lot of debate as to which of the financial system or structure promotes Economic Growth in an economy. In this sense policy makers have debated the relative merit of bank based and market based in affecting economic growth in the economy. This paper therefore examines the impact of financial structure on economic growth of some selected ECOWAS Countries. Relying on model developed by Levine (2002), Olofin and Udoma (2008), we specified a macro econometrics model to examine the relationship between financial structure variables and growth variable. The paper provides a useful contribution in the relationship between financial system and Economic growth in these selected ECOWAS countries. Based on the long-run and short-run estimate, it was concluded that some of the countries are Bank based financial systems while other are market based financial systems, and that financial structure matter for Growth of these economies.

  1. Economics Department, Faculty of Social Sciences, Ambrose Alii University, Ekpoma.

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Economic Slowdown and Indian Exports

Shri Prakash1
and
Ritisnigdha Panigrahi2


The paper focuses on the impact of recent economic slowdown on Indian economy with special reference to exports. It examines the close relation that has been forged between Indian economy and economies of the developed countries, especially the goods markets. But London stock market has been taken as the representative of European markets. The paper has also evaluated the performance of Indian exports in the wake of international economic slowdown. ANOVA, t-test of mean differences, rank correlation and regression model have been used to analyze the data. A mathematical decomposition model has been developed to estimate source wise contribution to export earnings. The main finding is that the world-wide economic slow-down has adversely affected the growth of Indian exports. The study has quantified the adverse effect on exports.

  1. Professor and Dean (Research), BIMTECH. Plot No. 5. Knowledge Park II, Greater Noida, India.
    E-mail: shri.prakash@bimtech.ac.in
  2. Ristisnigdha Panigrahi, Faculty at BIMTECH, Plot No. 5. Knowledge Park II, Greater Noida, India,
    E-mail: rritisnigdha@gmail.com or ritisnigdha.panigrahi@bimtech.ac.in

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University of Allahabad