India

India’s financial and capital market reforms since the early 1990s have had a positive impact on both the banking sector and capital markets. Nevertheless, the capital markets remain shallow, particularly when it comes to differentiating high-quality firms from low-quality ones (and thus lowering capital costs for the former compared with the latter). While some high-quality firms (e.g., large firms) have substituted bond finance for bank loans, this has not occurred to any significant degree for many other types of firms (e.g., old, export-oriented and commercial paper-issuing ones). This reflects the fact that most bonds are privately placed, exempting issuers from the stringent accounting and disclosure requirements necessary for public issues. As a result, banks remain major financiers for both high- and low-quality firms. The paper argues that India should build an infrastructure that will foster sound capital markets and strengthen banks’ incentives for better risk management.

The Indian economy provides a revealing contrast between how individuals react under a government-controlled environment and how they respond to a market-based environment. Evidence suggests that recent market reforms that encouraged individual enterprise have led to higher economic growth in that country.

Voluntary carbon markets, such as the Chicago Climate Exchange (CCX), were worth $90 million in 2006. This paper finds that community forestry interventions of three organizations in India are eligible to sell carbon sequestration credits on CCX. Their combined annual sequestration potential is 104,427 tons of carbon dioxide (tCO2), worth $417,708 at 2007 prices. Although this value will be difficult to realize immediately, it indicates the potential for carbon sequestration to raise rural incomes in India. These benefits can be actualized by first linking small pilot projects with CCX and then scaling up operations. Projects will also need to reduce transaction costs to raise the shares of carbon revenue that farmers receive. The diversion of land to raise tree crops needs to be balanced with food security concerns. A potentially viable approach would be to take up carbon plantations on common lands with concerned agencies acting as a liaison between farmer groups and the market.

The global population is more than seven billion and will likely reach nine billion by 2050. As India is home to 18 per cent of the world’s population, but has only 2.4 per cent of the land area, a great deal of pressure is being placed on all of the country’s natural resources. The increasing population has been trending towards an alarming situation; the United Nations has estimated that the country’s population will increase to 1.8 billion by the 2050 and, by 2028, it will overtake China as the world’s most populous country. The growing population and the environmental deterioration are becoming major impediments in the country’s drive to achieve sustained development in the country.

The programme certainly needs to be focused at achieving various welfare-oriented targets rather than increasing the number of contraceptive acceptors.

Energy based on fossil fuel consumption is very closely linked with environmental pollution in the form of CO2 emissions, a major element in global climate change. This paper analyses the changes in India’s energy consumption and CO2 emissions during the five-year period following the 1991 reforms, i.e. 1991/92 to 1996/97. The authors extend the energy Input-Output Structural Decomposition Analysis (SDA) to identify changes in energy consumption during this period. Results indicate that India’s energy consumption, which increased by 5.7 per cent a year in this period, was determined by a number of forces. The most significant role was played by the final demand structure followed by technical change and interaction between final demand structure and technical change. The CO2 emission trends reveal that the most dominating sectors have been petroleum products and electricity. The paper makes some broad policy recommendations for the future pattern of energy use in India.

India has adopted a balanced growth strategy driven by its large internal market, which entails making a major commitment to the endogenous development model. Previously, the country’s development plans were built around the supply-side and import substitution approach. In the early 1980s, the economy of India experienced structural changes, as the gross domestic product growth rate steadily increased, and then in the early 1990s, the country leapfrogged into a development policy centred on information technology, which led to the development of a globally competitive information technology (IT) sector. IT has helped states in India to develop through intersectoral linkages with several services and the multiplier effect. This makes it interesting to review the impact of growth of IT on development in states where IT development is prominent. As states have not been equal beneficiaries, a shift-share analysis was carried out to arrive at these imbalances for the period 2004/05-2008/09 and 2009/10-2013/14. The results of a shift in the share show that regional variations in software exports can largely be attributed to a regional component. In addition, the results of ordinary least squares estimation point out that existing infrastructure is overstressed, namely that there is excessive pressure on teledensity, a shortage of power and a large population, which is making it difficult for regions to sustain a high level of specialization.