Two important considerations in capital budgeting are the cost or economic value aspect and the liquidity aspect. The periods associated with “tight money” tend to increase the relative importance of the liquidity aspect. On the other hand, “tight monetary policy” and increase in interest rates aimed at curbing inflation may result in higher cost of external debt financing and also in constraints on the availability of funds from external sources. Thus, in such periods, an industry may be faced with the problem of liquidity, which will cast importance on other aspects of investment decisions. One possible solution to the liquidity problem seems to be a financial lease of the required asset. This strategy had been adopted by firms in USA to source the necessary funds at times of “tight money” periods. Any change in the Indian context in granting depreciation benefits to the lesser can disrupt industrial growth significantly, especially at times of liquidity crunch, and lead to higher cost of external debt financing.
The international trade in horticulture commodities such as cut flowers, fresh fruits and vegetables is expanding at a higher rate than trade in other commodities. No wonder there has been great deal of interest in APEDA in the role of horticultural products as an important means of agricultural diversification and foreign exchange earnings in India especially considering the negative growth in world exports of traditional items such as spices, coffee, and tea. Between the exports of fresh fruits and vegetables in the world, fresh fruits occupy the premier position both in the domestic and international scenarios. The purpose of the project was to prioritise perishable commodities, especially cut flowers and fresh fruits that could effectively utilize export incentives for air transportation for a viable long-term export market.
The focus is on investigating the scope and potential for specific perishable product market combinations based on an analysis of factor conditions, market conditions, and supporting infrastructure to identify possible APEDA and participating firms’ strategy in developing markets for perishables which would include floriculture products and fresh fruits.
Foreign trade plays an important role in the economic development of all nations. While considering foreign trade between closed economics, we often are faced with the phenomenon of illegal international trade. While much effort has been made by economists to track foreign trade related illegal transactions through legal channels via under and over as well as false invoicing, unofficial trade outside official channels has received little attention so far. This study makes an attempt in this direction.
This study looks at the illegal trade flows along the Indo-Bangladesh land border at two levels:
( i ) Cross-border trade outside official channels, and
( ii ) Illegal trade through official channels via false invoicing.
While using the technique of “Partner Country Data Comparisons” for detecting the extent of false invoicing, the study makes a significant contribution in terms of evolving a modified form of the “Delphi” technique for generating primary data through field surveys for assessing the nature and extent of smuggling across the Indo-Bangladesh land border. I am sure that others making a similar effort would benefit from the methodology developed here. “Delphi” is a technique commonly used in corporate research and I believe that this is the first time it is used to develop trade estimates.
The field survey showed some unexpected results. The composition of smuggled goods is dominated by essential commodities and goods of mass consumption. The flow is more or less unidirectional, i.e., from India to Bangladesh. The overall volume as well as the direction of the cross-border trade closely follows the pattern of India’s bilateral trade with Bangladesh, except for the variation in its composition. The survey gives an overall estimate of Rupees 1,165 crores of unofficial exports as against the provisional estimate of Rupees 1,350 crores of official exports during 1993-94. the prices of smuggled goods are generally high across the Bangladesh border, yielding price differentials ranging from 16% to 225% for different commodities.
The study was planned by me and executed under my overall directions by Mr. S.K. Chaudhari, Senior Economist in the council. Mr. Chaudhari devised a semistructured format for data collection and organized the field work. The data was analysed and the report was prepared by Mr. Chaudhari under my close supervision. Dr. A.K. Roy and his senior associates in “Economic Information Technology”, Calcutta, did the field work.
I would like to place on record an appreciation of the response and cooperation extended by the central and state government officials, respondents from the law enforcement agencies, trader and carrier groups, and others. Without this cooperation the study would not have been possible.
There have been major changes in the investment scenario in India after the changes in economic policies since July 1991. Private investment in manufacturing and infrastructure have begun to be the new engines of growth. The capital markets have seen dramatic changes. Indian companies are raising more and more capital from the markets in India. A new element has been the rising inflow of foreign exchange for investment by foreign and Indian companies as direct and portfolio investments. This paper is an attempt to describe and explain the changes that have taken place as well as the constraints, and together all the factors in one document. Growth is not balanced between sectors. Agriculture, and many geographical areas in India, continue to receive low investment. However the paper does not discuss the work of SEBI, and regulations, since this is by itself a large subject.
NCAER from time to time publishes working papers reporting the most recent research focus of the faculty members, based on the ongoing projects as well as their independent research. This working paper titled ‘Health Transition in India’ consists of papers recently written by Abusaleh Shariff, the Principal Economist and Head of the Human Development Research Area at the NCAER.
The first essay entitled ‘Differentials and Determinants of Morbidity in India : Disaggregated Analysis’ is an empirical analysis of survey data collected from 18,693 households across India. This survey was carried out during the summer months of May-June 1993. It is well recognized that NCAER is unique in collecting data through nationally representative sample surveys on morbidity and health expenditures. The survey cited above was the second in the series. The first survey was undertaken during May-July 1990. Another set of data will become available soon through a survey of 37,000 households conducted during January-May 1994. I am sure that, this essay and the subsequent analysis of the available data at the NCAER will help generate interest and develop policy alternatives underscoring the importance of morbidity studies in the context of human resources development in India.
The second paper is a critical essay on the health scene in India and the role of public health policy. In the light of the need to improve the health care of the millions living in poverty, and in rural and remote areas, this paper pleads for a re-definition of the concepts of ‘health care’ and ‘accessibility’. Supply of appropriate health care seems to remain a distant dream in India and, therefore, urgent corrective actions are in order.
