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

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Is There a Bubble in the Indian Stock Market?

The recent surge in stock prices in India sparked off a debate on a possible bubble in the Indian stock market. The attempt here is to detect and date stamp bubbles present, if any, in the Indian stock market using a recursive econometric technique. This technique can help identify bubbles as they emerge, not just after they have exploded. This study does not indicate any explosive price behaviour in the Indian stock market. Thereby, the presence of any bubbles during the study period is not detected. The sharp decline and the subsequent recovery of the stock prices during the past 15 months was most probably an overreaction to the pandemic.

Export-induced Loss in Employment and Earnings during the First Year of the COVID-19 Pandemic

The COVID-19 pandemic has been an unprecedented exogenous shock in the world economy unlike the global financial crisis in 2008, which was endogenously determined in the structure of capitalist financial market. Given the fact that Indian export sector significantly contributes to the Indian economy in general and employment in particular, it is worth examining how the Indian gross domestic product and exports changed in comparison with the world GDP and world exports respectively, in the first year of the COVID-19 pandemic in 2020–21 vis-à-vis the GFC in 2008. Which industries are affected the most, in terms of export loss, during this COVID-19 crisis? What have been the consequences of these falling export on employment and earnings in the Indian export sector? This study estimates that in the COVID-19 year 2020–21, Indian exports have fallen by `3.74 lakh crore, with a plausible loss of direct employment by 5.06 lakh and an estimated loss of earnings around `12.4 thousand crore across 85 commodities.

Managing Transition to a Low-carbon Electricity Mix in India

Demand for electricity in India is growing due to the increase in GDP and quality of life along with structural changes in the energy sector leading to the increase in the percentage share of electricity in the total final consumption of energy. Decarbonisation of the energy sector is a necessity, and it should be achieved without negatively affecting economic growth of the country. It can be best managed by having a diverse portfolio of technologies as diversity provides supply security, resilience, and hedging against price fluctuations. Therefore, all low-carbon technologies—hydro, nuclear, solar, and wind—should be exploited and provided with a level playing field.

COVID-19 Lockdown and Human Development

Maharashtra has emerged as the epicentre of the COVID-19 pandemic. In the trade-off between lockdowns to flatten the infection curve and saving an already slow economy, there is a significant human cost, thus exposing and deepening the existing structural inequalities. The article maps and analyses the impact of the first wave of the COVID-19 pandemic and the subsequent lockdown based on the three dimensions of human development—health and nutrition, education, and livelihood. Given the acute shortage of food supplies for certain groups during the period, the article examines the government response by analysing the implementation of food programmes.

Using Public Procurement Strategically

The article examines policy decisions and practices in public procurement in India during the pandemic, and finds that bureaucracy could not use public procurement strategically and relied upon archaic and centralised management of procurement to (mis)handle the pandemic. The article also offers some lessons from China’s procurement designs and calls for a major reform in this sector in India.

Lessons from Sri Lanka

Ethnocracy and concentration of power can derail even an affluent nation.

Impact of Leverage on Firms’ Investment

It has been observed that the economic growth cycle coincides with the investment cycle in India. It is found that firm-level leverage could provide early signals about the movements in the investment cycle. Furthermore, a firm’s leverage adversely affects its investment activity after a threshold. Regression results, after controlling for firm’s price to book ratio and operational variables, indicate that the adverse impact of high leverage is predominant on low-growth firms. The initiatives to clean up the balance sheets of banks and deleveraging by non-financial corporates should help in the revival of the investment cycle. The results are consistent with the agency cost of debt and trade-off theory of capital structure, wherein firms set targets for leverage by balancing costs and benefits of debt.

Labour ‘Invisibility’ during COVID-19 Times

As the migrant labour exodus unfolded with unrelenting grimness through the summer of 2020, there was frequent mention of how the COVID-19 pandemic had exposed the “invisibility” of migrant labour to Indian planners and policymakers.

Banking Sector Resilient in the Face of Pandemic

Contrary to several gloomy forecasts, the Indian banking sector has been surprisingly resilient in the face of the pandemic. This is because corporates, which account more than half the loans, are in better shape and banks are well-capitalised. This bodes well for loan growth and bank performance post the pandemic.

Rollback of Market Economics

Industrial policy has been rehabilitated globally despite the ideological bias.

Environmental Accounting in India

Does the present income accounting system represent the real value of the wealth of the economy? If not, how do we evaluate the performance economy? How can the present evaluation method accommodate different aspects of the economy, society, and the environment? If these aspects are not considered in the evaluation process, can it be justified socially or environmentally? In this paper, we discuss the limitations of conventional income accounting, recent developments in environmental accounting at the international level, the progress and challenges of environmental accounting in India, and the way forward.

The Lost Decades

The government must reimagine the fundamentals of the economy in favour of equality.

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