Is Diversification Enough? Lessons from the Agrarian Past of Bihar
Rakesh RanjanVolume 42, Issue 1 (January 2021 to June 2021)
The lack of sustained growth in agricultural output and deepening of paddy-wheat cultivation cycle over many decades have given impetus to policy prescription towards crop diversification in Bihar. The recent rise in area under fruits and vegetables as well as sugarcane has encouraged those who are observing the state's prospects closely. This essay asks for abundant caution while acknowledging the need and benefits of crop diversification. It explores the colonial agrarian history of Bihar to find similar trends towards crop diversification that did not bring any improvement in the economic conditions of the cultivators involved. The past pattern suggests that the nature of land, labour, credit and produce market was such that it exploited Bihar peasantry to the benefits of those who controlled these crucial inputs as well as channels of international trade. This has important lessons for the policy makers when the path of crop diversification is taken. If the government is serious about increasing crop diversity to boost agricultural growth and incomes of cultivators, then the choice of the cultivators has to be tilted by institutional means.
Absence of Financial Sector in Modern Macroeconomics: Oversight or Overlook
Avinash Kumar JhaVolume 42, Issue 1 (January 2021 to June 2021)
The paper explores the question of why modern macroeconomics ignores the financial sector in its analysis despite Keynes's crucial work on the link between expectations in financial markets and the economy's ability to restore full employment through price mechanism. It explores the evolution of the concept of liquidity trap in macroeconomics text-books and indicates the dilution in it over the decades. Further, the theoretical necessity of efficient market hypothesis for modern microeconomics to ignore the financial sector is elaborated. Policy implications about the economies in general, and the financial sector in particular are highlighted.
Emerging Trends in Outward FDI and Preliminary Evidence on the Effects of Covid-19 on Outward FDI from India
Pooja KhannaVolume 42, Issue 1 (January 2021 to June 2021)
Investing overseas is a potential channel to access new distribution networks, enhance knowledge base and technology and improve competitiveness which can be crucial for a country's growth and development. (Dunning and Lundan, 2008). Last few decades have witnessed a growing trend of overseas investments by the developing countries, including India. This paper presents a trends analysis for outward FDI flows from India, using RBI database for the period 2007-2019. Since RBI provides a disaggregated monthly data, it is aggregated to yearly observations for the purpose of trends analysis. A sectoral and destination specific trends analysis brings out some important facts about Indian OFDI. Service sector dominates the Ooutward FDI flows from India and the increasing presence of primary sector is noteworthy. Emergence of destinations such as Singapore, UAE, Russia, Mozambique as compared to the earlier popular destinations such as U.S and U.K, is another significant finding of the paper. However, because of COVID-19, FDI outflows have been adversely affected. This paper highlights some emerging trends in FDI outflows, for Asian economies, followed by a detailed case study on changes in Indian overseas investment due to the global pandemic. The study includes a monthly, like for like, comparison of the overall Indian overseas investment. It also presents a disaggregated sector-wise and destination-specific analysis of the trends in Indian OFDI flows for 2019 and 2020, for the months of March-August. Trend analysis and calculations based on the data, show a fall in OFDI flows with services and its sub-sectors hit hardest by the pandemic, followed by the manufacturing sector. Primary sector reported a growth driven mainly by investments from ONGC Videsh Ltd. and Oil India Ltd. Pattern of OFDI flows patterns changed in favor of destinations like Mozambique, British Virgin Islands and South Korea in 2020.
Does Corporate Social Responsibility affect Corporate Financial Performance? A Myth or a Reality
Lovleen Gupta, Varda Sardana, Garima Narula & Shubham SinghaniaVolume 42, Issue 1 (January 2021 to June 2021)
Corporations are being encouraged to commence social responsibility reporting in their financial statements and indulge in various activities due to the ascending shareholders’ interest in social performance. Many companies are, therefore, implementing social responsibility as a part of their daily operations. The aim of this study is to examine the impact of Corporate Social Responsibility (CSR) on the Corporate Financial Performance (CFP) of companies in the Indian context. Moreover, stakeholder theory and reputation theory have been analysed to understand the causal connection between CSR and CFP. NIFTY 50, a measure of the Indian market index that represents India's 50 largest companies listed on the National Stock Exchange, has been used as the study's base. Panel data regression with fixed effect assumptions has been employed for 210 firm-year observations from 2014-15 to 2018-19. The findings indicate that Corporate Social Responsibility and Corporate Financial Performance in terms of accounting and market-based measurements (Tobin’s Q and ROA) have a significant and positive relationship. Although multiple studies have been undertaken to understand the relationship between CSR and CFP, this study goes one step further by focussing on the mandatory provisions of CSR as per the Companies Act 2013, and its impact on financial performance post these mandatory provisions.
Lessons from the Unprecedented Pandemic: An Economist's Perspective
Ritu RanjanVolume 42, Issue 1 (January 2021 to June 2021)
The global economy is passing through the worst economic crisis of modern times since the beginning of 2020 due to the outbreak of an unprecedented pandemic resulting from the spread of novel Corona or Covid-19 virus. The abruptness with which this pandemic erupted and the fast pace at which its disruptive and disastrous impact spread across more than 220 countries of the world makes it a serious area of concern. The emerging challenges are even more daunting in the case of Indian economy owing to the huge population base, high population density and grossly deficient health infrastructure in India. It is against this backdrop that the present paper goes deeper into the important lessons that can be learnt from the unprecedented pandemic and analyses them from the perspective of an economist. In particular, the significance of contingency planning, building-up of reserve capacity, overcoming institutional rigidities and infrastructural bottlenecks, gradualism and cautious optimism are brought to the fore. Besides, issues relating to the demandside as well as supply-side management of an economy as also resource mobilisation for effectively tackling the pandemic are also discussed. The whole discussion provides useful insights for public policy-making that can be reasonably expected to go a long way in improving the policy environment in the times to come.
Factors Influencing Purchase Intention of Consumers for Toiletries Products in Haryana
Rashmi Chaudhary & Pawan KumarVolume 42, Issue 1 (January 2021 to June 2021)
In present scenario, marketers are interested to know more about consumers' purchase intention in order to increase their sales volume and market share. Purchase intention is related to the behaviour, perception and attitude of consumers. The information pertaining to consumers' purchase intention can be important in marketing decision making. The present study examines factors influencing purchase intention of consumers for toiletries products. The data has been collected from 500 respondents (sample size) of Haryana (universe of the study). The data, thus generated, has been analyzed with the help of Factor Analysis and ANOVA(one way).The results revealed that commendation, assessment, advertisement, and familiarity with the brand are main factors influencing the purchase intention of consumers for toiletries products. No significant difference, except one, has been observed in these factors across demographic variables (age, gender, education, occupation, marital status, residential status, and income).
Evolution of the Resolution Framework for NPAs in India: A Study of Assets Reconstruction Companies and Bad Bank Proposal
Dixit YadavVolume 42, Issue 1 (January 2021 to June 2021)
The idea behind a bad bank is to clean the balance sheets of the banks and financial institutions of an economy. Currently, the Indian economy is under a lot of pressure because of increasing NPAs in the banking sector particularly from the time when RBI started conducting asset quality review of the banks to get a clearer picture of the situation and this problem is going to escalate further because of the surge in COVID 19 cases and lockdowns due to the pandemic. This pandemic hits the Indian economy very hard, leading to a fall in growth rate, increasing unemployment, and providing uncertainty to all the sectors of the economy. Amidst this pandemic, the government proposed to setup a 'Bad Bank' in Union Budget 2021-22 to handle the stress in the banking sector of our economy. This study explores the idea of a bad bank in the Indian economy and analyse the positive and negative implications of it and this paper also attempts to understand the evolution of the regulations related to ARCs and see the performance of the present ARCs in India by looking into its shareholding pattern, size of non performing assets (NPAs) acquisition, recoveries in comparison with other resolution options, etc. the study revealed that the acquisition and the rate of recoveries of ARCs are growing but it is not sufficient to handle the entire NPAs crisis.
Book Review on "Covid Reset"
Sangeeta Relan & Shalu MahajanVolume 42, Issue 1 (January 2021 to June 2021)
Book Review on "Animal, Vegetable, Junk: A History of Food, from Sustainable to Suicidal"
Annavajhula J. C. BoseVolume 42, Issue 1 (January 2021 to June 2021)
Book Review on "Factfulness"
Annavajhula J.C. BoseVolume 41, Issue 2 (July 2020 to December 2020)