Search

This book, the second in the series, presents selections from papers read at the second Indian Conference on Research in National Income. It is a welcome addition to the 'meager but growing literature intended to deepen our understanding of historical and current Indian economic conditions. A reader, however, cannot help but realize the vital gaps in available basic economic data on India. In his presidential address, "Some Suggestions for the Improvement of National Income Data in India," V. K. R. V. Rao appropriately draws attention to these gaps and urges the government to direct its efforts to the collection of pertinent economic statistics through "well-designed and deliberately undertaken benchmark surveys," followed by annual sample surveys. Since Rao himself has joined the planning commission, it is to be hoped that these suggestions will soon be implemented. [ABSTRACT FROM AUTHOR]

Evaluates various papers focusing on social development in Asia. Land reforms and agrarian change in India; Examination of professional profiles and employment problems in selected countries; Analysis of the political sociology of the process of economic development; Agrarian framework for development.

The process of economic development of any country depends on the ratio of industrial activity to agricultural activity. When measured in terms of per capita income, economic development depends on a growing agricultural surplus. According to Jorgenson, "Both classical and neoclassical theories of development of a dual economy provide an explanation of the increase in the share of savings." The increase in the share of savings depends on a significant increasing agricultural surplus but not on the presence or absence of disguised unemployment. In a recent article by Bardhan and Bardhan, the price elasticity of marketed surplus food grains was estimated. The significance of neither the ratio of industrial output to the agricultural output nor the growing agricultural surplus in determining the savings ratio (S/Y) was established empirically. This paper attempts to investigate such a relationship in the Indian economy. I use annual time-series data for the period 1953-65. The conclusions of this study corroborate Jorgenson's hypotheses. Due to the significant presence of agricultural surplus, the industrial sector is viable. This has implications for disguised unemployment in Indian agriculture. [ABSTRACT FROM AUTHOR]

Numerous studies have concluded that the restrictive industrial and trade control regimes adopted by many semi-industrial countries have been responsible for inefficient allocation of resources. These studies typically have been concerned with cases where the control regimes led to production of goods in which developing countries do not have a comparative advantage or raised the cost of production above the minimum attainable. This paper discusses a closely related but nonetheless distinct cost of one such control regime: the designs of many engineering goods produced in India during the 1960s were not the most efficient ones available for the products concerned. Producer goods were manufactured to designs which were technologically obsolete or economically inefficient. Similarly, consumer goods were produced to designs which were inefficient for the tastes and incomes prevailing in India. The first section of the paper examines design deficiencies of a number of Indian engineering goods. The second section discusses the role of government industrial and trade policies in explaining why goods with inefficient designs were produced. The concluding section considers the possibility that the industrial and trade control regime not only led to inefficient resource allocation but also reduced the rate of technological change. It also discusses the implications of the study for semi-industrial countries which are attempting to make a transition from import substitution to export in the case of new manufactured goods. [ABSTRACT FROM AUTHOR]

This paper develops a theoretical framework for the application of cost-benefit analysis to management education in developing countries. Social returns are estimated through a combination of the import substitution and income creation approaches, both of which are considered in the evaluation of investment. The cost-benefit analysis of a major national project in India within this framework shows that its educational program has a positive net present value even at a social discount rate as high as 13 percent. The net returns appear to be quite sensitive to the values assigned to the foreign exchange rate, discount rate, and price elasticity. The purpose of this paper is to report the results of the cost-benefit analysis of a specialized branch of education in India. The branch selected is management education, which, though relatively new to India, is likely to expand significantly, given the managerial and organizational problems facing the country. The first section of the paper presents a conceptual framework of the cost-benefit analysis appropriate to management education.[1] The second section reports the results of the cost-benefit analysis of a national institution for management education in India. The conclusions of the study and its relevance for educational planning are summarized in Section III of the paper. [ABSTRACT FROM AUTHOR]

Responds to the comments of K.L. Gupta on the author's article discussing the response of household savings in India to prices and price changes. Dependence of savings on personal disposable income, price level and price changes; Koyck-type distribution lag function.

The present paper has two goals. First, since rotating credit associations have not been described for India, except in the briefest of terms, we shall contribute in a small way to filling this void. Our data are limited. They derive from a month of field work in the city of Hyderabad (Andhra Pradesh), carried out in July 1962, and include two days in a village approximately twenty miles from the city. The focus of the field investigation was voluntary associations generally. Only a few interviews dealt with chit funds, as rotating credit associations are commonly called in India. The work in the village, limited as it had to be, was more than usually fruitful, because reports were available from earlier studies by other social scientists. The second aim of this paper is to consider the potentialities of such associations for socializing to modern business life. Before dealing with the latter problem, let us look at the three types of chit fund that we found. (The number is not necessarily exhaustive. [ABSTRACT FROM AUTHOR]

This paper is a contribution to the growing body of empirical literature challenging basic assumptions and policy conclusions regarding industrial wage determination in the Lewis-Fei-Ranis model of economic development in labor surplus economies. We shall show that in India wages in modern industry are some four times higher than the earnings of agricultural laborers, rather than the 30 percent or so hypothesized by W. A. Lewis as necessary to attract labor to the modern sector and to compensate for the higher urban cost of living. More important, we shall show that the earnings differential, expressed in real terms, has been rising at an average annual rate of 1.5 percent from 1949 to 1965. Available evidence points to rising real wages in industry as an investment in higher productivity for the employer, not a wasteful deduction from the investable surplus forced upon industry by government and unions. [ABSTRACT FROM AUTHOR]

This paper examines the rationing system used with the Bhakra canals, one of the major new canal systems in north India, and focuses on study area in Hissar District. Rationing occurs at three principal levels: first, at higher levels, with the allocation of water available in the reservoir; second, at the middle level, with the rotation among channels of the preference to receive water; and third, at the farm level, with the rotation of turns among farmers (warabandi) served by the same watercourse, which is the ditch from the main channel to the farmers' fields. Institutional or administrative decision rules and schedules rather than market forces govern canal-water rationing. [ABSTRACT FROM AUTHOR]

This paper analyzes the trends in employment and labor productivity and attempts to link such trends with the overall development strategy that was followed during the last two decades in India. The trends in employment and labor productivity in agriculture, manufacturing, and services sectors are discussed in Section I. Data on employment and labor productivity are further disaggregated and analyzed separately, for as many sectors as possible, in Section II. The last section deals with the policy implications and conclusions. [ABSTRACT FROM AUTHOR]

It is generally agreed that the marginal propensity to consume obtained from cross-section data pertaining to a single year may be seriously underestimated. To the extent that we need such estimates for the purpose of planning economic development, their accuracy becomes of crucial importance. Mayer has shown for developed societies, over a wide spectrum of dates and countries, that a permanent-income-type problem does exist; that is, the strict permanent-income theory is wrong in asserting that the marginal propensity to consume is equal to the average propensity, but it is right in suggesting that the marginal propensity to consume permanent income is greater than the marginal propensity to consume measured income, though even for permanent income the marginal propensity is less than the average propensity. It is the purpose of this paper to (1) extend these considerations to developing countries by looking at the available data on India, and (2) evaluate the effect of these considerations on the estimates of the marginal propensity to consume. The formulation suggested in the following sections has been applied to data collected by the National Council of Applied Economic Research, New Delhi. These include: (1) the Delhi Survey, 1959; (2) the Urban Income and Saving Survey, 1960; (3) the All-India Rural Household Survey, 1962; and (4) the All-India Consumer Survey, 1964. [ABSTRACT FROM AUTHOR]

The subject of production incentives has received much attention from social scientists concerned with economic development. After some early debate, it has become generally recognized that some peasant farmers in almost all countries do respond to economic incentives. However, a number of constraints affect incentives to adopt new or increased quantities of productive inputs. The introduction of new seed varieties, along with the increased availability of fertilizers and irrigation tube wells, has greatly enhanced the production potential of Asian agriculture. Adoption of these inputs has been quite rapid in some parts of Asia by some types of cultivators. The pace of adoption has been uneven, however, implying a possible weakness of incentives for some cultivators to invest in the new input "packages." Little empirical work has been done in an attempt to assess the rates of return and constraints affecting adoption of the new, fertilizer-seed-water input packages. This study is an attempt to begin to fill that void by means of a case study of one important agricultural area in Asia. This paper combines partial budgeting and discounting procedures to compute present values and internal rates of return in an attempt to measure incentives to invest in new packages of agricultural inputs in north India. The packages include high-yielding seeds, fertilizer, irrigation inputs, and minor inputs. Returns to a number of input packages were found to be generally attractive, even when output prices are as much as 25 percent below six-year (1962-67) market averages. Small size of land holdings, extensive land fragmentation, and high down-payment requirements for loans were found to be serious hindrances to farmer investments in tube wells. For farmers with larger or less fragmented holdings, inclusion of a tube well in the investment package appears to be highly attractive. [ABSTRACT FROM AUTHOR]

In their recent analysis of a Punjabi market town, Walter Neale, Harpal Singh, and Jai Pal Singh have inaugurated a new line of social research for India. Hitherto, market towns and the commercial populations resident in them have attracted scant attention in the subcontinent. Because they lack the lustre and importance of the city, as well as the attractive size and relative social isolation of the village, they have not stirred field researchers. Then, too, the Indian community development program has for the most part given less attention to market towns and other small urban areas than to villages. Concurrently, the general mistrust and distaste for merchants (Baniyas) so characteristic of northern India may also have deterred such investigations. Yet the small market towns which dot the Indian countryside are essential as physical and social links between city and village, between urbanite and peasant. They may serve as centers for the dissemination of literate or sophisticated cultural traditions, as well as points of concentration and distribution for agricultural and manufactured products. Their intermediate position and economic role clearly indicate the importance of market towns for the appreciation of both rural and urban sectors of modern Indian society. The viewpoint presented by Neale and his associates is that of economists. They note the structure of the market and marketing, the nature and fluctuation of prices, and the geographical composition of the market place. However, they do not deal with the social composition of the merchant class or the "social organization" of business. This paper attempts to add a social dimension to the data on market towns. In the following pages I shall describe and analyze the social composition of a market center roughly equivalent in size and function to Neale's Punjabi town. To complement Neale's research, I shall note the nature of the commercial population, of business, of business ownership, of business... [ABSTRACT FROM AUTHOR]

The paper uses individual farm-level data fire nearly 1,000 Indian farms to analyze (a) the well-known inverse relationship between farm size and output per acre, (b) returns to scale, and (c) imperfections in the labor market. One major result is that while predominantly wheat areas show constant returns to scale, diminishing returns seem to prevail in predominantly paddy areas. But both in paddy and wheat agriculture the observed negative relation between output per acre and farm size is likely to be the result more of an inverse relation between size and other inputs than of scale diseconomics. [ABSTRACT FROM AUTHOR]

This study attempts to explain the coexistence of different farm lease arrangements in terms of the varying significance of entrepreneurial functions. In India, crop-sharing arrangements are common in areas of relative economic certainty with very little scope for decision making for example, for product an factor substitution. and where the entrepreneurial profit is low. Fixed-cash rents are common in situations of high uncertainty where the scope for decision making is significant or whre the crops are highly profitable. Efficiency considerations predominate in areas of sharecropping, favoring a smaller farm size, whereas, under high uncertainty, large size is favored for reducing risk. [ABSTRACT FROM AUTHOR]

The article discusses economic aspects relating to China and India from 1952-1970, as well as the stability of their newly industrialized governments. The article focuses on the two countries' growth in terms of their foodgrains output, industrial production, and national income. Also included is an appendix on the comparison of the estimated growth rate with alternative estimates, as well as a summary of the findings. The article lists the tables, charts, and indexes that are included for easy reference.

Reports on the correlation between fertility and natural resource availability in rural areas of India. Comparison between food production and fertility rates; Decline in the quality of life and indices of resources.

Discusses the impact of the dynamics of factionalism among politicians on the economy of the Poona District of India. Object of conflict; Economic associations of leaders of loyalists; Elements of economic background.

Comments on the article of Romesh Diwan on the response of household savings in India to prices and price changes. Dependence of savings on personal disposable income, price level and price changes; Koyck-type distribution lag function.

During the past two decades there has been a rapid increase in the politicosociological literature on the relationship between the armed forces and society in the emerging nations. A good number of these deal with the military as a political modernizing agent, and only very few deal with the role of the military as an agent of social and economic modernization. One of the studies which examine such problems in detail is the recent work of Janowitz on the role of the military in the sociopolitical development of new nations.@ In one place he discusses broadly the role of the military in the economic and social modernization of new nations after the Second World War. Here, the author, while analyzing the successes and failures of the contribution that the military makes to the social and economic modernization of new nations, points out that several classes of activities of the military are primarily involved, for example: (1) The military serves as a training ground for technical and administrative skills and organization of discipline. (2) The military manages economic enterprises to meet its own requirements or for the need of the civilian society, and also contributes to developing public works. (3) It works as an agency of socialization. And (4) it serves as an agent of social change. Shils, while speaking on the political implications of a modern army ill a new state, points out the role of the army in forming young men and women of heterogeneous ethnic and cultural backgrounds from traditional societies into citizens of a modern political society. Pye and Daalder also discuss some of the problems involved in the military as a modernizing agent of emerging nations and speak of the ways the armies in countries where social, economic, and cultural gaps among various groups of people are found step in to take political power into their hands. Lipset and Coleman, while trying to establish a relationship between economic modernization and political consequences,... [ABSTRACT FROM AUTHOR]

Discusses what might happen if taxation in used as a tool to reduce inequalities in the distribution of consumption expenditure in India. Distribution of households according to per capita consumption expenditure; Consumption expenditure by population deciles.

Discusses the influence of religion on social change in India. Structural and ideological transformation of a society; Characteristics of the Hindu culture; Difficulties in relating Hindu metaphysics to economic development; Differential responses to opportunities along caste or regional lines.