Dennis J Rajakumar - Academia.edu (original) (raw)
Papers by Dennis J Rajakumar
Economic & Political Weekly , 2020
The claim of sharp reduction in effective corporate tax rate to 25.11% does not, in fact, represe... more The claim of sharp reduction in effective corporate tax rate to 25.11% does not, in fact, represent any significant reduction in the tax burden that the companies bear at present, and hence, the fiscal instrument available for improvement in corporate investment gets blunted. Apart from frittering away the tax potential, this measure will shift the tax burden to individuals. Also, several non-manufacturing companies and a handful of large companies are likely to benefit from the measure.
Journal of Income and Wealth, Vol 39, No 2, July-December, pp. 197-227, 2017
Of late, the rising inequality, whether that is in wealth or income, has received the attention o... more Of late, the rising inequality, whether that is in wealth or income, has received the attention of both academic and policy makers. Central to income inequality are the distributional issues; that is labour’s share in income. The International Labour Organisation (2015), in its Global Wage Report 2014/15, argued that rising inequality across the globe was more of a labour market phenomenon. Lower wage rate or disproportionate increase in productivity and wage contributes to income inequality. Lack of paid employment also compounds the problem of income inequality. Wage share in total value added mirrors these labour market developments and thus wage share becomes a relevant issue from the welfare point of view. Generation of employment in the manufacturing sector has remained a major goal of industrialisation in India. Several studies have pointed out declining wage share in this sector, particularly since the early 1990s. Wage share can decline if manufacturing becomes more capital intensive which tends to increase the share of capital in income. Capital intensity differs from industry to industry. Thus, gaining a good understanding of the wage share requires a detailed analysis at the industry level. This paper aims to explore the link between real wage growth and labour productivity and their link with wage share across industries. Findings of this study would contribute to a better understanding of the factors responsible for wealth and income inequality, and also the welfare implications of the changes perceived to be important for ease of doing businesses, of which labour market related issues have become central. This study relies on Annual Survey of Industries (ASI), which is the principal source of data for studies in manufacturing. As the ASI has used different National Industrial Classifications (NICs), this study concords ASI data series at the disaggregate level starting from 1973–74.
Journal of Income and Wealth, Vol 38, No 2, July-December, pp. 143-157., 2016
The question of state-level trade performance has assumed significance in India with subnational ... more The question of state-level trade performance has assumed significance in India with subnational economies increasingly becoming responsible to deliver growth. Although several state governments have been implementing various schemes to promote exports, the central government launched a new scheme in 2002 known as Assistance to States for Developing Export Infrastructure and Allied Activities, the working of which is critically based on information pertaining to a state’s export performance. A major handicap faced while analysing trade performance of states is the availability of data. Attempts have been made to construct state-wise exports using data of Directorate General of Commercial Intelligence and Statistics (DGCI&S), captured from shipping bills filed by exporters. However, state-wise import data are not provided by DGCI&S. The schedule of Annual Survey of Industries (ASI) administered by the Central Statistics Office for collecting industrial statistics at the factory level has Block I by which it attempts to capture material inputs directly imported. Using the available information from ASI, this paper provides aggregate estimates of manufactured exports and intermediate imports at the state level. While doing so, this paper works out trade orientation of states by examining import and export intensities. The paper also reports the ratio of net merchandise export earnings to state domestic product across states and over the years. Finally, we undertake an econometric analysis of the determinants of state-level imports of intermediate inputs.
Journal Of Indian School Of Political Economy, 2017
The latest re-basing of India’s National Accounts series from 2004-05 to 2011-12 has been one of ... more The latest re-basing of India’s National Accounts series from 2004-05 to 2011-12 has been one of the most radical changes introduced ever in the adoption of new data sources as well as in the application of new concepts based on international guidelines for the revisions in the methodology of their compilation. These changes have aroused unusual misgivings and considerable debate amongst the academic circles and in the media. This paper seeks to provide an exposition of the rationale for the changes introduced so that there is better appreciation of the same, and at the same time, attempt some critical evaluation of the revisions made so that we could offer constructive suggestions for improving the overall results including, wherever necessary, the quality of estimates.
Economic and Political Weekly, March 2, 2019, 2019
Based on the data from the All-India Debt and Investment Surveys, a re-emergence of non-instituti... more Based on the data from the All-India Debt and Investment Surveys, a re-emergence of non-institutional credit agencies in the incidence of household indebtedness is found since the 1990s, especially in the rural areas, reflecting the inadequate social commitments of the institutional agencies due to their contemporary organisational deficiencies. The data, however, do not seem to capture the extent of urban distress in totality. Yet, given the general dearth of evidence on the status of household indebtedness over time, institutions like the Reserve Bank of India and the National Bank for Agriculture and Rural Development should revisit this information to resurrect their roles in strengthening credit delivery to the general population.
Economic & Political Weekly , 2018
A close examination of the recent trends in government finances suggests that the expenditure pat... more A close examination of the recent trends in government finances suggests that the expenditure pattern of the government does not provide any assurance for the future in terms of building adequate social capital. The regressive nature of taxation policy in recent years along with reduced government spending has put additional burden on out-of-pocket expenditure of individuals.
Economic & Political Weekly, 2017
The Index of Industrial Production series, the most significant macroeconomic lead indicator, was... more The Index of Industrial Production series, the most significant macroeconomic lead indicator, was revised by the Central Statistics Office in May 2017, two years and three months after revising the National Accounts Statistics series. Even as the new IIP series is more current, growth rates of output do not match those of the NAS. This, along with the significant lag in the periodic revision of IIP, diminishes its usefulness.
Economic and Political Weekly , May 20, 2017
Bringing attention back to the manufacturing sector and to the statistics available to understand... more Bringing attention back to the manufacturing sector and to the statistics available to understand it, this analysis presents the differences in size and rates of growth of the sector when measured using the new National Accounts Statistics series (2011–12) and the Annual Survey of Industries. Clearly, changes in methods of measuring (for instance, the shift from the establishment approach to the enterprise approach) have introduced unexplained changes into measures of the manufacturing sector.
Economic & Political Weekly, 2017
Sticking to the firm commitment to contain fiscal deficits, the reduced thrust on government spen... more Sticking to the firm commitment to contain fiscal deficits, the reduced thrust on government spending does not seek to be countercyclical given that economic growth is failing. There is vast scope to step up collection of corporate taxes by widening the tax base through greater compliance.
Economic and Political Weekly, Nov 26, 2016
In the context of the demonetisation of Rs 500 and Rs 1,000 notes, the issuance of currency and i... more In the context of the demonetisation of Rs 500 and Rs 1,000 notes, the issuance of currency and its different denominations are traced over time, while also tracking key macroeconomic features of India’s changing economy over the decades. Further, the possible immediate and longer term economic effects of demonetisation are discussed.
Economic and Political Weekly, Mar 4, 2016
In producing the new series, the Central Statistics Office with its rebased National Accounts Sta... more In producing the new series, the Central Statistics Office with its rebased National Accounts Statistics has done a studious job of marshalling diverse sources of data and weaving them together into a composite new source. However, the final picture of NAS data would have been more acceptable if better caution was exercised in using new concepts as well as new sources of data, and in weighing the growth results against frequent and extensive revisions. The CSO has failed to refine the growth results juxtaposed against the repetitive and substantial revisions that the data sources have impelled and have completely ignored the analytical construct of gross domestic product at factor cost.
Two recent press releases by the Central Statistics Office substantially revise the new series of... more Two recent press releases by the Central Statistics Office substantially revise the new series of National Accounts Statistics. The new releases are more than just routine updates, and entail methodological changes and incorporate new sources of data, perhaps in response to various critiques. Yet, on comparing the advance estimates released with past such estimates, the CSO’s latest growth projections once again turn out to be far too optimistic.
An analysis of the end-November 2015 data release of the Central Statistics Office raises some is... more An analysis of the end-November 2015 data release of the Central Statistics Office raises some issues that must be kept in mind while discussing the state of India’s economy. If past trends are anything to go by, economic growth in 2015–16 will not improve in the last quarter as some seem to hope. The movements in the GDP deflators and the very odd behaviour of a gradual decline in the investment rate together indicate that growth in 2015–16 will not end as earlier forecast.
The tax revenues of the Union government have surged in the first half of 2015-16, growing much f... more The tax revenues of the Union government have surged in the first half of 2015-16, growing much faster than budgeted. Indirect taxes led the rate of growth of tax revenue collections, while direct tax collections grew less than expected. Though higher revenue is welcome, indirect taxes are nonetheless regressive, and higher indirect tax revenue will only accentuate income inequalities in India.
There is concern that corporations have borrowed too much, and that therefore bank balance sheets... more There is concern that corporations have borrowed too much, and that therefore bank balance sheets are strained as well. Contrary to this popular view, it is argued here that the company finance data of the corporate sector in general does not support that this is so.
Economic & Political Weekly, Vol 50, No 30, pp.78-81, Aug 15, 2015
To estimate gross value added for the manufacturing sector, the 2011–12 National Accounts Statist... more To estimate gross value added for the manufacturing sector, the 2011–12 National Accounts Statistics series follows the “single deflation” instead of the “double deflation” method. In this note, it is argued that the double deflation method estimates come closer to the Index of Industrial Production growth estimates, and that this reinforces the view that gross value added of manufacturing is overestimated in the 2011–12 series. This has an impact on overall GDP growth numbers, which too end up lower than in the new series.
Economic & Political Weekly, Vol 50 No 29 , pp.149-153, Jul 18, 2015
Revisiting the MCA-21-based estimates of the size of the private corporate sector in the rebased ... more Revisiting the MCA-21-based estimates of the size of the private corporate sector in the rebased National Accounts Statistics, it is argued that the use of a single blow-up factor for non-government non-financial public and private limited companies could be leading to an overestimation of gross value added and gross savings. If there has to be a blow-up, it should be done separately, given the distinct characteristics of public and private limited companies.
Economic & Political Weekly, Vol. 50, Issue No.26-27, Jun 27, 2015
An analysis of bank lending rates suggests that reducing the lending rate, while important, may n... more An analysis of bank lending rates suggests that reducing the lending rate, while important, may not be as critical to reviving investment as it is made out to be. The three interest rate regimes followed over the last two decades or so are compared here and it is found that the current base rate regime is by far the most stable, and is one which reduces uncertainty of interest costs.
Economic & Political Weekly, Vol L (12), pp. 64-66, Mar 21, 2015
The new series of national accounts statistics raises the estimates of saving and investment, but... more The new series of national accounts statistics raises the estimates of saving and investment, but it also reconfirms the trend of a decline in domestic saving and capital formation in recent years. Analysing available data, this note attempts to understand the statistical differences in how saving and capital formation are measured in the new series.
Economic & Political Weekly,Vol L (9), Pp. 108-110, Feb 28, 2015
An analysis of the new 2011–12 series of National Accounts Statistics to understand the trends of... more An analysis of the new 2011–12 series of National Accounts Statistics to understand the trends of GDP growth and the sector-wise break-up. Data up to the advance estimates for 2014–15 are explored. The service sector continues to lead growth, manufacturing shows a revival, while agriculture has once again slowed down.
Economic & Political Weekly , 2020
The claim of sharp reduction in effective corporate tax rate to 25.11% does not, in fact, represe... more The claim of sharp reduction in effective corporate tax rate to 25.11% does not, in fact, represent any significant reduction in the tax burden that the companies bear at present, and hence, the fiscal instrument available for improvement in corporate investment gets blunted. Apart from frittering away the tax potential, this measure will shift the tax burden to individuals. Also, several non-manufacturing companies and a handful of large companies are likely to benefit from the measure.
Journal of Income and Wealth, Vol 39, No 2, July-December, pp. 197-227, 2017
Of late, the rising inequality, whether that is in wealth or income, has received the attention o... more Of late, the rising inequality, whether that is in wealth or income, has received the attention of both academic and policy makers. Central to income inequality are the distributional issues; that is labour’s share in income. The International Labour Organisation (2015), in its Global Wage Report 2014/15, argued that rising inequality across the globe was more of a labour market phenomenon. Lower wage rate or disproportionate increase in productivity and wage contributes to income inequality. Lack of paid employment also compounds the problem of income inequality. Wage share in total value added mirrors these labour market developments and thus wage share becomes a relevant issue from the welfare point of view. Generation of employment in the manufacturing sector has remained a major goal of industrialisation in India. Several studies have pointed out declining wage share in this sector, particularly since the early 1990s. Wage share can decline if manufacturing becomes more capital intensive which tends to increase the share of capital in income. Capital intensity differs from industry to industry. Thus, gaining a good understanding of the wage share requires a detailed analysis at the industry level. This paper aims to explore the link between real wage growth and labour productivity and their link with wage share across industries. Findings of this study would contribute to a better understanding of the factors responsible for wealth and income inequality, and also the welfare implications of the changes perceived to be important for ease of doing businesses, of which labour market related issues have become central. This study relies on Annual Survey of Industries (ASI), which is the principal source of data for studies in manufacturing. As the ASI has used different National Industrial Classifications (NICs), this study concords ASI data series at the disaggregate level starting from 1973–74.
Journal of Income and Wealth, Vol 38, No 2, July-December, pp. 143-157., 2016
The question of state-level trade performance has assumed significance in India with subnational ... more The question of state-level trade performance has assumed significance in India with subnational economies increasingly becoming responsible to deliver growth. Although several state governments have been implementing various schemes to promote exports, the central government launched a new scheme in 2002 known as Assistance to States for Developing Export Infrastructure and Allied Activities, the working of which is critically based on information pertaining to a state’s export performance. A major handicap faced while analysing trade performance of states is the availability of data. Attempts have been made to construct state-wise exports using data of Directorate General of Commercial Intelligence and Statistics (DGCI&S), captured from shipping bills filed by exporters. However, state-wise import data are not provided by DGCI&S. The schedule of Annual Survey of Industries (ASI) administered by the Central Statistics Office for collecting industrial statistics at the factory level has Block I by which it attempts to capture material inputs directly imported. Using the available information from ASI, this paper provides aggregate estimates of manufactured exports and intermediate imports at the state level. While doing so, this paper works out trade orientation of states by examining import and export intensities. The paper also reports the ratio of net merchandise export earnings to state domestic product across states and over the years. Finally, we undertake an econometric analysis of the determinants of state-level imports of intermediate inputs.
Journal Of Indian School Of Political Economy, 2017
The latest re-basing of India’s National Accounts series from 2004-05 to 2011-12 has been one of ... more The latest re-basing of India’s National Accounts series from 2004-05 to 2011-12 has been one of the most radical changes introduced ever in the adoption of new data sources as well as in the application of new concepts based on international guidelines for the revisions in the methodology of their compilation. These changes have aroused unusual misgivings and considerable debate amongst the academic circles and in the media. This paper seeks to provide an exposition of the rationale for the changes introduced so that there is better appreciation of the same, and at the same time, attempt some critical evaluation of the revisions made so that we could offer constructive suggestions for improving the overall results including, wherever necessary, the quality of estimates.
Economic and Political Weekly, March 2, 2019, 2019
Based on the data from the All-India Debt and Investment Surveys, a re-emergence of non-instituti... more Based on the data from the All-India Debt and Investment Surveys, a re-emergence of non-institutional credit agencies in the incidence of household indebtedness is found since the 1990s, especially in the rural areas, reflecting the inadequate social commitments of the institutional agencies due to their contemporary organisational deficiencies. The data, however, do not seem to capture the extent of urban distress in totality. Yet, given the general dearth of evidence on the status of household indebtedness over time, institutions like the Reserve Bank of India and the National Bank for Agriculture and Rural Development should revisit this information to resurrect their roles in strengthening credit delivery to the general population.
Economic & Political Weekly , 2018
A close examination of the recent trends in government finances suggests that the expenditure pat... more A close examination of the recent trends in government finances suggests that the expenditure pattern of the government does not provide any assurance for the future in terms of building adequate social capital. The regressive nature of taxation policy in recent years along with reduced government spending has put additional burden on out-of-pocket expenditure of individuals.
Economic & Political Weekly, 2017
The Index of Industrial Production series, the most significant macroeconomic lead indicator, was... more The Index of Industrial Production series, the most significant macroeconomic lead indicator, was revised by the Central Statistics Office in May 2017, two years and three months after revising the National Accounts Statistics series. Even as the new IIP series is more current, growth rates of output do not match those of the NAS. This, along with the significant lag in the periodic revision of IIP, diminishes its usefulness.
Economic and Political Weekly , May 20, 2017
Bringing attention back to the manufacturing sector and to the statistics available to understand... more Bringing attention back to the manufacturing sector and to the statistics available to understand it, this analysis presents the differences in size and rates of growth of the sector when measured using the new National Accounts Statistics series (2011–12) and the Annual Survey of Industries. Clearly, changes in methods of measuring (for instance, the shift from the establishment approach to the enterprise approach) have introduced unexplained changes into measures of the manufacturing sector.
Economic & Political Weekly, 2017
Sticking to the firm commitment to contain fiscal deficits, the reduced thrust on government spen... more Sticking to the firm commitment to contain fiscal deficits, the reduced thrust on government spending does not seek to be countercyclical given that economic growth is failing. There is vast scope to step up collection of corporate taxes by widening the tax base through greater compliance.
Economic and Political Weekly, Nov 26, 2016
In the context of the demonetisation of Rs 500 and Rs 1,000 notes, the issuance of currency and i... more In the context of the demonetisation of Rs 500 and Rs 1,000 notes, the issuance of currency and its different denominations are traced over time, while also tracking key macroeconomic features of India’s changing economy over the decades. Further, the possible immediate and longer term economic effects of demonetisation are discussed.
Economic and Political Weekly, Mar 4, 2016
In producing the new series, the Central Statistics Office with its rebased National Accounts Sta... more In producing the new series, the Central Statistics Office with its rebased National Accounts Statistics has done a studious job of marshalling diverse sources of data and weaving them together into a composite new source. However, the final picture of NAS data would have been more acceptable if better caution was exercised in using new concepts as well as new sources of data, and in weighing the growth results against frequent and extensive revisions. The CSO has failed to refine the growth results juxtaposed against the repetitive and substantial revisions that the data sources have impelled and have completely ignored the analytical construct of gross domestic product at factor cost.
Two recent press releases by the Central Statistics Office substantially revise the new series of... more Two recent press releases by the Central Statistics Office substantially revise the new series of National Accounts Statistics. The new releases are more than just routine updates, and entail methodological changes and incorporate new sources of data, perhaps in response to various critiques. Yet, on comparing the advance estimates released with past such estimates, the CSO’s latest growth projections once again turn out to be far too optimistic.
An analysis of the end-November 2015 data release of the Central Statistics Office raises some is... more An analysis of the end-November 2015 data release of the Central Statistics Office raises some issues that must be kept in mind while discussing the state of India’s economy. If past trends are anything to go by, economic growth in 2015–16 will not improve in the last quarter as some seem to hope. The movements in the GDP deflators and the very odd behaviour of a gradual decline in the investment rate together indicate that growth in 2015–16 will not end as earlier forecast.
The tax revenues of the Union government have surged in the first half of 2015-16, growing much f... more The tax revenues of the Union government have surged in the first half of 2015-16, growing much faster than budgeted. Indirect taxes led the rate of growth of tax revenue collections, while direct tax collections grew less than expected. Though higher revenue is welcome, indirect taxes are nonetheless regressive, and higher indirect tax revenue will only accentuate income inequalities in India.
There is concern that corporations have borrowed too much, and that therefore bank balance sheets... more There is concern that corporations have borrowed too much, and that therefore bank balance sheets are strained as well. Contrary to this popular view, it is argued here that the company finance data of the corporate sector in general does not support that this is so.
Economic & Political Weekly, Vol 50, No 30, pp.78-81, Aug 15, 2015
To estimate gross value added for the manufacturing sector, the 2011–12 National Accounts Statist... more To estimate gross value added for the manufacturing sector, the 2011–12 National Accounts Statistics series follows the “single deflation” instead of the “double deflation” method. In this note, it is argued that the double deflation method estimates come closer to the Index of Industrial Production growth estimates, and that this reinforces the view that gross value added of manufacturing is overestimated in the 2011–12 series. This has an impact on overall GDP growth numbers, which too end up lower than in the new series.
Economic & Political Weekly, Vol 50 No 29 , pp.149-153, Jul 18, 2015
Revisiting the MCA-21-based estimates of the size of the private corporate sector in the rebased ... more Revisiting the MCA-21-based estimates of the size of the private corporate sector in the rebased National Accounts Statistics, it is argued that the use of a single blow-up factor for non-government non-financial public and private limited companies could be leading to an overestimation of gross value added and gross savings. If there has to be a blow-up, it should be done separately, given the distinct characteristics of public and private limited companies.
Economic & Political Weekly, Vol. 50, Issue No.26-27, Jun 27, 2015
An analysis of bank lending rates suggests that reducing the lending rate, while important, may n... more An analysis of bank lending rates suggests that reducing the lending rate, while important, may not be as critical to reviving investment as it is made out to be. The three interest rate regimes followed over the last two decades or so are compared here and it is found that the current base rate regime is by far the most stable, and is one which reduces uncertainty of interest costs.
Economic & Political Weekly, Vol L (12), pp. 64-66, Mar 21, 2015
The new series of national accounts statistics raises the estimates of saving and investment, but... more The new series of national accounts statistics raises the estimates of saving and investment, but it also reconfirms the trend of a decline in domestic saving and capital formation in recent years. Analysing available data, this note attempts to understand the statistical differences in how saving and capital formation are measured in the new series.
Economic & Political Weekly,Vol L (9), Pp. 108-110, Feb 28, 2015
An analysis of the new 2011–12 series of National Accounts Statistics to understand the trends of... more An analysis of the new 2011–12 series of National Accounts Statistics to understand the trends of GDP growth and the sector-wise break-up. Data up to the advance estimates for 2014–15 are explored. The service sector continues to lead growth, manufacturing shows a revival, while agriculture has once again slowed down.