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Working Papers | 1997

Initiatives in Rural Credit Policies under New Economic Environment

Desai B M

Initiatives in rural credit policies pertain to two instruments. These are institutional development and interest rates. Some of these initiatives are right for both these instruments, while some others are not. Former for the institutional development includes new equity, prudential norms, reorganization of loss-making branches, MOUs and DAPs, hi-tech branches, enlarged scope of indirect agricultural credit, RRBs becoming full-fledged banks, SHGs, and entry of private local area banks. And the latter includes RBI's discontinued financial support, RIDF, and closing loss-making branches. Right initiative on interest rates is their simplified structure that is linked to amount of loans only though this needs to be more consistent with the rural realities. And wrong initiatives include increases in (minimum) interest rates on loans and a hotchpotch of partially and fully deregulated interest rates. Logic and/or empirical evidence are the basis for identifying initiatives that are wrong.

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Working Papers | 1997

Revitalizing the State: 3. Fragmenting the State for Innovation

Khandwalla P N

Organizational research indicates that large organizations involved in many different activities can counteract the diseconomies of size and complexity, tendency to bureaucratization, and to increasing resistance to innovation by breaking up into relatively autonomous, self-contained units such as relatively autonomous, self-contained divisions, retaining mainly policy control at the centre and a powerful MIS as a monitoring device. States too can enhance their administrative capacity and innovativeness highly by decentralizing and by fragmenting themselves into relatively autonomous, self-contained units headed by professional managers with clear accountability and clear mandate. Such unbundling must, however, be in the pursuit of an integrating, shared vision of national excellence like social justice, economic growth, and improvement in the quality of life. Several case studies from a number of countries of government departments, agencies, and projects that were decentralized along the foregoing lines under a shared vision of state excellence demonstrate the efficacy of this strategy of fragmenting the state in certain effective ways. Several additional mechanisms can institutionalize the culture on innovation in governmental bodies, such as progressively higher goals, with potential conflict among goals. The operationalziation of a strong serving the “customer” commitment, an operationlized commitment to cut costs, to make increasingly technologically sophisticated offerings, to benchmarking, to entrepreneurship, to global scanning for innovations, trends, and opportunities, to periodic diagnosis of the organization's functioning, to participative decision making and brainstorming for novel but workable solutions, to periodic, exonovation, and toa daunting developmental and growth vision are powerful mechanisms to make government bodies highly innovative.

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Working Papers | 1997

Revitalizing the State: 1. Models of the Modern State

Khandwalla P N

In this paper the complexity of the modern state is examined with reference to the pressures under which it operates, and the mechanisms it employs of differentiation and integration. The reasons for the very large increase in the size of the state in this century, both in the developed countries and in the developing countries, are examined, as also some differences in the patterns of growth of the state in these two sets of countries. The major forces shaping the state in the 20th century are briefly discussed, resulting in the evolution of four models of the state. These are: the democratic interventionist-welfare state, commonplace in many Western societies; the developmental state that evolved in the Soviet system, and spread with some modifications to many developing countries; the liberal, market-friendly state espoused by the World Bank which has found a footing in most developing countries that have taken structural adjustment loans from the World Bank and IMF; and the businesslike, managerial state promoted by Margaret Thatcher, Ronald Reagn and others. It is contended that innovations in any kind of state can, with suitable modifications, be adapted in any other kind of state, and that innovations in governance systems and adaptive borrowings are powerful keys to state excellence.

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Working Papers | 1997

Globalization Work and Management

Singh J P

Major changes are occurring in the sphere of work and management. While there is emergence of new time based and information based opportunities, some traditional office and business work opportunities are shrinking. Simultaneously, there is recognition of a new type of “Permanently Temporary” Employment that is a pointer to the need for employment laws that take into account new work realities. On a larger plane, changes are also occurring in trade and business world. A few truly global organizations have emerged. However, organizations that operate in 30-40 or 10-20 countries are many, and are beginning to encounter the problem of operating in international environment. Use of values and social concerns have become the new element in protection of markets in addition to the traditional concern for quality and the recent concern for environment. There is a shifting of polluting industries to new environments resulting in environmental hazards where none existed and a major shift in the job market around the globe. National economies are also shifting from industrial to service and information economies. Another major change is linked with the development of distance learning opportunities and a move towards a universal language. This is influencing not only the way education is imparted but also nature and management of educational institutions thus forcing organizations to rethink their human resource development and learning strategies. At the core of all these changes is a major technological breakthrough – in satellite imaging, communication, computing, high speed travel and transport technologies. This explosion of Technology has resulted in new competition giving older organizations very little response time. Emergence of the new slim and trim organizations have forced unions to change focus from wages and benefits to protection of jobs. Since both work and technology are changing at a fast pace, the sphere of management has also been affected. In some ways control and unity of command are under revision and calls for a reassessment of the management theory and practice. The paper concludes with a discussion of the challenges ahead before the business world and developing societies.

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Working Papers | 1997

An Operational Study of CO Patel Vegetable and Fruit Market of Ahmedabad

Girja Sharan and T. Madhavan

We present in this paper, an operational study of CJ Patel Wholesale Fruit and Vegetable Market (CJP Market) of Ahmedabad city. The market is viewed as a dynamic queuing system. A simulation model is constructed. Simulations are used to generate statistics on congestion as the volume of trade is increased form the present level to what would be expected by the year 2010 A.D. This market was built in the year 1996 in order to reduce congestion in another older market. While the buildings are designed to last a long time, simulations show that its handling capacity will get saturated much sooner, most likely by the year 2010 A.D. Based on this work, it is argued that programe to modernize loading, unloading and other handling systems must be initiated now. Further, design procedures for such markets need to recognize these as dynamic queuing systems and not just an assembly of buildings and road.

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Working Papers | 1997

Econometric Modelling of the Indian Cotton Sector: Disaggregate Analysis

Naik Gopal and Jain S K

Keeping in view the magnitude, importance, interlinkages among the variables and the high involvement of a large number of decision makers and the government intervention in Indian cotton sector, this study aims at understanding and quantifying the interrelationship among the important variables of this sector through an econometric simulation model. This model explains interlinkages among cotton farming, spinning and weaving sub-sectors through 27 equations. The estimated model performs satisfactorily in terms of goodness of fit, sign, significance of the coefficients and short-and long-term predictability. Forecasts were made for the period 1992-93 through 2001-2002. The trends indicate that the production of cotton would grow slightly slower growth rate than its consumption. The production of long staple cotton will increase faster than that of medium staple cotton. In the spinning sector, the export of cotton yarn will increase substantially. Therefore, the production of cotton yarn will increase at a higher growth rate than its consumption. The growth rates in the production of medium and coarse count yarn will be almost same. The demand for and production of decentralised fabric will increase at the growth rate of 3.63 per cent. However, the demand for and mill fabric will increase but the export of decentralised fabric will grow faster. The demand, production and price of khadi fabric will remain more or less stagnant. The simulation results of two different policy variables namely, export of cotton and yarn show that the promotion of export of yarn is more beneficial for the Indian cotton industry and raw cotton export does not have any impact on fabric export.

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Working Papers | 1997

Economic Analysis of Industrial Agroforestry: Popular (Poulus Deltoides) in Uttar Pradesh (India)

Jain S K

To meet raw material requirements. Wimco.the biggest match industry in India, has been promoting popular based agroforestry thorough agroforestry projects approved by National Bank for Agricultural and Rural Development (NABARD) in the northern region of India since 1984. This study aims at evaluating the performance of polular based agroforestry in terms of income, employment and environmental impact. Popular based agroforestry is economically viable and relatively more profitable in comparison to many of the crop rotations followed in the study are. Popular plantations with intercrops are more remunerative in a plantation of seven years instead of eight years. This land use system is capable of providing employment opportunities on farms and the preserving ecological system as well. The cost charged by Wimco for technical advice, however, reduces the income from poplar plantation substantially. With farmers gaining experiences, farmers can expect high dividends in subsequent rotations.

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Working Papers | 1997

Analysing Technology Strategies: Some Issues

Rakesh Basant

A firm's technology strategy is influenced by the 'technology regime' in which it operates. The regime is broadly defined by a combination of variables capturing industrial structure, nature of technical knowledge and the policy environment. Together, these variables determine the opportunity and appropriability conditions faced by a firm in a well defined industry. Given these broad relationships, firms' technology strategies may differ across industry groups. In addition, differences in technology strategies within an industry group may be induced by some form specific characteristics like size, nature and level of diversification, technological and other capabilities. Analyses of strategy using the modified the Strucutre-Conduct-Performance paradigm at the industry level have been unsatisfactory; industry heterogeneity gives rise to significant differences in the strategies of firms within the same industry. Dissatisfaction with the definition of industries has resulted in the use the concept of strategic groups, which differentiate a group of firms from others within a given industry in terms of their strategic choices. The value of the concept of strategic group lies in its role as a meaningful explanatory variable between the level of the firm and the industry. It should be capable of delineating extant structures and explaining (or predicting) conduct of firms within an industry. The major research problem with the strategic group approach is how to identify the different strategic groups in practice and how to allocate firms within an industry to the different groups which make up the industry's industrial structure. The present paper attempts a selective review of studies pertaining to technology strategy to explore parameters which can be used to define strategic groups within an industry. It is argued that nature of technology, industry and firm characteristics have major implications for theory and action related to the content of technology strategy and for the processes through which it is developed and implemented.

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Working Papers | 1997

Modelling a Vegetable and Fruit Market to Aid Modernisation

Girja Sharan and T. Madhavan

We present in this paper, an operational study of CJ Patel Wholesale Fruit and Vegetable Market of Ahmedabad city using simulation. This market was built in the year 1996 in order to reduce congestion in another older market. Viewed as a dynamic queuing system, simulations suggest that even though the buildings are designed to last a lot longer, utility of this complex as a market place will diminish considerably in just 10 to 15 years. So much so that by the year 2010 A.D., it may become necessary to move out yet again. Such an eventuality can be warded off, if loading, unloading and other handling systems are modernised and made speedier. A more general conclusion is that design procedures for such markets in future need to recognize these as dynamic queuing systems and not just an assembly of buildings and road.

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Working Papers | 1997

Comparative Financial Systems: Financial Liberalisation, The Black Market Exchange Rate and Demand for Money in South Korea, Taiwan and Thailand

Chotigeat Tosporn and Pandey I M

Central to the unbridled economic success of the Pacific-Rim countries is their financial liberalisation from 1981 to 1990, their ratio of M2/GDP (measure of the depth of the financial sector) is as large as the M2/GDP of the OECD economies. The Pacific-Rim countries have also been moving --albeit at different speed-- to liberalise their equity and bond markets and integrate them more closely into international financial markets. This paper first summarises the most essential aspects of the financial liberalisation and innovation process in Thailand, Taiwan and South Korea. Second, it tests at various stages of financial liberalisation for an appropriate overall functional form of demand for money for each country, using the Box-Cox extended auto-regressive model with data from January 1970 through June 1989. Black market exchange rate is used in the model as a key variable, instead of a conventional variable of the official exchange rate. The empirical results confirm that real income, expected inflation and expected inflation and expected depreciation in the black market exchange rate are appropriate scale and opportunity cost variables in the long-run money demand function, especially for South Korea. In addition, depreciation in the black market exchange rate is found to be a negative effect on the demand for money in all cases, but there is no empirical evidence to indicate that the black market exchange rate influences the demand for money differently over the period before and during the on-going financial liberalisation process. Therefore, the Pacific-Rim countries in this study must carefully select an appropriate exchange rate policy to support their economic goals because (a) the black exchange rate is significant to their economies, and (b) neither a decline in the black market nor an alignment of the black market and official exchange rates will occur as long as the financial liberalisation has not reached maturity and/or exchange rate control still exists.

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