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Special Centennial Issue

No. 408

July 2022

Vol. CIII (Part-I)

ISSN: 0019-5170


What Drives Imports in India? : An Empirical
Investigation Using ARDL Bounds Testing Approach

Surendra Singh Rajpurohit1

This paper investigates the import demand function using ARDL bounds testing approach, and assesses the degree to which different factors stimulate the import demand in India. This time- series study carried out on the data pertaining to 41 years ranging from 1978 to 2018 has its findings mostly in congruence with the existing literature of various research studies carried out across the world. This research study detects a positive relationship of Gross National Income (GNI), Exports and Liberalization on India’s import demands whereas Exchange Rate, Interest Rate and Economic Crisis of 2008 were found to have a negative impact on the import demands of India. This study intends to help the policymakers in formulation of appropriate policies keeping in mind the desired macroeconomic objectives, especially with respect to influencing the import demand of the country.

Keywords: Import demand function, International Trade, ARDL bounds testing.

JEL Classification: E61, E58, F14, F62

  1. Associate Professor, School of Business, Mody University of Science & Technology, Laxmangarh, Rajasthan-332311. E-mail:

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Emerging Sector-wise Trends in Asset Quality and
Gross Advances of Domestic Systemically Important
Banks in India

Ameen Uddin Ansari1
Sanjeev Kumar2

The overwhelming importance of domestic systemically important banks (D-SIBs) in the entire Indian banking industry as well as in the Indian economy is the main considerations for selecting them for the purpose of the study in order to analyze the trends in sector wise NPAs of D-SIBs and address how different sectors contribute towards nonperforming assets of domestic systemically important banks in India. There are three banks in the club of domestic systemically important banks in India namely State Bank of India (SBI), Industrial Credit and Investment Corporation of India (ICICI) and Housing Development Finance Corporation (HDFC) Bank. The trends in sector wise gross advances and gross nonperforming assets of D-SIBs during the period 2013-14 to 2019-20 show that the share of personal advances in gross advances of D-SIBs is increasing in recent years. The banks are shifting their focus away from large industrial loans towards personal loans as the Gross NPAs ratios of the personal sector, traditionally, have been low over the period of time. This diversification strategy may hamper the allocation of gross advances towards the productive purposes. Besides, the personal income is not stable –a part of concern for banks. This requires that the household leverage and indebtedness need to be kept in focus in the context of overall financial stability. On analyzing how different sectors contribute towards NPAs through the aggregate sector wise panel data analysis for the period starting from 2009-10 to 2019-20, the result obtained from panel data regression model with fixed effect shows that agriculture, industrial and personal sector is positively related with NPAs of D-SIBs while service sector is negatively related with NPAs of D-SIBs in the study period. The study suggests that some sector specific policy is needed in order to make better control over the problem of asset quality in India as the need; nature and requirement of credit differ from sectors to sectors. Last but not the least, the study also suggest that D-SIBs should be prioritized in the resolution of NPAs in contrast to the Non D-SIBs in India.

Keywords: Asset Quality, Domestic Systemically Important Bank, Gross Advances, Gross Nonperforming Assets.
JEL Classification: G20, G28, G33
  1. Research Scholar, Department of Economics, University of Lucknow, Lucknow (UP)- -244901
    Email Id :
  2. Associate Professor Department of Economics, Ch. Charan Singh University, Meerut (UP), India-250004

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Factors Affecting MSMEs Export in Uttar Pradesh:
A Regional Study of External Determinants

Aditya Kumar Sharma1
Rajiv Kumar Bhatt2

MSMEs can be used as a weapon to tackle the issue of unemployment, poverty and inequality. They are the largest employment generator and contribute significantly in the GDP and export. Contemporary literature related to the internationalization of MSMEs firms doesn’t focus on issues at the intra-national level, i.e., Regional Resource Base. This study tries to fill this gap by considering regional resources which affects the export in the two regions(Eastern and Western) of Uttar Pradesh and inter-regional variation. The external factors were identified in these regions and then applying the Generalized Method of Moments approach of panel data analysis to find statistically significant factors affecting total exports from each region. The study concludes that inter-regional variations exist among the factors affecting export in two regions of Uttar Pradesh. The research finds some common indicators in these regions.

Keywords : MSMEs, Export, Regional Resource Base, Uttar Pradesh.
  1. Assistant Professor, School of Liberal Arts and Management, DIT University, Dehradun. E-mail:
  2. Professor, Department of Economics, Faculty of Social Sciences, Banaras Hindu University, Varanasi-221005. E-mail:

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Measuring Capital Stock for an Industry – A Case Study in India

Arijit Roy1

More than one type of capital measure exists in practice and each measure corresponds to a different analytical usage. For example, if we are interested in measuring wealth stock of fixed capital, we construct a measure for the net fixed capital stock or gross fixed capital stock which is basically the present discounted value of the stream of future returns derived from a fixed capital asset. At the same time one may be interested to know the productive potential of the capital stock. Then he will derive an estimate of the productive stock which is nothing but the gross fixed capital stock in efficiency units.

In the present paper, we focus on the measurement of wealth value of fixed capital assets. The national statistical agencies, as for example, the Central Statistics Office (India) provides estimates for the aggregate economy and some major sectors only. An individual researcher needing estimates of net fixed capital stock or gross stock at the two digit or more disaggregated level of industry, is left with the problem of estimating it on her own.

The method commonly used for measuring wealth value of fixed capital assets in India is the (traditional) Perpetual Inventory Method. There are several variants of this method used by different scholars in different context. We have applied some of those variants to measure the wealth capital stock at the industry level. Using some judgements and imposing some unavoidable assumptions, we have derived the net and gross fixed capital stock at the industry level.

Keywords : Gross Fixed Capital Stock, Net Fixed Capital Stock, Gross Fixed Capital Formation, Consumption of Fixed Capital, Perpetual Inventory Method.

JEL Classification: B41, E01, E02, L16.

  1. Associate Professor of Economics, V. M. Mahavidyalaya (Affiliated to VIDYASAGAR UNIVERSITY), P.O. – Chaitanyapur (Haldia), DIST - Purba Medinipur, PIN – 721645, WEST BENGAL, India.

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Impact of Demonetization and Digitalization on
Financial Inclusion and Payment System in India

Anawar Alam2

Digital transformation of payment system has been a need of the day in present hitech World. The slogan of ‘digital India’ of Indian government indicates the priority towards digital transformation of the Indian economy. A lot has been done, reforming banking system with new technology regarding digital and cashless banking transactions, in India, but still far behind from the target, particularly before demonetization. Basic reasons behind it were less effective efforts to resolve the issues of demand side, including supply side also. So in this concern, the paper examines the role of demonetization and digitalization (which is proxied by JIO mobile & internet facility) in the progress of payment system and financial inclusion in India. Growth of digital and cashless banking is measured by growth in electronic banking transactions (based on mobile phones and internet). The empirical analysis is based on the secondary data which has been collected from the website of RBI on monthly basis for the period of 2014–2020. This period includes launching of the JIO mobile and internet facility as well as demonetization in India. The data has been analyzed with the help of mean difference and regression models. The finding suggests that demonetization and digitalization has served to advance the goal of digital and cashless (electronic) banking in India through encouraging the growth of mobile banking transactions.

Keywords- Financial inclusion, demonetization, cashless economy, digitalisation.

  1. Assistant Professor, Department of Economics, University of Allahabad, , Prayagraj,
    U.P. Pin -211002. Email-
  2. Assistant Professor, Veerbhumi Government PG College, Mahoba, (UP), Pin-210427

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Sustainability of Micro-enterprises: An Empirical Investigation

Prasid Gurung1
Soumitra Sarkar 2

With the growing concern for sustainable development and sustainable business practices, this paper attempts to study and analyse the sustainability practices adopted by the manufacturing microenterprises of the Siliguri sub-division. The term sustainability was first defined as an environmental impression by the Brundtland Commission report of 1987 and it is believed to be multi-dimensional in nature, and for business entrepreneurs, it means the protection of the environment and social resources that are parallel to the organizational viability. This dimension of sustainability is now emerging as a global concept to be recognized as a sustainable business initiative. Using the direct survey method, sustainability data is collected from owners/managers of manufacturing microenterprises to ascertain the implementation rate of sustainability practices, especially the financial and environmental sustainability practices. Using Exploratory Factor Analysis (EFA) for dimension reduction to identify the underlying latent construct from each set of sustainability practices, the items of financial sustainability practices were reduced to two factors of which it was found that the manufacturing microenterprises have sound and healthy book-keeping practices and items of environmental sustainability practices was reduced to four factors of which it was found that these enterprises adhere to an improved energy efficiency practices. The findings of the study suggest that financial sustainability practices and environmental sustainability practices have a complementary relationship and the implementation rate of both sustainability practices adopted by manufacturing microenterprises of the Siliguri subdivision is considerable but there still exists a huge opportunity for further enrichment of practices.

Keywords : Sustainable development, Sustainable Practices, Micro-enterprises, Exploratory Factor Analysis.

  1. Research Scholar, Department of Commerce, University of North Bengal.
  2. Associate Professor, Department of Commerce, University of North Bengal.

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Equity Premium Puzzle and the Nigerian Capital Market

IDOLOR, Eseoghene Joseph1
Onome Linda Oshevire2

This study empirically investigates whether the equity premium puzzle (EPP) exists in the Nigerian Capital Market, using evidence form eight major sectors, consisting of agriculture, conglomerates, construction and real estate, consumer goods, financial services, health care, industrial goods, oil and gas, examined over the period 2000 to 2019 due to available data. Equity stock was used as risky asset, while treasury bills were used as risk-free assets (riskless asset). Consumption growth was included-being a core intervening variable in inter- temporal and utility based asset price modelling.

Employing descriptive statistics, correlation analysis, and, joint system-GMM estimation approach, the empirical results show no evidence of EPP in Nigeria, as the treasury bill rate (return on risk-free asset) outperformed the return on equity stock (risky asset) throughout the period and crosssection and the risk aversion found to be statistically insignificant, even though it was high, implying a highly risk averse investment environment, but with no evidence of EPP in the Nigerian Capital Market.

Further evidence shows an insignificant relationship between risk and return; a further validation of no evidence of EPP in the Nigerian Capital Market. Consumption growth is positively and significantly related to asset return and positively correlated with risks. Against the backdrop of the foregoing findings, continuous empirical investigation is important in the subject matter, given the unfolding dynamics, and volatile nature of the Nigerian economy and capital market. Strong regulatory framework and institutional mechanisms to enhance optimal investment decisions and the operations, efficiency, penetration, deepening and development of the Nigerian Capital Market are also important.

  1. Associate Professor, Department of Banking and Finance Faculty of Management Sciences, University of Benin, Nigeria. E-mail:,
  2. Department of Banking and Finance, Faculty of Management Sciences, University of Benin, Nigeria.

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Evidence from Indian Manufacturing Industries on
Foreign Direct Investment and Technology Spillover

Rajesh Pal1
Rahul Ranjan2

This paper investigated the influence of foreign direct investment (FDI) in boosting domestic firm’s productivity through technological spillovers in India's manufacturing sector using ASI unit data for period 2015-16 to 2018-19. The study reveals that FDI has a positive and beneficial influence on domestic firms in upstream industries. Even downstream industries profit from FDI, but at a lower rate than domestic firms that supply intermediate outputs. It is apparent that India has become one of the most sought-after locations for FDI, which has not gone untapped by domestic enterprises. To maintain their competitive edge in the market, MNEs strive to limit technological spillover to competing domestic firms. This necessitates the implementation of regulatory and institutional changes that encourage domestic firms to invest in the research and development process. Furthermore, the majority of FDI in the manufacturing sector goes to medications and pharmaceuticals, chemicals, and autos, necessitating immediate attention to the need to diversify FDI inflows into other industrial sectors. This would contribute significantly to the economy's infrastructure growth.

Keywords: FDI, Horizontal FDI, Backward FDI, Forward FDI.

  1. Professor at Mahatma Gandhi Kashi Vidyapith, Varanasi. Email:
  2. Consultant at Research and Information System for Developing Countries (RIS), New Delhi.

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Students’ Performance in Higher Secondary Education
in Assam: Examining Inter and Intra
Institutional Disparities

Pranati Das1
Komol Singha2
Damodar Nepram3

Higher secondary education performance in Assam appears to have deteriorated drastically in recent years. As part of this study, the students were given a written test to evaluate their overall performance/test score. Using the ANOVA test, the study discovered that students from privately run institutions, regardless of type (college, school, and junior college), performed far better than students from public institutions. The standard deviation results, on the other hand, revealed that there is a significant intra-institutional performance disparity within private institutions. Furthermore, multivariate regression analysis revealed that a student’s economic situation, the number of assignments and class tests, access to the library, and Pupil-Teacher Ratio all aided students’ performance. However, it is disheartening to learn that teachers with a long year of service have a negative effect on students’ test scores. Based on the findings, this study suggests that school accountability and teacher responsibility be prioritised in order to improve HS education performance in Assam.

Keywords: Assam, Higher Secondary Education, Performance, Private, Public, Test Score.

JEL Code: I21, I26, I28

  1. PhD Research Scholar, Department of Economics, North-Eastern Hill University, Shillong, India 793022.
  2. Professor, Department of Economics, Sikkim University, Gangtok, Sikkim, India 707102,
  3. Associate Professor, Department of Economics, Manipur University, Imphal, India 795003.

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Effect of Digital Readiness on the
Export Preparedness in India

Shreyasee Kaushik1
T Varun Reddy2

Since the reforms in the 1990s, India has posted a stellar export performance. However, for a vastly diverse nation like India, a disaggregated analysis of exports at the state level is warranted. Therefore, NITI Aayog and IFC have jointly constructed the first-ever ‘Export Preparedness Index’ (EPI) with four constituent pillars that together gauge the subnational level of export readiness. However, it remains to be seen whether and how the improvements in digital readiness of the states play a role in making them better export prepared. In this paper, we investigate the effect of related economic variables on EPI viz. the e-Readiness, population size, political ecosystem and coastal access. We find that digital readiness, population size and the states’ political ecosystem have a significant and positive impact on the states’ export preparedness.

Keywords: Export Preparedness Index, Digital Readiness, State level Export Performance, e-Readiness Index, Digital Trade.

  1. Research Scholar, Delhi School of Economics, University of Delhi, Delhi, IN-110007.
  2. Research Scholar, Delhi School of Economics, University of Delhi, Delhi, IN-110007.

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