ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

K P KalirajanSubscribe to K P Kalirajan

Con Conver er ergence ence of Incomes acr across oss Indian Sta States tes

This article examines the trends in interstate inequalities in the levels of income in India over the last three and a half decades. Contrary to the predictions of neoclassical growth theory that interstate differences in income levels tend to reduce as they approach the steady state equilibrium, our analysis shows widening interstate disparities. To understand the causes of this divergence, the article examines the determinants of interstate differences in growth rates and analyses the role of interstate transfers - explicit and invisible - in determining the geographical spread of investment and incomes. It finds that divergence in income levels has been mainly caused by the allocation of private investments which in turn, has been influenced by the inequitable spread of infrastructure. The inequitable nature of public expenditure spread across states is attributed to the inability of the intergovernmental transfer mechanism to adequately offset the fiscal disabilities of the poorer states as well as regressive nature of the invisible interstate transfers.

India s Agricultural Dynamics-Weak Link in Development

Weak Link in Development Shashanka Bhide K P Kalirajan R T Shan d There has been a growing concern on the performance of agricultural sector in recent years. The regional balance in growth has also been a matter of interest both in policies and academic discussions. The central budget speeches in recent years have noted the need to accelerate agricultural growth as it has been slower growth than the growth of the other sectors. The declining real public investment in agriculture has also been cited with concern given the implication of such trends to agricultural growth. It is useful to examine the longer-term trends in agricultural growth to place in perspective the more recent trends. This paper is an attempt to assess the trends in agricultural output both at the national level and the state level. The study shows that there are strong cyclical patterns in the growth trends and there is evidence of convergence of the growth rates at the state level in the shorter intervals of time. But in the longer term, the state level growth rates converge to different levels. Thus, the concerns regarding slower rate of growth at the overall level and the divergent growth pattern of the states are well founded. Unless there are policies which strengthen the investment climate in agriculture, by operating on both the supply and demand factors, the slower growth at the national level and the consequent state level imbalances would continue.

Public Sector Enterprises in India-Is Privatisation the Only Answer

Public Sector Enterprises in India Is Privatisation the Only Answer? K P Kalirajan R T Shand Privatisation is a major theme in public sector reform. This article argues on the basis of empirical evidence that improving the performance of public enterprises is an alternative measure where privatisation is a difficult policy option to implement in the short term. A bench-mark for measuring productive performance of public enterprises has been evolved and applied to measure productive performance and production behaviour.

World Bank on Fiscal Adjustment in India

World Bank on Fiscal Adjustment in India M Govinda Rao R T Shand K P Kalirajan The World Bank's Country Economic Memorandum (CEM) on India this year reviews the progress of fiscal reforms at central and state levels. However, like in the past, the emphasis on reducing fiscal deficits rather than increasing public savings robs the analysis much of the relevance. Also, its assertion that there is no further scope for expenditure compression and additional deficit reduction should be achieved by increasing taxes is not based on sound empirical analysis. In fact, such a recommendation may signal a spate of spending on populist schemes as has been seen recently. Similarly, attributing fiscal problems at the state level to inadequate revenue efforts is not based on facts. This can not only encourage profligacy, but also may introduce additional sources of inefficiency.
Back to Top