A Social Accounting Matrix (SAM) having 60 production sectors, 2 factors of production namely, labour and capital, and 12 household occupational categories has been constructed for the Indian economy for 1994-95. For construction of SAM the 1989-90 input-output table prepared by the Central Statistical Organisation has been updated. The distribution of personal income among different household categories, which is a unique feature of this SAM for India, is based on the Income and Expenditure Survey of Households conducted by the National Council of Applied Economic Research for the year 1994-95 as part of the MIMAP-India Project, The problems encountered and the methodology used for constructing the SAM have been highlighted.
Poverty alleviation and economic growth is high on the government’s policy agenda since independence. Studying the impact of economic growth on income distribution and poverty assumes further significance in light of the ongoing economic reform process in the country. In this paper, income distribution and incidence of poverty in India are derived for the period 1994-95 to 2000-01 using a macro-econometric model. Unlike other studies, here, an attempt has been made to forecast poverty at 6 rural and 6 urban household group levels. Household income data generated from the “Micro Impact of Macro Adjustment Policies in India” (MIMAP-India) survey is used in this study. Between groups, inequality in rural areas is consistently higher and increasing at a faster rate as compared to urban areas. Though the incidence of poverty will decline both in rural as well as urban areas, decline will be faster in urban areas. However, agriculture dependant households (labour as well as self-employed) and non-agricultural labour households have higher incidence of poverty in the beginning and rate of decline is slower. The remaining household categories have low incidence of poverty. Poverty gap ratio and FGT index of poverty also depict similar trends as observed for the head count ratio.
Conventional economic analysis assumes the existence of ‘the interest rate” – a guiding rate that is representative of the interest rate structure and appropriate for use in interest rate modelling. In developing countries like India it is difficult to identify this rate because the market for funds is highly fragmented and collectively generates a plethora of unconnected interest rates. This paper attempts to identify such a rate by examining some important short-term and medium term interest rates in the Indian economy. In general, as the financial sector of an economy is liberalised, free flow of funds between different market segments ensure greater co-movement between different rates, so that any market rate can be considered as a representative rate for the economy. Evidence shows that financial sector liberalisation has had some impact on Indian interest rates in this direction. An examination of the correlations between different rates during the period 1993-91 reveals that linkages between different rates improved substantially in the second half of this period, after reforms picked up pace.
