Department of Economics and Finance
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Item Economic Development and Environmental Degradation: A Study of Indian Situations(Lambert, 2011) Mohapatra, Geetilaxmi; Giri, Arun KumarItem Fiscal Sustainability in Major South Asian Economies: Evidences from Panel Data Analysis(JECD, 2018) Giri, Arun Kumar; Mohapatra, GeetilaxmiThe paper examines the issue of fiscal sustainability for a panel of five major South Asian economies namely, India, Pakistan, Bangladesh, Sri Lanka and Nepal, for the period from 1985-2014. The results of panel cointegration tests by Pedroni (1999) and Westerlund (2007) confirm the presence of a long- run relationship between government revenue and expenditure. The panel auto regressive distributed lag (ARDL) estimates of the fiscal reaction function indicate a positive long-run response of the primary balance to the rising public debt ratio, thus confirming fiscally responsible behaviour in the region. However, the size of the cointegrating slope parameter between revenue and expenditure obtained from the group mean fully modified OLS (FMOLS) and the group mean dynamic ordinary least squares (DOLS) is significantly less than one, indicating weak form of fiscal sustainability. The weak sustainability underscores the need for commitment to long term fiscal discipline and justifies the ongoing efforts by the South Asian countries to strengthen their fiscal positions.Item Does accessibility to water and sanitation improves household wellbeing in India?(A Diva Enterprises Ltd, 2019-03) Mohapatra, Geetilaxmi; Giri, Arun KumarThe aim of this study was to investigate the potential linkages between access to water and sanitation with household wellbeing in India. A few studies have been carried out on the expected benefits of investments in water and sanitation in spite of the fact that effect of investment in water and sanitation has a huge impact on overall performance of household in terms of health, education, employment, etc. This study uses data from Indian Human Development Surveys (IHDSs) collected by the University of Maryland and the National Council of Applied Economic Research in 2004–05 and 2011–12. Econometric analysis has been done to examine the relationship between access to water and sanitation and its consequential impact on the overall welfare of households. The main hypothesis is that an improvement in the accessibility of water and sanitation sources increases the overall standard of living with the assumptions that an improvement in the accessibility of water and sanitation sources reduces illness among household members, which also, in turn, tends to increase overall standard of living. The data indicated that there was no significant improvement in access to water sources in India from 2004–05 to 2011–12. Around 53% of the households surveyed used open fields as toilets in 2004–05, and this proportion only slightly decreased (44.72%) by 2011–12. While comparing the overall standard of living, about 38.5% respondents believe they became better off between two periods (from 2004–05 to 2011–12) while around 52% respondent feels there was no significant improvement in their standard of living. Ordered log it regression analyses were carried out to establish links between water and sanitation access and changes in household welfare. There is a positive relationship between improvements in households ’sources of water and sanitation and improvements in households ’(self-reported) overall welfare. In other words, households experiencing an improvement in their source of water supply and sanitation were more likely to report an improvement in their overall standard of living, and less likely to report deteriorationItem How Livelihood Diversification and Institutional Credit Help to Improve Household Well-Being in India?(Asian Economic and Financial Review, 2019) Giri, Arun Kumar; Mohapatra, GeetilaxmiUsing nationally representative data from the India Human Development Survey (IHDS) collected in 2011-12, this study examined the impact of livelihood diversification and accessibility to institutional credit on the monthly per capita consumption expenditure (MPCE) of households. The data provided information about 42,152 households, and our study focused on only the households that had taken a loan from any source, thus reducing the sample size to 22,630 households. The estimate suggested that, if a household had taken a loan from a formal source, then it was likely to have a higher MPCE by approximately 24.68 percent on average. We also found that households whose main source of income belonged to the secondary sector had a negative and insignificant coefficient while the coefficient of the tertiary sector suggested that they had about a 29 percent higher MPCE compared to those households who belonged to the primary sector. The results also suggested that Hindus had a higher consumption compared to Muslims. However, Christians and Sikhs had about 36 percent and 23 percent higher consumption, respectively, than Hindus. The study also found that households belong to lower social groups (OBC, SC, and ST) had lower consumption compared to households that belonged to the general category of the caste system.Item https://www.indianjournals.com/ijor.aspx?target=ijor:jiw&volume=40&issue=2&article=005(Indian Association for Research in National Income & Wealth, 2018) Giri, Arun Kumar; Mohapatra, GeetilaxmiThe aim of this study was to investigate the potential linkages between access to water and sanitation with household wellbeing in India. A few studies have been carried out on the expected benefits of investments in water and sanitation in spite of the fact that effect of investment in water and sanitation has a huge impact on overall performance of household in terms of health, education, employment, etc. This study uses data from Indian Human Development Surveys (IHDSs) collected by the University of Maryland and the National Council of Applied Economic Research in 2004–05 and 2011–12. Econometric analysis has been done to examine the relationship between access to water and sanitation and its consequential impact on the overall welfare of households. The main hypothesis is that an improvement in the accessibility of water and sanitation sources increases the overall standard of living with the assumptions that an improvement in the accessibility of water and sanitation sources reduces illness among household members, which also, in turn, tends to increase overall standard of living. The data indicated that there was no significant improvement in access to water sources in India from 2004–05 to 2011–12. Around 53% of the households surveyed used open fields as toilets in 2004–05, and this proportion only slightly decreased (44.72%) by 2011–12. While comparing the overall standard of living, about 38.5% respondents believe they became better off between two periods (from 2004–05 to 2011–12) while around 52% respondent feels there was no significant improvement in their standard of living. Ordered log it regression analyses were carried out to establish links between water and sanitation access and changes in household welfare. There is a positive relationship between improvements in households ’sources of water and sanitation and improvements in households ’(self-reported) overall welfare. In other words, households experiencing an improvement in their source of water supply and sanitation were more likely to report an improvement in their overall standard of living, and less likely to report deterioration.Item Livelihood Diversification into NFEs and Poverty Alleviation Among Farm Households in Rural India(Sage, 2019-09) Giri, Arun Kumar; Mohapatra, GeetilaxmiUsing the Indian Human Development Surveys of 2004–2005 and 2011–2012, this article examines the impact of livelihood diversification of farm households in non-farm enterprises (NFEs) on their poverty status, escaping from poverty and falling into poverty. The estimates reveal that livelihood diversification into NFEs prevent farm households from falling into poverty and helps them escape it. The result also indicates that NN (who did not diversify in 2004–2005 and 2011–2012), NY (who diversified in 2011–2012 but not in 2004–2005), and YN (who diversified in 2004–2005 but not in 2011–2012) had 4.1 per cent, 16.6 per cent and 24.5 per cent, respectively, lower odds of escaping poverty compared to those farm households that diversified their livelihood into NFEs in 2004–2005 as well as in 2011–2012. However, the results of whether previously non-poor households fell in poverty or not show that livelihood diversification status of NN and YN had 28 per cent and 44.7 per cent higher chances of falling into poverty than those farm households who diversified their livelihood in 2004–2005 as well as in 2011–2012. The results of control factors like religion, caste, education of household head, land holding, livestock ownership, quintiles of income and consumption represent consistent coefficients, which reveals robustness concerning the impact of control factors on outcome variables.Item Fiscal Policy, Economic Growth and Income Inequality: A Case of Indian Economy(The Romanian Economic Journal, 2017) Giri, Arun Kumar; Mohapatra, GeetilaxmiThrough this study, we try to evaluate the effects that the direct and indirect taxation and the subsidies provided by the Government have on income inequality. We use Gini coefficient as a measure of inequality and use annual data for Indian economy for years 1982-2015 and employ an ARDL-based bounds test approach for testing co-integration. We ascertain the stationarity properties for all the series, separately using the ADF test, the DF-GLS test and the KPSS test. We estimate the long-run and short-run coefficients and find that a long-run negative relationship exists between Gini coefficient and subsidy-related expenditure. The long-run coefficients of direct and indirect taxation terms are positive but are significant only at 10%. The short-run coefficients obtained from ECM show that a negative relationship exists between expenditure on subsidies and Gini coefficient. In short run, direct tax seems to have an insignificant positive coefficient while indirect tax seems to have a significant unbalancing effect. We employ the Granger causality tests to confirm direction of causality and find that there runs a unidirectional causality from direct tax, indirect tax and subsidy to Gini coefficient, while any causality from Gini to any series is largely insignificant. The results imply that the government should use the calculated hybrid of tools like direct and indirect taxation and subsidies to have an equalizing impact on the economy. Moreover, the significant causal relationship from subsidies to Gini opens up an opportunity for the government to improve the income distribution using targeted subsidies, for example the Aadhaar-linked Direct Transfer Benefits etc.Item The composition of public expenditure and economic growth in India: Evidence from auto regressive distributed lag approach(JER, 2016-08) Giri, Arun Kumar; Mohapatra, GeetilaxmiThe present study examines the role of various components of pub- lic expenditures on economic growth in India during the period from 1980 to 2013. The study used ARDL approach to examine the long run and the short run dynamic relationship. The VECM based Granger causality test is utilized to check the direction of causality. The results reveal that there exists a long run cointegrat- ing relationship between economic growth, developmental expen- diture, fiscal deficit and gross private investment. The ARDL es- timates show significant positive long run impact of development expenditure on economic growth. However, the non development expenditure and revenue expenditure reveal insignificant impact on economic growth. The causality test estimates indicate short and long run unidirectional causality running from development expen- diture and fiscal deficit to economic growth in IndiaItem Budget deficit sustainability and revenue expenditure linkages in major South Asian economies(EJBE, 2017) Giri, Arun Kumar; Mohapatra, GeetilaxmiThe paper examines sustainability of budget deficits and dynamic linkages between government revenues and expenditures in five major South Asian economies, namely India, Pakistan, Bangladesh, Srilanka and Nepal for period 1985-2014. The study contributes to the literature by combining individual-country analysis with recent panel data approaches for robustness of results. Our results support existence of long-run relationship between government revenues and expenditures for the countries in a specification allowing for unknown structural break. The size of slope parameter obtained from Dynamic Ordinary Least Squares is however significantly less than one except for Bangladesh indicating incoherence with ‘strong’ sustainability of deficits. The long run causality analysis lends support to ‘spend-tax hypothesis’ for India, Bangladesh, Pakistan and Srilanka and ‘tax- spend hypothesis’ in case of Nepal. From perspective of design of fiscal consolidation programmes, this implies that adjustment of revenues would be optimal solution to control spending in Nepal while control of expenditure would be effective in case of India, Bangladesh, Pakistan and Srilanka. The results from Pedroni (1999) and Westerlund (2007) panel cointegration tests and block exogeniety and Dumitrescu-Hurlin (2012) panel causality tests are broadly in conformity with the time series results.Item An empirical investigation of the twin deficit hypothesis: Panel evidence from selected Asian economies(2017) Giri, Arun Kumar; Mohapatra, GeetilaxmiThe paper examines the twin deficit hypothesis for a panel of eight South Asian and South East Asian economies having a history of persistent deficits on both fiscal and current accounts for the period 1985-2014. The results based on first and second generation panel cointegration tests indicate existence of a long-run relationship among budget balance, interest rate, exchange rate and current account balance. The estimates of long run coefficients obtained from common correlated effects mean group indicate a positive relationship between the two balances, the impact of the budget balance on the current account being stronger. Dumitrescu-Hurlin panel causality and block exogeniety tests suggest a feedback relationship between the two balances. The conventional hypothesis of causation running from budget balance to interest rates, to exchange rates and then to current account balance is however not borne out by the results.