ARTICLES / 2

International Experience with Fuel Ethanol Lessons for India
Pradeep Agrawal and Inder Sekhar Yadav

The rapid increase in petrol prices in 2006-2008 demonstrated the vulnerability of oil importing countries like India to sharp increases in oil prices and the need to develop alternative and renewable sources of energy. Ethanol has been one promising option and its production around the world has expanded rapidly during the last decade. USA, Brazil, China and India are the top four ethanol producing countries in the world. This paper reviews the experience of these four countries with the production and use of ethanol as a fuel substitute and examines the possibility of significantly increasing its use in India. While Brazil has been able to use ethanol as a fuel substitute on a large scale, China experienced rapid increase in food prices when it tried to do the same. India can produce some ethanol from waste products like molasses, but given the limited land availability in India and the likely rapid increase in demand for food in the near future due to rising incomes, it may be difficult to divert significant amounts of food crops for ethanol production in India. Producing ethanol from cellulose (waste biomass) could become an important option in the future if the technology can be made commercially viable. Thus, the Indian government should support research towards this end.

Pradeep Agrawal
RBI Chair Professor of Economics, Institute of Economic Growth, Delhi.
E-mail: pradeep@ieg.ernet.in 
Inder Sekhar Yadav
Assistant Professor, Dept. of Finance, India Business School, Hyderabad.
E-mail: indersekharyadav@gmail.com 
 

Fiscal Scenario of the Union Government in India
Anil Kumar Jain

For a sustainable fiscal policy it is essential that fiscal consolidation process is not only facilitated but it is also strengthened by concerted efforts to boost revenue flows to meet the growing expenditure requirements. By 1990, the situation on the fiscal front had become precarious and all deficit indicators started showing increasing trend. The adoption of various fiscal measures resulted in reducing the deficit ratios to GDP in respect of fiscal deficit, revenue deficit and primary deficit. However, the real picture is much less rosy on account of adoption of two important methods of window dressing. First, since 2000-01, gross fiscal deficit (GFD) figures are shown as net of states’ share in small savings. This has resulted in decline in absolute figures, as also deficit ratios. Second, off-budget liabilities are not shown in the budget and these reduce the quantum of deficit. There is an urgent need for fiscal correction. Significant fiscal improvements will hinge increasingly on improvements in revenue collections. There is need to restructure the Indian tax system so as to ensure elasticity of the tax system and achieve increasing share of direct taxes in total tax revenue. The ultimate success would, however, depend upon strong political will and concerted and committed political leadership.

Anil Kumar Jain
Professor of Economics and Dean, Faculty of Social Sciences,
Banaras Hindu University, Varanasi.
E-mail: jainbhu@gmail.com 

 

ARTICLES / 4

Determinants of Acquisition Evidence for India
Paramjeet Kaur

Envisaging the effects that mergers and acquisitions (M&As) can have on the economic health of a nation, the paper analyses some key issues, ‘why some firms acquire’ and ‘why some get acquired’ with special reference to the Drugs and Pharmaceutical Industry during 1993-94 to 2002-03. Making use of firm-specific variables; profitability, market share, capital structure, age of the firm, results show that efficiency of firm and market share play a positive, while high leverage has negative role in explaining the probability of firms adopting mergers as their growth strategy. The young firms, expectedly more aggressive and innovative, have greater chances of acquiring. Concerning firms getting acquired, results show that better performing and high-leveraged firms have greater likelihood of becoming merger targets. The paper points to the possibility of obtaining financial synergies that acquiring firms could foresee in making these acquisitions. The assertion that size matters more than efficiency in M&As, is not supported. The paper argues for M&As to evolve.

Dr. Paramjeet Kaur,
Reader in Economics, Sri Guru Gobind Singh College of Commerce, University of Delhi, India.
E-mail: paramsps42@yahoo.co.in 
 

ARTICLES / 5

 Prof. A.K. Dasgupta’s Contributions to Economics A Study
Purba Chattopadhyay

Prof. Amiya Kumar Dasgupta (1903-1992) was one of the greatest economists of his time with his multifaceted contributions in varied fields related to the economics and the economy itself. Dasgupta’s field of analysis was vast, ranging from theory of value, distribution, growth, money, international trade to public finance, etc. His huge volume of published work deal with economic planning, wage policy, austerity, black market, inflation, Gandhian economics, Marshallian Theory, Keynesian economics, Marxian thought so on and so forth. His contributions to theoretical economics and contemporary critical issues pertaining to the Indian economy were pioneering effort in his time as well as seem relevant even today. Further, Dasgupta’s tryst as a policymaker and economic advisor makes his works even more pertinent. His analyses were unique translating ground realities to pure theories. The aim of the present paper is to have a brief overview of his works focussing on his major contributions to the discipline of economics. The paper tries to look into the various aspects of his contributions to economics in form of a teacher, academician, policymaker and social philosopher.

Purba Chattopadhyay, Lecturer in Economics, Gobardanga Hindu College, West Bengal.
E-mail: poorvaganguly@yahoo.co.in 
 

ARTICLES / 6

Empirical Evidence on Determinants and Extents of Alcoholism
S.N. Nayanatara, D.R. Myageri and B. Prasanna Kumar

This paper discusses the nature, determinants and extent of alcoholism with its burden on the society. The logit and multi-logit models are used for the data analysis based on a qualitative survey method. Findings suggest that standard of living index and education will help to reduce alcoholism and its burden in the society irrespective of productive age, targeted areas, social groups, and gender classifications. Policies should be targeted on these factors to have a rational and welfare-oriented society.

S.N. Nayanatara,
Associate Professor, Centre for Multi-disciplinary Development Research, Dharwad.
E-mail: nsnayanatara@yahoo.com 

D.R. Myageri,
Research Scholar, Centre for Multi-disciplinary Development Research, Dharwad.
E-mail: dastageer_s@indiatimes.com

B. Prasannakaumar,
Assistant Professor, Centre for Multi-disciplinary Development Research, Dharwad.
E-mail: barikpk@yahoo.com
 

ARTICLES / 7

Regional Trade Agreements and Competition Policy Some Lessons for India
Augustine Peter

Competition policy has emerged as a major element in the economic policy set of countries, and with increasing globalisation the rationale of incorporating competition rules in regional as well as multilateral trade agreements is being more and more recognised. India has recently joined the RTA bandwagon and a number of regional trade/free trade agreements have either been concluded or are under various stages of negotiation. Even though under the multilateral process the proposal for a separate competition policy agreement has been taken off the Doha agenda, there is increasing demand from countries like the US, EU, Japan and South Korea for inclusion of competition related provisions (CRPs) in RTAs. Therefore, India which is negotiating comprehensive free trade agreements with most of these countries or will have to review in the future the agreements already signed, will have to give serious thought to a possible strategy. The article reviews the nature of CRPs in RTAs already in force globally and those which had been proposed at the multilateral level. RTAs with deep integration tend to have more detailed provisions related to competition, though dispute settlement provisions are rare. India needs to consider including CRPs, including capacity building, at the SAFTA level and also in other comprehensive agreements of deep integration nature where investment is also part of the agreement. Cooperation of a deep level, including case based cooperation and sharing of confidential business information, requires capacity building at the Competition Commission of India. Even though anti-dumping rules tend to frustrate competition policy objectives, India needs to cautiously move as regards elimination of anti-dumping as part of RTAs. However, there is need to review the way anti-dumping rules are implemented so as to ensure that consumer harm is minimised while ensuring fair play for domestic producers.

Augustine Peter is a government official belonging to IES (1982).
E-mail: paugustine@nic.in. 
 

COMMUNICATION FOR DEBATE & RESEARCH / 1

An Empirical Investigation of Kaldor’s Growth Laws Evidence from the Mediterranean Region
Constantinos Alexiou and Persefoni Tsaliki

This study empirically evaluates the Kaldorian contention i.e., ‘manufacturing is the engine of growth’. The Kaldorian growth laws are subjected to econometric testing and the generated evidence supports the Kaldorian postulates. This suggests that resources have to be mobilised towards manufacturing should the economies in the scrutinised region attain a higher level of economic growth and development. For the econometric investigation a Time-Series-Cross- Section (TSCS) methodology has been applied to five Mediterranean countries, over the period 1975 to 2006.

Constantinos Alexiou,
Assistant Professor, Department of Urban-Regional Planning and Development Engineering, Polytechnic School, Aristotle University, Greece.
E-mail: alexio07@otenet.gr 

Persefoni Tsaliki,
Assistant Professor, Department of Economics, Aristotle University, Greece.
E-mail: ptsaliki@econ.auth.gr 


COMMUNICATION FOR DEBATE & RESEARCH / 2

 Impact of Globalisation on Rural Employment (1983-2008)
Roli Misra

The process of globalisation and prospects for rural employment has been a subject matter which has been extensively discussed in literature. A noticeable shift from farm to non-farm employment has taken place in the post globalise era. This paper attempts to analyse the trend in employment in the rural sector on one hand and on the other hand tries to establish a linkage between impact on education on workforce participation rate in a specific age group.

Roli Misra,
 Assistant Professor, Department of Economics, DBS College, Kanpur.
E-mail: roli219@gmail.com 
 

REVIEW ARTICLE / 1

Economic Growth in India History and Prospect
(Author: Pulapre Balakrishnan; pp.352; August 2010; Oxford University Press)
Reviewed by Professor C.H. Hanumantha Rao,
Centre for Economic and Social Studies, Hyderabad

REVIEW ARTICLE / 2
Growth, Distribution and Public Policy A Study of West Bengal
(Author: Biswajit Chatterjee, pp. 825, Price: Rs.2400, Deep & Deep Publications)

Reviewed by Dr.Arunkumar R. Kulkarni,
Assistant Professor, Centre for Multi-Disciplinary Development Research (CMDR),
Dharwad (Karnataka)

REVIEW ARTICLE / 3
Economic Reforms and Small Scale Industries
(Author: M. Soundarapandian, Concept Publishing Company, 2009)

Reviewed by Dr. Dalip Kumar,
National Council of Applied Economic Research, New Delhi