No. 333

October 2003

Vol LXXX

ISSN 0019-5170

 

The Indian Journal of
Economics
 

University of Allahabad

Contents


 

 The Buoyancy and Elasticity of the Tax System: A Study of Botswana

THAPELO MATSHEKA
 

This paper reports the results of the estimation of the buoyancy and elasticity of the Botswana tax system over the period 1973- 1995. The Oivisia Index Method, developed by Choudhry (1979), is used to estimate tax elasticities. The paper extends on the 'work done by Lewis and Mokgethi (1983), that estimated tax buoyancies for the Botswana tax system. It improves this earlier work in two ways. Firstly, this study uses a larger data set, and secondly, it provides estimates of the elasticity of the tax system. The study finds that, although the structure of tax revenues is dominated by mineral revenues, the tax system is buoyant and elastic. Furthermore, where there are reductions in tax rates, the elasticity estimates are higher than buoyancies. It is concluded as such that a non diversified, non-elastic tax structure imposes a constraint on the ability of the country to fund the requisite investment and more severe where the private sector is not adequately developed unless if the country has accumulated budget surpluses and foreign reserves, which is the case with Botswana.

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  Agri-Infrastructure and Modem Farm Practices: Their Impact on Agricultural Productivity

RUDRA PRAKASH PRADHAN
 

Agri-infrastructure's role in modern farm practices has received renewed attention in recent research to determine the agricultural productivity. Thus, the primary aim of this paper is to establish the linkage between agri-infrastructure and modern farm practices, which are used in agricu1ture. An attempt is also made to carry out the linkage between agri-infrastructure and agricultural productivity and then between modem farm practices and agricultural productivity. Orissa, one of the backward states of eastern India has been taken as a study area.
The implication 01' these findings is that the main determinant of agricultural productivity is the use of modem farm practices .in agriculture. However, the effect is supported by the availability of agri-infrastructure, as it indirectly determines the agricultural productivity. Further, there is need to wipe out the inter-regional disparities in the availability of agri-infrastructure, which restores balance agricultural development in the economy.

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  Measuring India's--Food Security Problem: A Risk and Vulnerability Approach

AKRAM A. KHAN AND FARHAD SHIRANI BIDABADI
 

The intensity of food insecurity existing in a country is a composite of interactions operating at diverse levels from the macro to micro or household level. The components of the system would include international trade and macro policies, the agriculture sector, the market economy, consumption patterns, and the micro economy or household incomes, urban rural differentiation, gender issues, etc. Change in any one of these components is able to produce as price or income distress. Even if the magnitude of price or income shock is relatively high, the households/individuals with diversified income and outflow pattern can stand the distress without using severe coping strategies such as reduction of food consumption. For India to deal with risks of people being exposed to food insecurity there is need to identify its worst food security problems in terms of risks and population exposed to them and give the highest priority to tackling them. A prerequisite for determining risk is defining a scale against which to measure an outcome. In this analysis, the outcomes are physical availability which itself is affected by variability in production, and economic access to food, which is under the effect of price rise or income failure. To assess risk of entitlement failure or susceptibility to food insecurity the best way is to calculate the ratio of expenditure on non-food items to the expenditure on food items. In fact, the non-food expenditures, are acting as buffer this means when there is a rise in food prices or decline in income of households or individuals the expenditure on non-food items can be diverted to food expenditure and protect person's food entitlement. Rich people have little to fear from hunger, this is a simple consequence of Engel's law; consumers have a substantial buffer of non-food expenditures to rely on, even if food prices rise sharply. Without the buffer of Engle's law, poor consumers are exposed to routine hunger and vulnerability to shocks that set off famine.
The risk feature related to physical availability and food entitlement has been reviewed in this analysis. While in case of production and physical availability' India faces less variation and consequently less risk during I 990s when compared to I 980s, and 1970s. The food entitlement especially in rural areas is faced with high level of risk. The risk level has been classified into five different levels including; very high risk, high risk, moderate risk, risk and no risk. Calculations based on National Sample Survey Data on Household Consumption Expenditure Shows that 69.8 percent of urban population and 95 percent of rural population are to some degree at risk of loosing their food entitlement. It is necessary to understand that reduced risk at national level doesn't translate into reduced risk as far as households and individuals are concerned. The reduced risk of entitlement failure could be achieved through a mix of employment and income policies for the fann and non-fann sectors and through a minimum safety net.

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 Policy Package for Informal Sector Development: Basic Assumptions

VINOD ANAND
 

There is sufficient evidence to support the fact that non-format, micro, small, and intermediate-sized enterprises, which essentially survive and subsist without the active encouragement of public authorities, and frequently with their disapproval. have tremendous employment-generation capabilities. It is perhaps for this reason that economic literature abounds in a large number of research projects on this and other facts of these enterprises. But, talking in general terms, there always occur inconsistencies and contradictions between the stated goals and the actual policy, and also between the stated goals and allocations. These inconsistencies and contradictions occur because of many reasons, including ignorance and indifference of the policy makers in respect of many inherent assumptions that are basic to the context to which the given policy relates. In other words, the policy package fails to account for the given assumptions, and this lack of perspective in the policy package adversely affects its final outcome. At this is also true of the various policy packages in the context of informal sector support and development. The focus of this paper is on the various inbuilt and inherent assumptions that are basic to all the segments of this sector. The paper very explicitly underlines the basic assumptions that are highly relevant to the very existence and survival of the informal sector all the world over.

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 Special-skills Payment-base from Viewpoint of Competitive Advantage: Exploratory Studies

 HAI-MING CHEN AND CHIA-HUI CHEN
 

This paper proposes a "special-skills payment-base'.. from competitive advantage viewpoint, which is defined by two dimensions, "competitive advantage of human resources" and "explicitness of job worth." It'll increase core employees' accomplishment sense, commitment, satisfaction, and decrease the employees' turnover. Two high-tech companies had been studied to illustrate the pay system proposed. The paper emphasizes certain positions shouldn't be given more priorities of special skill- based pay unless development for a competitive advantage is needed. It also helps discovering positions to be potential source of competitive advantage and better decisions can be made.

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 An Approach to Sustainable Development

T. V. S. RAMAMOHAN RAo AND SUJATA KAR
 

Over the years a few authors considered the satisfaction to society, from the production and consumption of goods and services, as a stock instead of a flow over time. It has been conjectured that this will make the development process sustainable. This study present~ some formal models to demonstrate this result. It can be surmised that an awareness of this result will, in itself, result in behavioral and institutional changes that contribute to the process of sustainable development.

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The Money Supply Process in Bangladesh: An Error-Correction Approach

M. KABIR HASSAN. MUHAMMAD MUSTAFA AND SYEDABUL BASHAR
 

Money supply has become an important policy instrument and is being increasingly used since the financial deregulation in the late 1 980s. There lies a consensus among policy-makers that controlling the growth rate of money stock is essential to achieve full employment and stable price level. However, two prerequisite must be accomplished in order to attain these targets (Zaki 1995) : first, development of an effective procedure for controlling the rate of money stock growth and second, close identification of the linkage between the desired growth rate of money and the ultimate objectives. Money multiplier in this case plays a crucial role by exerting control over the reserve aggregate such as the monetary base (Johannes and Rasche 1979) although the monetary base, often called high- powered money!, is independent in this case.

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Sustaining Farm Production through Integrated Nutrient Management-Adoption Levels in Farms of Tamil Nadu and Future Prospects

K. N. SELVARAJ. T. SAMSAIANDT. C. SIVAKUMAR
 

Farmers are aware of the need to incorporate organic nutrients in their package of practices due to their advantages both in terms of productivity and environment. The present level of production and actual requirement of eco-friendly inputs show a big gap. The gap suggests further investment on evolving more and more of eco- friendly technologies to sustain agricultural productivity. The estimates of production elasticities indicated that economic responses continue to be obtained to TamilNadu and there is a gap between actual use and recommended doses suggesting that fertilizer use at these levels has to be continued. However, imbalance in use of fertilizer was noticed among the sample Farmers across the agro-climatic regions of TamilNadu. Further, it was noticed that in the trend of increasing cost of production due to increase in cost of fertilizer inputs, higher output-input ratio is possible only if the Farmers adopt right mix applying organic forms of nutrients. While planning for nutrient supply through fertilizers, the availability. of organic quantity of manures should be assessed thereby use of inorganic fertilizers may be reduced, which also reduces the burden of burgeoning subsidies and appropriate mix can be evolved. Considering the special benefits of the integrated plant nutrient system, government should implement various schemes to encourage production of compost apart from popularizing the improved compost-making techniques for preparation of rural compost. Quantity of available organic manures and requirement of inorganic manure with the available organic nutrients need assessment for sustainable use. Further, such estimates would enable government to reduce burden of subsidies and sustain agriculture. To promote and popularise bio-fertilizers in the state, training centers should be developed and setting up of more number of bio-fertilizer production units with public and private support requires emphasis.

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Exports and Output in Three South Pacific Countries

TSANGY AO CHANG. WENRONG Llu AND HENRY THOMPSON
 

The relationship between exports and output is investigated in a bivariate framework for three small open South Pacific island countries: Fiji, Papua New Guinea, and the Solomon Islands. Exports and output are co integrated in Papua New. Guinea and the Solomon Islands, but not Fiji. Time series properties are evaluated, and Granger causality tests are supplemented with bivariate co-integration and error correction models. Hsiao's of the Granger causality test is used to examine the direction of causality. Impulse response and variance decomposition analyses confirm conclusions of the Granger causality analysis.

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 Economic Contribution of Women Workers and Development of Family Members: A Note

S. SHARMA AND N. OGALE
 

The impact of economic contribution of women workers was assessed in terms of the development of family members. The mean percentage share of respondents' income to family income/month was 32.51 per cent. Almost 61 per cent of respondents' perceived their family members' health status as normal after their employment where as this figure was 52 per cent before employment of respondents. Nearly 61 per cent of respondents reported improvement in education of children and 43 per cent were able to spare some money to teach skills to their children after their employment. Income of the respondents and development of family members showed positive correlation. Development of urban households was more than rural households.

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University of Allahabad