Below is given the Table of Contents of the
Issues listed above:
Volume 57.
No 1. April-June, 2009
ARTICLES
/ 1
India’s March Towards a
Knowledge Economy
Crucial Milestones Yet to Accomplish G.K. Chadha
Many analysts assert that the right
time has arrived for the knowledge
economy to take roots in India, most
ostensibly, because it is the
knowledge- or technology-base of the
economy that will sustain the high
economic growth achieved in recent
years. The most essential pillar of
a knowledge economy being an
educated and skilled workforce that
continuously upgrades and adapts
skills to efficiently create and use
knowledge, the paper examines
whether the past and the on-going
policy initiatives, especially for
promoting higher education, hold any
assurance of a knowledge economy
being already around, or arriving
soon. The available evidence
undoubtedly shows that, during the
past decades, the Indian society has
witnessed tremendous expansion of
education at all levels, but then,
it is equally true that India needs
a many-fold further expansion
of higher education. Happily, the
on-going policy initiatives seem to
be working for that.
Nevertheless, a far more important,
and inescapable, pre-requisite for
reaching the doorstep of a knowledge
economy is the urgent need to inject
numerous qualitative improvements in
our educational system in general,
and higher education in particular.
Unless this is done, with a high
degree of political resoluteness,
most markedly at the state level,
knowledge economy would remain an
unrealised dream. The paper exhorts
that, for a country as big, diverse
and economically aspiring as India,
the knowledge economy’s most trusted
pillar (grooming an educated and
skilled workforce) has to be raised,
largely, from within; there is no
short cut to it.
G.K. Chadha, Member, Prime
Minister's Economic Advisory
Council, New Delhi.
E-mail:
chadha2001in@yahoo.co.in
The paper is a revised version of
the Presidential Address delivered
at the 91st Annual Conference of the
Indian Economic Association held at
Mohanlal Sukhadia University,
Udaipur, Rajasthan, December 27,
2008
ARTICLES
/ 2
Emerging Issues in Higher Education
Approach, Strategy and Action Plan
in the 11th Plan Sukhadeo Thorat*
Over the preceding decades, the
country had taken long strides in
higher education, yet it had come to
face several critical issues
including access, equity, quality
and excellence, and relevant
education. The Eleventh Five Year
Plan (2007-2012) has addressed these
issues in a more comprehensive
manner. We have recognised that
higher education has been neglected
during the last 20 years or so,
particularly by the state
government. Higher education has
received high priority in the 11th
Plan. It is important to note that
11th Plan marks a major break from
the past and brings higher education
on the priority list of the
government. This is abundantly borne
out by the fact that Prime Minister
Dr. Manmohan Singh describes the
Eleventh Plan as 'Education Plan',
and mentions this change as 'Second
Wave' in higher education.
It is in this context, I wish to
address the issue of higher
education. My purpose is to discuss
the emerging issues confronting
higher education system in the
country, and to present as to how
they have been addressed in the 11th
Plan.
Sukhadeo Thorat, Chairman,
University Grants Commission, New
Delhi. Email:
thoratsukhadeo@yahoo.co.in
* Valedictory Address delivered at
the 91st Annual Conference of the
Indian Economic Association, at
Udaipur, 29th December, 2008.
ARTICLES / 3
Economic History of Tamil Nadu
Living Conditions of Scheduled
Castes During the
Post-Independence Period, 1947-2007 Velayutham Saravanan
Literature on economic history of
the Indian subcontinent suggests
that several neglected aspects of
vital importance like regional and
different social groups are yet to
be explored. The existing studies
too are mostly confined to the
colonial period. Considering this,
the present article attempts to
situate the living conditions of the
Scheduled Castes (SCs) in Tamil Nadu
of the post-Independence period, in
a historical perspective
(1947-2007). State intervention has
made a positive impact on their
upward mobility and development in
terms of land ownership, housing,
education, employment and other
basic infrastructural facilities
over the last six decades. However,
we are confronted with an important
question, whether the developmental
schemes and programmes have paved
the way for their economic
transformation. If not, what could
be the problem in the policies and
schemes, being pursued after
Independence! Precisely, the
argument rests on the premise that
developmental strategies adopted in
Tamil Nadu, which were populist to
the core, have failed to yield the
desired result as no remarkable
change has occurred
in their living conditions.
Velayutham Saravanan, Professor,
Centre for Jawaharlal Nehru Studies,
Jamia Millia Islamia, New Delhi-110
025. Email:
Saravanan.JMI@gmail.com.
The earlier version of the paper was
presented as Vera Anstey Memorial
Lecture at the 91st Annual
Conference of Indian Economic
Association (IEA), Udaipur,
December 28, 2008..
ARTICLES
/ 4
Firm Heterogeneity and Choice
of Ownership Structure
An Empirical Analysis of German FDI
in India Holger Görg, Verena Lauber,
Birgit Meyer, and Peter Nunnenkamp
We contribute to the nascent
literature on the heterogeneity of
multinational enterprises (MNEs) and
the relevance of firm
characteristics for analysing the
determinants of outward foreign
direct investment (FDI). The focus
is on the role of firm-level
heterogeneity when MNEs decide on
the share of ownership in foreign
affiliates. We combine two
firm-specific datasets on German
MNEs with varying equity stakes in
Indian affiliates. The impact of
firm characteristics on ownership
shares is assessed in the context of
OLS and fractional logit models,
controlling for industry and
location characteristics. We show
that the effect of several
characteristics differs between the
establishment of new affiliates by
German MNEs and their engagement in
already
existing Indian firms. Most notably,
the productivity of the German
parents matters only for ownership
shares in new affiliates.
Estimation of Agricultural Supply
Response by Cointegration Approach Amarnath Tripathi and A.R. Prasad
The issue of agricultural supply
response is a very important one as
it has an impact on growth, poverty
and environment. The size of
agricultural supply response is
expected to improve after removing
some of the constraints that farmers
were facing before. Though many
constraints have been removed from
the agrarian system and many
incentives have been provided to
farmers, still the supply response
for Indian agriculture is price
inelastic. Hence, the question “why
is supply response price inelastic”
becomes relevant. The present study
is an attempt to find supply
response through cointegration
approach and to see if the response
has been better at the all India
level in comparison to previous
studies. Further, it also focuses on
the question whether there is
difference in the supply response
among highly agricultural based,
medium agricultural based, and low
agricultural based states. The study
indicates that aggregate
agricultural output elasticity with
respect to agricultural TOT is very
low and not statistically different
from zero.
Amarnath Tripathi, Research Scholar,
Department of Economics, Faculty of
Social Sciences, Banaras Hindu
University,
Varanasi.
amarnathtripathi@rediffmail.com
A.R. Prasad, Professor, Department
of Economics, Faculty of Social
Sciences, Banaras Hindu University,
Varanasi.
anubhuti_prasad@rediffmail.com
ARTICLES
/ 6
Cross-Country Differentials in
Economic
Growth and Inequality in South Asia
A Panel Data Approach Ratan Kumar Ghosal
This paper investigates the
proximate explanatory factors behind
the cross-country differentials in
the growth rates and the various
dimensions of inequalities in the
South Asian (SA) region since 1965
by using both the cross-country
regression technique and the panel
data approach. We find that most of
the countries in the S.A. region
have been able to achieve high rates
of growth of both the real GDP and
PCI especially in the 90s with
slightly declining tendency in the
cross-country inequalities but
increasing tendency of intra-country
inequalities. The cross-country and
cross-time variations in the country
specific factors and the cross-time
variations in the effect of the
investment, health and education
capital are more important for the
differentials in the level and the
inter-temporal growth rates of per
capita income in this region. Since
our panel regression results confirm
that the effect of the human capital
more than offsets that of physical
capital one can plausibly conclude
that the individual nation states
should undertake massive public
investment in boosting the social
sector development even under the
ongoing process of globalisation.
Ratan Kumar Ghosal, Professor of
Economics, Department of Commerce,
University of Calcutta, Kolkata,
West Bengal,
India. E-mail:
ratankumarghosal@rediffmail.com
COMMUNICATION
FOR DEBATE & RESEARCH / 1
Impact of Liberalisation on Capacity
Utilisation of Indian Iron and Steel
Industry Sarbapriya Ray and Mihir Kumar
Pal
In the context of the ongoing debate
of whether liberalisation has
significantly contributed to the
improvement in industrial growth and
performance or not, this study
attempts to estimate the impact of
liberalisation on the capacity
utilisation of Indian iron and steel
industry at an aggregate level. In
doing so, the present study attempts
to estimate econometrically rate of
capacity utilisation in Indian iron
and steel industry at aggregate
level and analyses its trend during
a period of 25 years. In this paper,
optimal output is defined as the
minimum point on the firm’s short
run average total cost curve and the
rate of capacity utilisation is
merely ratio of its actual output to
capacity output level. We use an
econometric model to determine the
optimal capacity output. Our result
shows capacity utilisation has not
been improved after the path
breaking economic reforms in 1991
and liberalisation has its
significant adverse impact on
capacity utilisation during
post-reform period.
Sarbapriya Ray, Senior Lecturer,
Dept. of Commerce, Shyampur
Siddheswari Mahavidyalaya, West
Bengal.
Email:
sarbapriyaray@yahoo.com
Mihir Kumar Pal, Reader, Dept. of
Economics, Vidyasagar University,
West Bengal. Email:
mihirpal@yahoo.com
COMMUNICATION FOR DEBATE AND
RESEARCH / 2
Sustainability of Service Sector
Growth in Goa
A Study Based on Granger Causality
Test Geetanjali R. Urankar and P.K.
Sudarsan
The present study, attempts to
analyse the growth and
sustainability of the service sector
of Goa’s economy, a sector that
generates nearly 50 per cent of the
state income in real terms and has
over 50 per cent of its workforce
employed. The basic research
question is whether the service
sector led growth pattern in Goa is
sustainable in the long run, given
the fact that services growth in Goa
was driven by government services
during its pre-statehood period
i.e., from 1970-71 to 1986-87 and by
tourism-related consumer services
like trade, hotel and restaurant
services, during the post-statehood
i.e., from 1987-88 to 2003-04. The
Granger Causality (GC) test findings
indicate that the service sector can
sustain its growth momentum, through
its sub-sectoral and intra-sectoral
linkages.
Geetanjali R. Urankar, Senior
Lecturer, GVM’s College of Commerce
& Economics, Goa. E-mail:
geetu_ur@rediffmail.com
P.K. Sudarsan, Reader, Department of
Economics, Goa University, Goa.
E-mail:
sudha@unigoa.ac.in
