Indira Gandhi Institute of Development Research

About: Indira Gandhi Institute of Development Research is a facility organization based out in Mumbai, Maharashtra, India. It is known for research contribution in the topics: Monetary policy & Inflation. The organization has 307 authors who have published 1021 publications receiving 18848 citations.

Investment, Uncertainty and Credit Market Imperfection in India

Abstract: The paper attempts to make a timely contribution to the debate on the status of business fixed investments in Indian private manufacturing firms. There are two key issues on which the debate hinges: lower presence of formal credit and, procedural and contractual rigidities. Lower presence of formal credit restricts or makes it costlier for a group of firms to incur investment expenditure that they would have incurred otherwise. Such firms predominantly rely on their internal funds for investment. Procedural and contractual rigidities, on the other hand, make almost all the investment projects undertaken, partially or completely, irreversible. Firms respond to such irreversibilities by aligning their investment to a relatively favorable time which, in turn, depends on the way firms process future uncertainty. The analytical exercise endogenously distinguishes between two investment regimes based on the access to external credit and uses a set of characteristics, along with different measures of uncertainty, to explain fluctuations in investment. The results provide three important observations. First, in the post-reform period there has been an adverse shift in the investment financing policy. Second, firms with inferior access to external credit are smaller, younger, pay less dividend, export less and belong to an industry with inferior demand than others. Such firms invest by running down their available cash flows and selling assets. Third, macroeconomic uncertainty depresses investment whereas microeconomic uncertainty has no impact on investment.

Superfluous matrices in linear complementarity

Abstract: Superfluous matrices were introduced by Howe (1983) in linear complementarity. In general, producing examples of this class is tedious (a few examples can be found in Chapter 6 of Cottle, Pang and Stone (1992)). To overcome this problem, we define a new class of matrices\(\bar Z\) and establish that in\(\bar Z\) superfluous matrices of any ordern ⩾ 4 can easily be constructed. For every integerk, an example of a superfluous matrix of degreek is exhibited in the end.

The structure and price efficiency of an emerging market

Abstract: This paper examines market structure and efficiency of price transmittals in the two national stock exchanges of India: The Bombay Stock Exchange and the National Stock Exchange. Price movements in a large number of important stocks in both markets are considered. The framework used is the Johansen‐Juselius multivariate cointegration technique. It is discovered that price movements within each market are cointegrated. Short‐run ECM analysis shows that no stock in any market is exogenous, thus indicating that there is considerable feedback in short‐run price movements from each stock. Some short‐run price movements are stabilizing. The Bombay Stock Exchange and National Stock Exchange appear to be reasonably efficient markets.

Diversification of Rural Workforce: Indian Context

Abstract: It is projected that the proportion of India's rural population in the working age group of 15-64 years would increase from 62.9 per cent in 2006 to 68.4 percent by 2026 (Economic Survey 2006-2007 p. 215). A diversification of employment opportunities in rural India in conjunction with a larger working age population could offer India the opportunity to benefit from the demographic dividend. However, the employment numbers do not suggest that India might not be on course to reap the demographic dividend. The inability of agricultural sector to absorb workforce is reflected in the elasticity of employment. The elasticity of employment was estimated at 0.00 for the period 1993-94 to 1999-00 (Planning Commission 2001). We seek to understand whether there is diversification of employment in rural India. The specific questions addressed are the following. What are the trends in workforce participation rates and unemployment rates? Are there gender specific differences? Are people moving out of agriculture? Is there employment diversification? Are there differences across very high, high, medium and low poverty regions? Over the years there has been no change in the overall workforce participation rates across all the poverty regions. But the workforce participation rate of male declined and that of female increased over the years across all the poverty regions. The workforce participation rate for females doubled in 2004-05 compared to 1993-94 in the very high poverty region. The unemployment rate increased over the years across all the poverty regions. The unemployment rates almost doubled for male and female in the low poverty region in 2004-05 compared to 1993-94. The increase in the unemployment rate has been the least in the very high poverty region. Based on three recent rounds of NSSO data on employment and unemployment, our findings infer that over the years there has been a tendency of decline in the share of agricultural sector and increase in the share of non-agricultural sector in total rural workforce. This pattern of diversification is evident across all the age cohorts. Over the years there has been a decline in the share of agriculture in the total rural female workforce across all the poverty regions. The share of agriculture in male workforce declined in the very high poverty region but in other poverty regions the share of agriculture in total rural male workforce almost remained unchanged over the years. Our findings show that over the years the share of tertiary sector employment in the female workforce particularly employment in the construction sector has increased across all the poverty regions. Among the manufacturing sector the share of employment in the wearing apparel industry increased over time for both male and female.