Special Centennial Issue

No. 413

October 2023

Vol. CIV (Part-II)

ISSN: 0019-5170


An Empirical Study on the Revealed Comparative
Advantage in Exports of BRICS Countries

Lizette D'Costa 1
P. K. Sudarsan 2

Countries are inclined to specialize in the production of commodities in which it has a comparative advantage compared to other nations. Comparative advantage is a significant aspect of international trade that describes the specialization of commodities by nations. The Revealed Comparative Advantage (RCA) Index is based on the Ricardian theory of trade, which postulates that the flow of trade or trade patterns amongst countries are administered by their relative differences in productivity. It acts as a tool to analyze trade competitiveness between nations. This paper aims to study the trade competitiveness between BRICS nations. The study uses data obtained from the ITC database for the period 2001 – 2020 of all BRICS countries for 15 product categories under the HS-2 digits classification. The Revealed Comparative Advantage Index (RCAI) of each of the select product categories of the five BRICS countries is computed and further analyzed by comparing the mean and coefficient of variation to seek complementarity in trade. Emphasis has been made to reveal India's complementarity in trade among BRICS countries concerning the select product categories. Results portray areas wherein trade can be intensified to benefit from BRICS as a bloc.

Keywords: Trade, Exports, Revealed Comparative Advantage, BRICS, Complementary

JEL Classification: B17, F02, F11, F15
  1. Research Scholar, Goa Business School, Goa University, Goa-403206, Email: dcostalizette@gmail.com, Orcid ID: 0000-0002-3557-398X
  2. Professor, Goa Business School, Goa University, Goa-403206, Email: sudha@unigoa.ac.in, Orcid ID: 0000-0002-6523-3601

The OECD Approach and Measurement of Consumption
of Fixed Capital (CFC)

Arijit Roy 1

The term ‘consumption of fixed capital' has been put forward by the System of National Accounts to describe and distinguish ‘economic depreciation' from ‘depreciation' used in company accounts and balance sheets. ‘Consumption of fixed capital' is measured in conjunction with productive stock and net fixed capital stock. In reality, there are different methods for measuring ‘consumption of fixed capital'. But the System of National Accounts recommends either the (traditional) Perpetual Inventory Method or the (alternative) Perpetual Inventory Method. In the present paper, we have analyzed different methods for measuring ‘consumption of fixed capital'. Further, an attempt has been made to measure ‘consumption of fixed capital' in the context of the Indian economy over the period 1995-96 to 2004-05.

Keywords: Perpetual Inventory Method, Consumption of Fixed Capital, Net Fixed Capital Stock, Productive Stock, Age-Efficiency, Age-Price.

JEL: B40, B41, C02, E01, E22

  1. Associate Professor of Economics, Vivekananda Mission Mahavidyalaya, Chaitanyapur (Haldia), Purba Medinipur, PIN – 721645, West Bengal. Email: aroy2003@gmail.com

Economic Growth and Demographic Dividend in Major Indian States

Isika Jaiswal1
Bimal Jaiswal2

"We are proud of 3 things: Democracy, Demographic dividend and Demand".

Hon'ble PM Narendra Modi

This paper asserts that the changes India is experiencing on its demographic fronts have opened a window of opportunity for economic evolution, though they will also give birth to certain challenges at the same time which the country needs to address in time in order to harness the potential benefits of these changes. The paper takes into consideration the inter-state disparities with respect to preparedness of the bigger States of the country to deal with their changing working-age population as the demographic window of opportunity has been closed in the states of Kerala and Tamil Nadu, is about to close in the states of Delhi, Andhra Pradesh (including Telangana), Gujarat, Punjab, West Bengal, Karnataka, Odisha, Himachal Pradesh, Maharashtra, Jammu & Kashmir, Assam, Uttarakhand and Haryana while is completely open in the states of Chattisgarh, Jharkhand, Madhya Pradesh, Rajasthan, Uttar Pradesh and Bihar. The study is based on explanatory research design for a period of 30 years taken for seven points of time – 1990-91, 1995- 96, 2000-01, 2005-06, 2010-11, 2015-16 and 2020-21. The growth of NSDPPC is taken as the dependent variable and the independent variables include initial NSDPPC, initial working-age population, growth of working-age population, gross fixed capital formation, growth of gross fixed capital formation, total fertility rate, sex ratio, gross enrolment ratio and infant mortality rate. The study mainly focused to carry a detailed analysis of change in share of working-age population in total population on economic growth rate of selected Indian states. The results suggest that the magnitude of relationship between independent variable and dependent variables is changing across models while their direction remains same. Additionally, the paper studies in detail the favorable and non-favorable circumstances India is likely to experience to a certain extent because of its distinguished process of demographic transition.

Keywords : Demographic Dividend, Age-Composition, Economic Growth, Inter-state Disparities.

  1. Junior Research Fellow, Department of Applied Economics, University of Lucknow- 226007, E-mail: ishsoniya@gmail.com
  2. Professor, Department of Applied Economics, University of Lucknow-226007, E-mail: bimalsiyaram@gmail.com

Investment Preference of Salaried Women in Varanasi
District, Uttar Pradesh

Ritika Maurya1
V. Shunmugasundaram2

Financial planning is critical for establishing clear financial objectives and constructing the appropriate investment portfolio to satisfy financial needs and aspirations. The goal of investment is to generate a profit through investing money. The author examines the investment preference of women investors belonging to urban and rural areas. They also investigate the factors motivating women investors to take investment decisions. A well-structured questionnaire was prepared and the response of 384 respondents was examined. Mann-Whitney U test and Kruskal-Wallis test were used to determine whether there is any difference in investment preference of urban and rural women investors and to determine the motivating factors responsible for investment decisions based on different demographic attributes. Results revealed that women investors in urban and rural areas have the same investment preference except for saving accounts, FD, shares, mutual funds and LIC. The factors motivating female investors to invest differ based on demographic traits. The current study will assist financial institutions and policymakers in understanding the preference of women investors and the factors influencing their investment decisions and recommend the investment options to the investors on the based on expectations and needs.

Keywords : Investment, Preference, Decisions, Working women, Investors.

JEL classification code: : G11, G24, G5, G51, G53

  1. Research Scholar, Faculty of Commerce, Banaras Hindu University, Varanasi, Uttar Pradesh. Email ID: ritikamaurya05@gmail.com
  2. Professor, Faculty of Commerce, Banaras Hindu University, Varanasi, Uttar Pradesh. Email ID: sundarambhu@gmail.com

Does Global Spillover Matter in the Indian Money
Market? A Vector Error Correction Model

Avijit Bakshi1

This study examines the role of global liquidity, confidence and exchange channels in transmission to the Indian money market. It also attempts to explore which channel is predominant and how it influences the policy rate- repo and call money rate which is market determined. The Vector error correction model (VECM) was applied to the weekly data (obtained from RBI, Bank of St. Louis and Federal Reserve Bank) from 29 April, 2001 to 21 March, 2021. The results suggest that the domestic money market is not fully shielded from global spill over. The weighted average call money Rate (WACR) which is a market-determined rate, is more responsive to transmission channels than to repo. Long-run causality exists between call money rates and global liquidity, confidence and exchange channels. Shortterm causality runs from Global Liquidity and Exchange Channel to Repo. The confidence and exchange channel were found to be more dominant than global liquidity in influencing WACR and Repo. This study examines the role of transmission channels from international markets to the Indian money market. This study attempts to enrich empirical research in the field by providing insight into the role of individual channels in transmission of global spillover to money markets and observing the reaction of call money rate and policy rate. The study provides conflicting evidence regarding the role of confidence channel but similar results regarding the role of liquidity channel in transmitting global spillover. This study is likely to be resourceful for policymakers to maintain monetary policy independence.

Keywords- Global liquidity, Spill over Effect, VECM, WACR, Repo Rate, Confidence Channel, Exchange Channel.

JEL Classification Codes -- E51, E52, E58

  1. Assistant Professor, CMS Business School, (Jain-Deemed-to-be University), 17, Seshadri Rd, Gandhi Nagar, Bengaluru, Karnataka 560009. Email: avijit.bakshi2008@gmail.com

Missing from Imagination – Context of Migrant Labour
and Lock down – Study from South India

Trinadh Nookathoti1

It is unimaginable to envisage India's growth, especially the urban, without the migrants. Migration is perceived as a natural phenomenon in growth and development, but the estranged lives and livelihoods of migrants have not been able to capture the imagination of not only the policymakers but also the civil society. Across the globe, migrant labour has been exposed to the exigencies during the Covid -19 pandemic. Indian Economy, which is predominantly an informal economy, maintains a massive chunk of circular migration. The lockdown 1.0, imposed to contain covid, has galvanised the governments to rehabilitate and rescue the sagging and grief-stricken migrants. Since the catastrophe was unprecedented, migrants succumbed to the vicious repercussions. They had to undergo insurmountable vagaries manifested in hunger, destitution, unemployment, infections, casualties, indebtedness...etc. Against the backdrop, the study has been undertaken to examine the trajectory and impact of lockdown 1.0 on migrant labour, especially construction labour, through empirical observations from south India. The Study found that there has been a gigantic loss of employment and income to the migrants and, the governments' relief and rescue measures have neither been able to commensurate the loss nor embolden the sagging migrants/economy.

JEL classification : F 22, J 16, O 15, R 23.

  1. Assistant Professor, Department of Economic, Studies and Planning, School of Business Studies, Central University of Karnataka.

Industrial Performance and Industrial Dispute:
A Case Study of Tamil Nadu

Anish Gupta1
Rahul Ranjan2

Social unrest is usually a result of the political or economic demands of the people not being met. Protests, demonstrations, picketing, and collective petitioning have become increasingly common in Tamil Nadu's industries. As Tamil Nadu's economy has grown during the last decade, the quality of living standards for many of its residents has improved. Simultaneously, social protests have increased considerably. This paper shows that Tamil Nadu had highest number of closed units in 2000-01 and 2018-19. The closed unit in Tamil Nadu has been increasing sharply after 2013- 14 and reached at highest level in 2018-19. It is evident that the concentration of closed units lies in 0-10 worker size and Micro enterprise. But there are also some closed units in the worker size of more than 51 workers and large enterprise which is a matter of concern for the government and policy makers. Further, panel regression shows that industrial disputes, closure of units and loss of mandays has negative impact on net value added and each of the three factors are statistically significant.

Keywords : Social Unrest, Industrial Dispute, Industrial Performance, Closed Units, Tamil Nadu.

  1. Assistant Professor at Delhi School of Economics, New Delhi. E-mail: pioneer.article@gmail.com. This paper is an outcome of ICSSR-Impress Project title “Industrialization and Social Unrest: A Case Study of Tamil Nadu
  2. Consultant at Research and Information System for Developing Countries (RIS), New Delhi.

Productivity Trends of Paddy in Andhra Pradesh and
Telangana: An Analysis of Agro-Climatic Zones

Shreyasee Kaushik1
T Varun Reddy2

This study has examined the paddy yield trends of the erstwhile state of Andhra Pradesh, and the present-day twin ‘rice-bowl' states of Andhra Pradesh and Telangana, from 1997-98 to 2019-20. We see a phenomenal turnaround of rice production in Telangana, which for the first time in 2019-20, has overcome Andhra Pradesh, both in terms of paddy production and acreage. However, there's still some catching up to do for Telangana's paddy yield rates vis-a-vis Andhra Pradesh. To further understand the dynamics of yield differences across time and space, we delve into the agroclimatic zones of both these states to gauge the intra-state variation in paddy productivity. There has been a steady growth in the yield rates of all the agro-climatic zones of Andhra Pradesh from 2013-14 and of Telangana after 2016- 17, with the latter witnessing reduced volatility as well. These trends have been correlated with expected changes in climatic factors. Finally, we contrast the paddy production in these states with the procurement under the Central Pool of Paddy and observe anomalies in the data for Telangana for two years, in that the procurement of rice is found to be more than the production of rice.

Keywords : Paddy Productivity, Paddy Yield, Andhra Pradesh, Telangana, Agro-Climatic Zones.

  1. Research Scholar, Delhi School of Economics, University of Delhi, Delhi, IN-110007. Email: shreyaseekaushik@gmail.com
  2. Research Scholar, Delhi School of Economics, University of Delhi, Delhi, IN-110007. Email: tvarunreddy333@gmail.com

Mutual Fund Performance and Stock Selection Abilities
of Fund Managers in India- An Experiential Analysis

Anju Bala1

Mutual fund industry of India has been developing significant growth in terms of AMCs started from Rs. 246.7 million in 1965 to Rs. 1006 billion in 2002 to 7599.95 billion end of 2012 to 8252 billion INR in 2014 to 36.09 trillion in August 2022.As a result of this large investment interest, Stock selection is the nucleus in the investment management process and the stock selection skills exploited by the fund managers to earn superior returns always merits for continuous assessment. For this, the present study tried to evaluate the performance of selected 60 schemes and stock selection performance of the equity growth-oriented schemes of mutual funds by fund managers in India for the duration of 16 years from January 2006- July 2022 using Jensen alpha (1968) and FamaNet Selectivity (1972) models for fund selection. The study has found insignificant evidence for superior returns due to stock selectivity of the fund managers in India. It has also found that selected mutual fund schemes, on an average, have failed to perform better the market and bearing low risk than market. In the diversification front, majority of the schemes have performed moderately well. As a result, compensation for the inadequate diversification has not impacted selectivity performance.

Keywords: Diversification, Mutual Fund, Stock Selection, Risk, Selectivity.

  1. Assistant Professor, Dev Samaj College for Women, Ferozepur. E-mail: anju.sarna@gmail.com

Self Help Groups in Mizoram: A Study of Group
Governance and Nature of Bank-Linkages

C. Laldingliana1
Bhartendu Singh2

This paper examines the performance of self-help groups in the state of Mizoram (Northeast India) with reference to group-governance and the nature of bank-linkages. The study covered a sample of 500 SHGs drawn from all districts (08) of Mizoram. The performance of SHG was measured mainly on the basis of NABARD's SHG performance indicators. It was found that SHGs in Mizoram were democratically governed (high level of members participation) in terms of selection of their leaders and identification of group activities. It attained a medium level of performance with respect to management of group lending system and access to formal bank credit. However, SHGs in Mizoram were found lagged in terms of regularity of meetings and savings, which could be one of the important backlogs that need to be improved for the sustainability of the movement. Meanwhile, Mizoram Rural Bank (MRB) has made a significant contribution to the SHG movement, registering over 93 percent of the total selected SHGs in Mizoram.

Keywords: Chi-Square Statistics, NABARD, NABARD's SHG performance indicators, Self-help groups, performance, Mizoram.

JEL Classification Codes: O17, I38, J16, D71, C93.

  1. Mizoram University, Aizawl, Mizoram, India. E-mail: madingac@gmail.com
  2. Department of Commerce, Mizoram University, Aizawl, Mizoram, India. E-mail: bsingh@mzu.edu.in