Export incentives : the impact of recent policy changes

India's trade policy regime has changed dramatically since July 1991. The objective of reform has been to improve export performance by improving export incentives and eliminating discretionary controls. Using a simple model, the author sets out to examine whether export incentives actually improved as a result of policy changes. One part of the two-part model compares export profitability across regimes, The other compares the gap between domestic and export profitability across regimes. The export base is divided into eight subsectors, and several simulation exercises are applied to each of them. The main results: 1) For most export sectors, export profitability was lower under the dual exchange rate regime (March 1992 - February 1993) than in the period before July 1991; 2) the gap between domestic and export profitability increased in the period of the dual exchange rate regime, meaning that domestic sales, already more attractive than export sales, became even more so; 3) this adverse movement in export incentives was reversed with unification of the exchange rate in March 1993. Overall, the regime has moved closer to its eventual goal of being neutral about import subsitution and exportpromotion, which is reflected in a significant change in the attitude of India's corporate sector toward exports. It is more than a coincidence that the export surge in fiscal 1993-94 was led mainly by the sectors that witnessed the greatest increase in export profitability.Economic Theory&Research,Environmental Economics&Policies,Economic Stabilization,Airports and Air Services,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT

Mutually Supportive or Trade-Offs: An Analysis of Competitive Priorities in the Emerging Economy of India

To refine the theories of operations strategy, we need research from all different situational contexts, including different countries—both developing and developed. There have been many studies, including some replications, done in various parts of the world to further the debate on whether competitive priorities are mutually supportive or if they present potential trade-offs, but hardly any from a rapidly growing economy, such as India. This study is a significant attempt in that direction. After a thorough review of the literature, a set of hypotheses is introduced to test whether Indian manufacturers view competitive priorities as mutually supportive or trade-offs. The data from over 150 high-ranking individuals from over 75 manufacturers in India is used to test the hypotheses by way of cluster analysis and ANOVA. The resultant taxonomy reveals patterns that uniquely represent Indian manufacturers\u27 view of the competitive priorities, namely quality, flexibility, delivery and price. The study findings have significant managerial implications, both for India and other developing as well as developed economies. The taxonomy will serve to gauge India\u27s manufacturers\u27 role in the world. From a researcher\u27s perspective, this study makes a significant contribution to theory development, furthers our understanding of the strategic role of operations, moves forward the ongoing debate on the topic of trade-offs or complementarity, and paves the way for future studies in this topical area

Is Economic Growth Sustainable? Environmental Quality of Indian States Post 1991

This study is an attempt to investigate the relationship between environmental quality and per capita NSDP (i.e., Environment Kuznets Curve, EKC) of 14 major Indian States in the light of their very high economic growth in the post-liberalisation period. The analysis involves first ranking the States on the basis of their environmental quality, and then checking the relationship. The analysis captures both temporal and spatial aspects of environmental quality by ranking the States in two time periods – (i) early 1990s (1990 - 1996) and (ii) late 1990s (1997 - 2001). The results indicate that the relationship between environmental quality and per capita NSDP is slanting S-shaped. Except Bihar all other States are on the upward sloping curve of the EKC. The results suggest that the economic growth is mostly at the cost of environmental quality.Environment and development; economic growth; Environmental Kuznets Curve (EKC); Environmental Quality (EQ); liberalisation; India

Monitoring and Enforcement: Is Two-Tier Regulation Robust?

The regulation of industrial pollution is clearly difficult in a rapidly industrializing, low-income setting. In addition to the general lack of resources for monitoring and enforcement, authorities must deal with the asymmetric nature of the information and multiple nonpoint sources of pollution. In this study we look at efforts to regulate chemical plants in Ankleshwar, in the Indian state of Gujarat. The plants are located in an industrial estate, which provides interesting preconditions for a form of two-tier regulation, in which an industry association becomes an intermediary between the government and individual firms: it monitors its members’ pollution and promotes compliance with the government’s environmental regulations. The Indian agency responsible for environmental protection cannot effectively control the many small individual plants within such estates. The local industry association is much better informed and has an incentive to regulate its members to maintain a good reputation but does not possess much formal authority, and its voluntary monitoring and abatement program is akin to managing a common property resource. We study four preconditions for the success of such management: suitable design principles, effective monitoring, objective implementation of rules, and enforcement. We show that these conditions are satisfied at least to some extent in Ankleshwar and that the fines decrease pollution.Industrial estate, two-tier monitoring, common property resource, industry association, nonpoint sources of pollution

Is Economic Growth Sustainable? Environmental Quality Of Indian States Post 1991

This study is an attempt to investigate the relationship between environmental quality and per capita NSDP (i.e., Environment Kuznets Curve, EKC) of 14 major Indian States in the light of their very high economic growth in the post-liberalisation period. The analysis involves first ranking the States on the basis of their environmental quality, and then checking the relationship. The analysis captures both temporal and spatial aspects of environmental quality by ranking the States in two time periods (i) early 1990s (1990 - 1996) and (ii) late 1990s (1997 - 2001). The results indicate that the relationship between environmental quality and per capita NSDP is slanting S-shaped. Except Bihar all other States are on the upward sloping curve of the EKC. The results suggest that the economic growth is mostly at the cost of environmental quality.Environmental Quality, per capita NSDP, economic growth, post-liberalisation period, S-shape, Environment Kuznets Curve, economic growth

Export quotas and policy constraints in the Indian textile and garment industries

The Agreement on Textiles and Clothing will abolish all quota restrictions in trade in textiles and clothing by the year 2005. Dismantling the quota regime represents both an opportunity (for developing countries to expand exports) and a threat (because quotas will no longer guarantee markets and even the domestic market will be open to competition). Data about the real burden imposed by distorting but nontransparent policies under the quota regime are inadequate, so the authors interviewed traders in Delhi and Bombay about quota rents. They provide comprehensive estimates of the magnitude of the implicit export taxes resulting from the labyrinth of quotas imposed under the WTO Agreement on Textiles and Clothing. Using the concept of an export tax equivalent (or ETE), they assess how much exports are restricted. The international trade regime in textiles and clothing imposes a substantial tax equivalent on Indian exports. Between 1993 and 1997, ETEs for garment exports to the United States were roughly double those for the European Union. The ETEs for the United States declined 1996, which could be a warning signal that India faces increasing competition from NAFTA-empowered Mexico. From India's viewpoint, the European Union is ahead of the United States in dismantling the quota regime - and in not restricting India cotton (garment) exports (where India has a comparative advantage) more than synthetics. India's strengths in this sector lie in natural resources and factor endowments - raw cotton and cheap labor. The Indian garment industry's decentralized production structure - subcontracting, which is low risk and low capital - has served the industry well but has executed Indian products from the mass market for clothing which demands consistent quality for large volumes of a single item. Growth in Indian exports may require a shift to an assembly-line, factory-type system. This would probably require: a) No longer restricting garment production to the small-scale sector (and ending other anachronistic policies). b) Making labor policy more flexible. c) Ending the policy bias against synthetic fibers. d) Reducing transaction costs for exports.Environmental Economics&Policies,Economic Theory&Research,Water and Industry,Labor Policies,Markets and Market Access,Economic Theory&Research,Environmental Economics&Policies,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Water and Industry,Access to Markets