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

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Public Sector Banks Are Adrift

With credit and deposit growth slowing in key sectors and only retail credit growing, low capital adequacy ratios of banks, senior management changes in the offi ng, and bank mergers, the National Democratic Alliance government needs to ask itself what it envisages for public sector banks, and indeed for the Indian economy.

Economic Policy Uncertainty and Growth in India

A measure of economic policy uncertainty or EPU for India is constructed to study its impact on the economy. It is found that gross domestic product growth and fixed investment are negatively related to EPU in India. For instance, if the economic uncertainty were to decrease to the level observed in 2005, India's GDP growth would increase by 0.56%, and fixed investment growth would increase by 1.36%. Additionally, a negative correlation between the Bombay Stock Exchange index and EPU in India is observed, suggesting that increases in EPU lower expectations of future growth or increase perceived risk of listed stocks. Lastly, it is found that firm-level capital expenditure rates are lowered when EPU increases.

How Real Are Estimates of Corporate Investment?

The NAS estimates for private corporate investment based on RBI's studies of joint stock companies suffer from shrinking coverage, especially in the 1990s, leading to overestimates. Re-examining the official methodology, this study reports an alternative estimate. The results show that the level of re-estimated GFCF of the corporate sector had remained lower than that of NAS estimates. The trend between these two series has been diverging, more significantly since the mid-1990s. While the NAS series shows that the momentum of corporate investment has been sustained throughout the 1990s, the alternative estimates suggest that it had tapered off since the mid-1990s.

Liberalisation and Growth of Firms in India

This study analyses the impact of the liberalisation policies on the growth of firms in India. It analyses the inter-firm differences in growth rates over a seven-year period. The basic unit is the firm and the study allows for the entry and exit of firms during the sample period. Further, the authors show that not all firms have benefited from the liberalisation measures. There were gainers and losers. The impact of the determinants on growth has not remained constant over the years but has changed during the process of liberalisation.

Financial Reform: Doubtful Case

Saving, Investment and Growth in India by Prema-Chandra Athukorala and Kunal Sen; Oxford University Press, 2002; pp 181, Rs 495 (hard bound).

Can Singapore Be a Hong Kong to India?

Can Singapore with its spare investible resources and expertise in building infrastructure act as a window of investment to eastern India as Hong Kong has been to southern China, making the latter a hub of great industrial activity? Much depends on the political leadership in India, at the centre and in the concerned states.

Foreign Direct Investment in India in the 1990s

This paper documents the trends in foreign direct investment in India in the 1990s, and compares them with those in China. Noting the data limitations, the study raises some issues on the effects of the recent investments on the domestic economy. Based on the analytical discussion and comparative experience, the study concludes by suggesting a realistic foreign investment policy.

What Ails Kerala's Economy:A Sectoral Exploration

The `Kerala model' of development has been facing a serious crisis due to low growth, high cost, low productivity, low investment and low employment in the state economy. This paper analyses the performance of major sectors of the state economy, such as agriculture, industry and the financial sector, during the past two decades and brings out the problems they confront. The paper highlights the lack of a development strategy in Kerala for growth and employment generation.
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