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Special Centennial Issue

No. 393

October 2018


ISSN 0019-5170



Perverse Subsidy and Its Impact on Environment: Focus
on LPG Resource in India

Soumyendra Kishore Datta1
Manjari Hasin Khanam2


After 2002, domestic LPG in India came under regulation and it was mainly introduced as a pollution free cooking fuel which brought the kitchen revolution' in India. So India wanted to expand its use by incentivizing people towards its consumption by providing subsidy on LPG and this resulted in continuous increase in the number of consumers and total volume of subsidy. However rising subsidy often results in inefficient extraction of this scarce resource. The paper attempts to analyze per capita growth rate of LPG consumption, the share of net import to meet the excess demand, effect of subsidy on future availability and impact on environment. The advantage of LPG as cooking fuel is that it is smokeless and less hazardous to health. Thus demand for LPG is rising every year due to the presence of subsidy and leads to its huge extraction. Further, being an exhaustible resource, rapid extraction, overuse, and misuse reduces its net quantity rapidly and so this subsidy is dubbed as environmentally perverse in nature. The government needs to introduce modified subsidy policy that targets the really needy section of population, thus obviating its coverage extended to wealthy segment in the society..

Key Words : LPG, subsidy, perverse, resource, extraction.

  1. Professor, Department of Economics, University of Burdwan, West Bengal, India,Email:
  2. Research Student, Department of Economics, University of Burdwan, West Bengal, India,Email:

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Impact of Financial Inclusion on Economic Development
of Rural Households in Northern States of India

Tarsem Lal


The paper aims at measuring the impact of financial inclusion on economic development of rural households through cooperatives. To accomplish the objectives of the study, the primary data were collected from 191 beneficiaries of Cooperative banks operating in three northern states of India i.e., J&K, Himachal Pradesh and Punjab using purposive sampling. The data were collected during the month January to July 2017. For scale purification and data analysis various statistical techniques like EFA, CFA, SEM, one-way ANOVA and independent sample t-test were used. The results of the study revealed that financial inclusion through Cooperatives has direct and significant impact on economic development of rural poor households. The study makes contribution towards financial inclusion literature and fulfils the research gap to some extent by analysing the impact of financial inclusion on the economic development of rural households. Present study can provide inputs to policymakers and other stakeholders of Cooperatives to formulate strategic policies which can helps them in promoting and practicing financial inclusion both at the national and international level. The research has certain inevitable limitations. First, the in-depth analysis of the study is restricted to three northern states of India only because of inadequate time & resource availability. Second, comparative study of beneficiaries who are covered under the financial inclusion drive and those who are excluded from the financial inclusion has not been done and thus, could be undertaken in future. Third, possibility of subjective interpretation in some cases cannot be ruled out.

Key Words: Economic development, EFA, CFA, SEM, Cooperatives, Financial inclusion, Purposive sampling.

  1. Sr. Assistant Professor, P.G. Department of Commerce, University of Jammu, Jammu J&K (India)-180006, Email:

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Pattern of Households' Savings: A Tale of Two Surveys

Tarujyoti Buragohain 1
Gautam Kumar Das 2


This paper attempts to assess the households' savings behavior from no sets of nationally representative penal data-1HDS and IHDS-11 (India Human Development Survey). The study finds that each income quintile is not a homogeneous group. Among top income quintiles, there are households whose expenditure exceeds income. Whereas, among bottom segment, there are households whose income exceeds expenditure and have surplus income for saving. Among bottom quintiles the food-income ratio is 54 percent in IHDS-I, and at a lower level of 47 per cent in IHDS-11, These results are comparable with other countries like Nigeria and Kenya which spend 56.4 and 46.7 per cent respectively, of their income on food. Among top quintile the food-income ratio was 22.6 per cent in IHDS-I, and at a lower level of 17.5 per cent in IHDS-II. One interesting fact observed among quintiles-I and quintile-Il is that the savings to income ratio is lower in IHDS-II than in IHDS-1. The marginal propensity to save has also declined from 0.227 in IHDS-I to 0.196 in IHDS-11. The value of average propensity to save and elasticity of savings is negative among top quintile in IHDS-II, indicating that savings reach the saturation level and an increase in income will lead to fall in demand for savings and may lead to more expenditure on luxurious commodities. However, the study finds that households' income is the major determinants of consumption expenditure and savings. The estimated marginal propensity to spend on consumption lies between zero and one among all quintiles. Hence, the results satisfied the Keynesian hypothesis with recent primary households' data.

Key Words: Economic development, EFA, CFA, SEM, Cooperatives, Financial inclusion, Purposive sampling.

  1. Associate Fellow and **consultant, National Council of Applied Economic Research (NCAER), Parisila Bhawan, 11 Indraprastha Estate, New Delhi 110002, India. Email: Views expressed here do not necessarily reflect that of organization where the authors work.

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Healthcare Development Index in Punjab:
Inter District Analysis

Avinash Kaur 1  

Rajinder Kaur 2  

Health is considered as an essential element for the socio economic development of any nation. The present study made an attempt to ascertain the inter-district disparities in health development in Punjab for the year 2015-16. For the purpose of the study, composite index method has been used to calculate the health development of each district of the state. The districts based on the composite index are categorized into four groups, High Developed, Low Developed, Middle Level Developed and Developing. The findings of the study prove that the districts in Punjab are marked with wide disparity in health development. The study concluded that proper steps should be taken to reduce the disparities among districts of the appropriate and suitable measures by the policy makers.Key words: Household, savings, income, marginal, propensity, elasticity.

Key Words:Health, Health infrastructure, Punjab, Composite Index.

  1. Assistant Professor, Department of Commerce, Punjabi University, Patiala.
  2. Professor, Department of Commerce, Punjabi University, Patiala.

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Evaluation of Sustainability of Special Category States of

N. K. Bishnoi 1
Tanu Juneja 2  

Special category states are given special assistance by the Indian Constitute. Special Category States are highly dependent on the central grants from the Union Government for meeting their financial requirements. These states show a revenue surplus position because any expenditure that they make on creating assets out of grants from the centre is not treated as revenue expenditure. Conversely, it has been noticed that the fiscal position of special category states is not satisfactory rather suffering from huge escalating public debt. In this context, this paper has examined the sustainability of sub national public debt.

Keywords:Fiscal Responsibility and Budget Management Act, Fiscal deficit, Special category states, Gross State Domestic Product.

  1. Professor, Haryana School of Business, Guru Jambheshwar University of Science and Technology, Hisar, Haryana, India. Email:
  2. Research Scholar, Haryana School of Business, Guru Jambheshwar University of Science and Technology, Hisar, India. Email:

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India's Herbal Products Exports: An Empirical Analysis
of Export Related Market Access Barriers  

Ram Singh 1
Hemant Singh2  

Research paper discusses the growing importance towards Herbal Products in international markets and accordingly increasing trade in Herbal Products in the world market. The case analysis is based on standard definition of Herbal Products as used by European Union and United Kingdom. Even after trade liberalization, export related market access issues are one of the prime area which affect the free and fair trade of Herbal Products from India. The research paper appraises the existing literature and secondary evidence based on trade data accessed from various databases of World Bank, International Trade Centre and World Trade Organization. Paper analyses the export related market access issues faced by Indian exporters and list them as per standardized classification of Non- Tariff Barriers. The paper concludes and suggests the way forward for Indian exporters of herbal products.

Keywords: Herbal Products, Export Related Non-Tariff Barriers, Herbal Exports.

  1. Professor of Exim Procedures and Documentation at Indian Institute of Foreign Trade, New Delhi.
  2. Research Scholar at Indian Institute of Foreign Trade, New Delhi.

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Cropping Pattern of Agriculture Sector in Punjab State
A Temporal Analysis  

Supreet Kaur 1
Moninder Kaur2  


The present study is an attempt to analyse the growth, structural changes in the area, production and productivity of different crops grown, and the extent of crop diversification in agriculture sector of Punjab state for the period 1980-81 to 2013-14. To achieve the objective, certain analytical techniques viz., average annual compound growth shares of different crops, various concentration/diversification indices viz., Herfindahl, Simpson and Entropy indices were applied on the data compiled from various issues of Statistical Abstract of Punjab. The findings from the study concluded that during study period, major crops grown were wheat, rice and cotton. Moreover, increasing trend in the Herfindahl and Entropy index points out towards the dominancy of conventional cropping pattern in the state, which is a serious matter of concern. Thus, there is dire need to shift to new production profile for sustainable agricultural development.

Keywords: Cropping Pattern, Crop Diversification, Concentration.

JEL Classification: O13; Q10; Q18

  1. Assistant Professor, PG Department of Economics, Khalsa College, Amritsar-143001 E-mail :
  2. Assistant Professor, SSSS College of Commerce for Women, Amritsar-143001, E-mail :

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Does Household Participation in Employment and Poverty
Alleviation Programs Change

the Pattern of Consumption Expenditure?
An Empirical Analysis of MGNREGA Program in India  

P.Mahendra Varman1

Neeraj Kumar1

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), enacted in the year 2005, is one of the flagship programmes of the Indian Union Government to improve rural livelihood in the country and bridge the gap between the rich and the poor. Around the world, employment programs such as MGNREGA have become popular weapons to alleviate poverty and minimise the gap between the rich and the poor. The study take advantage of the two nationally representative surveys of India Human Development Survey (IHDS) published during 2004-05 and 2011-12 and makes a modest attempt to identify the impact of the MGNREGA program on the level of consumption expenditure and the pattern of consumption expenditure of rural households through a difference-in-difference (DID) approach. Use of DID method to examine the impact of the program on consumption expenditure is possible with IHDS dataset because the first survey was published during 2004 05, when the MGNREGA program was not implemented and the other survey during 2011-12 when the program was in place in almost all the parts of India. The findings of the study indicate that the monthly per capita consumption expenditure (MPCE) for the participant households has increased. Due to the participation in the MGNREGA program the consumption pattern has changed for participant households. The share of less expensive and low nutrients food items has decreased for participant households and correspondingly higher valued and high nutrient food consumption has increased. Further the households smooth consumption by investing in assets such as durable goods. The impact appears to be slightly higher for poor participant compared to the non-poor participant households.

  1. Assistant Professor, Dept. of Econometrics, University of Madras, Chennai-600005, Tamil Nadu.
  2. Sr. Research Fellow, Livestock Economics, Statistics & IT Div., ICAR-IVRI, Bareilly, UP.

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Effects of Rural Infrastructure on Agricultural Growth
in Uttar Pradesh: Panel Data Analysis  

Sanjeev Kumar 1

This paper attempts to construct a district wise Rural Infrastructure Index (RII) through Principle Component Analysis (PCA) of Uttar Pradesh and examines the trends and patterns of agriculture growth and rural infrastructure at the district as well as regional level during 2004-05 to 2015-16. Further, it identifies the effect of rural infrastructure at composite index as well as individual parameters of rural infrastructure on agricultural growth for the state by using panel data regression analysis. The growth of value of output by agriculture sector and the value of RII in the state indicates huge variations persisting both; at district as well as regional level. In this connection, Western UP indicates the highest growth rate in value of output by agriculture sector followed by Eastern UP, Bundelkhand and Central UP in that order and RII has also shown the highest value in Western UP. The Fixed Effect Model-I result attests that rural infrastructure index along with fertilizer consumption, area under commercial crops and rainfall has a positive and significant impact on value of output by agriculture sector, while impact of mechanisation (tractor) has a negative impact. Moreover, the impact of disaggregate infrastructure variables viz. , net irrigated area, road length, agricultural market, primary agricultural loan credit societies commercial crops area, fertilizer consumption, village electricity, number of hospitals and rainfall variability has a positive impact while per hectare tractor and number of primary school had negative but insignificant impact on the value of output of agriculture. In this context, the results suggests that there is a need to enhance the rural infrastructure facilities, optimizing use and accessibility farm inputs along with adopting sustainable climate resilient technology, for boosting up agricultural growth and farmers income. The paper henceforth concludes that agricultural growth through better facilities of rural infrastructure can lead the state to a higher trajectory of rural development and reduce poverty at a faster pace and to a greater extent.

Key Words: Agricultural Growth, Rural Infrastructure, Fixed Effect Model and Uttar Pradesh.

JEL Classification: O13, O18, C23

  1. Assistant Professor, Department of Economics, University of Lucknow, Lucknow (Uttar Pradesh) - 226007
    Email- sanjeeveco@gmail.comThe authors acknowledge the funding support from ICAR-National Institute of Agriculture Economics and Policy Research (NIAP), New Delhi for Networking Project entitled "Structural Transformation, Regional Disparities and Institutional Reforms in Agriculture"

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Does Accelerating Educational Achievements and Health
Outcome Matter for Poverty Reduction:
Evidence from Indian States  

Gargi Ghosh1

The paper investigates the impact of educational and health achievements on poverty reduction across fifteen major states of India. In today's life, from the point of view of both the poor individual and of the societies in which they live, poverty in any absolute form is not so much effective, it is basically acceptable as a multifaceted concept now. So, nine most relevant indicators are considered to calculate weighted aggregate indicator of standard of living as proxy of poverty. The states with high standard of living means low poverty and vice versa. Similarly, ten indicators of Educational achievement and nine indicators related to Health are considered to calculate the aggregate indicators of Education and Health respectively. To construct weighted aggregate indices of Poverty, Education and Health- the Principal Component Analysis (PCA) has been done. The states are categorized as high, medium or low developed with respect to the three aggregate indicators separately. It is found that, all the high category states with respect to their weighted aggregate standard of living index, are also performed as high or medium developed with respect to weighted aggregate indices of educational achievements as well as health outcomes. The cross state regression analysis has also been conducted to understand the impact of weighted aggregate educational index (WAEI) and weighted aggregate health index (WAHI) on weighted aggregate standard of living index (WASLI) empirically. It is found that, there is highly significant positive relationship between WASLI and WAEI. Again, there is highly significant negative relationship between WASLI and WAHI As WAHI is a negative indicator the negative significant relationship between WASLI and WAHI indicated that decrease in health hazards will increase standard of living or reduce poverty.

Key Words: Poverty, Weighted aggregate standard of living index, Weighted aggregate educational index, Weighted aggregate health index.

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