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

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Rural Construction Employment Boom during 2000–12

Amid (near) jobless economic growth during 2000–12, construction employment boomed at over 9% annually. It was part of a 10 percentage point rise in fixed capital formation rate in 13 years, to 35% of gross domestic product. The boom was rural, growing 2.5 times (at over 12%) as fast as in urban areas (at a mere 5%). National Sample Survey Office primary data reveals that a rise in rural private residential construction is the principal factor explaining the boom. This suggests improvements in rural housing status: conversion of kutcha houses into pucca houses. Decline in price-to-income ratio—of cement to rural wages—expanded rural construction demand. The popular perception (or explanation) for the rural construction employment boom in terms of rural–urban migration—of short-term, circular or seasonal—does not hold water.

Reimagining Development Banks

The RBI’s “Discussion Paper on Wholesale and Long-term Finance Banks” is a welcome initiative for its familial resemblance to development banks—an indispensable institution in most late-industrialising economies. The success of development banks critically hinges on: (i) access to assured sources of low-cost, long-term funds; (ii) public ownership and/or management; and (iii) the quality of institutional governance. As development banks invariably incur quasi-fiscal costs with potential social benefits, their operations often are kept off-budget, insulating the investments from short-term budgetary negotiations.

Quarterly GDP Estimation

The latest quarterly estimates of gross domestic product by the new National Accounts Statistics methodology are once again in the news for the wrong reasons. With inadequate accurate information available on a quarterly basis, the estimates hardly represent the state of the economy and reflect the effects of demonetisation over the October–December 2016 period.

Economic Reforms and Manufacturing Sector Growth

Manufacturing output grew 7%–8% annually since 1991, with a marked improvement in the variety and quality of goods produced. Yet, its share in gross domestic product has practically stagnated, with a sharp rise in import intensity. Liberal (or market-friendly) policies were expected to boost labour intensive exports and industrial growth. Why did the manufacturing sector fail to realise these goals? It is widely believed that India needs to “complete” the reform agenda to realise its potential. Critically examining such a view, it is suggested that the long-term constraints on industrialisation perhaps lie in poor agricultural productivity and inadequate public infrastructure. Further, there is a need to re-imagine the role of the development state to realise goals, as the experience of all successful industrialising nations suggests.

Unorganised Sector Output in the New GDP Series

In the new National AccountsStatistics, household (unorganised or informal) sector output for 2011-12 has shrunk by 22% in absolute size, or, by 11 percentage points of GDP, compared to the older series with 2004-05 as the base year. In per capita terms, household sector output as a proportion of GDP in the organised sector has come down from 11% to 7%. A change in the methodology of estimation has been the cause. This article investigates the merits of the new methodology.

Size and Structure of India's Private Corporate Sector

In the new National Accounts Statistics, the absolute size of the gross domestic product for 2011-12 is smaller by 2.3% compared to the old series; but the private corporate sector's size is larger by 43%; and, its GDP share higher by 11 percentage points. This is true for the next two years as well. The new estimates are more realistic, claims the Central Statistics Office, as they better represent the contribution of nearly a million "active companies." Critics are unconvinced, however. Seeking to narrow the differences between the competing views, this paper compares the official figures with an alternative estimate for the private corporate sector to gauge the magnitude of (the claimed) improvement, or (the putative) overestimation.

Statement of Social Scientists

We, as social scientists, scholars, teachers and concerned citizens, feel extremely concerned about the lynching at Dadri, and the murders of scholars and thinkers like M M Kalaburgi, Narendra Dabholkar, Govind Pansare and others, and wish to register our strong protest. We are not just shocked by...

Growth in GVA of Indian Manufacturing

Two comments on "Growth in Gross Value Added of Indian Manufacturing: 2011-12 Series vs 2004-05 Series" (EPW, 23 May 2015) question the defence of the statistics on growth in manufacturing in the new National Accounts Statistics of the Central Statistics Offi ce.

Seeds of Doubt Remain

In reply to the Central Statistics Office's rejoinder (18 April 2015) to his article (28 March 2015), the author examines the CSO's methodological improvisations to find out if they could have contributed to the higher estimates of growth in the private corporate sector in 2013-14. He concludes that there are reasons to maintain the seeds of doubt expressed in his initial contribution.

Seeds of Doubt on New GDP Numbers

The estimates of the private corporate sector in 2012-13, using a new data set, seem to account for a substantial part of the upward revision of the economic aggregates in the new series of National Accounts Statistics. This brief note poses a few questions about their veracity.

Can the Public Sector Revive the Economy?

The public sector's share in domestic output has stagnated since the late 1980s, its share in capital stock has fallen since 1990, and employment has contracted by 10% from the mid-1990s. Why has it fared so poorly even as its financial performance has improved? This paper argues that fiscal orthodoxy has throttled government borrowing for investment, and competitive politics has disallowed rational pricing by public utilities and recovery of user charges. If these constraints are relaxed by suitably adjusting fiscal deficit targets to accommodate the rise in input costs, and the prices of public utility services are adjusted for inflation, the public sector can revive the economy. Growing public sector enterprises with financial surpluses could also accommodate some political-economic demands.


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