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This issue of PRAGATI: Journal of Indian Economy contains a vast array of research papers discussing diverse subjects ranging from elements of output and productivity growth to determinants of volatility of soyabean futures contract and from the budget interpretation for this financial year to an analysis of the potential impact of the pandemic on the digital payment system in India.

Dr. Prasanta Kumar Roy, in his study estimates the sources of output and productivity growth of the 2-digit manufacturing industries as well as the total manufacturing industry in Andhra Pradesh during the period from 1981-82 to 2010-11. Employing a stochastic frontier model with a translog production function to estimate the sources of output and total factor productivity growth (TFPG) of the 2-digit manufacturing industries of the state, the author finds that input growth effect is the major contributor to output growth in Andhra Pradesh manufacturing. Another interesting paper by Ms. Saroj Joshi and Prof. Ritu Sapra, discusses the trends and determinants of volatility in the context of the Indian futures market by taking soybean futures contracts traded on NCDEX. Employing the ARMA-GARCH model, the study finds that return distribution exhibits thick tails, time-varying volatility and volatility persistence. The study finds a positive relationship between trading volume and volatility, whereas a negative relationship is observed between open interest and volatility. The study concludes that trading volume and open interest are two important determinants of volatility.

Two papers in this issue examine different aspects of foreign direct investment flows to India. Mr. Sudharsana Reddy Pujari and Dr. Rajasekhar Mamilla in their research attempt to study how foreign capital flows are helping an economy in enhancing the economic activities. The study attempts to confirm the long-run and short-run relationship between the foreign direct investment, foreign institutional investments and Index of Industrial Production in India from April 2012 to March 2020.  Applying the Johansen cointegration test and the Vector Error Correction Model, the authors find that FDI, FII and IIP are cointegrated in the long-run. However, there is no causality running from FDI and FII to IIP as per the results of VECM Model. Another interesting paper dealing with FDI as subject matter is by Ms. Neha and Prof. Madan Lal that lays down the analytical framework for empirically testing the annual rate of change, the compounded annual growth rate and instability associated with the flow of FDI inflows to India since the initiation of economic reforms in 1991. Through regression analysis, the results show that FDI is increasing with a growth rate of 19.31 % which is highly significant with a falling growth in the instability of FDI inflows to India.

Another interesting study by Prof. Ranita Nagar and Mr. Prashant Tiwari evaluates the efficacy of Consumer Protection Act, 2019 as compared to Consumer Protection Act, 1986. Employing random sampling method for a total of 200 cases from the states of Kerala and Rajasthan, the data analysis reveals significant reduction of transaction cost as well as efficient internalization of the harm in the Consumer Protection Act 2019 Act as compared to its 1986 counterpart.

Prof. Shobha Rajamadagu and Dr. Annapoorna M. S. in their study, analyse 144 IPOs offered from 2014 to 2020 on the Bombay Stock Exchange (BSE) India and conduct their performance analysis in terms of raw returns, market-adjusted excess return (MAER), annualized returns, and wealth relative tools. The authors observe that in the study period, IPOs have outperformed the markets, and they are under-priced too.

This issue of PRAGATI also contains two ‘Perspectives’ on pertinent issues for the Indian economy.  The present situation of the COVID-19 pandemic has affected the socio-economic and attitudinal changes in society altering livelihoods to a large extent. Therefore, an examination of the three-dimensional changes in the socio-economic and occupational shifts resulting from the COVID-19 pandemic is presented in the paper by Ms. Bisla Devi and Dr. Chhatrapal Singh. The authors discuss systemic restructuring that is required with the help of different models/ schemes to address the changing demand and supply, and to adapt to the new environment of jobs and attitudes, technology use and ‘work from home’ experiences. The other ‘Perspective’ by Dr. Shubhi Agarwal on ‘Interpreting the Budget Speech for 2022-23’ delves into the government’s budget complexities to grasp the details of whatever is being pledged, how those commitments are supposed to be achieved, and if they satisfy the country’s present economic expectations.

We hope this issue upholds our commitment to publishing quality research on emerging issues of the Indian economy with a view to provide inputs for policy formulation at different levels and is enlightening for our readers. We are eternally grateful for the support of our contributors and readers.

Prof. K. V. Bhanu Murthy

Editor