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Special Centennial Issue

No. 405

October 2021

Vol. CII

ISSN: 0019-5170


Insurance Parameters, Linkages between Investment and Economic Growth in India

Shrikant Madar1
Sheetal D. Arondekar2

With the advent of private sector life insurance firms, the post-2000 period has led to fierce competition amongst the firms to retain existing and attract prospective consumers with their innovative life insurance products. This paper is an attempt to examine the trends and performance of the life insurance sector in India and to analyze the impact of this sector’s investment on the gross domestic product(GDP)for the period from 2000-01 to 2019-20. The database for this study is purely dependent on secondary sources namely, the Handbook on Indian Insurance Statistics and RBI. Data were analyzed using MS-Excel and GRETL Software and results were presented in the form of tables and graphs. For effective data analysis, the econometrics models such as linear trend line analysis, Log-linear model, and correlation analysis were applied. The performance of the life insurance sector is assessed using the parameters, viz., insurance penetration, and insurance density. The study reveals that life insurance density and penetration have an increasing trend that results in the overall growth of the economy and also shows that investment in the life insurance sector has a significant association with India's GDP.

Keywords: Insurance, Investment, Economic Growth, Hypothesis testing, Econometric and Statistical Methods.

JEL Codes: G22, P45, F43, C12, C10

  1. VVM’s Shree Damodar College of Commerce &Economics (Economics and Banking), Margao (Goa), India. E-mail:
  2. VVM’s Shree Damodar College of Commerce &Economics (Commerce and Management), Margao (Goa), India.E-mail:

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Does High Trade Volume Affect the Fiscal Deficit of India? An Econometric Investigation

Diptarghya Bhattacharjee1

This paper establishes the relation between fiscal deficit and trade volume of India and apart from trade volume also the other variables are government final consumption expenditure and share of defence expenditure of total GDP of India and the theory says that the trade volume has the negative relation with the fiscal deficit but by using the Engle-Granger two step cointegration approach it is found that there is the cointegration between fiscal deficit, trade volume, government final consumption expenditure and share of defence expenditure even though there is no cointegration between trade volume and fiscal deficit solely and also having the positive relation between trade volume and fiscal deficit in case of India which contradicts the theory and the only reason is high import which raises the expenditure of government and the fiscal deficit is supressed if there is the balance trade and also government should increase the tax base and which will automatically reduce the government expenditure and fiscal deficit as well.

Keywords: Fiscal deficit; Trade volume; Government final consumption expenditure; Share of defence expenditure
  1. M.Sc. (passed in 2021) in Economics, University of Calcutta, West Bengal, India. E-mail:

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Maternal and Child Health Deprivation Scenario - An Analysis of Longitudinal Data Across Selected SAARC Countries

Soumyendra Kishore Datta1
Tanushree De2

The issue of health care benefits for females during maternity and that of children should be considered in an integrated manner and not in isolation. Children health deprivation often gets aggravated due to inadequacy in maternal health condition. It is rightly viewed that child bearing phase of mother and condition at delivery constitute the prime definite life incidents that have a bearing on the health status of a child’s future life courses. In this context, a maternal health deprivation index and child health deprivation index based on some relevant components are developed in the context of six SAARC countries over 2000-2016. Principal component method and UNDP goalpost method are applied in this context for deriving the indices and corresponding ranks. The variation in these indices are further tried to be explained by considering several relevant factors. A recursive simultaneous equation structure is applied for explaining the simultaneity in variation of these two deprivation indices. It is observed that provision of several health related benefits needs to be made in order to lift the poor state of maternal and child health in some of the considered countries.

Keywords : Maternal Health, Child Health, Deprivation Index, Simultaneous Equation, SAARC Countries.
  1. Professor, Department of Economics, The University of Burdwan, Burdwan, West Bengal, India, Email:
  2. Assistant Professor, Department of Economics, Vivekananda Mahavidyalaya, Burdwan, West Bengal, India, Email:

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Policy Transmission Channels and the Economy: Structural Vector Autoregression Estimation of the Monetary Policy Effects

T. Lakshmanasamy1

The monetary policy shocks propagate to the real economy affecting the aggregate demand and aggregate through various transmission mechanisms like credit, asset price, exchange rate and interest rate channels. This paper analyses the relative importance of the monetary transmission channels in India through which the monetary policy influences output and prices and to ascertain the components of aggregate demand of the economy in which the effect of the monetary policy has maximum impact in India during the period 2001 to 2019 using quarterly data applying the structural vector autoregression estimation method. The SVAR results show the significance of interest rate and asset price channels in transmitting the monetary shocks to the real economy in India than the credit and exchange rate channels. Among the components of aggregate demand, the maximum impact of the monetary shock is borne by investment demand and imports. The interest rate changes account for a significant part of the fluctuations in the components of aggregate demand. All the channels of monetary policy and all components of aggregate demand except for private consumption are robust around the period where the impacts are felt the most.

JEL classification: B23, C32, C54, E43, E52, E63

Keywords : Monetary policy, shocks, transmission channels, commodity prices, components of aggregate demand, SVAR.

  1. Formerly Professor, Department of Econometrics, University of Madras, Chennai. Email:

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Investigating the Agriculture-induced Environmental Kuznets Curve in Indian context

Owais Ibin Hassan1
Shahid Ashraf1

Agriculture is a pivot in the economic, political and social landscape of India. As significant as it is to the livelihood, it also poses high pollution risk most notably through the unchecked use of fertilizers. This study investigates whether an agriculture induced EKC exists for India using annual frequency data over the period 1970-2018. EKC is a widely tested hypothesis especially for the pollutant, carbon dioxide. The behaviour of nitrous oxide as a pollutant has been relatively neglected in the EKC literature. Nitrous oxide is an environmental hazard with its 300 times greater warming capability than carbon dioxide. This paper attempts to fill that gap in literature and uses nitrous oxide as a proxy for environmental degradation in the EKC framework. The results of this study conform a short-run as well as long-run relationship between agricultural growth and environmental degradation using ARDL Bounds test approach thus validating the EKC hypothesis for Indian agriculture sector. However, no significant relationship was found between land use and nitrous oxide emissions. ARDL Bounds test approach is applied to investigate the relationship between pollution and economic growth. Alternate agricultural practises and use of organic fertilisers and manures should replace conventional agricultural practises. The findings underscore a greater and urgent need for wider implementation of green farming.

Keywords- Agriculture, ARDL Bounds test, Environmental Kuznets Curve, Greenhouse Gases, Nitrous oxide, Pollution.

  1. Research Scholar, Department of Economics, Jamia Millia Islamia, Okhla, New Delhi. Email:
  2. Professor, Department of Economics, Jamia Millia Islamia. Email:

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Joint Forest Management in India: A Game Theoretic Analysis of Its Evolution and Reasons Behind Poor Performance

Debolina Saha1
Avinandan Taron 2

India initiated Joint Forest Management in 1990, by the National Forest Policy of 1988. It stressed on the involvement of partnership between the Forest Department and local communities for sustainable forest management. This study utilises a game theoretic framework to describe the evolution of this system, and its present structural problems. The model indicates conditions of improvement within the institution to make it sustainable. These recommendations are based on certain assumptions of the existing situation. Therefore, using the conclusion for policy recommendations needs a thorough appreciation of complexities existing in the system, which has been simplified in the model.

Keywords: deforestation, natural resource management, Joint Forest Management, property rights, game theory.

JEL Classification: Q01, Q23, C7, D02, D7.

  1. Assistant Professor, Department of Economics, Rabindra Bharati University, 56 A, B.T. Road, Kolkata 700050, West Bengal, India. Email ID:
  2. Researcher, Investment and Institutional Analyst for RRR Business Development, International Water Management Institute, Colombo, Sri Lanka. Email ID:

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Host Country–Transnational Corporations Relative Power Positions and Bargaining Outcomes: A Distinct Model

Shah M. Tarzi1

This study offers a formulaic-based new schema that is sufficiently flexible yet robust enough to capture various complementary and conflicting host governmenttransnational corporations bargaining dynamics and interactions. In order to illuminate the need for the proposed model, a brief overview of the prevailing Obsolescing Bargaining Model (OBM) model is presented. This segment pinpoints OMB’s shortcomings which the proposed model aims to ameliorate. Next, the study provides a narrative of stages of the investment cycle, and the international constraints that can impede the ability of host national governments from translating any potential shift in power into desirable results so as to explain how these vital factors can be incorporated into the proposed model.

A concluding section highlight select findings and sets forth a pathway for applying the model to advance future research with emphasis on garnering both theoretical, policy and programmatic insights, the later likely most helpful to host governments and transnational corporations. Two of the several vital questions the study poses for applying the proposed schema in future research are: (1) How close can the host get to achieving its proximate goal of extracting economic rent; (2) Under what conditions will national governments host to transnational corporations and such firms sustain a relationship in which the rewards and costs experienced by both players are likely to be one of a positive zero-sum game?

Keywords: Transnational Corporations, Bargaining with Multinationals, Foreign Direct Investment, Obsolescing Bargains and Development.

  1. Lee L. Morgan Endowed chair in International Affairs and Professor of International studies at the Department of Political Science and International Studies, Bradley University, USA. E-mail:

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Exploring Trade Potential Between India and Mexico-An Empirical Assessment

Reema Jain1
Saba Ismail2

This paper aims to assess the trade potential between India and Mexico. Various indices have been used to analyse the changes in trade patterns and trade relations from 1997 to 2019 based on HS-2 digit code on a total of 97 commodities. The empirical analysis reveals that trade relations between India and Mexico have improved over the last two decades and identifies the existence of mutually advantageous product groups. The intensity of trade has strengthened; still there exists a potential for further economic integration as compared to their respective shares in the world trade. There exist intra-industry trade in various commodities and a strong comparative advantage in products like Textiles and Ceramics. The findings of this paper suggest that there is a need for better policy coordination and effective collaboration between both sides to enhance the trade volume.


Keywords: International economics, Latin America, India, Mexico,BRCA, Intra-Industry trade.

  1. Ph.D. Research Scholar, Department of Economics, Jamia Millia Islamia, New Delhi. Corresponding author’s email id:
  2. Associate Professor, Department of Economics, Jamia Millia Islamia, New Delhi-110025.

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