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The Make in India program aims at building best-in-class manufacturing set up in the country. However, public infrastructure is considered to be one of the biggest obstacles for the growth of manufacturing in the country. In this context, this paper examines the role of infrastructure and information & communication technology (ICT) on total factor productivity (TFP) and technical efficiency (TE) of the Indian manufacturing sector for the period 1994–2010. We use advanced estimation techniques to overcome problems of non-stationarity, omitted variables, endogeneity and reverse causality by applying fully modified OLS, panel cointegration and System GMM. Estimation results suggest that the impact of infrastructure and ICT is rather strong. Importantly, industries, such as Transport Equipment, Textile, Chemicals, Metal & Metal Products, which are more exposed to foreign competition, are found to be more sensitive to infrastructure endowments. In the light of these findings, policy implications are brought out. [ABSTRACT FROM AUTHOR]

Rising incidence of corruption and tax evasion in India in the recent years have attracted a great deal of attention and initiated intense debate on these issues. Motivated by this, the present study intends to examine two important research issues. First, we test the impact of bribe payment on firms’ performance. Specifically, from an empirical point of view, we investigate two important but alternative hypotheses namely ‘grease the wheels’ and ‘sand the wheels’. Second, we intend to identify firms that must pay bribe. The study is based on the enterprises survey data of the World Bank. The findings on the effects of bribe on firm's performance are rather mixed. We noted that bribe works as tax on profitability of firms and reduces efficiency. However, the evidence is inconclusive relating to productivity. On the other hand, bribing shows a positive effect on the firms’ export and product innovation. Therefore, the evidence provides support to both the hypotheses. Findings regarding who must pay bribe reveal that tax-evading firms are likely to pay greater bribes to the government officers. Furthermore, policy impediments are an important cause of bribe payment. Thus, it is the complexity in the system (policy or bureaucratic) which tends to raise the probability of paying bribes and dampen performance. In the light of these findings, policy implications are brought out. [ABSTRACT FROM AUTHOR]

Abstract: The main aim of this study is to investigate India''s demand for international reserve by focusing on the role of national monetary disequilibrium and to present new benchmarks for assessing the adequacy of international reserves. We assessed India''s position in terms of reserve adequacy and found that India is well placed and has sufficient stock of international reserves to meet the minimum adequacy requirements. Also, the results reveal that the central bank is holding substantial excess reserves and the related opportunity cost (1.5% of GDP) appears to be quite considerable. Further, the estimates of reserve demand function suggest that scale of foreign trade, uncertainty and profitability considerations play significant role in determining India''s long-term reserve demand policies. More importantly, validating the monetary approach to balance of payment, our results show that national monetary disequilibrium does play a crucial role in short-run reserve movements. An excess of money demand (supply) induces an inflow (outflow) of international reserves with an elasticity of 0.56 which also implies that Reserve Bank of India responds to correct the domestic money market disequilibrium; and did not just leave it completely on the mercy of reserve inflows. [Copyright &y& Elsevier]