The Indian Economic Journal, Volume 72, Issue 2, Page 372-388, March 2024.
We undertake an extensive literature survey and segregate the methods mainly into two approaches: parametric and non-parametric. Further, we categorise the non-parametric techniques into the Growth Accounting Approach and the Deterministic Frontier Approach. The evaluation and development of methods used in the study of productivity growth measurement is a continuous process over the years, even if we found a longstanding critical debate from the classical school, popularly known as the Cambridge controversy. This article presents a holistic review of methods for documenting the growth debates in independent India, which helps understand the concepts for the new researcher in the field and the policymakers in the developing and less developed countries.JEL Codes: D24, E24, O47

The Indian Economic Journal, Ahead of Print.
This article examines the threshold effects of government size (measured as a percentage share of government final consumption expenditure in GDP) on economic growth from a non-linear perspective. We apply a smooth transition autoregression (STAR) model to estimate the threshold level of government size and its impact on economic growth in India for the period spanning from 1971 to 2019. The empirical results reveal that the relationship between government size and economic growth is non-linear. The study finds a statistically significant positive relationship between the size of the government and economic growth below the estimated threshold level of government size of 10.45 per cent. Above the 10.45 per cent threshold level, government size has a deleterious impact on economic growth. The results also reveal that the transition from one extreme economic phase to another is gradual. The findings of our study recommend that policymakers can enhance India’s economic growth by restricting government size to the estimated threshold level or by reducing the size of the government when it lies well above the threshold level.JEL Codes: JEL H00, JEL E6, JEL E62

The Indian Economic Journal, Volume 72, Issue 2, Page 243-258, March 2024.
We examine if policy interventions to curb the spread of COVID-19 were driven by political factors. We focus on the period between 1 June and 31 August 2020 when lockdowns and testing were the only responses available with governments and policymakers across the world. These instruments are costly. Stringent lockdowns post challenges to livelihoods while only testing without any lockdown accentuates health risks. This choice between life and livelihood becomes all the more pertinent in a developing country like India. We find that state governments in India that had upcoming elections, faced close margin victory in the last election, were non-incumbents and were aligned with the party at the centre adhered to aggressive testing as a strategy and did not impose strict lockdowns to avert losses in economic activity. Such policy responses indicate an attempt to avert possible losses in future elections. These findings confirm the strong role of political factors in policy decisions.JEL Codes: P52, P16, P36

The Indian Economic Journal, Ahead of Print.
In India, the differences in a range of development indicators, including wages and earnings, along the spatial, caste, religious and ethnicity lines have been a serious concern. This article revisits the wage disparities and discrimination among regular salaried male workers across five categories of socio-religious groups. Using nationally representative Periodic Labour Force Survey (2018–2019) data, we examine the pattern of disparity and the associated endowment and institutional factors leading to unequal labour market outcomes. Our findings suggest that all the groups—Scheduled Tribes (STs), Scheduled Castes (SCs), Other Backward Classes (OBCs) and Muslims continue to earn significantly lower wages than ‘Others’—the non-ST/SC/OBC/Muslim group. On decomposing the wage gap using the Blinder–Oaxaca decomposition method, we observe that the share of unexplained components reflecting discriminatory treatment continues to be significant. While the wage gap is highest for Muslims and SCs, discrimination is high against SCs and OBCs and lowest against Muslims. Higher education and institutional factors explain a significant proportion of the wage gap for these groups. For STs, urban location and higher education explain most of the differences. In addition, quantile regression results indicate a wider gap at the bottom and a narrower gap at the top of the wage distribution, signalling a ‘sticky-floor’ phenomenon for ST, SC and OBC workers.JEL Codes: E24, J71, J49

The Indian Economic Journal, Ahead of Print.
The present study is an attempt to identify the major sources of economic growth in India over the period 1971–2016 by employing the auto-regressive distributed lag (ARDL) bounds testing model. The long-run estimates of the ARDL model indicate that the economic growth in India is predominately driven by per capita capital and financial development while inflation retards economic growth. Contrary to the long run, the short-run results of error correction representation suggest that per capita capital along with human capital development has a significant positive impact on economic growth in India, while inflation curtails economic growth. India has some important policy insights to draw from these findings that the government policies in India need to emphasize the institutional mechanisms that further strengthen the Indian financial system which would increase its depth, scope and stability to foster economic growth. Further, the policymakers in India should strengthen their anti-inflationary measures, through supply-side reforms, to avoid the negative effects of inflation on economic growth. Finally, the government policies in India should also place a considerable emphasis on investment in human capital, which in turn fosters economic growth.JEL Codes: O4, G2, E24, C1

The Indian Economic Journal, Volume 72, Issue 2, Page 287-302, March 2024.
The export-led growth hypothesis (ELGH) postulates that export is a major driver of economic growth. This study tests this hypothesis and further analyses the determinants of exports in the case of West African countries. An annual panel data spanning from 2008 to 2018 was used. Findings from the system GMM and OLS estimations validate the ELGH in West Africa. The results also reveal that foreign direct investment, employment, remittances, land area and infrastructure are significant boosters of export while population, real effective exchange rate and taxes on international trade are detrimental to export performance in the region. The study recommends the relaxation of taxes especially on international trade to encourage businesses that produce to feed the export sectors, provide an enabling environment for businesses and also attract foreign investors.JEL Codes: F14, F21, O55

The Indian Economic Journal, Ahead of Print.
This study aims to determine the levels of production efficiencies and their determinants across India’s private and cooperative structures. Stochastic frontier modelling of a panel data sample comprising 14 plants (7 cooperatives and 7 private) in Andhra Pradesh for six years from 2013 to 2019 was considered. The production inefficiencies obtained are then modelled based on the ownership status and percentage of female employment to identify if these affect the variations in the scores. The results observed the presence of production inefficiencies under both structures, but the production efficiency was observed to rise over the period, that is, reducing inefficiencies. The results revealed a marginal but significant efficiency advantage of the cooperative plants over the private plants. The mean technical efficiency of all the firms was observed at 0.69, that of the cooperatives at 0.72 for and that of the private dairies at 0.66. This implies that the average efficiencies can be improved by 0.31 using the existing resources. The cooperative ownership of the plant and greater female employment rate was found to enhance production efficiency. The results can significantly impact policy design for both the state government and private entities. The observed advantage of cooperative ownership and greater female employment rates in enhancing production efficiency could guide policy decisions related to ownership structures and workforce diversity.JEL Codes: C5, C880, Q1, L2

The Indian Economic Journal, Ahead of Print.
Using NFHS-4 data, this study explores the determinants of maternal health care programmes for eastern states of India, which include prenatal care and hospital delivery. To reduce unobserved heterogeneity in the analysis, we employed the Full Information Likelihood Method, also known as the Joint Estimation Technique, in conjunction with individual probit models. Like other studies, we found place of residence, wealth, caste, religion and level of education as significant contributor for demand for both services. But, unlike earlier studies, we found that women’s age increases the use of prenatal care and hospital delivery, and the child’s birth order influences getting prenatal care. To increase the utilisation of maternal health care services, we recommend investing in health infrastructure, increasing the Janani Suraksha Yojana (JSY) subsidy amount and coverage of the Janani Shishu Suraksha Karyakram (JSSK) scheme, and promoting awareness about various government programmes among women through the Accredited Social Health Activists (ASHAs).JEL Codes: I140, I150, I180, O150

The Indian Economic Journal, Ahead of Print.
Classic microfinance loan contracts characterised by rigid weekly repayment schedules used by most microfinance institutions (MFIs) offer little flexibility—and little benefit—to borrowers who are poor and have seasonal income. Previous research has also shown that such contracts can negatively affect the economic well-being of poor borrowers leading to underinvestment of capital, selling of productive assets, over-indebtedness through cross-financing from informal sources, reductions in consumption and income, and in some cases, a deterioration in borrowersʼ mental health arising from stress and worry. If lenders offered more flexibility in loan repayment schedules, would it help to overcome some of these problems? To explore this, we tested whether clientsʼ business outcomes were sensitive to various repayment schedules using primary data collected from the clients of three MFIs, a cooperative society and a few local traders specialising in business lending in a village in North India. We analysed alternatives to the rigid contract model, focussing on the degree of flexibility and the length of gap between repayments in the loan schedule. This study finds that clients repaying their loans monthly invested more in their businesses and earned higher income, compared both to those who repaid weekly and to those with an irregular payment schedule.JEL Codes: G12, D12, O16, O12

The Indian Economic Journal, Ahead of Print.
The story of Punjab’s economic development witnessed an asymmetrical shift in the structure of output and employment due to the intensive capitalistic model of production in agriculture. The present study, based on National Sample Survey Office data, examines the patterns of employment and output in rural economy of Punjab during the pre-reform and post-reform period. Rural Punjab witnessed fall of work participation rate and phenomenon of ‘defeminisation’ of the labour force in agriculture during the post-reform period. There is a paradigm shift as the share of non-agriculture employment increased to 59.3% as per Periodic Labour Force Survey 2018; consequently, the non-agriculture sector becomes a major driving force in the state economy. An increase in employment elasticity among all sectors (except construction sector) during the post-reform period is a good sign. But a substantial decline in employment elasticity for all the sectors (except the construction sector) of Punjab is a disquieting phenomenon during the study period. Amidst the agrarian crisis, the rural non-farm sector can emerge as a silver lining, but evangelists of market economy disregarded the rural non-farm sector. Hence, the state should abdicate its neoliberal policies and adopt post-Washington consensus for the development of the rural non-farm sector within a given mode of production.JEL Codes: E24, J16, J43, J46, O11