Business Analyst Journal

Indian economy started with economic reforms in 1991 which marked arrival of new era of the Indian economy, which definitely has raised its growth path at higher altitude. It becomes evidently clear if we compare the average GDP growth rate of 6.6 percent per annum for last 25 years (1990-91 – 2014-15) to that of 4.14 percent per annum for the pre-economic reforms 25 years (1964-65 – 1989-90). Such jump in average GDP growth rate of the Indian economy has brought India in quite a formidable position globally as an engine of world GDP growth as well as also a popular destination of global capital. If we look at the data of foreign exchange reserve, which highlights the directional flows of global capital, we find that it has risen from 5.84 billion dollar in 1990-91 to 341.64 billion dollar in 2014-15.i The foreign exchange reserves as percentage of GDP increased from 0.84 percent of GDP in 1990-91 to almost 34 percent of GDP in 2014-15.ii This clearly points out the degree of openness of the Indian economy to the global capital as well as the Indian economy as an important destination for global capital to extract the profits from India. We have also observed the decrease of inflation rate after the economic reforms period except few exceptional years around 2009-10, which points out an important objective achieved by the inflation targeting monetary policy of the RBI. Such transition of the Indian economy to better path of economic performance and economic stability is an outcome of sustained persuasion of economic policies conceptualised under the Washington Consensus.

A dynamic model of monopolistic competitive industry is set out which is based on standard textbook formulations of a linear demand function and cubic cost function. The existence of the equilibrium, local stability and comparative dynamic properties of the model are set out. The Hopf Bifurcation theorem is employed to establish the possibility of cycles in the model.

In this study, a multisectoral neo-classical type price driven computable general equilibrium (CGE) model, with the additional feature that it includes a mechanism by which public education expenditure to build human capital augments the supply of educated/skilled labor, is used to analyse the impact of an increase in the former, financed by an increase in direct tax rates, on economic growth and income distribution in the Indian economy. The simulation results suggest that it is possible to increase investment in education in the resource constrained fiscal environment of the Indian economy, and reap the benefits in terms of a faster economic growth and an improved income distribution. The results also suggest that secondary education needs to be accorded higher priority, though, not necessarily, at the cost of higher education. Finally, to maximize the benefits in terms of economic growth it is desirable that investment in physical capital be increased simultaneously with investment in human capital (education).

This study attempts to analyse the impact of demonetisation of High Denomination Currency Notes (HDCNs) on the stability of Indian Stock market. The current central government announced the withdrawal of HDCNs from Indian currency in circulation in a move to curb black money from the Indian economy by making Rs. 500 and Rs. 1000 currency notes not remaining legal tender from 9th November, 2016. This sudden move of central government has resulted into short-term contraction of money supply in the economy. The change in the money supply has resulted into redistribution of portfolios of Indian investors. The logistics of replacement of currencies has affected all walks of life. The earlier experiences of demonetisation in 1946 and 1978 has alternatively been negative and then positive for Indian stock market. Using Event Study methodology, this study examines the information content of announcement of demonetisation of HDCNs by the central government. The study also employs ARDL methodology to establish a stable long-run relationship between money supply and stock market. It was observed that the current move of reduction in money stock in the economy has both short-term and long-term implication for the investors’ wealth. Sooner the restoration of money supply happens, faster the investors regain their lost wealth.

This paper econometrically investigates the effect of Bilateral Investment Treaties (BITs) on Foreign Direct Investment (FDI) into five South Asian countries. It employs an extensive panel data model to conclude that the BITs signed by Bangladesh, India, Pakistan, Nepal and Sri Lanka between 1970 and 2014 have not led to an increase in FDI--a result that is later established on theoretical grounds as well. When this conclusion is juxtaposed with compelling literature on the BIT’s deleterious impact on domestic sovereignty and independent policy space, the scope for a pareto superior outcome is envisaged; and this outcome is shown to be a Nash equilibrium using an augmented prisoners’ dilemma model with a provision for mutual cooperation.

The Indian primary market has seen several fluctuations in the post-SEBI era. The introduction of SEBI and abolition of CCI created ‘hot issue phenomenon’ in the market wherein several new issues entered the market, however, only a few managed to survive in the aftermarket. This paper explores the survival profile of 3125 IPOs issued during 1992-1996 using most sophisticated methodologies i.e., Logistic Regression and Survival Analysis. The models take a range of information concerning offering, market, and corporate specific characteristics of IPOs. The empirical investigation reveals that most of the IPOs entered the market in hot issue period (1992-1996) but they failed to survive longer in the market. Overall, the Kaplan-Meier estimation exhibits a significant decline in survival rate and a growth in hazard rate during the first 50-60 months of listing. The offering characteristics such as issue size, lead manager’s reputation, and IPO demand exhibit a positive influence, whereas initial returns, risk, and list delay exhibit a negative influence on the endurance of IPOs. The analysis of market specific variables and survival profile of IPOs reveals that issues in the period of high IPO activity fails to sustain longer on the exchange. The results of corporate specific variables validates that age of the company not only enhances the odds of survival of IPOs but also accelerates their survival duration in the aftermarket. The survival profile of IPOs varies across the several industries as well. The findings of this study will have fruitful implication for the issuers, investors, regulators, and the entire capital market as they can evaluate the future prospects of IPOs and can take rational decisions accordingly.

The main purpose of the paper is to analyze the structural changes in India’s direction of import during new trade policy since 1991 within the framework of WTO. The period of study is 1987:88 – 2014:15. The paper used the dominance pattern, ranking technique, mobility and turnover, concentration ratio and growth rate technique as research methodology for analysis of the paper. The paper found that USA has been at the top in exporting of goods and services to India.. Top five countries are exporting to India more than one-half of India’s import. Saudi Arabia and China are Asian Countries in top five countries. China and Russia within BRICS grouping are exporting around 10 percent to India. India’s import from SAARC countries is almost negligible. However, world level concentration ratio of India import direction is low. Growth rate of concentration ratio is low, negative and statistically significant. This is favourable for India because this may be possible because India deliberately simplifying her import procedures and adding new trading partners for import at competitive price. In general, USA is top exporting country to India. India needs to diversify her import direction on bilateral basis from SAARC and other Asian, African and South American counties. This will lead to increase India absorption capacity of global shock and recession such as global financial crisis in 2008 and reduce dependence on few developed countries.