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Obituaries
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vol lI no 28
EPW
LETTERS
that Punjab has been overusing groundwater and applying excessive urea, and
on top of that the drug problem has
worsened in Punjab as depicted in the
Udta Punjab movie.
It is also clear that the central government has no urgent intentions to
save Punjab from these crises or
India from the crisis of the deficit
in proteins. The blindfolded ban on
cow slaughter has not only increased
the cost of culling excessive stock of
cattle but has unfairly prevented significant number of lower caste and
those of non-Hindu faith Indians from
eating beef.
The basic course of agronomy has
taught us that pulses fi x nitrogen in
soil and are good for sustainable agriculture. Pulses can reduce the demand
for urea as well as water. So, Punjab
can leverage on promoting the pulse
wheat rotation on farms and getting
out of the vicious cycle of the rice
wheat rotation promoted by the incorrect procurement and subsidy policies
of the central government. For this
purpose, Punjab should demand financial support from the central government in the form of subsidies for the
promotion of pulses. These can be
treated as input subsidies since the
pulse crop can be treated as an input
for maintaining soil fertility.
A comprehensive economic analysis
shows that this will not only help India
in reducing the protein deficit even
while keeping the ban on cow slaughter,
but will also help in making agriculture
in Punjab sustainable. Sustainable agriculture will also help in reducing the
drug crisis in Punjab and as a chain
reaction in other cities from Mumbai
to Kochi.
Chandrashekhar G Ranade
WASHINGTON DC
Kolkata
Gayatri Sharma
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New Delhi
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July 9, 2016
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LETTERS
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July 9, 2016
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JUly 9, 2016
n 18 May, four Indian warships set out on a two-and-ahalf month deployment in the South China and East China
Seas, more generally, the north-west Pacific, ostensibly
to ensure freedom of navigation over there. Of course, the Indian
Navy is not aloneit is there to, among other things, carry out
joint military exercises (war games) with the navies of the United
States and Japan. Washington and New Delhi are supposedly furthering the USIndia Joint Strategic Vision for the Asia-Pacific
and the Indian Ocean Region, signed by Prime Minister Narendra
Modi and US President Barack Obama in January 2015, which
aims at safeguarding maritime security and ensuring freedom of
navigation and over-flight throughout the region, especially in the
South China Sea. The war games are an extension of Exercise
Malabar involving the US and Indian navies with the Japan
Maritime Self-Defence Force as a regular partner since 2014.
Exercise Malabar has gone a long way since it was first launched
in 1992 when New Delhi initiated its foreign-policy somersault in
the aftermath of the end of the Cold War. The ninth Malabar exercise, held in 2007, was perhaps the first one that went beyond the
Indian Ocean, in this case, off the Japanese island of Okinawa,
and the Japanese navy subsequently came on board first in 2009,
again in 2011, and then regularly since 2014. In 2007, Australia
and Singapore participated in military exercises in the Bay of
Bengal. So what is new about these geopolitical manoeuvres?
To answer this question we need to get to Obamas address to
the Australian parliament in November 2011 wherein he
announced that Washington was now going to turn its attention to
the Asia-Pacific. This focus was subsequently dubbed by his the
then Secretary of State Hillary Clinton, in an article in Foreign
Policy, as a pivot, and it then came to be known as Americas
Pivot to Asia strategy. Washingtons strategy has since encompassed a greater concentration of US military assets in the region,
an extension of defence ties, a step-up of military-hardware
exports and training programmes for its military partners,
more frequent visits by US warships, and, of course, more war
games. At the heart of the justification for the Pivot to Asia
something that remains mostly officially unacknowledgedis
the rise of China, which the US views as its principal adversary
in the region. As long as China succeeds economically and
geopolitically the Pivot to Asia will only deepen and grow.
And, with the convergence of New Delhis Act Eastearlier a
Economic & Political Weekly
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EDITORIALS
JUly 9, 2016
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EDITORIALS
Divine-bodied Disabled
Access to education and the labour market is abysmal among Indias disabled.
JUly 9, 2016
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EDITORIALS
1971, the bloody coup that killed Sheikh Mujibur Rahman and
much of his family was followed by a fresh Pakistanisation of
Bangladesh under military rulers. Much of the ideology of a
liberal, secular state was undone in 21 years of military rule.
JUly 9, 2016
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COMMENT
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COMMENT
WEST BENGAL
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MARGIN SPEAK
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JULY 9, 2016
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JULY 9, 2016
Attention ContributorsI
The EPW has been sending reprints of articles to authors. We are now discontinuing the
practice. We will consider sending a limited number of reprints to authors located in India
when they make specific requests to us.
We will, of course, continue to send a copy of the print edition to all our authors whose
contributions appear in that particular edition.
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Congress
Bharatiya Janata Party
Congress
Bharatiya Janata Party
11 (43.2)
15 (46.5)
0 (32.9)
26 (59.1)
july 9, 2016
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COMMENTARY
and continued thereafteris a key reason for the Patidar agitation. This is also
why the BJP fared miserably in the rural
hinterlands in the local body elections.
This is besides the stagnation in Gujarats
traditional small-scale and medium-scale
industrial sector, on which the states
famed entrepreneur depends heavily.
Still, the biggest advantage that the
BJP has ahead of the 2017 elections is the
opposition, the Congress, which is in a
state of disarray. The partys good showing in the recent elections is largely by
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july 9, 2016
Highest among 36 Indian social science journals and highest among 159 social science
journals ranked in Asia.
Highest among 36 journals in the category, Economics, Econometrics and Finance in the
Asia region, and 36th among 835 journals globally.
Highest among 23 journals in the category, Sociology and Political Science in the Asia
region, and 15th among 928 journals globally.
Between 2008 and 2014, EPWs citations in three categories (Economics, Econometrics,
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please see http://tinyurl.com/qe949dj
EPW consults referees from a database of 200+ academicians in different fields of the social
sciences on papers that are published in the Special Article and Notes sections.
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needed to be allayed, and that the National Front, a far right anti-immigration
party, had indeed raised legitimate concerns. Thatcher also promised to bring
down immigration. She is reported to
have snubbed Prime Minister Morarji
Desai when he was waiting to meet the
Liberal Party leader at 10 Downing
Street. Thatcher won to become the
Prime Minister who opposed trade unions,
privatised and liberalised the economy,
and sowed the seeds of polarisation,
poverty, and regional disparities.
Indians will recall Winston Churchill,
the wartime Tory Prime Minister, and the
struggle over Tory policies towards India.
Churchill vehemently opposed dominion
status to India, which is what the liberal
Congress leadership had asked for. At the
height of World War II, when two million Indian soldiers were fighting for the
empire with Indian money and materials,
Churchill never held back from display of
hatred for Indians. I hate the Indians.
They are a beastly people with a beastly
religion, he said, adding, [t]he Hindus
[are] a foul race protected by their mere
pullulation from the doom that is their
due. I wish that Harris, [the Air Chief
Marshall] would send some of his surplus
bombers to destroy them. When cautioned about the dangers of racial politics
that Britain was pursuing in India, which
could backfire on Britain under war conditions, Churchill said, [w]ell if our poor
troops have to be kept in a sweltering,
syphilitic climate and lice-infested barracks for the sake of your precious unity, Id
rather see them have a good civil war.1
The question as to what the future of
Britain might have been if the Tories had
conceded to dominion status for India
must remain a speculative one. In the
end, the Indians did have a good civil
war, but also the sunset over the British
Empire under Tory watch.
The Brexit vote and the victory of the
nationalist strand in Toryism present the
spectre of disintegration of the UK. Within
six hours of the result, Scottish First
Minister Nicola Sturgeon announced that
another referendum to leave the UK was
on the table. Sinn Fin leader Gerry Adams
in Ireland announced that the Brexit
result effectively undermined the Good
Friday agreement of 1998, which ended
21
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22
reunification of Gibraltar with the mainland. Can the same logic that ended the
empire now transform Great Britain into
Little England?
Note
1
july 9, 2016
All quotes from Churchills Secret War: The British Empire and the Ravaging of India During
World War II, by Madhusree Mukerjee (Basic
Books, New York 2010), New York: Basic Books.
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22
The economic, political and constitutional crisis unleashed by the Brexit vote
is, of course, one not only for the UK. EU
leaders in the other 27 member states
were not only quick to express their regret at the British vote but also to insist
that the UKs departure should be managed relatively quickly and that the rest
of the EU would remain united.
Yet the EU is already under strain
from the eurozone crisis and the refugee
crisisand populists in France and the
Netherlands rapidly called, after the Brexit
vote, for referendums on EU membership
in their countries too. The Euro also fell on
the currency markets and stock markets
fell across the EU with the turmoil
affecting wider global markets too.
How Did It Come to This?
The UK joined the EU in 1973, 16 years
after it was first set up as a project to
promote peace and prosperity in Europe
after the carnage of World War II. Britain
was long a slightly awkward member,
not sharing the political enthusiasm of
some member states for ever closer
political and economic union, staying
out of the Euro when it was created 17
years ago, and also opting out of the EUs
border-free Schengen zone.
Yet at the same time, the UK had been
an influential player in the EUit was
one of the driving forces behind the creation of the EUs large single market; it
played a big role, after the Berlin Wall fell
in 1989, in ensuring the EU enlarged to the
new democracies in central and eastern
Europe, and it promoted, for better or
worse, a strong free trade stance. While the
UK never fully matched the political influence of France and Germany, it was, with
them, one of the big three in Europe.
The Labour Party slowly put its doubts
about the EU behind it in the 1980s, accepting that the EU provided social protection for workers as well as large open markets for business. But the Tory Party went
in the opposite direction. As the Tories increasingly split internally during the 1990s
july 9, 2016
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Birth of Bangladesh
Recollections of a Politician Economist
book reviewS
Untranquil Recollections: The Years of
Fulfilment by Rehman Sobhan; New Delhi: Sage, 2016;
pp 445, `450 (paperback).
music. When such a multivalent personality, a legend in his own rights, writes his
memoirs, multiple twists, strands and
dimensions are natural. It is difficult to
find a point of departure.
With Politicians and Intellectuals
Let us start with a photograph in the
middle of the book under review (before
page 232) where Rehman Sobhan as a
young student is seen with some of the
most distinguished politicians, business
tycoons and future academics and journalists of South Asia. Jawaharlal Nehru
and Swaran Singh, along with others, are
seen with young Sobhan, the then president of Mazlish, a platform for the South
Asian students at Cambridge. There is
another photo of him running a marathon
at St Pauls school at Darjeeling. Sobhans
marathon of a long public life is yet to
end. His friends circle at Cambridge days
included Amartya Sen, Mahbub ul Haq
and Manmohan Singh, among others and
his teachers included Joan Robinson,
Peter Bauer, Maurice Dobb and other
luminaries. The network of economists
was probably the only network that existed in South Asia in the 1960s and early
1970s; this network played a crucial role
in the early phase of the liberation war.
Sobhan and Anisur Rahman, a fellow
economist at Dhaka University, crossed
into Agartala in disguise following the
military crackdown that was launched on
the night of 25 March 1971. This was a perilous journey during which Sobhan was
mistaken as a non-Bengali, and was about
to meet popular justice. Fortunately for
himand for Bangladeshhe was spared
JUly 9, 2016
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EPW
BOOK REVIEW
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JUly 9, 2016
2.
City: New Delhi
Venue: India International Centre
Date: 16th July 2016 (Saturday)
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Venue: Bangalore International Centre
Date: 23rd July 2016 (Saturday)
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BOOK REVIEW
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BOOK REVIEW
ohn Kay has written a highly readable and often incisive book about
the way in which the financial practices dominating much of the world have
evolved into a highly dysfunctional system that generates ever greater instability, inequality and waste. As someone
who has not only academic credentials
but considerable practical experience in
the financial sector, and who believes in
the benefits of the free market in many
contexts (for example, Kays The Truth
About Markets, 2003), his trenchant
critique of the contemporary financial
world is all the more credible. He draws
on historical, economic, legal and psychological perspectives to analyse modern
finance, focusing especially on the experiences of the United States (US) and
the United Kingdom (UK); and he offers
proposals for reform.
Modern Financial System
Kays main aim is to show how contemporary financial institutions fail to serve
well the primary purposes of a financial
system: (i) to process payments, (ii) to
channel savings to productive investments, (iii) to help manage personal finances across the lifecycle and across
generations, and (iv) to manage and
transfer risk. As he demonstrates, the
primary business activity of large financial institutions is no longer financing
growth in the real economy; instead it
is exchanging financial claims (bits
of paper) with peer institutions. The
explosion in the volume of financial
Economic & Political Weekly
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JUly 9, 2016
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BOOK REVIEW
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BOOK REVIEW
Books Received
Atal, Yogesh (2016); Indian Tribes in Transition: The
Need for Reorientation, Oxon and New York:
Routledge; pp vi + 192, `895.
EPW
JUly 9, 2016
Jethwaney, Jaishri (2016); Social Sector Communication in India: Concepts, Practices and Case
Studies, New Delhi, California, London and
Singapore: Sage Publications; pp xiii + 269,
`850.
Kapur, Anu (2016); Made Only in India: Goods with
Geographical Indications, Oxon and New York:
Routledge; pp xxi + 228, `895.
Khanna, Parag (2016); Connectography: Mapping
the Global Network Revolution, London: Weidenfeld & Nicolson; pp xxv + 456, `500/UK
13.99.
Moulik, Achala (2016); Dangerous Dispatches, New
Delhi: National Book Trust; pp 379, `410.
Muntaqim, Khwaja Abdul (2016); Islam Discourages Polygamy and Divorce a Reality, Not a Myth,
Delhi: Kalpaz Publications; pp 150, `490.
Singh, Hemlata and Rajkumar Singh (2016); Challenges of Contemporary India: Polity, Justice,
Education, Empowerment & Judiciary, Delhi:
Kalpaz Publications; pp 296, `950.
Subramanium, Gopal (2016); Constitutional Morality: Is It a Dilemma for the State, Courts and
Citizens? Visakhapatnam: Centre for Policy
Studies & Visakhapatnam Public Library;
pp 92, price not indicated.
Ramasamy, C and K R Ashok (eds) (2016); Vicissitudes of Agriculture in the Fast Growing Indian
Economy: Challenges, Strategies and the Way
Forward, New Delhi: Academic Foundation in
Association with Indian Society of Agricultural
Economics; pp 665, `1,495.
Veeramani, C and R Nagaraj (eds) (2016); International Trade and Industrial Development in
India: Emerging Trends, Patterns and Issues,
New Delhi: Orient BlackSwan; pp xviii + 339,
price not indicated.
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INSIGHT
Is sustainability an idea, a
science, a philosophy or a way of
life? The premise of this article is
that sustainability is all of these
and more. Furthermore, science
and technology of both today
and the future must be
re-visioned to understand and
enable sustainability.
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INSIGHT
Defining and
Framing Sustainability
Sustainability is defined in multiple ways
and the emphasis provided in the definition is usually a function of the subject
discipline from where the definition
originates. An example of this is the prefix often used in defining sustainability:
ecological sustainability, environmental
sustainability, economic sustainability,
social sustainability, sustainability science,
etc (Morelli 2011). In most scientific literature the definition of sustainability is
embedded in ecology. This is because its
usage emerged from the environmental
movement. Sustainability has been described through various terms, including
conservation, renewable, eco-efficiency,
environmentally sound, ecological footprint, ecosystem services, etc. In the mid
to late 1980s, sustainability entered the
global political agenda when it was
defined as sustainable development with
the formal definition being put forth by
the World Commission on Environment
and Development (WCED). This definition
has a strong economic focus with human
well-being and equity at the centre: equity
for both the present and future generations.1 From here forward, the usage and
definition had a strong economics and
development focus. Governments, policymakers, civil society organisations, and
academics use sustainable development
extensively and interchangeably with
sustainability.
Human society is at a critical juncture
in its history where it is becoming pivotal
to its existence to understand that the
idea of sustainability extends beyond sustainable development. With the focus on
development, sustainability has come to
mean economic sustainability as defined
by an industrial, market economy encompassing industrial/post-industrial societies. It must therefore be recognised that
sustainability has cultural, ethical and
spiritual dimensions and the ideas of justice, equity and fairness must encompass
all societies on the planet along with
non-human living species. Understanding
sustainability means recognising the fragility of the social-ecological interlinkages.
Human life is inextricably bound to
other life forms and taking action without understanding these linkages can
Economic & Political Weekly
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What is therefore clear is that the scientific approach does not necessarily
lead automatically to sustainable ways
of addressing the various environmental
phenomena unfolding around us. Science
needs to move away from the conventional reductionist and fragmented approach of an expert giving advice to
others. Science, the scientist and the
technologist need to be an integral part
of a systemic and humanistic approach.
They need to work together with and learn
from communities that have adapted to
face major shifts in their environment.
Any solution or way of understanding
and resolving an issue must be done collectively with the affected communities.
Lens of Climate Change
Climate change is not a problem waiting for
a solution. It is an environmental, cultural
and political phenomenon that is reshaping
the way we think about ourselves, about
our societies and about humanitys place on
Earth.
Michael Hulme, International climate
change scientist and public commentator.
Today, all discussions around sustainabilitypolitical, cultural, scientific, socialare subsumed within the frame of
climate change. This article would not be
doing justice to this discussion if it did not
view the challenges to science and scientists through the lens of climate change.
Climate change started as an environmental issue based on research data on
greenhouse gases and global warming in
the 1980s. It was observed, quantified and
measured purely as a physical phenomenon by scientists. For most people,
including policymakers, it was a phenomenon whose impact would be felt far
into the future, there was a lot of uncertainty on the scientific understanding of
Economic & Political Weekly
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INSIGHT
With this, the EPWRF ITS now has 16 modules covering a range of macro-economic, nancial and social data.
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held by many scientists that in being rational they cannot advocate a solution or
approach in a credible and rational manner. Oreskes (2013) urges scientists not to
link rationality to dispassion; instead to
be the sentinel, particularly in the context of climate change.
Science and scientists also have a public role in education. The mainstream
education system is based on the reductionist approach to problem-solving. The
challenges of the present and future demand a re-visioning of this education
and learning process. Science must be
demystified and become inclusive and
integrative of all ways of knowing and
learning if it is to enable a sustainable
world view.
Notes
1
2
3
Development that meets the needs and aspirations of the present without compromising the
ability of future generations to meet their own
needs (WCED 1987).
Rene Descartess words in Discourse on Method.
Originally published in 1637.
The Kyoto Protocol is an international agreement linked to the United Nations Framework
Convention on Climate Change, which commits
its parties by setting internationally binding
emission reduction targets. Recognising that
developed countries are principally responsible
for the current high levels of GHG emissions in
the atmosphere as a result of more than 150
years of industrial activity, the Protocol places
a heavier burden on developed nations under
the principle of common but differentiated responsibilities. The Kyoto Protocol was adopted
in Kyoto, Japan, on 11 December 1997 and entered
into force on 16 February 2005. The detailed
rules for the implementation of the Protocol
were adopted at COP 7 in Marrakesh, Morocco,
in 2001, and are referred to as the Marrakesh
Accords. Its first commitment period started
in 2008 and ended in 2012. (Source: http://unfccc.int/kyoto_protocol/items/ 2830.php).
Popes Encyclical on Climate Change and the
Environment, http://w2.vatican.va/content/
francesco/en/encyclicals/documents/papafrancesco_20150524_enciclica-laudato-si.html.
References
Altieri, M (2016): Cubas Sustainable Agriculture
at Risk in US Thaw, The Conversation, 25 March,
https://theconversation.com/cubas-sustainable-agriculture-at-risk-in-u-s-thaw-56773, acce
ssed on 28 March 2016.
Funtowicz, S O and J R Ravetz (1993): Science for
the Post-normal Age, FUTURES, September.
Harari, Y N (2015): Sapiens: A Brief History of Humankind, Harper Collins.
Hulme, M (2009): Why We Disagree About Climate
Change, Cambridge University Press, UK.
Morelli, J (2011): Environmental Sustainability: A
Definition for Environmental Professionals,
Journal of Environmental Sustainability, Vol 1,
Issue 1.
Oreskes, N (2013): The Scientist as Sentinel, Limn,
Issue No 3, June.
World Council for Environment and Development
(1987): Our Common Future.
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defines the scope of economic transactions in markets, attempting to encourage, constrain or facilitate operational aspects of
the market economy. (ii) Political activities that cause government entities to be co-participants with business as users of
economic resources. (iii) The range of administrative government controls defining the operation of a private market economy
or direction of certain economic decisions.3
In the research, the APMC index is conceived as based on the
normative economics (as opposed to positive economics) to
consider the role of state functioning for economic and social
fairness.4 In about 50 years, state agricultural markets have
shed their colonial administrative structures and evolved to
possess Indian characteristics. Present agricultural market
institutions are steadily reworked through reforms by the state
as part of the modernisation and progressive growth of India.
Therefore, in the conceptual institutional framework of this
research, institutions such as the APMC Act are meant to offer
those arrangements that promote broad-based growth by
maximising the growth potential of the society as a whole
(Acemoglu 2003). It influences (directly and indirectly) cost of
exchange and production, alters preferences of actors and
serves interest group by provisions provided and enforced
codes of conduct to a considerable degree.
The APMC index is based on variables from de jure (in law)
set of indicators in place of the de facto (in practice) set of
variables to construct a measure of the APMC Act & Rules. The
choice of de jure (rules based) indicators controls biases both
for and against a particular state. It also limits selection
of spurious indicators of the APMC Act, driven by personnelspecific political or ideological biases or beliefs that experts
assessments may have. It also allows distinguishing objective
indicators easily from the outcome indicators of the APMC
Act & Rules.
The de jure APMC index is a time-varying multidimensional
construct. It is obtained by combining six different regulatory
indices that measure one distinct regulatory dimension of the
APMC Act and Rules. They are: (i) scope of regulated markets;
(ii) constitution of market and market structure; (iii) regulating
sales and trading in market; (iv) infrastructure for market
functions; (v) pro-poor regulations; and (vi) channels of
market expansion. Each of the six indices (sub-indices) is constructed based on 36 variables classified from state-specific
APMC Act & Rules and other supporting agricultural marketing-related information evolved over the period of 38 years
(19702008). The work treats the composite APMC index as a
latent, continuous variable, where selected indicators are seen
as a function of the APMC Act and Rules.
2 Coding and Measuring APMC Act & Rules:
Classification of Variables
The New Model APMC Act & Rules (2003) is used as the baseline model act & rules for the classification of the core legislative measures (variables) in the construction of APMC index.5
The historical background of regulated markets in the states
guides to interpret the marketing law analytically.6 Each
states APMC Act corresponds with state APMC Rules. The
Economic & Political Weekly
EPW
July 9, 2016
vol lI no 28
Out of the acts of the 14 states that are read, here Rajasthan
gets a code of plus one in the data set since 1963. The rules to
enforce the act were framed in 1963 satisfying three identified
variables: (i) provision of payment to grower/seller on the
same day; (ii) provision of interest payment over the delayed
payment and (iii) penalty for default payment. In comparison,
except for Madhya Pradesh and Karnataka that included similar clauses in 1986 and 2007 respectively, other states act excluded clauses on interest over the delayed payment and penalty
for default payment, and in this case these states included only
37
SPECIAL ARTICLE
(1) Scope of Regulated Markets: This dimension conceptually characterises the spread of the regulated markets as well as
the sufficiency (against shortage) of the markets in the state. It
is measured by the following two variables:
(i) Average area covered by each regulated market in sq km
measures the density of market to assess if farmers have to
travel far with their produce to avail the facility of regulated
market (Acharya 2004). It is calculated by: state area in square
kms/total regulated markets in the state. A large market area
indicates lesser number of market yards in the vicinity of production area in the state. The state receives the lowest score on
this variable that has the largest market area after standardisation of raw score. The score for each state is computed yearwise for 38 years.
(ii) Population served by each regulated market per thousand
people measures the adequacy of number of markets in a
state to serve the public efficiently. Larger population implies
considerable congestion in market yards that may lead to
undue delays in the disposal of the farm produce resulting in
long-waiting period and low returns. It is calculated by: total
state population per thousand/total number of regulated
markets. The score for each state is computed year-wise for
38 years.
(2) Constitution of Market and Market Structure: This
dimension conceptually characterises the level of democracy
in the regulatory set-up which equitably represents diverse interests involved in sale and purchase of agricultural produce.
It is measured by the following seven statutory clauses verified
from the act where an observed variable:
(i) Equals 1 if composition of market committee takes place
through a provision of direct election; otherwise 0.
(ii) Equals 1 if the chairman of the market committee is agriculturalist; otherwise 0.
(iii) Equals 1 if the chairman of the market committee is an
elected chairman; otherwise 0.
(iv) Equals 1 if a provision to dismiss the chairman of the market committee exists; otherwise 0.
(v) Equals 1 if a provision to suspend the market committee
exists; otherwise 0.
(vi) Equals 1 if a provision to suspend the market committee
exists; otherwise 0.
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EPW
SPECIAL ARTICLE
(5) Pro-poor Regulations: This dimension conceptually characterises pro-poor regulatory environment to ensure social
justice to small and marginalised farmers. The law recognises
that owing to unscrupulous practices by certain sectors of
traders, special regulations in the regulated markets are
required. It is measured by the following three statutory clauses verified from the act where an observed variable
(i) Equals 1 if law offers provision where buyer is liable to
make additional payment over the actual due amount as an
interest payment, if the buyer at first trade transactions fails to
make immediate cash payment to the seller; otherwise 0.
(ii) Equals 1 if law offers a provision of penalty on a buyer who
is a defaulter in making payment (both principal and interest)
to the seller within the specified period; otherwise 0.
(iii) Equals 1 if law offers a provision of maintaining market
stability allowing the state government to adopt special measures
by passing an order to correct an immediate market problem or
to give effect to the provisions of the act, subject to providing
reasons in the order; otherwise 0. For instance, Section 64 BC
of the Act 2007 in the act of Karnataka mandates that no bid
during the market auction shall be permitted to start below the
price of notified agricultural produce in the market yard of
which minimum support price (MSP) has been declared by the
state government. A score of 1 is given in each year if a provision
of market stability in a prescribed manner exists, 0 otherwise.
(6) Channels of Market Expansion: This dimension conceptually characterises expansion of scope of agricultural market
by recognising the role of alternative marketing channels such as
contract farming, direct marketing, private markets, e-markets,
EPW
July 9, 2016
vol lI no 28
39
SPECIAL ARTICLE
Andhr
Andhra Pradesh
Pradesh
Assam
Bihar
Gujarat
.4
.2
0
.6
.4
APMC index
Haryana
Karnataka
Odisha
Punjab
Uttar Pradesh
West Bengal
Madhya Pradesh
Maharashtra
.2
0
.6
Rajasthan
Tamil Nadu
.4
.2
0
1970 1980 1990 2000 2010 1970 1980 1990 2000
.6
2010
.4
.2
0
1970 1980 1990 2000 2010 1970 1980 1990 2000 2010
Year
Source: Authors calculations.
APMC Index: Based on the summary statistics of the composite APMC index and six sub-indices, the overall mean score of
the composite APMC measure begins with very low score of
0.006 that improves significantly over the period 19702008
(estimated by the difference between max and min
values) to be greater than 0.5. Nevertheless, measure evolves
very gradually over 38 years of time period and still it is
substantially lower than the optimum level for a country like
India, where agriculture is a central theme on the development agenda.
Figure 1 captures the movements of statewise APMC
measure in the period 19702008. In terms of levels and
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vol lI no 28
EPW
SPECIAL ARTICLE
Figure 2: Market Structure Dimension of the APMC Index by State
1
Andhra Pradesh
Bihar
Assam
Gujarat
.5
Haryana
Karnataka
Madhya Pradesh
Maharashtra
.5
Odisha
Orissa
Punjab
Rajasthan
Tamil Nadu
1
.5
0
1970 1980 1990 2000 20101970 1980 1990 2000 2010
Uttar Pradesh
Market infrastructure
Market structure
Assam
Bihar
Gujarat
Haryana
Karnataka
Madhya Pradesh
Maharashtra
Odisha
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
0
1
Andhra Pradesh
.5
1
.5
0
1
.5
0
1970 1980
West Bengal
.5
.5
1970
1980 1990
2000
2010 1970
1980 1990
2010
Year
Assam
Bihar
Gujarat
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Madhya Pradesh
Maharashtra
Orissa
Odisha
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
.5
.5
0
Haryana
Madhya Pradesh
Karnataka
Maharashtra
1
.5
.5
0
Orissa
Odisha
Rajasthan
Punjab
Tamil Nadu
.5
0
1970 1980 1990 2000 20101970 1980 1990 2000 2010
Uttar Pradesh
West Bengal
Market pro-poor
1990 2000
1980
2000 2010
Year
2010 1970
1970 1980 1990 2000 2010 1970 1980 1990 2000 2010
1990 2000
0
1
.5
0
1970 1980 1990 2000 2010 1970 1980 1990 2000 2010
1
.5
.5
1970 1980 1990 2000 2010 1970 1980 1990 2000 2010
Year
Year
Source: Authors calculations.
EPW
July 9, 2016
vol lI no 28
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Figure 6: Scope of Regulated Markets Dimension of the APMC Index by State
Andhra Pradesh
Assam
Bihar
Gujarat
Andhra Pradesh
Assam
Bihar
Gujarat
Haryana
Karnataka
Madhya Pradesh
Maharashtra
Odisha
Orissa
Punjab
Rajasthan
Tamil Nadu
Uttar Pradesh
West Bengal
.5
.5
0
Haryana
Market scope
Karnataka
Madhya Pradesh
Maharashtra
1
.5
.5
0
Orissa
Odisha
Punjab
Rajasthan
Tamil Nadu
1
.5
.5
0
1970 1980 1990 2000 2010 1970
Uttar Pradesh
1980 1990
2000 2010
West Bengal
1
.5
.5
0
1970 1980 1990 2000 2010 19701980 1990 2000 2010
Year
Year
Source: Authors calculations.
42
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AP Assa Bih
Guj Har
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Rank change
1970 vs 2008
7
7
7
6
6
6
6
7
6
6
6
6
7
6
6
7
7
8
7
7
7
8
8
8
8
8
8
8
8
8
8
8
8
8
8
6
6
7
7
Kar
4
5
5
5
5
3
3
4
4
4
4
5
5
5
5
5
6
6
6
6
6
6
6
7
6
6
6
6
6
7
7
7
7
7
7
8
7
4
2
UP WB
10
9
9
9
10
9
9
9
10
10
13
13
13
12
10
12
5
5
5
5
5
5
5
5
5
5
5
3
3
3
1
1
3
3
3
5
5
6
6
14
12
8
8
8
11
12
10
9
9
9
10
12
13
13
13
13
14
13
12
13
13
13
13
13
13
13
13
13
13
13
13
12
12
11
12
12
13
13
13
14
14
14
14
14
13
11
11
11
11
11
11
11
11
10
11
11
11
11
11
12
12
12
12
12
12
12
12
12
12
12
13
14
14
9
8
9
9
12
13
12
13
11
8
8
8
8
8
8
8
8
8
8
9
9
9
9
9
10
11
11
11
11
11
11
11
11
11
11
11
11
11
13
13
13
14
14
6
6
6
7
7
7
7
6
7
7
7
7
9
9
9
6
8
7
8
8
8
9
9
9
9
9
10
10
10
9
9
10
10
10
9
11
11
11
11
5
3
4
3
3
5
5
3
3
3
3
3
3
3
3
3
2
2
2
2
2
2
2
2
2
2
2
4
4
4
5
5
5
5
5
4
4
5
5
2
2
2
4
4
4
4
5
5
5
5
4
4
4
4
4
4
4
4
4
4
3
4
4
3
3
3
2
2
2
3
2
2
2
2
3
3
1
1
9
10
11
12
12
12
11
13
14
14
14
14
14
14
14
14
14
13
14
14
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12
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12
12
1
1
1
1
1
1
1
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
3
1
1
1
1
1
2
4
3
4
3
2
2
2
2
1
2
2
2
2
2
2
2
2
3
3
3
3
3
4
3
3
4
4
4
5
5
5
4
4
4
4
4
2
2
3
3
0 +4
-2
-5
0 +2 +4 +1
-3
-3
8
11
10
11
9
10
10
12
12
12
10
12
10
10
12
11
12
12
12
13
12
7
7
6
7
7
7
7
7
6
6
6
6
6
6
7
9
8
8
11
8
13
10
13
13
14
14
13
13
12
9
6
7
7
8
10
10
10
10
9
10
10
10
10
10
9
9
9
10
10
9
9
9
10
10
10
10
10
0 +1 +1
* AP: Andhra Pradesh; Assa: Assam; Bih: Bihar; Guj: Gujarat; Har: Haryana; Kar: Karnataka;
MP: Madhya Pradesh; Maha: Maharashtra; Odi: Odisha; Pun: Punjab; Raj: Rajasthan; TN:
Tamil Nadu; UP: Uttar Pradesh;WB:West Bengal /(+) improvement/(-)decline/ (0) no change.
Economic & Political Weekly
EPW
July 9, 2016
vol lI no 28
SPECIAL ARTICLE
without resorting to subjective surveys. Examining of the evolution of APMC index and its sub-indices across Indian states
suggests a few perspectives to understand agricultural growth
prospects and development.
First, APMC index over time shows an upward movement,
which implies strengthening of legal and administrative
framework of agricultural produce markets. Yet, much scope
for improvement remains in the states. APMC begins with a
very low score of 0.006 in 1970 and reaches up to 0.609 in
2008. There are wide differences in the APMC measures
across the states.
Second, rankings of states in terms of the APMC index show
varying time trends (Annex A/Table 2)stable and high ranks
for states like Maharashtra and Punjab, stable and low ranks
for states like Uttar Pradesh, West Bengal and Assam, rapidly
improving ranks for states like Karnataka and Madhya Pradesh,
while maintaining better ranks for Haryana, Andhra Pradesh,
Tamil Nadu and Rajasthan and swift deterioration in ranks for
states like Gujarat, Bihar, and Odisha.
Third, the case of Bihar emerges as an exception because
instead of the state showing response to strengthening the
governance institutions and legal framework, it chooses to
repeal the states APMC Act in 2006. In absence of the institutional agency to manage functioning of the markets, there is
continuous decline in the facilities provided by the agricultural markets. In this respect, Bihar lost scoring and ranking
in the APMC measure.
Andhra Pradesh, Rajasthan, Assam with others, witness sudden spiky growth in the index. It is mainly driven due to revamping of the state act on lines of the latest model APMC Act
2003. These are visible signs of efforts to reform institutions.
Despite the encouraging progress, more concerted efforts,
however, are needed to strengthen enforcement of the laws
and implementation of regulations.
Regulations in general are hard to measure (Bollen and
Paxton 1998) and thus, this first effort of measuring the APMC
Act & Rules in a comprehensive way is an important step forward to opening a debate. It overcomes the major constraint of
lack of adequate measurement of agricultural market regulations over time. However, with more data coverage especially
by use of qualitative information, the measurement could be
further improved. This article is an important contribution to
ongoing policy debates on agricultural reforms in India. It may
help to diffuse the fallacy or general pessimism about multifaceted regulations of the agricultural markets. Lack of policy
understanding about regulations being an important condition for economic development can severely undermine effort
to enhance economic growth in agriculture and poverty
reduction in nation states.
Indra Munshi
Depletion and destruction of forests have eroded the already fragile survival base of adivasis across the country,
displacing an alarmingly large number of adivasis to make way for development projects. Many have been forced to
migrate to other rural areas or cities in search of work, leading to systematic alienation.
This volume situates the issues concerning the adivasis in a historical context while discussing the challenges they
face today.
The introduction examines how the loss of land and livelihood began under the British administration, making the
adivasis dependent on the landlord-moneylender-trader nexus for their survival.
The articles, drawn from writings of almost four decades in EPW, discuss questions of community rights and ownership,
management of forests, the states rehabilitation policies, and the Forest Rights Act and its implications. It presents
diverse perspectives in the form of case studies specific to different regions and provides valuable analytical insights.
Authors:
Ramachandra Guha Sanjeeva Kumar Ashok K Upadhyaya E Selvarajan Nitya Rao B B Mohanty Brian Lobo K Balagopal Sohel Firdos
Pankaj Sekhsaria DN Judy Whitehead Sagari R Ramdas Neela Mukherjee Mathew Areeparampil Asmita Kabra Renu Modi M Gopinath
Reddy, K Anil Kumar, P Trinadha Rao, Oliver Springate-Baginski Indra Munshi Jyothis Sathyapalan Mahesh Rangarajan Madhav Gadgil
Dev Nathan, Govind Kelkar Emmanuel DSilva, B Nagnath Amita Baviskar
SPECIAL ARTICLE
Notes
1 For longer article on the construction of the
APMC index and its sub-indices, see: (Purohit
2014) Measurement of Regulations: An Application to the Agricultural Produce Markets of
Indian States, IDPMs Development Economics and Public Policy Working Paper Series,
36/2014, University of Manchester, UK
2 In 2013, the Commission for Agricultural Costs
and Prices comes out with states ranking
based on degree of agricultural market friendliness, in which a reference to the APMC Act is
made (CACP 2013). The states ranking casts
doubt for number of reasons. Few are noted.
First, APMC Act is one peripheral parameter in
computing states ranking, when it deserves serious treatment for the sake of its more than 60
years of services to agricultural markets in India. Second, the exercise tends to undermine
the role of institutions (rule of law) in the efficient functioning of the agricultural markets.
Bihar is projected as the model state where the
state APMC Act is repealed and the states marketing system suffers due to institutional vacuum. Third, ranking is based on limited scope
and time dimension dealing with market for
wheat and paddy alone, than the entire state
agricultural marketing over the time. Fourth,
analysis seems to misrepresent the case of private sector participation in the agricultural
markets. The problem in most of the states of
India is not absence of private market, but that
of its correction for efficiency of the system as a
whole. According to Acharya (2004), the private trade handles around 80% of the total
marketed quantities of all agricultural commodities taken together. The marketed surplus
handled by cooperatives is estimated as 10%
and by public agencies 10%. And, fifth, the
exercise does little to understand how to safeguard and improve incentives of farmers in the
market who are central to both productivity
growth and commercialisation of agriculture.
This research attempts to take balanced
approach to issues.
3 There is a spectrum of definitions of regulation
ranging from broad to narrow in conceptual
scope, appeared at different times and there is
no accepted international definition of regulation. See Shaffer (1979) and Gardner (1979).
4 Traditionally, there is no agreement where and
how much the state should intervene in an
economy. At the same time, institutions must
have a dynamic feature since a good institutional arrangement may later become obstructive to growth in a different time and context
(Acemoglu 2003).
5 The model APMC Act & Rules, 2003 was introduced by the union government as a response
to address and overcome criticism of the existing regulated marketing system in the various
states of India. This research, thus, accepts the
model act as the baseline ideal act & rules.
The Act (2003) is taken to facilitate economic
outcomes with reference to how far they support or structure economic activities of the
agricultural markets by reducing uncertainly
and establishing a predictable stable structure
to peoples market-based interaction. A copy of
the model act and rules, as the baseline act,
can be found at http://agmarknet.nic.in/amrscheme/modelact.htm and Rules: http://agmarknet.nic.in/amrscheme/FinalDraftRules
2007.pdf.
6 The establishment of regulated markets in
India is evolved from the colonial statute on
regulation of agricultural marketing in 1897
when elements of regulation were first introduced in the cotton market under the British
Economic & Political Weekly
EPW
July 9, 2016
10
11 The poor trend in APMC measure for the eastern states, especially Odisha, Assam and West
Bengal is consistent with findings of a recent
case study of agricultural marketing system in
some of these states, conducted by the National
Institute of Agricultural Marketing (NIAM),
Government of India.
12 Extension of this research tests the relationship
of variation in the measures of the APMC Act
with productivity yield and poverty incidence
separately. The results from the selected 14
states for nearly 40 years of empirical analysis
show that states with improved regulatory
arrangements in the agricultural markets
have significantly higher agricultural investment, yield productivity and fall in poverty.
The results are robust and yet to be published
by the author.
vol lI no 28
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Farmers Welfare, New Delhi, F No 2743/
Dir(M)/2009.
Gardner, Bruce L (1979): Economic Analysis of
the Regulation of Agriculture, American
Journal of Agricultural Economics, 61 (4),
73240.
Intodia, Vijay (2011): Investment in Agricultural
Marketing and Market InfrastructureA Case
Study of Bihar, Research Report, National
Institute of Agricultural Marketing (NIAM),
Jaipur.
Kolenikov, Stanislav and Gustavo Angeles (2009):
Socioeconomic Status Measurement with Discrete Proxy Variables: Is Principal Component
Analysis a Reliable Answer?, Review of Income
and Wealth, 55(1), 12865.
Minten, Bart, Anneleen Vandeplas and Johan
Swinnen (2012): Regulations, Brokers, and Interlinkages: The Institutional Organization of
Wholesale Markets in India, Journal of Development Studies, 48(7), 86486.
Rajagopal (1993): Indian Rural Marketing (Jaipur:
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Shaffer, James D (1979): Observations on the
Political Economics of Regulations, American
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72131.
45
SPECIAL ARTICLE
46
Statistical thinking will one day be as necessary for efficient citizenship as the ability to read and write.
H G Wells
Economics is at a crucial juncture. The research program that has
guided economic theory for some six decades is at an impasse, and
a new and different research programme is emerging. The new
programme grows out of a different vision of the economic process.
This vision suggests a very different type of economic theory offering a different explanation of how the economy works and different
policy advice.
Meir Kohn
he field of macroeconomics was dominated by Keynesian ideas till 1970s. Since then, the perceived conventional wisdom has been challenged by a number of competing schools of thoughts. Especially in the post-2008 crisis,
the relative ineffectiveness of policy initiatives in the stabilisation of economy has made the voice of dissent much louder.
We are now on the cusp of a paradigm shift in our thinking of
the next phase of theorisation. The main objective of this short
paper is to review a few critical strands of arguments that persuade research for a fresh look on analytical framework in the
present context and the statistics needed for empirical support
of the same.
The official statistical system is a very important part of
institutional framework of a country. At this juncture, this
system needs a major paradigm shift for a much-improved
insight on socio-economic changes taking place at a faster
pace through various transformations. The measurements
of variables generally conform to international standards for
comparability, but their consistency remains a problem, area
because of practical issues of measurement (for instance,
the banking services price index) and decentralisation without effective coordination. There is a stress on microdata-bases
fully compatible with macroeconomic accounts (SNA 2008) for
a comprehensive view of an economy. In this effort, we need to
take advantage of the revolution in information technology
(IT)-based systems, capturing data at transaction levels and
then using them for modelling greater insight on dynamic
forces operating. This is also used in propelling fundamental
changes, identifying factors which are more effective for inclusive growth, the causes for failure to gain full demographic
dividend, deeper insight on transmission channels, structural
transformation and so on.
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The monetary policy assumes an efficient transmission channel to operate smoothly. If we analyse the impact of monetary
policy on corporates, small firms and households, or urban
and rural financial markets, we will find that the reality is different. Thus the present framework which assumes symmetry
48
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rather than down (Adelman 1975; Piketty 2014). The end result is
the large rise in inequality (Sachs 2011). India is no exception.
There are other issues on stabilisation policy options using
macro models. The estimated parameters remain stable for a
short period and hence simulations work well in this narrow
time window. The time-inconsistencies problem, using these
macroeconomic systems, are highlighted in the literature. The
so-called deep parameters of the Lucas (1976) critique inspired research on inter-temporarily optimised models independent from specific policy regimes. As he suggested, the parameter may possibly be lying somewhere deep inside the mountains of microdata, called microeconomic structure of models.
As Akerlof and Shiller (2009) observed, We need to look at
how people actually behave, and how this behaviour contributes to the performance of the economy as a whole. The emphasis on actual needs to be noted carefully. The aggregates
are simplistic summary of actual microdata, void of distributional characteristics. As a theory, consumption and investment functions may be derived from the rationally-expected
optimising behaviour of households and firms. We understand
utility function for individuals for behavioural analysis. But
how does one derive it from empirical analysis of macro aggregates; moreover, how do we conceive the idea of marginal utility
from data on aggregate consumption? We need to examine behavioural foundation of macroeconomics based on actual micro behaviour revealed in data for it to be realistic.
Rethinking on Macroeconomics
EPW
JUly 9, 2016
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This observation appears to be a grudging acceptance of conventional approach of decomposition of fluctuations in GDP.
This paper has presented a reasonable idea about limitations of macroeconomics and the macro-econometric models.
It is time to come to a conclusion. Let me highlight what some
leading economists think about the current state of macroeconomics. The intellectual disarray was complete. No shared
ideas about what is going on, why and what could be done
about our ailing economy. Disputes in economics today are
like those in medieval theology with different schools anathematising each other but with no obvious indicator of who is
right and who is wrong, noted Lester Thurow (1982). Ronald
Coase (1993) called economics blackboard economics saying, what is studied is a system which lives in the minds of
economists but not on earth. Paul Krugman (2009) (as quoted
in Andrew Sheng et al 2012) went even further saying, Macroeconomics over last three decades has been useless at best and
harmful at worst. Economists became blind to catastrophic
macro failures because they mistook the beauty of reasoning
of theoretical model for truth. I hardly need mention that this
severe criticism poses a challenge on us as economists. If we
have to look for an alternative which models random behaviour
of individuals, stochastic process is a possibility, as below.
49
SPECIAL ARTICLE
Misleading Analysis
Questioning the validity of the fundamental idea of neoclassical equilibrium theory based on flexibility of prices, Aoki and
Yoshikawa (2007) observed that it is misleading and wrong to
analyse such problems as business cycles, unemployment, and
deflation, assuming neoclassical equilibrium theory. This
theory does not hold when there are a large number of agents
of heterogeneous type. Microeconomic behaviour is fundamentally stochastic. In their analysis, an important finding is
that the ultimate factor-generating economic growth is demand creating technical progress. They suggested the new
literature of combinatorial stochastic processes, to restructure
macroeconometric models. We need to pursue this idea in our
research in lines suggested in their work.
In short, starting with Keynesian framework of macroeconometric models we had many ways of theorisation and
empirical support for explaining economic fluctuations (Favero
2001), for an excellent review of applied econometrics and
Fullbrook (2004), for a guided tour on failure of mainstream
economics. Jan Tinbergen initiated macroeconometric modelling and Klein (1983) lifted it to a great height. Sims (1980)
gave a new direction which continues, with sophistications of
cointegration, but with economic logic to avoid mindless empiricism. Macroeconometric modelling may be rich and elegant, but we increasingly realise that this is not enough. We
need to delve much deeper to understand how the efforts of
individuals give rise to overall changes, and how the fruits of
economic development get distributed among its people, in the
so-called welfare aspect of the economy. The theory should
build on the micro realities as reflected in the granular data.
Econometric techniques are now much more sophisticated,
thanks to panel data models (Baltagi 2001), stochastic processes indexed by various dimensions, and other powerful statistical tools of multivariate analysis. Tools used for artificial intelligence based on machine learning, such as neural network,
genetic algorithm and self-organising maps are some of the
others which are capable of processing high-frequency data to
extract useful information. With this capability it looks that
we are set for a new phase of theorisation, validated by empirical tests. There are major issues on heterogeneity and autocorrelation, apart from specification issues, which will beset empirical exercises. Unobserved heterogeneity arising out of differences in culture, religion or preferences are factors which
have to be considered in some way. The author believes that
these challenges will test the ingenuity of researchers, and
new ways of dealing with them will emerge. There are enough
of success stories with microdata. The new generation of business analysts are already using high frequency data to support
corporate goals. We need a similar crop for public policy goals.
Importance of Microstructure
Along with attainment of overall growth, the policy framework of any welfare state tries to empower people at the bottom of the pyramid to raise their level of income and overall
welfare of the society. Therefore, inclusive growth as a key
strategy for economic growth is of paramount importance and
50
The major impulse for growth originates from large enterprises as investments made by them impact the economy in a big
way. The quality and sophistication required for international
competitiveness on high value goods and services arise out of
this sector. We have high quality data through their audited
accounts and disclosures to understand how they operate,
raise productivity and competitiveness, save and invest. What
we now need is to create infrastructure to integrate them
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them) report that in the long run, a countrys income per head
rises by roughly 300% if it improves its governance by one
standard deviation. Governance is measured by voice and accountability, political instability and violence, government
effectiveness, regulatory burden, rule of law, and control of
corruption. How do we measure them, what are the multivariate factors we take, how do we quantify them and how are
these linked into the framework of analysis, are the critical
concerns for data collection and aggregation. The quoted estimates are therefore required to be reworked, sorting out which
items of data to be collected, how determinants are to be
measured and how sensitive data needs to be obtained. A suitable method based on research may suggest approach for empirical verification for their validation.
In India, each state has certain advantages arising out of
community bondage. Gujarat was in the forefront of dairy
development as successful example of cooperative movement.
The North East has a rich heritage of colourful designs in the
production of traditional handloom textiles. The former gainfully absorbed large numbers of people as part of a very successful enterprise while the latter is still struggling in spite of
continued government support. Of course, there are differences within the North East itself. Tripura, Sikkim and even
Mizoram have done better than the rest. What stimulates people into gainful activities where they have certain natural
advantages and more responsive governance, in spite of
some other handicaps? Special dispensation on funding for
these states did not work that well. These two regions located in two extreme ends of India are just examples of institutional settings in which dynamics of socio-economic development unfolds. It is necessary to measure socio-economic
dynamics in their environmental and cultural settings to study
the institutional influence on development (Acemoglu and
Robinson 2012).
Implementation with SNA 2008 as Guide
In the official statistics of a country, the GDP and its components are compiled following SNA as prescribed by the United
Nations (UN) through its Statistics Department, in coordination with leading institutions like the International Monetary
Fund (IMF), the World Bank, the Organization for Economic
Co-operation and Development (OECD) and the Commission of
the European Communities. Now India follows the SNA 2008
for our GDP estimates. The SNA classification of national accounts is aimed at providing a comprehensive view of an economy and reinforcing the central role of national accounts in
statistics (SNA 2008: xxxiii). The use of microdata for macroeconomic accounting is covered in para 1.59 of the report (p 9).
To quote:
There would be considerable analytical advantages in having microdatabases that are fully compatible with the corresponding data for
individual units. There would be considerable analytical advantages
in having micro-databases that are fully compatible with the corresponding macroeconomic accounts for sectors or the total economy.
Data in the form of aggregates, or averages, often conceal a great deal
of useful information about changes occurring within the populations
to which they relate.
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The new digital age is now at its full flow in every walk of life.
We also have technology to sift through huge volume of information for meaningful analysis. There are a number of initiatives through e-governance designed to capture valuable data.
These data can become fertile fields for micromacro linkages
necessary for deeper insight on the distributional characteristics over time, space and multiple dimensions. There are
examples to follow. Vivek Kundra, Chief Information Officer,
Columbia, a young person of Indian origin picked up by Barack
Obama, was driving a $76-billion-dollar-project on federal
technology for creating dashboards using open source technology for bootstrapping the bureaucracy (refer Macrowikinomics). Amazon and Google are classic examples of pursuing business gainfully using huge volume of transaction data
for customer relationship management. Data analysts are
now highly valued for churning these data using data mining
tools. We need to develop systems for official statistics on
similar lines.
First, the issue of data quality is critical for maintaining
credibility of official statistics. Second, there should be full
audit trail for checking the integrity of collected data. Third,
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References
Acemoglu, Daron and James A Robinson (2012):
Why Nations Fail, The Origin of Power, Prosperity, and Poverty, Crown Business, Random
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Adelman, Irma (1975): Development Economics: A
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Albert, J R G (2014): Challenges, Opportunities
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Atle, Midttun and Eirik Svindland (eds) (2001):
Approaches and Dilemmas in Economic Regulation: Politics, Economics and Dynamics,
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Aoki, Masanao and Hiroshi Yoshikawa (2007):
Reconstructing Macroeconomics: A Perspective
from Statistical Physics and Combinatorial
Stochastic Processes, Cambridge, UK: Cambridge
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Baltagi, Badi H (2001): Econometric Analysis of
Panel Data, Wiley, UK.
Bardhan, Pranab and Christopher Udry (1999):
Development Microeconomics, New Delhi:
Oxford University Press.
Barman, R B (2007): Determinants of Profitability
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edited by V Pandit and K R Shanmugan, New
Delhi: Academic Foundation, 2008.
Baumol, William J (1990): Entrepreneurship:
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Bhattacharya, B B, R B Barman, A K Nag (1994):
Stabilisation Policy Options: A Macroeconometric Analysis, DRG Study 8, Reserve Bank
of India, Bombay.
Blaug, Mark (2002): Ugly Currents in Modern Economics, Fact and Fiction in EconomicsModels, Realism and Social Construction, Uskali
Maki (ed), Cambridge: Cambridge University
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Carlin, Wendy and David Soskice (2006): Macroeconomics: Imperfections, Institutions & Policies, Oxford: Oxford University Press.
Chakravarty, Sukhamoy (1985): Report of the
Committee to Review the Working of the
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Coase, Ronald (1993): The Institutional Structure
of Production, The Nature of the Firm: Origins,
Evolution and Development, Oliver E Williamson and Sidney G Winter (eds), Oxford: Oxford
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Dasgupta, A K (1987): Keynesian Economics and
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Delorme, Robert (2001): Regulation as an Analytical Perspective: The French Approach,
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Approaches and Dilemmas in Economic Regulation, Atle Midttun and Eirik Svindland (eds),
pp 10 and 17, Palgrave.
Diebold, F X and G D Rudebusch (1999): Business
Cycles: Durations, Dynamics and Forecasting,
Princeton University Press.
Favero, Carlo A (2001): Applied Econometrics,
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Fullbrook, Edward (ed) (2004): A Guide to Whats
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Gylfason, Thorvaldur (1999): Principles of Economic Growth, Oxford: Oxford University Press.
Kaufman and Kraay (2008): A Series of Articles by
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Random Walks in Macroeconomic Time Series:
Some Evidence and Implications, Journal of
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Quiggin, John (2010): Zombie Economics: How
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DISCUSSION
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july 9, 2016
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DISCUSSION
With detailing of the huge diversity of concerns and points of departure, Water: Growing Understanding, Emerging
Perspectives will be invaluable to students and scholars of sociology, economics, political science, geography, ecology
and public policy.
Authors: Baba Amte Suhas Paranjape K J Joy Jayesh Talati Tushaar Shah R Maria Saleth Dinesh K Marothia Marcus
Moench Navroz K Dubash Rahul Ranade P S Vijayshankar Himanshu Kulkarni Sunderrajan Krishnan David Gilmartin Margreet Zwarteveen
Rohan DSouza David Hardiman Niranjan Pant Lyla Mehta Anindita Sarkar Deepa Joshi Biksham Gujja Vinod Goud Shruti Vispute Ramaswamy
R Iyer A Vaisyanathan K Sivasubramaniyan E Somanathan R Ravindranath Isha Ray Sulochana Gadgil Siddhartha Gadgil Avinash Kishore
Shilp Verma Aditi Mukherji Partha Sarathi Banerjee Mihir Shah
DISCUSSION
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DISCUSSION
60
References
Bhat, T R (2013): Right of Unions to Demonstrate
Peacefully, Economic & Political Weekly,
Vol 48, No 43, pp 1517.
Lal, Rajiv and Rachna Tahilyani (2011): State Bank
of India: Transforming a State Owned Giant,
Sales and Marketing Case Study, Harvard Business School.
NE
The Economic and Political Weekly Research Foundation (EPWRF) has added state-wise
data to the existing Banking Statistics module of its online India Time Series (ITS)
database.
State-wise and region-wise (north, north-east, east, central, west and south) time series
data are provided for deposits, credit (sanction and utilisation), credit-deposit (CD) ratio,
and number of bank offices and employees.
Data on bank credit are given for a wide range of sectors and sub-sectors (occupation)
such as agriculture, industry, transport operators, professional services, personal loans
(housing, vehicle, education, etc), trade and finance. These state-wise data are also
presented by bank group and by population group (rural, semi-urban, urban and
metropolitan).
The data series are available from December 1972; half-yearly basis till June 1989 and
annual basis thereafter. These data have been sourced from the Reserve Bank of Indias
publication, Basic Statistical Returns of Scheduled Commercial Banks in India.
Including the Banking Statistics module, the EPWRF ITS has 16 modules covering a
range of macroeconomic and financial data on the Indian economy. For more details,
visit www.epwrfits.in or e-mail to: its@epwrf.in
july 9, 2016
vol lI no 28
EPW
CURRENT STATISTICS
Foreign TradeMerchandise
The year-on-year (y-o-y) inflation rate based on WPI rose to 0.8% in May 2016
against (-) 2.2%, a year ago and 0.3% in April 2016. The index for primary
articles increased by 4.6% in May 2016 against (-)1.1% a year ago, as the index
for food articles grew substantially by 7.9% compared to 2.7% in May 2015. The
index for fuel and power continued to decline for 19th month in a row, but, at
a decelerated rate of -6.1% in May 2016 from (-)9.4%, a year ago. The index for
manufactured products rose by 0.9% in May 2016 against a fall of (-)0.5% in
May 2015.
The merchandise trade deficit narrowed down by (-)39.7% to $6.3 bn in May 2016 from
$10.4 bn, a year ago. Exports contracted marginally by (-)0.8% to $22.2 bn in May 2016
compared to $22.3 bn in May 2015. Imports declined by (-)13.2% to $28.4 bn in May
2016 from $32.8 bn, reported last year. Oil imports fell by (-)30.5% to $5.9 bn and
non-oil imports by (-)7.1% to $22.5 bn, in May 2016 compared to $8.5 bn and $24.2 bn,
respectively, in May 2015. Exports and imports stood lower by (-)3.7% and (-)18.2% to
$42.7 bn and $53.9 bn in the current financial year so far (AprilMay 2016-17)
compared to $44.4 bn and $65.8 bn, respectively, in the corresponding period last year.
The CPI inflation rate rose to a 21 month high to 5.8% in May 2016 compared to
5.0%, a year ago and 5.5% in April 2016, as the consumer food price index
increased sharply by 7.6% compared to 4.8% in May 2015 and 6.4%, a month ago.
The CPI-rural and CPI-urban inflation rate increased to 6.5% and 4.9%,
respectively, in May 2016 from 5.5% and 4.4%, respectively, in the corresponding
month last year. As per the Labour Bureau data, the CPI inflation rate for
agricultural labourers and industrial workers increased to 6.0% and 6.6%,
respectively, in May 2016, compared to 4.4% and 5.7%, in May 2015.
The y-o-y growth rate of IIP declined to -0.8% in April 2016 against 3.0%, a year ago.
The index of eight core industries grew by 2.8% in May 2016 compared to 4.4%, a
year ago. Growth in coal, electricity, refinery products and cement decreased to
5.5%, 4.6%, 1.2%, 2.4%, respectively, in May 2016, from 7.6%, 6.0%, 7.8%, and 2.7%
in May 2015. Crude oil and natural gas production declined by (-)3.3% and (-)6.9%,
respectively, in May 2016 against 0.8% growth and a (-)3.0% fall, respectively, a
year ago. Growth in fertiliser production increased substantially to 14.8% in May
2016 from 1.3% in May 2015, while steel production inched up to 3.2% from 2.0%.
Year-on-Year in %
12
Primary Articles
Exports
Imports
Trade Deficit
4.6%
22.2
28.4
6.3
7.8
11.9
29.5
Over Year
(%)
(AprilMay)
(201516 over 201415) (%)
-0.8
-13.2
-39.7
-3.7
-18.2
-48.0
Manufactured Products
-6
$ billion
-6.1%
-12
Over Month
(%)
0.9%
May 2016
($ bn)
-$2.4 bn
Non-oil Trade Deficit
-3
-$3.9 bn
-18
January
2016
February
March
April*
-6
May*
-$6.3 bn
* Data is provisional.
-9
Over Month
Over Year
100
20.1
14.3
14.9
65.0
1.4
2.4
2.8
2.8
0.5
0.8
4.6
7.9
-6.1
0.9
All commodities
Primary articles
Food articles
Fuel and power
Manufactured products
-12
6.0
9.8
12.8
10.2
3.0
2.0
3.0
6.1
-0.9
2.4
-2.5
0.2
3.4
-11.7
-1.1
-15
-18
April
2015
Jan
2016
Oil refers to crude petroleum and petroleum products, while non-oil refers to all other commodities.
16
Year-on-Year in %
14.6%
Electricity
10
8
8
6
6.5%
5.8%
4.9%
Rural
4
2
0
CPI (Combined)
1.4%
Manufacturing
-3.1%
Mining
-8
April
2015
April*
2016
Urban
Jan
2016
May*
Weights
* May 2016 is provisional. Source: Central Statistics Office (CSO); Base: 2012=100.
CPI combined
Consumer food
Miscellaneous
100 128.6
39.1 133.9
28.3 120.7
1.0
2.0
0.6
5.8
7.6
4.0
5.9
6.3
4.6
4.9
4.9
3.7
275
860
1.5
1.4
6.6
6.0
6.3
6.6
5.6
4.4
CPI: Occupation-wise
Industrial workers (2001=100)
Agricultural labourers (1986-87=100)
* Provisional. Source: CSO (rural and urban); Labour Bureau (IW and AL).
General index #
Infrastructure industries
Coal
Crude oil
Natural gas
Petroleum refinery products
Fertilisers
Steel
Cement
Electricity
100.0
37.9
4.4
5.2
1.7
5.9
1.3
6.7
2.4
10.3
Over Month
-11.2
4.1
6.4
4.1
6.8
-1.0
24.2
11.9
0.8
0.4
Over Year
-0.8
2.8
5.5
-3.3
-6.9
1.2
14.8
3.2
2.4
4.6
2.8
4.5
8.1
-0.9
-4.9
0.3
-0.1
4.7
5.6
8.4
2.4
2.7
4.6
-1.4
-4.2
3.8
11.3
-1.5
4.7
5.3
* Data is provisional; #April 2016; Base: 200405=100. Source: CSO and Ministry of Commerce and Industry.
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.
EPW
JULY 9, 2016
vol LI no 28
61
CURRENT STATISTICS
201415
Q1
201516
Q2
1406817
294338
832420
48976
42871
-40831
620869
661700
-49687
2534903
(8.2)
(9.0)
(8.3)
(23.0)
(16.3)
Q3
1422029
322557
828754
48434
38194
-55355
625875
681230
-36835
2567778
(11.6)
(-0.6)
(7.5)
(9.2)
(15.4)
(2.2)
(20.6)
(0.3)
(1.1)
(4.6)
(8.3)
1495823
261886
843733
45077
37174
-45813
636468
682281
21305
2659185
Q4
(1.5)
(33.2)
(3.7)
(16.0)
(10.8)
(2.0)
(5.7)
(6.6)
1539614
223826
903344
52521
55036
-13988
625191
639179
29933
2790285
Q1
(6.6)
(-3.3)
(5.4)
(21.6)
(32.2)
1504442
293720
891627
50754
43138
-60253
585324
645577
761
2724188
(-6.3)
(-6.1)
(6.7)
Q2
(6.9)
(-0.2)
(7.1)
(3.6)
(0.6)
1511464
333116
909117
51068
42932
-78201
599264
677465
-7146
2762350
(-5.7)
(-2.4)
(7.5)
Q3
(6.3)
(3.3)
(9.7)
(5.4)
(12.4)
1618333
269808
853858
48547
42192
-59076
579684
638760
78020
2851682
(-4.3)
(-0.6)
(7.6)
Q4
(8.2)
(3.0)
(1.2)
(7.7)
(13.5)
(-8.9)
(-6.4)
(7.2)
1666888
230308
886147
55448
45549
-15520
613471
628991
143210
3012029
(8.3)
(2.9)
(-1.9)
(5.6)
(-17.2)
(-1.9)
(-1.6)
(7.9)
Q3
Current account
Merchandise
Invisibles
Services
of which: Software services
Transfers
of which: Private
Income
Capital Account
of which: Foreign investment
Overall balance
-7721
-38635
30913
19982
17844
16428
16521
-5497
22864
13194
13182
Q1
-645
-31560
30916
20116
18625
16425
16600
-5625
30023
22993
30149
-6132
-34175
28043
17751
17512
16153
16267
-5861
18637
10226
11430
201516 ($ mn)
Q2
Q3
-8559
-37173
28614
17835
18058
16263
16421
-5484
8121
3150
-856
Q4
-7121
-33975
26854
18013
18556
15250
15305
-6408
10915
11256
4056
201415 (` bn)
Q4
Q3
-338
-24755
24417
16077
17328
14961
15146
-6621
3455
7259
3274
-478 [-1.5]
-2393
1915
1238
1105
1017
1023
-340
1416 [4.5]
817
816 [2.6]
Q1
-40 [-0.1]
-1964
1924
1252
1159
1022
1033
-350
1869 [5.6]
1431
1876 [5.7]
201516 (` bn)
Q3
Q2
-389 [-1.2]
-2169
1780
1127
1111
1025
1033
-372
1183 [3.7]
649
725 [2.3]
-556 [-1.7]
-2415
1859
1159
1173
1057
1067
-356
528 [1.6]
205
-56 [-0.2]
Q4
-469 [-1.4]
-2240
1770
1187
1223
1005
1009
-422
720 [2.1]
742
267 [0.8]
-23 [-0.1]
-1671
1648
1085
1170
1010
1022
-447
233 [0.6]
490
221 [0.6]
` crore
$ mn
Variation
24 June
2016
2284580
338070
26 June
2015
31 Mar
2016
Over
Month
Over
Year
2124640
334565
2229020
337605
32050
345
194470
6565
114240
13256
Monetary Aggregates
` crore
Outstanding
2016
Over Month
Over Year
11915660
14280 (0.1)
1678660
969580
9254060
13360
560
19020
-5460
160
(0.0)
(2.0)
(-0.1)
(1.2)
216220
83210
803280
2960
3623950
7776040
2522980
2029210
2165690
120390
-12520
12610
106190
9680
(3.4)
(-0.2)
(0.5)
(5.5)
(0.4)
363110
610370
144500
14410
270840
201516
1732410
420030
13250
660460
659440
45160
2438670
21910
1000500
-580 (-0.0)
10310 (2.5)
-50 (-0.4)
30330
29820
-31440
31570
0
20770
(4.8)
(4.7)
(-41.0)
(1.3)
(0.0)
(2.1)
1105680 (10.2)
Aggregate deposits
Demand
Time
Cash in hand
Balance with RBI
Investments
of which: Government securities
Bank credit
of which: Non-food credit
Capital Markets
S&P BSE SENSEX (Base: 197879=100)
S&P BSE-100 (Base: 198384=100)
S&P BSE-200 (198990=100)
CNX Nifty (Base: 3 Nov 1995=1000)
Net FII Investment in equities (US $ Million)*
Over Month
1 July
2016
27145
8486
3539
8328
168529
(-3.1)
(-0.8)
(0.1)
(-1.5)
(0.0)
10800
18640
-7850
-1840
-6490
39340
39400
-14480
-460
(0.1)
(2.2)
(-0.1)
(-2.9)
(-1.7)
(1.5)
(1.5)
(-0.2)
(-0.0)
Month
Ago
26714
8284
3445
8180
167758
201415
201516
322660
40486
218620
16297
Financial Year
201415
201314
80570
-27440
210280
-2090
(5.0)
(-2.8)
(2.3)
(-13.5)
104760
58760
965330
-1270
(9.2)
(7.8)
(14.9)
(-39.2)
140360
79650
800140
12630
(11.3)
(9.8)
(10.7)
(641.1)
211910
105390
786020
850
(15.3)
(11.8)
(9.5)
(5.8)
(11.1)
(8.5)
(6.1)
(0.7)
(14.3)
253440
123040
127830
244850
-33610
(8.4)
(1.7)
(5.7)
(13.8)
(-1.7)
382920
-45880
32270
107990
-15050
(11.8)
(-0.6)
(1.3)
(5.6)
(-0.7)
335850
777430
287280
275010
217860
(12.4)
(13.7)
(17.6)
(16.8)
(14.4)
-37470
597340
326710
-144120
195710
(-1.2)
(9.3)
(17.0)
(-7.5)
(11.3)
233630
779290
240060
151270
252280
(7.8)
(11.1)
(10.7)
(8.5)
(13.1)
(48.6)
(48.7)
(-13.4)
(8.5)
(9.6)
(15.1)
49120 (3.4)
-77190 (-16.6)
-5540 (-38.0)
79830
82480
-150330
120590
570
84270
(21.9)
(22.8)
(-74.2)
(5.7)
(2.9)
(10.7)
(9.6)
(10.5)
(9.5)
(11.0)
(6.7)
(4.7)
(4.8)
(8.7)
(9.1)
(9.8)
(10.0)
(12.7)
(10.7)
(8.0)
181250
-6640
187890
2550
-11390
135840
135790
124180
101740
1127560 (13.4)
68940 (4.1)
-81800 (-16.3)
-2200 (-14.2)
235460
234880
-259380
55190
0
46330
(55.4)
(55.3)
(-85.2)
(2.3)
(0.0)
(4.9)
Variation
Financial Year So Far
201617
(2.1)
(-0.8)
(2.4)
(4.8)
(-3.1)
(5.5)
(5.5)
(1.9)
(1.6)
226500
-18750
245250
4610
-1350
126870
126920
-10940
-2490
(2.4)
(-2.1)
(2.9)
(8.0)
(-0.3)
(4.8)
(4.8)
(-0.2)
(-0.0)
201516
Trough
Peak
24674
7656
3193
7546
-
22952
7051
2938
6971
-
147240 (11.3)
35860 (8.3)
12620 (643.9)
215160 (14.9)
36270 (7.8)
870 (6.0)
108120
107150
14070
244460
2000
150810
-334170
-336610
145020
324760
2090
-58050
60470
63520
102040
256200
2480
168900
955110
51620
903480
5380
34080
206720
207540
733640
731610
(18.3)
(18.1)
(32.4)
(15.7)
(13.0)
(21.8)
22386
6707
2681
6704
149745
(-47.8)
(-48.2)
(0.0)
(18.0)
(12.1)
(-6.9)
Financial Year
201415
(14.1)
(7.8)
(14.8)
(13.3)
(12.1)
(10.3)
(10.4)
(13.9)
(14.2)
827730
80110
747620
7480
56730
279000
278560
542320
546350
(10.7)
(11.2)
(10.7)
(16.3)
(17.9)
(12.6)
(12.6)
(9.0)
(9.3)
201314
29044
8980
3691
8834
-
1104180 (10.5)
110090 (9.2)
109020 (34.0)
-1280 (-39.5)
201314
27145
8486
3539
8328
-
1032780 (10.9)
201516
(5.5)
(-0.6)
(2.3)
(-28.8)
Year
Ago
28021
8552
3536
8453
168483
Variation
Financial Year So Far
201617
251570
16769
76260
-5260
193020
-4200
Over Year
839250
82850
756400
6140
24410
124720
125310
578080
598130
82800
-485
(14.8)
(9.4)
(9.5)
(28.5)
201516
9553790
870240
8683550
62040
386090
2752380
2750850
7238680
7141870
108086
-14361
Financial Year
201314
261320 (2.2)
201213
259820 (2.5)
234980 (15.7)
31660 (8.2)
4210 (46.6)
216100
215920
-7010
190800
1910
130960
55560
835
201112
(18.8)
(18.1)
(17.2)
(18.0)
(9.9)
27957
8607
3538
8491
168116
(24.9)
(28.3)
(31.9)
(26.7)
(12.3)
(16.6)
(17.6)
(0.0)
(12.0)
(12.8)
(21.5)
201516
794000
94960
699040
4080
14370
133690
134180
713200
702360
(9.3)
(12.0)
(9.0)
(7.6)
(3.9)
(5.4)
(5.4)
(10.9)
(10.9)
201516
25342
7835
3259
7738
166107
(-9.4)
(-9.0)
(-7.9)
(-8.9)
(-1.2)
* = Cumulative total since November 1992 until period end | Figures in brackets are percentage variations over the specified or over the comparable period of the previous year | (-) = not relevant | - = not available | NS = new series | PE = provisional estimates
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.
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66
july 9, 2016
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