Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics

C. Rangarajan ¹

Affiliations
1 Twelfth Finance Commission, Jawahar Vyapar Bhawan, 1 Tolstoy Marg, New Delhi 110 001, IN

Abstract

It is a great honour and privilege to be invited to deliver the Kale Memorial Lecture. Rao Bahadur R.R. Kale was a well-known leader who played a notable role not only in the political but also in the social and economic life of Maharashtra. His contributions to the development of education are well known. His generous contribution helped to establish the Gokhale Institute of Politics & Economics at Pune, which has emerged as a leading research institution in the country in the field of economics, politics and sociology. Professor D. R. Gadgil and Professor V. M. Dandekar, to name only a few, who were associated with this Institute, have made landmark contributions to the development of economic policy in post-Independent India. Kale Memorial Lecture is a prestigious lecture series, which includes contributions by many distinguished and outstanding personalities of our country. I, therefore, feel greatly honoured to deliver this year's lecture.

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C. Rangarajan , Raaj Kumar Sah , K. S. Reddy

Abstract

When the price of a commodity increases, it has an impact on the prices of other commodities through the inter-industry dynamics. Earlier studies in this lield have attempted to trace, for example the effect of an increase in indirect taxes on certain commodities on the prices of the non-taxed commodities through the use of input-output table. The underlying assumption of all these studies is that the price of a commodity increases when prices of the inputs that go into the production of a commodity increase. In this paper we have attempted to present a methodology by which the impact of the increase in the price of one commodity on others can be calculated under a situation where the prices of specific commodities are not allowed to rise even though input prices go up.

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