Department of Economics and Finance
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Item Estimating an optimal debt/GDP ratio: an empirical investigation for Indian states(Inder Science, 2021-04) Rao, N.V.M.The objective of this study is to get an insight into the debt scenario of different states of India and understand the factors governing it, thereby estimating an optimal debt/GDP ratio for each of them. The study begins with estimating the trend for optimal debt and plotting it parallel to the actual debt for each Indian state for the time period from 2002-2003 to 2014-2015. Modified Blanchard (1983) model was employed for estimating optimal debt/GDP ratio. The results display notable difference between optimal debt/GDP ratios and actual debt/GDP ratios for almost all Indian states. In states where debt/GDP ratio is rising constantly, the governments should aim at achieving a balance between anchoring debt sustainability and high growth yield in the long run. For states where actual debt/GDP ratio is below the optimal level, policy focus should be on providing cushion against external financial crisis and market shocks.Item Infrastructure development and income inequality in India: an empirical investigation(Inder Science, 2020) Rao, N.V.M.The purpose of this paper is to investigate the relationship between infrastructure development and income inequality in India from 1991 to 2012, by using the auto regressive distributed lag (ARDL) bound testing approach. The co-integration test confirms the presence of a long run relationship between infrastructure development and income inequality. The ARDL test results indicate that infrastructure development does not help in reducing income inequality. Both inflation and economic growth amplify the income inequality both in the long run as well as the short run whereas trade openness comes out to be the indicator which is able to decrease the gap between rich and poor in India. The study calls for adopting economic policies and reforms which are aimed at developing and strengthening the infrastructure levels, bringing in more investment in order to achieve the much required inclusive growth, and ultimately reduce the income inequality currently prevailing in India.Item Infrastructure financing and economic growth in India: an empirical investigation(Emerald, 2018-10) Rao, N.V.M.This paper aims to suggest the preferred mode of financing for major sub-sectors of infrastructure: roads, seaports, telecommunication and energy by examining which mode of infrastructure financing – public, private or public–private partnership (PPP) – has the maximum positive impact on the overall GDP of India. The same exercise was carried out for the overall infrastructure sector by integrating data from all the four sub-sectors.Item Estimating the determinants of public private partnerships in infrastructure: the case of India(Inder Science, 2018-09) Rao, N.V.M.Public private partnership (PPP) mode of financing is quickly becoming the favoured way to invest and fund infrastructure in India. This paper focuses exclusively on the PPP mode of infrastructure financing by examining and estimating the significant determinants of attracting any PPP in India. The empirical findings indicate that for India a higher cash deficit with huge government debt tends to attract more number of PPP projects. The study also suggests that political factors play a crucial role for the private sector in terms of making decisions regarding involvement of the PPP mode for financing infrastructure. Ultimately, there is evidence in favour of all the channels except the macroeconomic factors. While examining the investment aspect for PPPs, it was concluded that soft governmental constraints, market conditions and effectiveness of government proved to be decisiveItem Investigating the issue of fiscal sustainability in India: a state level analysis(Inder Science, 2021) Rao, N.V.M.This article offers an analysis of the dilemma confronting India currently with fiscal sustainability. The goal of this analysis is to develop a method to determine and analyse the fiscal sustainability component. To accomplish this, the current study deduced a fiscal sustainability measure whose nomenclature was defined as 'sustainability gap'. This approximation was calculated for 28 Indian states with the exception of Telangana. The present analysis is performed using the secondary information provided by the respective website of the state government in view of the 2006-2007 to 2017-2018 time frames. The states are grouped into three divisions on the basis of 'sustainability gap' values: good performer, average performer and poor performer. The current manuscript stresses that Indian states must concentrate on reducing their public debt if they wish to shift towards fiscal sustainability. The time has come for us to engage the private sector through public-private collaborations (PPPs).Item Investigating the Landscape of India's Balance of Payments: Cointegration and Causality Analysis(Centre for Environment & Socio-Economic Research Publications, 2015) Rao, N.V.M.This paper makes an attempt to investigate the landscape of India's Balance of payments (BOP) by analyzing the significant variables related to India’s BOP over the period of 1980-2013. The empirical results from our analysis establish that there is a cointegrating relationship between BOP, Balance of Trade (BOT), Foreign Direct Investment (FDI) and Exchange Rate (EXR- INR vs $). The analysis finds the existence of bidirectional causality between FDI and BOT and between FDI and BOP. Unidirectional causality is also found running from EXR to FDI, EXR to BOT and from BOP to BOT. The research study proposes that expansion of FDI will lead to an improvement in BOT along with a positive impact on India’s Balance of Payments. Therefore, focusing on the long term stability, it is proposed that foreign inflows need to be enhanced along with a dual aim of increasing the exports and keeping a check on our imports, if we are to proficiently tackle and remove any concerns on India’s balance of payments scenario.Item Examining the interlinkages between regional infrastructure disparities, economic growth, and poverty : a case of Indian states(Economic annals, 2015) Rao, N.V.M.Item Generator Estimation for Transition Matrices with Applications to Credit Ratings(SSRN, 2017) Rao, N.V.M.The major objective of this paper is to identify conditions under which a true generator can or cannot exist for an empirically observed transition matrix. In this study, an approach to finding a valid generator has been presented and the signs to look for, when trying to choose the ‘correct’ generator, have been forwarded. Conditions for the estimation of an approximate generator when a true generator does not exist have also been explored in this paper. Finally, we have given illustrations using transition matrices published by CRISILItem Integrating the issue of infrastructural investment with economic growth: The case of India(AGER, 2016) Rao, N.V.M.The development of a country’s infrastructure is instrumental in accelerating its economic growth. The inadequacy in the infrastructure provisions hinders population to promote self reliance in economic sectors, thereby proving to be a hindering factor to economic growth. Through this paper, we have aimed to investigate the relationship between investment in key infrastructure sectors and economic growth, in order to see how these sectors impact India’s economic growth and how significant this impact is. Further, a detailed qualitative analysis of all the infrastructure sectors involved in our study has been done with a focus on explaining the reasons behind significance/ insignificance of a particular sector. In the final part of analysis, a budget allocation model has been formulated with the help of linear programming technique. This model gives us a fresh viewpoint of the prospective inclination of government budget, and its extent of allocation to the diversity of infrastructure sectors.Item Public Infrastructure Investment and Economic Growth : A Sector Wise Investigation for India Using Westerlund Panel Cointegration Approach(The Romanian Economic Journal, 2016) Rao, N.V.M.The paper aims to empirically analyze the relationship between Public Infrastructure Investment and economic growth for India using yearly data for its twenty-eight states (excluding Telangana) over the time-period of 1999-00 to 2014-15. We have aimed to assess this eye catching issue after the recent focus of Indian government to devote a majority of public funds to finance Infrastructure. For all the states, we have taken Public Investment data for six major sub sectors falling under overall Infrastructure sector: Transport, Education, Sports, Art and Culture, Medical and Public Health, Water supply and sanitation, Irrigation, Energy/Power. The Per Capita Gross State Domestic Product is taken as an indicator to represent economic growth. For empirical analysis, we apply panel unit root and cointegration tests, and estimate a panel error correction model. The Per Capita Gross State Domestic Product along with Public Investment in analyzed sectors have a unit root at their levels suggesting that there is presence of long-term relationships among the variables for the whole sample. Finally, Granger causality tests are applied to check for the presence of causal relationships between Per Capita Gross State Domestic Product and Public Investment in different sub sectors of Infrastructure. The research study proposes that the state governments across India should focus upon private as well as foreign direct investment options which would ultimately help in improving the landscape of India’s Infrastructure sector.