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

Sanjay K HansdaSubscribe to Sanjay K Hansda

Employment and Poverty in India during the 1990s

In an otherwise win-win situation of increasing growth and declining poverty in the 1990s, the phenomenon of jobless growth has been disquieting as well as puzzling. This study focuses on the observed inverse relation between poverty and unemployment, which holds both at the aggregate level as also at various cross-sections. The jobless growth of the 1990s, in general, and more so for agriculture, arguably contained the extent of underemployment and contributed to declining poverty. Continuing employment generation in the unorganised sector, albeit at a decelerated pace, coupled with increasing productivity also played a role. While there has been increasing casualisation of employment, the real wage rate increased sharply amongst casual labourers in rural India, possibly as an offshoot of public employment programmes and declining general prices for agricultural/rural labourers. Interstate remittances, as also those from abroad, could have also made possible the emergent configuration of declining poverty, increasing unemployment and decelerated growth at the state level.

Stock Market Integration and Dually Listed Stocks

In search of the micro-foundation of the commonly held view of a dominant Nasdaq and satellite Bombay Stock Exchange (BSE), the study looks into the price interdependence of 10 Indian companies, which have floated American Depository Receipts (ADRs). The strong correlation between the prices of the dually listed stocks is corroborated by the finding of a bidirectional causality in a vector auto regression model. The competing domestic stock exchange, viz, National Stock Exchange (NSE) too is found to share the same bidirectional relation scripwise with the Nasdaq/New York Stock Exchange. Furthermore, the impulse responses pattern indicates that a positive shock in the domestic (international) price of a scrip gets transmitted in terms of a strong positive movement in the international (domestic) price the very next day. Thus, the quotes of both the markets share not only a stockwise bidirectional causality, but markets also are efficient in processing and incorporating the pricing information.

BSE and Nasdaq

The synchronised movement of BSE and Nasdaq has often been interpreted as an indication of integration catching up with the Indian financial markets. The authors have looked into the nature of relationship between the daily share price in BSE and NSE on the one hand and Nasdaq and New York Stock Exchange on the other, for 1999-2000 through 2000-2001 and have found a unidirectional causality from Nasdaq to BSE or NSE. The relationship as well as direction of causation also holds good for the technology segment of the New York Stock Exchange and BSE or NSE. However, domestic prices of technology stocks and overall domestic share prices were found to be independent of each other.
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