Journal Press India^®

         It gives me immense pleasure to bring to you another issue of Pragati. The current volume consists of six papers, a commentary and a book review. The paper on ‘The Interest Rate Channel of Monetary Transmission - The Indian experience’ by Suvojit Lahiri Chakravarty, examines the effect of the changes in the policy rate on the different segments of the financial market in India from the onset of LAF i.e., July 2000 onwards to March 2014.  A VAR model comprising of interest rate, output, price and exchange rate is estimated for the same period, to study the effect of changes in the policy rate on the various macroeconomic variables.

         A paper on ‘Regional Pattern and Determinants of Knowledge-based Industry: Evidences from Firm-level Data of Indian Pharmaceutical Industry’ has been contributed by Tareef Husain. The empirical findings based on negative binomial regression model reveal that the group of regional factors such as, size of industry, availability of skilled labour, number of science and technology (S&T) institutions and number of patent applications attract higher number of pharmaceutical firms in respective states. There has been a shift in the regional pattern with the share of Western India declining in favour of North India.

         ‘Poverty Line: A Definitional Progress in India’ by Deepti Kakar, reveals that in India poverty had been traditionally looked at as insufficiency to attain subsistence and all the attempts at poverty line definitions were anchored to the Food Energy Intake method. More recently, the recommendations by the Tendulkar Committee and Rangarajan Expert Group include a shift away from the calorie norms to the cost of basic needs method which looks at basic requirements of food and non-food items.

         Two of the papers in this issue look at India’s growth story. The paper on ‘A Study of Trends in India’s Economic Growth since 1951: The Inclusive Growth Approach’ by Arjun. Y. Pangannavar, focuses on the saga of India’s economic growth under the ‘Nehru-Mahalanobis Economic Growth Model’ (NMEGM) and ‘Narsimhrao-Manmohan Singh Economic Growth Model’ (NMSEGM). This paper attempts to assess the growth rate trends of Indian economy by using the measuring tool called ‘Inclusive Growth’ to get a fair and true picture. Another article on ‘Inclusive Growth for Social Justice: An Imperative for India’s Development Efforts’ by Niti Bhasin argues that inclusive growth is the new paradigm that is related essentially to equality and opportunity to all for achieving a productive and meaningful life with freedom, equality and dignity. There is a lot of talk on growth with equity but it has not been dovetailed with the development effort. An immediate plan for achieving equitable development is needed and the challenge before the Government is to evolve a system in which reforms and globalisation can proceed on one track, and the poor can be protected from the ill effects of it, on the other. Local communities and markets should be reinforced to take advantage of finance, trade and investment changes flowing from the national and global levels. Investing to improve productivity in agriculture is essential for sustainable poverty reduction. In essence, therefore, there has to successful localization first to reap the benefits of globalisation.

         This issue also contains a case study by Bhajan Chandra Barman, on ‘Microfinance and Women Empowerment: A Case Study of Darjeeling District’. It is based on a primary field survey that has been carried out in Kharibari block of Darjeeling district. The case study finds that SHGs women have more active participation in various income generating activities. They earned more income, saved more money and at the same time owned more assets than non-SHGs women. The study also stresses the need of more loans to be expanded to rural poor women folk to enhance their economic solvency and empower them economically. In view of the recent significant changes taking place at policy level, this issue contains a commentary on the newly created NITI Aayog.

          The trending in the current literature is towards finance. One paper dwells upon the ‘Interest Rate Channel of Monetary Transmission’ and uses a very rigorous empirical methodology. Other papers are analytical and descriptive. From time to time it is necessary to revisit our thoughts on economic concepts and philosophies including that of the development philosophy of our nation. Therefore, some papers dwell upon development strategy and growth while others dwell upon inclusive growth and poverty. This leads to a good blend of thought provoking papers on the Indian economy.

Prof. K. V. Bhanu Murthy

Editor-in-chief