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No. 339 |
April 2005 |
Vol LXXXV |
ISSN0019-5170 |
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Contents
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Tax
Shifting,Economic, Growth, and welfare
Maximization
Tai-Yung Kam
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Ching-Huei. Shieh
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This paper re-examines
Barro's (1990) result of maximizing the
economic growth rate is equivalent to
maximizing social welfare in the context
where the government adopts a tax-shift
policy. The results show that at the steady-growth
equilibrium,consumption, capital, output,
and government expenditure grow at the
same rate. The economic growth reaches
its maximum when the consumption taxes
rate approaches to infinity. However,
the effect of tax-shift on social welfare
is ambiguous,it depends on the interaction
of two opposite forces. The social welfare
reaches its maximum while the consumption
tax rate is somewhere less than infinitive.
We conclude that social welfare maximizing
policy is not equivalent to maximizing
the economic growth.
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Foreign Capital
Inflows and skill-Formation with the Without Technology
Transfer: A Theoretical Analysis
Anirban Paul
AND
Kausik Gupta
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In a simple three sector
extension of the HOS-framework with foreign
enclave as the third sector, we analyse
the effects of foreign capital inflow
on skilled-unskilled wage-gap, skill formation and welfare separately in the absence
and presence of technology transfer. We
have shown that whereas without technology
transfer, inflow of foreign capital raises
wage rate of skilled labour, it may also
lower the same under transfer of technology.
In both the cases we have derived the sufficient conditions for the skill-formation
and welfare-rise..
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Varuiation
of Wholesale Price Indices of India's Manufactured
Products 1989-1999
H. Raman
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In the theory of price,
the only macro aspect is the determination of
changes in the aggregate price level per
unit of time. Therefore one of the important
objectives of monetary policy is to attain
price stability with a tolerable rate
of inflation. As opined by Milton Friedman
(1960's1,monetary policy will affect prices
with 'long and variable lags' .Nevertheless,
both the monetary and credit policies
of Reserve Bank of India differently affect
the prices of various groups of commodities
in the frame work of fiscal and the balance of payments situation prevailing in a particular span of time. Regarding price
movements, the wholesale price indices
and the consumer price indices of commodities
are not very often moving closely and
there is variation in the indices among
different types of commodities even within
the same group. As such, the prices within
the group may vary in accordance with
the nature of individual commodities.
Therefore, an attempt has been made in
this paper to find out the extent of variation
in the indices of manufactured products
during the period between 1989-90 to 1998-
99.
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Sales
Tax Incentive and Industrial Growth
Ashok M. Agrawal
AND
Mrs. Rashmi Ojha sharma
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Every government thrives
to bring about balanced regional development
through industrialization as it was realized
that industrialization alone, if done
in a planned manner, can bring about balanced
regional development. India and many of
its state governments have been providing
various incentives to encourage entrepreneurship,
disperse industries in backward areas,
provide competitive strength, give stimulus
to industries, etc. with the main objective
to bring about regional balance. In this
direction Government of Maharashtra took
the lead by introducing Package Scheme
of Incentives for industries in 1964 which
has been amended from time to time depending
on changes in the needs of the entrepreneurs.
The study is done with special reference
to Maharashtra as it is the pioneer in
introducing the scheme and is recognized
as one of the most developed states on
various socio-economic parameters. The
Government of Maharashtra has been providing
various incentives in its PSI but one
incentive which has remained common is
the Sales Tax Incentive, though the form,
quantum and ceilings kept changing from
Scheme to Scheme. Just recently in PSI
2001 the government removed this incentive
bowing to the pressure from other state
governments and Central Government. The
study is done with the main objective
of analyzing the role of Sales Tax Incentive
in helping disperse the industries and
for this study is also made regarding
the expected outcome of Sales Tax Incentive
in different regions depending upon the
level of industrialization the problems
connected with it, role of Implementing
Agencies i.e., SICOM and DlC with regard
to LSI/MSI and SSI respectively, role
of supportive agencies i.e., the Sales
Tax Department affecting the success of
PSI, operational problems, and problems
faced by entrepreneurs in availing of
incentive.
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Financial
constraints, Inventory Investment, and
Fixed Capital
T. V. S. Ramamohan
Rao
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In a series of empirical
studies, Fazzari and Petersen (FP) and
their associates examined the substitutability
between the stock of fixed capital and
inventory investment of firms when they
encounter short run and/or sporadic financial
constraints. They consider the cashflow
constraint as the major source of adjustments.
In addition, they argue that firms cannot
forego investment opportunities in the
interest of maintaining a stable market
share in the long run. Hence, inventory
investment is expected to bear the brunt
of the adjustment. The firm has many more
options if the financial constraints persist.
A more satisfactory theoretical explanation
for the relationship between the financial
constraints and investments in inventories
and fixed capital is therefore necessary.
This study sets up a comprehensive theoretical
framework and demonstrates that changes
in cost of production and other logistic
costs will be the primary channel through
which financial constraints affect investment
in inventories and fixed capital. Many
other important insights into the transmission
mechanism have been highlighted.
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Production Function Forms under Technology Gap:Evidence from Public Accounting Firms in Taiwan
Bao-Guang Chang
AND
Yahn-Shir Chen
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Functional form of
production under technology gap in the
same industry, a less discussed topic
in literature, is investigated in this
paper. To enrich this line of theories,
the technology pattern of production function
of public accounting firms in Taiwan under
different technology level is examined.
The main findings are as follows. Public
accounting firms with different technology
level show different functional forms
of production during two sub-periods of
1989-1995 to 1997-2000. Due to potential
structure shift in economy, the functional
form of production for large firms with
high-tech level resembles variable elasticity
of substitution pattern during the former
sub-period and is exactly variable elasticity
of substitution pattern during the latter
sub-period. For small ,firms with low-tech
level, their functional forms of production
remain to be the constant elasticity of
substitution pattern during both sub-periods.
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Performance and Cost-efficiences of the General Insurance Corporation of India:
Rabindra N. Bhattacharya ,Shyamal Paul
AND
Suparna Sanyal
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The general insurance
business in India was nationalized in
1972. Now this business is on the way
of liberalization. It is imperative to
undertake some in-depth study of this
business to identify the rationale of
-the recent developments. This paper is
a partial and modest attempt to such a
study about the performance of the general
insurance business in India. In this paper
we examine the performance of the General
Insurance Company of India (GICI) from
the perspective of scale efficiency. This
analysis is based on data over the period
1990-91 through 1999- 2000 and across
the five units of the GICI namely, National
Insurance, New India Assurance, Oriental
Insurance, United India Insurance and
GIC itself.
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Resource
Use Efficiency and return from selected
Foodgrain crops of Himachal Pradesh :
A Study of low Hill Zone
Sikander kumar
AND
Sandeep Kumar
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The main aim of production
unit is to co-ordinate and utilize resources
or factors of production in such a manner
that together they yield the highest net
returns. The paper present a study of
the resource use efficiency of key factors
of production returns to scale and profitability
of the selected foodgrain crops in Himachal
Pradesh. To make Himachal agriculture
cost efficient, it is suggested that farmers
should use more of HYV seeds, insecticides
and pesticides, bullock labour and tractorization,
improved implements etc. to turn out negative
returns into positive. Again, consolidation of land holdings and a redistribution
of land in favour of marginal and small
farmers will undoubtedly help in increasing
the agricultural production, productivity
and rural employment in the state.
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