Pub Date : 2020-09-17DOI: 10.1093/oso/9780197531556.003.0004
A. Panagariya
This chapter shows that even industry and services in India are characterized by gross underemployment. The bulk of the workforce in industry and services is concentrated in informal unincorporated enterprises, where self-employment and casual employment dominate. The average value added by a worker in these enterprises is no higher than that in agriculture. Most enterprises have no hired workers, and when they do, annual wages are under 100,000 rupees. Whereas 75 percent of China’s manufacturing workforce is in medium and large enterprises, only 16 percent of India’s workforce is. The near absence of medium and large enterprises translates into very low productivity, not just overall but also in small enterprises. This is because medium and large firms produce greater competition and innovation in products, processes, and management. Medium and large firms also benefit from exposure to global markets. Creation of high-quality jobs requires an ecosystem conducive to the emergence of medium and large firms.
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Pub Date : 2020-09-17DOI: 10.1093/oso/9780197531556.003.0008
A. Panagariya
Relative to labor, capital is India’s scarce factor of production. Therefore, it is particularly important that it is allocated to the most productive activities. Well-functioning financial markets are critical to achieving this objective. Accordingly, this chapter focuses on the securities markets in India. In terms of new issues, private placements have dominated securities markets in India, both in equity and in debt. When it comes to public placements, while there is a bit of liquidity in equities, the same is not the case in the debt market. The market in publicly traded corporate bonds is thin, with limited liquidity. This chapter offers a number of ideas to deepen this market. For instance, rules governing investment in these bonds by pension, provident, and insurance funds may be liberalized. The government may also partially de-risk long-term bonds for infrastructure projects through provision of collateral.
{"title":"Investing Productively: The Securities Market","authors":"A. Panagariya","doi":"10.1093/oso/9780197531556.003.0008","DOIUrl":"https://doi.org/10.1093/oso/9780197531556.003.0008","url":null,"abstract":"Relative to labor, capital is India’s scarce factor of production. Therefore, it is particularly important that it is allocated to the most productive activities. Well-functioning financial markets are critical to achieving this objective. Accordingly, this chapter focuses on the securities markets in India. In terms of new issues, private placements have dominated securities markets in India, both in equity and in debt. When it comes to public placements, while there is a bit of liquidity in equities, the same is not the case in the debt market. The market in publicly traded corporate bonds is thin, with limited liquidity. This chapter offers a number of ideas to deepen this market. For instance, rules governing investment in these bonds by pension, provident, and insurance funds may be liberalized. The government may also partially de-risk long-term bonds for infrastructure projects through provision of collateral.","PeriodicalId":93252,"journal":{"name":"Agricultural research (New Delhi, India)","volume":"19 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78911266","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-09-17DOI: 10.1093/oso/9780197531556.003.0001
A. Panagariya
Until 1820, India accounted for one-sixth or more of world output. But under British rule and in the wake of the Industrial Revolution, its economy was eclipsed. Today, though, India stands on the cusp of reclaiming its lost glory. During the fifteen years ending in 2017/18, India’s economy grew 7.7 percent in real rupees and 9.9 percent in real dollars. Today its GDP stands at $2.6 trillion. Even if it were to grow at only 8 percent in real dollars in the coming decade, GDP would reach $7.2 trillion by 2030/31, placing the country in third place in the global GDP rankings. But, as the experiences of all successful developing countries show, sustained growth at a rate of 8 percent or higher requires a policy framework that leads to greater outward orientation, urbanization, and expansion of labor-intensive manufacturing. With concerted policy reform, such transformation is within India’s grasp.
{"title":"Reclaiming the Lost Glory","authors":"A. Panagariya","doi":"10.1093/oso/9780197531556.003.0001","DOIUrl":"https://doi.org/10.1093/oso/9780197531556.003.0001","url":null,"abstract":"Until 1820, India accounted for one-sixth or more of world output. But under British rule and in the wake of the Industrial Revolution, its economy was eclipsed. Today, though, India stands on the cusp of reclaiming its lost glory. During the fifteen years ending in 2017/18, India’s economy grew 7.7 percent in real rupees and 9.9 percent in real dollars. Today its GDP stands at $2.6 trillion. Even if it were to grow at only 8 percent in real dollars in the coming decade, GDP would reach $7.2 trillion by 2030/31, placing the country in third place in the global GDP rankings. But, as the experiences of all successful developing countries show, sustained growth at a rate of 8 percent or higher requires a policy framework that leads to greater outward orientation, urbanization, and expansion of labor-intensive manufacturing. With concerted policy reform, such transformation is within India’s grasp.","PeriodicalId":93252,"journal":{"name":"Agricultural research (New Delhi, India)","volume":"28 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2020-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84394844","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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