Night Lights and Economic Activity in India: A study using DMSP-OLS night time images

This paper investigates the association between night lights and GDP estimates for India at thedistrict level. While many studies are finding a high degree of association between economicactivity as measured through the Gross Domestic Product (GDP) and night lights internationally,there is a lack of understanding of whether and how night light data are correlated with economicactivity at the sub-national level in emerging economies. This achieves more significance ineconomic monitoring and policy-making as estimates of GDP are not available at geographicallydisaggregated level, and even if available there is a large time lag involved before they are released.Stable light data obtained from night time images of 2008 captured by Defense MeteorologicalSatellite Program – Operational Linescan System (DMSP-OLS) satellite are used in the study.The data records artificial lights from human habitations from the earth surface and is a surrogateof the level of development of an area. The data on GDP at the district level for the year 2008have been sourced from Indicus Analytics that has used data from government sources and amethod of estimation suggested by the Central Statistical Office of the Government of India.Using multinomial non-linear regression techniques the paper finds that indeed GDP at thedistrict level is significantly explained by night lights in the area. It also finds that the non-linearityis much stronger for metropolitan cities where GDP levels are far higher than a linear model canexplain. Conversely, in areas where agriculture and forestry activities are higher, the use of nightlights in a linear model overestimates the GDP

Industrial Corridors in India

This study identifies industrial corridors (two or more contiguous districts) in India with a special emphasis on their further potential. Using Principal Component Analysis, the study finds that there are five major and three minor industrial corridors in the country. The distribution pattern of these corridors reveals the domination of the western and the southern part of India. The northern region does have a large corridor around Delhi. The western coastal region is found to be the region with the highest level of industrial activity in the country. The southern part of the country has the maximum proportion of districts covered by a major or minor corridor. The eastern region however has only two corridors -- a major one around Calcutta, and a minor one in the north-east.Industrial Corridors

Regional Inequality in India: A Fresh Look

There are concerns that regional inequality in India has increased after the economic reforms of 1991. This concern is supported by various statistical analyses. In this paper, we show that the conclusions are sensitive to what measures of attainment are used. In particular, human development indices do not show the same increase in regional inequality. Furthermore, looking at consumption and credit indicators for regions disaggregated below the state level also suggests that inequality trends may not be as bad as suggested by State Domestic Product data, although the greater strength of the economies of the western and southern states emerges in our results. Finally, we briefly discuss policy implications within the context of India’s evolving federal polity.regional inequality, federalism, human development

Assessing Income Distribution at the District Level for India Using Nighttime Satellite Imagery

Several studies have been carried out relating nighttime lights with economic activity.But most studies relating nighttime lights with economic activity have focused on associatinghigher totals in economic activity with higher sum of lights across regions. The questionaddressed in this paper is how best to model the relationship of nighttime lights with not just thewealthy but also the relatively worse-off within a region. The implications of such an exerciseare immense with respect to ascertaining income distribution aspects of any area. The methodsdeveloped in this paper explore the relation between households in different income brackets atthe district level for India, and the radiance-calibrated nighttime image of 2004. Besides theradiance-calibrated data of 2004, estimates of household incomes and number of households indifferent income brackets, made by Indicus Analytics (specialized economic research firm, basedin New Delhi, India) were used. The results were mapped and insights were drawn for alldistricts based on their socio-economic profile. These results illustrate the advantage of using thiseasily available data for determining income inequalities, especially in information-deficientcountries such as India

Development financial institutions, financial constraints and growth:evidence from the Indian corporate sector

In many countries, Development Financial Institutions (DFIs) have been major conduits for channelling funds to particular firms, industries and sectors during the latter's process of development. In India, DFIs have been a more important source of long-term funds (mainly debt) for industry than bank loans or other sources of debt. Using data from the Indian corporate sector, we evaluate the role of DFIs in India for the period 1989-97 by examining how firms' investment decisions are affected by their ability to access DFIs. We find that firms that had prior access to DFIs continue to receive funds from these sources only if they can be classified as a priori more financially constrained. Access to DFIs for funds spurs investment. These results suggest that DFI lending is not governed by considerations of lobbying, precedence or even to sponsor particular types of projects that might be socially desirable but not privately profitable. Rather, the primary role of DFIs has been to reduce financial constraints faced by firms. We also find that the drastic contraction of long-term bank lending to industry in India in the early nineties had adverse consequences for firms that were particularly bank-dependent, but only if these firms could be classified as a priori more financially constrained. Together, these results support the view that in contrast to firms in well-developed capital markets, in emerging markets, firms with growth potential are likely to rely significantly on debt financing, especially debt that is channelled through financial inter mediaries