Showing papers by "Indira Gandhi Institute of Development Research published in 2014"

Small farmers in India: Challenges and opportunities

Abstract: This paper examines the roles and challenges of small holding agriculture in India. It covers trends in agricultural growth, cultivation patterns, participation of small holding agriculture, productivity performance of small holders, linking small holders with markets including value chains, role of small holders in enhancing food security and employment generation, differential policies and institutional support for small holders and, challenges and future options for small holding agriculture including information needs. It also provides lessons from the experience of India on small holding agriculture for other countries. [WP-2012-014]. URL:[http://www.igidr.ac.in/pdf/publication/WP-2012-014.pdf].

Mixed Duopoly and Environment

Abstract: We show under general demand and cost conditions that in a mixed duopoly with pollution the government can implement the socially optimal outputs and abatements by a tax-subsidy scheme and keeping the public firm fully public. The scheme requires taxing outputs and subsidizing abatements at different rates, unlike a pollution tax. Our result improves on the shortcoming of a pollution tax to implement the social optimum. We also show that when the private firm is partly foreign-owned, the government will adopt some privatization and will not implement the social optimum, though the social optimum is implementable.

Is sustainable energy security of India increasing or decreasing

Abstract: This paper presents an indicator-based approach to highlight the emerging trends in energy security and sustainability for India over the past four decades. It selects four dimensions of Sustainable Energy Security (SES),namely Availability, Acceptability, Affordability and Efficiency and their corresponding indicators to represent SES. Thereafter, using quantitative data, the study establishes that certain indicators show increasing SES, while certain others show decreasing SES for India. Interpretation of these indicators leads to the conclusion that at the dimensional level ‘Availability’ and ‘Efficiency’ indicate increasing SES, while ‘Acceptability’ and ‘Affordability’ dimensions indicate decreasing SES. This study, therefore, gives valuable insights into the multi-dimensional aspects of SES and the emerging trends in SES for India.

Polarization, Inequality, and Growth: The Indian Experience

Abstract: One issue that has attracted considerable attention recently among scholars interested in inequality and conflict is polarization. We analyze polarization in India over roughly the past three decades using consumption expenditure data. We show that both bipolarization and multidimensional polarization (on several dimensions: rural–urban, state, region) have increased since the 1990s. In the case of bipolarization, this is a reversal from an earlier trend (in the 1980s). Overall, our results suggest that the high growth that India has witnessed since the 1990s has been associated with widening disparities. Comparing polarization and inequality trends, we find similarities, but also some differences; we also show how the study of polarization can provide different insights. Our results therefore underscore the importance of studying polarization as distinct from traditional inequality.

Consumption patterns by income groups and carbon-dioxide implications for India: 1990-2010.

Abstract: This paper highlights consumption pattern differences across income classes in India, namely the top 10%, middle 40% and bottom 50% of the population in rural and urban areas. The analysis is based on an input–output (I–O) model that uses consumption expenditure distribution data from various sources. It examines direct and indirect demand on resources and carbon–dioxide emissions due to consumption of each of these income classes. Out of a total of 167 mtC of carbon emissions in 1989–90, 62% was due to private consumption, 12% from direct consumption by households and remaining 50% due to indirect consumption of intermediates like power, steel and cement, while the rest was attributed to investment, government consumption and exports. The analysis reveals that the consumption of the rich is oriented more towards energy using sectors like electricity and transport, and uses relatively more resources in the form of minerals and metal products. The net effect is that the rich have a more carbon intensive lifestyle. The per capita direct and indirect emission level of the urban rich is about 15 times that of the rural poor and yet about the same as the world average. In a scenario where private consumption expenditure is expected to reach twice the 1990 level by 2010, carbon–dioxide emissions are projected to rise to 502 mtC. The low purchasing power of the poor results in their dependence on nature and the environment. This points to the conclusion that poverty is unsustainable.

Skill development in India: an examination

Abstract: Skill development has been a major policy agenda of the Indian government in the past few years. This paper sheds light on the current scenario and labour market outcomes of vocationally trained population. The paper is based on data from two recent rounds of nationally representative employment and unemployment survey. The paper shows that 2.4% of the population had vocational education and training in year 2004–2005 and this share has further declined to less than 2% in year 2009–2010, in the age bracket 15–29 years. Though unemployment rate of this group has declined by two percentage points between the two years, nevertheless, the extent of the rate has remained very high. Further, we compare the outcomes between formal and non-formal vocational trainees.

MOOCs and LIS education: A massive opportunity or challenge

Abstract: Massive Open Online Courses (MOOCs) are revolutionizing the field of higher education by giving a new learningopportunity for aspiring students, faculty and universities in many subject areas including Library and Information Science(LIS). In this paper, an attempt has been made to explain the concept of MOOCs, key players in the field, courses offered inLIS and how best this new medium can be used in improving the quality of LIS education by listing out possible areas ofwork and its impact on LIS education in developing countries.

The case of the missing billions: estimating losses to customers due to mis-sold life insurance policies

Abstract: Regulation of retail finance has been the subject of policy interventions in several countries, including India. Much of the regulatory change in India has been carried out with little support of empirical evidence. This paper is motivated by questions of the evidence of losses due to mis-sales of financial products. It constructs two measures of the loss to customers due to mis-selling of life insurance policies. The first is calculated using the value of lapsed policies, and the second uses the persistence of premium payments. Both arrive at estimates of around USD 28 billion lost between 2004 and 2011.

Open access journals in library and information science: a study

Abstract: Open access spurred by the Internet has brought in new vistas for dissemination of scholarly content in almost all the disciplines. It has enabled agencies, publishers and individuals to distribute scholarly content online, free from licensing restrictions and cost. Like other fields, the growth of open access has also benefited the field of library and information science (LIS). In this paper an attempt has been made to assess the current status of open access journals in LIS covered in Directory of Open Access Journals (DOAJ) based on various parameters.

The Causal impact of algorithmic trading on market quality

Abstract: What is the impact of algorithmic trading (AT) on market quality? This research question has been dogged by endogeneity bias. We address the problem by using orders clearly identied as originating from AT, and the introduction of co-location as an exogenous event after which AT increased. A matched set of rms with high and low

MGNREGA works and their impacts: A Rapid assessment in Maharashtra

Abstract: This paper presents the results of a survey of over 4100 works created under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and over 4800 randomly selected users across 100 villages in 20 districts in Maharashtra. It has two goals: the first was to verify the existence of the assets and the second was to elicit user perceptions of the problems and benefits they associate with the work. The survey indicates that 87% of the works exist and function and over 75% of them are directly or indirectly related to agriculture. A bulk of the rest constitutes rural roads that connect habitations to farms and provides access to agricultural markets. The study also finds that 92% of the randomly selected users paper that their main occupation is farming; half of them are small and marginal farmers, owning less than 1.6 hectares of land. An overwhelming 90% of respondents considered the works very useful or somewhat useful; only 8% felt the works were useless. There is some evidence that where people feel that have played a part in deciding the type of work, these are more likely to be ranked as useful and well-maintained. Likewise, works on private lands tend to score better in terms of perceived usefulness and in terms of present condition. Overall it appears that the works are supportive of agriculture and of small and marginal farmers. There is however scope to improve the design of assets and to have a more inclusive process of work selection.

Internal migration for education and employment among youth in India

Abstract: This paper sheds light on the issue of internal migration for education and employment among the youth. i.e those aged 15-32 years. The paper is a first step towards addressing the issue of whether states should be concerned about internal brain drain since some states act as feeders and other states gain at their expense. States with better job opportunities such as Delhi, Maharashtra, Gujarat, Karnataka are gainers whereas traditionally backward states of Bihar, Uttar Pradesh, Orissa, Rajasthan are losing human capital. In the south, Kerala and Andhra Pradesh are possibly losing out workers to Karnataka and Maharashtra. [IGIDR WP-2014-004].

How Inclusive Is India's Reform(ed) Growth?

Abstract: Given the contemporary public concern about the worsening relative deprivation of the masses and the need for appropriate policies to address the social cost of the reform programme, the Government of India has declared its commitment to the aam aadmi and the poorest of the poor. This paper examines how far the government has been successful in realising its objective of inclusive growth. As evidence of outcomes, it examines the National Sample Survey data on household consumption distribution in terms of relative distributional measures across social groups at different levels of regional aggregation by rural and urban sector. The estimates from four different NSS rounds for the agricultural years 1993-94, 2004-05, 2009-10 and 2011-12 throw up a profile of exclusion of the poor involving exclusionary growth of the better-off in the economy as a whole. At the national level, disparities across social groups have increased involving a widening of the average consumption shortfall of the scheduled tribes, a decline for the scheduled castes, marginal decline for the Other Backward Classes and an increase in the excess of average consumption of Other Social Groups with respect to the overall median. Similar analyses at the level of major states, by sector, corroborate in general the findings at the national level of an era of exclusionary growth confined to the better-off sections.

Strategic trade policy for network goods oligopolies

Abstract: We analyze strategic trade policy for differentiated network goods oligopolies under alternative scenarios, when there is export rivalry between two countries. We show that, under price competition without managerial delegation, it is optimal to tax (subsidize) exports, if network externalities are weak (strong). But, the oppos ite is true under price competition with relative performance based managerial delegation in firms. In contrast, under quantity competition, the optimal trade policy always involves subsidization of exports. Nonetheless, the optimal rate of export subsidy under quantity competition is always higher than that under price competition. We also show that, under quantity (price) competition without managerial delegation, trade policy interventions in the presence of sufficiently strong (weak or very strong) network externalities lead to higher social welfare of each exporting country compared to that under free trade. However, under quantity (price) competition with managerial delegation, trade policy interventions result in Pareto inferior outcomes always (unless network externalities are strong).

Banks, policy, and risks: how emerging markets differ

Abstract: Emerging market (EM) banks differ from advanced country banks. They may be weaker in some respects but are stronger in others. Neither of these is well understood leading to inappropriate policy. Scale and cross-border exposures for banks in emerging economies are lower compared to advanced economies. The path of market development and regulatory evolution has helped reduce structural risks but some of the distinctive broad-pattern regulation used creates good incentives that could fill gaps in global regulatory reforms if more widely applied. Since markets remain thin, and interest rate spreads are high, EM banks are vulnerable to large fluctuations in policy rates. Cyclical risks can be contained as long as policy makers moderate the rates. Global regulatory reform can also reduce risks. The argument is illustrated with the Indian case.

Stability analysis of Uzawa–Lucas endogenous growth model

Abstract: This paper analyzes, within its feasible parameter space, the dynamics of the Uzawa–Lucas endogenous growth model The model is solved from a centralized social planner perspective as well as in the model’s decentralized market economy form We examine the stability properties of both versions of the model and locate Hopf and transcritical bifurcation boundaries In an extended analysis, we investigate the existence of Andronov–Hopf bifurcation, branch point bifurcation, limit point cycle bifurcation, and period-doubling bifurcations While these all are local bifurcations, the presence of global bifurcation is confirmed as well We find evidence that the model could produce chaotic dynamics, but our analysis cannot confirm that conjecture It is important to recognize that bifurcation boundaries do not necessarily separate stable from unstable solution domains Bifurcation boundaries can separate one kind of unstable dynamics domain from another kind of unstable dynamics domain, or one kind of stable dynamics domain from another kind (called soft bifurcation), such as bifurcation from monotonic stability to damped periodic stability or from damped periodic to damped multi-periodic stability While there are an infinite number of kinds of unstable dynamics, some very close to stability in appearance, there also are an infinite number of kinds of stable dynamics Hence, subjective prior views on whether the economy is or is not stable provide little guidance without mathematical analysis of model dynamics When a bifurcation boundary crosses the parameter estimates’ confidence region, robustness of dynamical inferences from policy simulations are compromised, when conducted in the usual manner only at the parameters’ point estimates

Arranged marriage, education and dowry: A Contract-theoretic perspective

Abstract: This paper propounds a contract-theoretic model where dowry acts as a screening device to differentiate grooms of varying qualities. In 'arranged' marriage settings that are characterized by incomplete information in the sense that the true quality of the groom remains unobservable to the bride, and in the presence of observable traits like education that are easier for the better quality groom to achieve, education-dowry contracts can potentially serve as a screening instrument. Moreover, increasing dowry levels can be explained through increased educational attainments brought about by modernization and government policies. The paper also discusses historical and narrative evidences in support of its main hypotheses. [IGIDR WP-2014-006].

Psychology, cyclicality or social programs: Rural wage and inflation dynamics in India

Abstract: The paper analyzes causes of movements in Indian wages for rural unskilled male laborers, and assesses their impact on inflation. Theoretical priors derived from an analytical framework based on the concepts of fair wages, salience and over-reaction are tested using a State level rural wage data panel. [IGIDR WP-2014-014].

An exploratory analysis of messages on a prominent LIS electronic discussion list from India

Abstract: The study analyses some of the aspects of e-mail postings such as number of posts, contributors and the topics of discussion on India’s leading e-mail discussion list, LIS-Forum between 2006 and 2011. It has been found from the study that during the period of study on an average; about 1600 postings per year, are being circulated on the LIS-Forum, out of which ‘announcements’ are forming the major posting. It shows, even in an era of several powerful social media and Web 2.0 tools, the e-mail based discussion list which is the earliest kind of social medium, continues to retain its relevance and popularity and it is evident from its usage by professionals in India to form their virtual network. DESIDOC Journal of Library & Information Technology , 2014, 34(1), pp. 23-17. http://dx.doi.org/10.14429/djlit.34.5942

The European unemployment problem: its cause and cure

Abstract: The stubbornly high unemployment experienced by European countries since the mid-1970s have led to a major reconsideration of the natural rate paradigm. Traditional theories which describe movements of unemployment as fluctuations around a moving natural rate have been challenged by hysteresis theories. The question arises how one can discriminate between these competing theories. To this end, we estimate a time-varying parameter model of the unemployment rate for the US, UK, Germany, and France. The parameters of the model were estimated jointly by maximum likelihood estimation using the Kalman filter algorithm. When the moving natural rate model is tested against the alternative of a unit root process, the unit root hypothesis is resoundingly rejected. Among the determinants of the natural rate institutions that alter labour market incentives for workers appear to have been more important than institutions that affect labour demand.

Reading the tea leaves on financial inclusion: The Case of rural labour households

Abstract: Understanding the extent of financial inclusion of rural labour households is important since in the intercensal period 2001-11, the proportion of agricultural labourers in the workforce increased by 3.5 percentage points. This paper examines progress in financial inclusion using information on indebtedness of rural labour households collected by NSSO as part survey of employment and unemployment conducted in 2004-05 and 2009-10. It is estimated that 22.3 million out of the nearly 66 million rural labour households report being in debt in 2009-10. The share of formal institutions in outstanding debt of rural labour households increased from 29 percent to 37 percent while the share of money lender decreased from 44 percent to 33 percent during this period. There has been a near doubling of loans sourced from cooperative societies and a 77 percent increase in loans sourced from banks. In contrast, outstanding debt on account of borrowing from money lender increased by a meagre 1.7 percent. One does not have a ready explanation for the miniscule growth in outstanding loans from money lenders. What is promising is that the reliance on institutional sources among rural labour households without cultivable land increased from 20.6 percent to 26 percent. The aggregate picture however masks large variations across the states of India and one does not observe any structural change in geographical distribution of flow of credit and share of outstanding advances to the landless.

Purchasing Power Parity, Wages and Inflation in Emerging Markets

Abstract: Three open economy puzzles are, first, the price level of an advanced economy (AE) is higher compared to that of an emerging or developing economy (EDE) measured in the same currency. But, second, inflation tends to be much higher in EDEs. Third, there is a persistent deviation of real exchange rates from equilibrium values although nominal shocks, which cause such deviation, are expected to have only short-run effects. Balassa Samuelson (BS) explained the first puzzle by introducing two sectors with differential productivity growth. The article presents a framework that allows a new simple proof of the BS result. Inflation in EDEs is often attributed to the catch-up process where productivity in traded goods starts growing faster than that in non-traded goods. But if wages grow at a relatively higher non-traded goods productivity growth, nominal shocks can trigger deviations from equilibrium and adjustments that sustain inflation. This explanation retains the BS ranking of relatively lower traded goods p...

Bank Competition, Managerial Efficiency and the Interest Rate Pass-Through in India

Abstract: If banks solve an inter-temporal problem under adverse selection and moral hazard, then bank specific factors, regulatory and supervisory features, market structure, and macroeconomic factors can be expected to affect banks’ loan interest rates and their spread over deposit interest rates. To examine interest rate pass-through for Indian banks in a period following extensive financial reform, after controlling for all these factors, we estimate the determinants of commercial banks’ loan pricing decisions, using the dynamic panel data methodology with annual data for a sample of 33 banks over the period 1996–2012. Results show commercial banks consider several factors apart from the policy rate. This limits policy pass-through. More competition reduces policy pass-through by decreasing the loan rate as well as spreads. If managerial efficiency is high then an increase in competition increases the policy pass-through and the vice-versa. Reform has had mixed effects, while managerial inefficiency raised rates and spreads, product diversification reduced both. Costs of deposits are passed on to loan rates. Regulatory requirements raise loan rates and spreads.

The Political Economy of Mahatma Gandhi National Rural Employment Guarantee Scheme Spending in Andhra Pradesh

Abstract: While government spending on pro-poor community asset creation and income-transfers could have compounding positive effects on poverty reduction, it is important to first study trends in the allocation of funds, particularly as they relate to the susceptibility of the program to political clientelism. This paper uses expenditure data at the local level in Andhra Pradesh from India’s National Rural Employment Guarantee Scheme, a rights-based program distributing both public and private goods, to investigate the relationship between voting outcomes and program intensity in the seven years straddling a major election. By focusing on one state where accountability and transparency mechanisms have been employed and implementation efforts have been applauded, the authors do not find evidence of blatant vote buying before the 2009 election but do find that patronage played a small part in fund distribution after the 2009 election. Indeed most variation in expenditures is explained by the observed needs of potential beneficiaries, as the scheme intended.

On the spatial concentration of employment in India

Abstract: This paper seeks to understand what kind of economic activities are concentrated in which regions of India. Spatial concentration of jobs is measured by calculating the location quotient using information on the industry of work of the individuals in a region. The paper uses data from NSSO 2011-12 survey of employment and unemployment.

Two Decades of International Climate Negotiations - Carbon Budget Allocation Approach to Re-Shaping Developing Country Strategies

Abstract: Climate negotiations have been going on for the last two decades and the awareness for impacts of climate change has improved substantially However, the trends of global CO2 emissions did not reveal any encouraging signs, with developing countries emitting even more CO2 and industrialized nations showing no signs of reducing emissions to below their 1990 levels In order to meet the ambitious targets set by the Stern report for the next two decades, it is important to find new and path-breaking approaches to climate change This paper attempts to analyze the use of carbon/development space historically, at present and in the future with a focus on equity Trends analysis focuses on the last two decades (Post Rio) and the carbon budget based analysis considers a period of 1850-2050 Industrialized countries are found to have significantly overshot their budgeted allocation for the last 160 years Both the developing and industrialized countries are overshooting the present budget estimates based on world per capita budget for the next forty years and proportional to the population of each country It is important for the industrialized countries to bring down their emissions to meet their carbon budgets while the developing countries use their development space as a guideline for their development path Furthermore, this paper presents aggressive and regressive scenarios for the industrialized countries to compensate for the climate debt they have created