Journal of Indian School of Political Economy

Dhanmanjiri Sathe ¹

Affiliations
1 Institute of Management Development and Research, Pune, IN

Abstract

The Journal of the Indian School of Political Economy has published in its July-December 1989 issue a Paper, titled 'India's Balance of Payments-1948-49 to 1984-85:A Survey'. This Paper is an update of the same. The period reviewed is significant because of the balance of payments crisis in 1991 and important external and internal policy changes. It discusses the genesis and nature of the crisis in 1991, the adjustment made by the economy to it and the effects of such adjustment and of the consequent policy changes on various components of the balance of payments in the post-liberalisation period.

Full Text

     

Dhanmanjiri Sathe ¹

Affiliations
1 Indian School of Political Economy, Pune, IN

Abstract

This paper develops a methodology for measuring the advantage which an economy gains from its foreign trade in a static, input-output framework. The advantage is measured in terms of the Stimulus and the Net Stimulus to the output generated by the exports and imports. The methodology has been applied to the Indian economy for the period 1951-52 to 1983-84, using six input-output tables. It is generally expected that with trade liberalisation (i.e., outward-orientation), the advantage to the domestic economy from foreign trade increases. However, the case of the Indian economy shows that the advantage from trade need not increase with opening-up. The share of foreign trade in total output and the advantage from trade seem to be loosely related. The advantage from trade seems to be most affected by the composition of exports and imports. Moreover, it has been found that the increase in manufactured exports need not be more beneficial to the domestic economy as is generally believed.

Full Text

     

Dhanmanjiri Sathe ¹

Affiliations
1 Indian School of Political Economy, Pune, IN

Abstract

Most of the developing countries have followed a path of diversification of the composition of exports in the post-war period. The purpose of this paper is to examine the impact of diversification of the composition of exports on the Indian economy for the period 1951-52 to 1983-84. To this end, the import, income and input effects of exports have been measured in an input-output framework. The results show that the import intensity of exports has doubled, the income intensity almost halved and the input intensity has not shown any marked increase, for the period considered. The reason for this can be traced to a shift in favour of non-traditional exports. Certain sectors of exports have been identified which would benefit the domestic economy the most.

Full Text