Econometric Analysis of the performance of SSI Sector in India during 1980-81-2014-15

ABSTRACT

In this paper, author attempts to establish relationship among output, employment, average productivity of labour and export of SSI sector in India and GDP in India during 1980-81-2014-15 through simple regression analysis, causality test, cointegration and vector error correction models. The paper concludes that output of SSI sector has been increasing at the rate of 10.12% per year and exponentially at the rate of 0.554% per year during 1980-81-2014-15.The series is stationary, stable and divergent as indicated by ARIMA and AR models. Average productivity, employment and export of SSI sector have been rising at the rates of 1.68%, 8.43%, and 13.34% per year respectively during the same period. One per cent increase in export led to 0.48% increase in GDP per year during the specified period. Production, employment, average productivity and export of SSI showed two cointegrating vectors whose vector error correction model is stable, divergent and insignificant error correction process. India’s GDP,SSI sector’s output, employment, average productivity and export have two cointegrating vectors but its vector error correction model is stable, divergent and insignificant error correction having problem of autocorrelations. New policy recommendations of RBI and new government policy on MSME are likely to accelerate the performance of SSI and its contribution to the national economy.   

I.Introduction

The promotion of the small-scale sector in India has been an important thrust of industrial policy since independence though the focus of concern changed with the priorities of each five year plan. A Small Scale Industries Board was set up in 1954. Small Scale Industries and Agricultural & Rural Industries and the Small Industries Development Organisation (SIDO) which was under the Development Commissioner, Small Scale Industries were set up in 1956. At the State level, the Commissioner/ Directorate of Industries were the main institutional authority for SSIs. This structure has remained, though several other institutions have come into being in the 1970s and 1980s, particularly at the State level.

The Karve Committee Report (1955) was one of the earliest of these exercises which recommended a protective environment for the growth of small industries in India. Since then, policies targeted for the SSI sector have aimed at fostering its growth through positive policy interventions in the areas of finance, technology, infrastructure and extension services, among several other requirements of the sector. Supportive policies through the 1960s, 70s and 80s took the form of reservation of products exclusively for the SSI sector (836 products are reserved exclusively for SSIs at present) grant of fiscal concessions and government procurement of supplies from the sector. Due to liberalization, globalization and privatisation, SSI sector has so far been insulated to a large extent from pressures of competition both domestically and internationally. There are at least 3lakh units declared as sick and out of production, accounting for 10 percent of the recorded units.

The sector now employs 17 million persons and is the second largest employer of India's workforce after agriculture. It now accounts for 95% of all industrial units in the country and 40% of total output. About 7,500 products are manufactured in the small-scale sector. The export share is 35%.The composition of exports shows the largest shares of SSIs are in the industry groups : hosiery and garments (29.0%) , food products (21.4%) and, leather products (18%). The industry groups which have recorded high growth rates and a large share in total production of SSIs are: textile products, wood, furniture, etc., paper and printing, and metal products.
The total number of SSI working units in the country is estimated to be around 3 million. In terms of ownership, the vast majority of SSI units are proprietary concerns (80.5%) with only 16.8% functioning as partnerships and private limited. A UNIDO study defines clusters as 100 registered small-scale units. There are estimated 350 SME clusters in India which contribute directly and indirectly to 60% of India's exports. The location-wise distribution of clusters shows 65% concentrated in cities and metros and only 13% in small towns and rural areas. There is scope for encouraging the development of clusters in rural areas and rural-based artisan centres. The micro, small and medium enterprises (MSMEs) currently employ 12 crore individuals and contribute 15 percent to GDP. 

II. Objective

In this paper, the author tried to find out the growth of output, employment, average productivity and export of small scale industries in India during 1980-81-2014-15 and relate among them with GDP in India by causality, cointegration and VEC models.

How much Indian GDP is affected by those factors was also calculated by the author during the specified period. The new policy of the Government of India on MSME is an added area of this paper.

III. Methodology and data

Semi-log linear and exponential model were used to calculate growths of output, employment, average productivity, and export of SSI sector during 1980-81-2014-15. Double log multi-variable models were used to show relationship between GDP, output, employment, average productivity and export of SSI sector of India in the same period. Granger Causality, Johansen cointegration and Vector Error Correction Models were used to relate among them. The data of production, employment, average productivity of labour, exports of SSI sector in India and GDP at factor cost of India during 1980-81-2014-15 were collected from the Reserve Bank of India.

IV. Literature review

Rao and Kiran(2014) studied that the sector has characterized by low investment, operational flexibility, location wise mobility and import substitution. The Sector has been undergone a metamorphic change in the era of globalization. Many changes have taken place both national and international markets. The sector is playing a prominent role in ensuring the inclusive growth and regional balance. The sector is consistently registered a higher growth rate than the rest of industrial sector. There are over 6000 products ranging from traditional to high-tech items manufactured by this sector. Besides, the sector is facing challenge in the form of competition and opened opportunities due to improved technology, collaborations government intervention. Malapati(2011) showed that small-scale industries have been playing a momentous role in overall economic development of a country like India where millions of people are unemployed or underemployed. This sector solves these two problems through providing immediate large-scale employment, with lower investments. According to Dr. Manmohan Singh, “the key to our success in employment lies in the success of manufacturing in the small scale sector.” In a country like India, where capital is scarce and unemployment is wide spread, growth of small-scale industries is vital in order to achieve balanced economic growth. The strength of small-scale enterprises lies in their wide spread dispersal in rural, semi-urban and urban areas, fostering entrepreneurial base, shorter gestation period, and equitable distribution of income and wealth. Susmita Mohan(2014) described that in Kerala the amount of investment and the value of production has increased but, with respect to the amount of employment and the number of enterprises, a marginal decline has been observed. The total number of small enterprises does not show a real progress. If the potential of SSI is properly harnessed, it can help in accelerating the pace of socio-economic development and balanced regional growth apart from creation of employment opportunities. It is very essential to develop the industrial sector of Kerala mainly through the development of SSI sector. Hussain(2004) showed that the growth, production, export potentiality of SSI sector of India are high. Bayiuei(2004) explained that paper highlights the role and performance of small-scale industries in the economy with the parameters of number of units, production, employment and exports. The Report of Loksava Secretariat (2014) showed the export, credit and sick industries and government policies of SSI sector of India. Garg(1996) analysed the growth of SSI sector especially after 1980 and examined structure of fiscal incentives which improved the growth of SSI sector. Vanipriya and Venkatrumaraju (2011) studied that Small scale industry is widely recognized as a powerful instrument for socio economic growth and balanced sectoral development. One of the distinctive characteristics of small scale sector is that the development of these industries would create broader employment opportunities assisting entrepreneurship and skills development and ensure better use of scarce financial resources and appropriate technology. The small enterprises have by now established their competence to manufacture a wide variety of sophisticated goods in different product lines requiring a high degree of skill and precision. Chowdhury and Saini (2015) indicate that small manufacturers are affected in the globalization era and facing lot of problems to run their businesses. It has been observed that units from all surveyed industries irrespective of age and turnover believed that liberalization has resulted into more competition, increased quality consciousness, difficulty in marketing, dumping of cheaper goods by other countries, reduction in profit margin and high level of customer satisfaction. Small units are not using latest machinery to manufacturer quality product with latest design as per international standards.

There is absence of clear policies relating to marketing and human resource management. Most of the units do not have separate marketing and human resource departments. Small manufacturers are unable to attract the professionals because of their financial limitations. Another problem of the small units is that there is lack of cluster association for the small industry. The operational cluster associations are ineffective and not helping much to the industry. The domestic and foreign markets have become highly competitive due to the process of liberalization. Sonia and Kansal(2009)showed the growth of output, employment and export of SSI sector of the Indian economy after reform. Jena(2009) emphasized in the Vishesh Krishi and Gramin Udyog Yojana (VKGUY) including other incentives and concessions, the export obligation period for cottage and tiny industrial sector in  SEZ Schemes the export oriented Small Scale Industries and the clusters approach for development of small and medium scale industries and potentiality of export. Shivani Mishra(2012) threw light on the role of MSME to uplift the social disadvantage group and highlighted the MSME status in the era of globalization and also mentioned review for the same. Lastly she suggested that apart from governmental role it is also responsibility of MSME sector to be empowered about awareness, access and usage of government policy and programme. This proactive approach helps MSME sector to sustain in liberalization era.

V. Econometric observations on small scale industries in India.

Production of SSI in India during 1980-81-2014-15 has been increasing at the rate of 10.12% per year significantly.

Log(x₁)=6.066699+0.10126t 

             (35.307)*  (12.16)*

R²=0.817  ,F=147.94* ,DW=0.2298 ,where x₁=output of SSI sector , *=significant at 5% level.

Even the SSI production has been increasing exponentially at the rate of 0.554% per annum during 1980-81-2014-15 which is significant at 5% level. 

The estimated AR(2) process in the model of ARMA Maximum Likelihood  method of the SSI production during 1980-81-2014-15 is highly good fit and stable but its AR(1) is significant and AR(2) process in insignificant and thus the model is divergent.

X_1t=8.107859+1.168611x_1t-1-0.187227x_1t-2+0.06178σ²_t

          (5.55)*       (3.66)*       (-0.608)             (7.27)*

R²=0.95  , F=203.61*  , DW=2.01 , Inverted AR root=0.98 and 0.19 respectively.

Similarly the ARIMA(1,1,1) model of SSI production is estimated as stable, stationary and divergent because its AR(1) is significant and convergent but its MA(1) is insignificant and divergent and its root is imaginary .The estimated equation is a good fit and is given below.

X_1t=8.119189+0.9800x_1t-1+ε_t+0.1557ε_t-1+0.0621σ²_t

          (5.50)*      (7.30)*             (0.396)     (7.26)*

R²=0.95,F=202.26* , root of AR=0.98 , root of MA=-0.16

Average productivity of SSI in India during 1980-81-2014-15 has been increasing at the rate of 1.68% per year significantly

Log(x₃)=4.3707+0.016822t

                 (33.40)* (2.65)*

R²=0.1758 ,F=7.04 ,DW=0.289,*=significant

VIII. Conclusions

The paper concludes that output of SSI sector has been increasing at the rate of 10.12% per year and exponentially at the rate of 0.554% per year during 1980-81-2014-15.The series is stationary, stable and divergent as indicated by ARIMA and AR models. Average productivity, employment and export of SSI sector have been rising at the rates of 1.68%, 8.43%,and 13.34% per year respectively during the same period. One per cent increase in export led to 0.48% of GDP per year during the specified period. Production, employment, average productivity and export of SSI showed two cointegrating vectors whose vector error correction is stable,divergent and insignificant error correction process. India’s GDP, SSI sector’s output, employment, average productivity and export have two cointegrating vectors but its error correction model is stable, divergent and insignificant error correction having problem of autocorrelations. New policy recommendations of RBI and new government policy on MSME are likely to accelerate the performance of SSI and its contribution to the national economy.

References

Bala, N. (20007). Economic Reforms and Growth of Small Scale Industries, New Delhi, Deep & Deep Publications.

Bansal, S. K. (1992). Financial Problems of Small Scale Industries, New Delhi ,Anmol Publications.

Basem, M. Lozi.(2008). Small-Scale Industries in the Globalization Era: The case of Jordan, Journal of Business and Public Affairs. www.scientificjournals. org/journals2008 /articles1348.pdf

Bayiuei,Srinivasulu.(2004).The role and performance of small scale industries in Indian Economy, The IUP Journal of Managerial Economics.

Bhavani, T.A. (2002,July). Small-Scale Units in the Era of Globalisation: Problems and Prospects, Economic and Political Weekly, Special Article.

Chowdhury,Mamata.,&Saini,Anjali.(2015,Jan-June). Globalisation and Its Impact on the Performance of Small Scale Industries in India, International Journal of Trade and Commerce,4(1),160-171.

Datt, R., & Sundaram, K. P. M. (1999). Indian Economy, (39th Edn.). New Delhi ,S. Chand & Company.

Desai,Vasanta.(2007). Management of Small Scale Industry, Mumbai,Himalaya Publishing House, 564-565

Garg,C.C.(1996,October).Growth of Small Scale Industries in India-some policy issues, Working Paper-10,NIPFP

Government of India. (2010).Report on Prime Minister Task Force on Micro, Small and Medium Enterprise. Ministry of Micro, Small and Medium Enterprise, New Delhi.

Government of India.(2012-17). Report on Working Group on Micro, Small and Medium Enterprise Growth for 12th Five year Plan.

Grant ,Thornton. (2010,April). Vision 2020: Implication for MSME (Online)

Hussain, Syed Vazith.(2004,Jan).Performance of small scale industries in India and the challenges ahead, Indian Journal of Industrial Relation,39(3),391-401.

Jain,Neelam.(2004,March).Small Scale Industries in the new Millennium, SEDME, 30(1).

Jena,R.K.(2009,May).Small Scale Industries in the Path of growth and promoting exports. DGCIS.

Kumar,Nallabal Kalyan.,& Sardar, Gugloth. (2011,Jan-June). Competitive Performance of Micro, Small and Medium Enterprise in India.  Asia Pacific Journal of Social Science,8 (1).

Loksava Secretariat.(2014).Growth and performance of Medium and Small Scale Industries. New Delhi

Malapati,Venkataramanaiah.(2011,June).The Performance of Small Scale Industries in India:An Overview,ssrn.com

Mishra,Shivani.(2012,July).Small Scale Industries:Striving and Friving in the era of globalization,  International Journal of Enterprise Computing and Business Systems,2(2).

Rabindranath Tagore on Economy,Politics and Society: Contemporary Discourses

Rabindranath Tagore on Economy,Politics and Society: Contemporary Discourses
....Edited by Prof.Sebak Jana (Vidyasagar University)
Published by Dey Book Concern,kolkata,2017,Rs.600/-,HB,pp388+xxxii
The book contains 15 articles ,namely


1.Tagore's ideas on India's Rural Reconstruction:Some reflections.....Sib Ranjan Misra
2.Cooperatives as a tool for development,Rabindranath Tagore and Organisation of cooperatives in early 20th century Bengal....Dikshit Sinha
3.Rabindranath Tagore :AXiology and Nationalism...Sibaji Pratim Basu
4.Tagore and the future of an illusion.....ANUP DHAR AND ANJAN CHAKRABORTY
5.Swaraj,charkha and the dream of economic paradise:Debate between Rabindranath Tagore and Mahatma Gandhi..... .Joyjit Ghosh
6.Reflections of a creative genius:Rabindranath on hindu muslim relations in India..... Abdus Samad Gayen
7.Tagore's views on dharna artha kaarya:The concept if activating socioeconomic reforms for just living.....Udayan Narayana Singh
8.Towards an interpretation of social and political visions of Rabindranath Tagore and Sri Aurobindo.....Sanchita Karmakar and Asim K.Karmakar
9.Tagore,The Educator.....Pabitra Sarkar
10.Discipline at Santiniketan Brahmacharyaashram:Rabindranath Tagore,Education and Colonial Bengali Society...Gautam Chando Roy
11.Nobel Laureate Rabindranath Tagore..An Activist.....Debesh Bhowmik
12.Rabindranath Tagore's Thoughts on education.....Keya Banerjee
13.Tagore's Love and concern for environment.....Sebak Kumar Jana
14.Human Development ,Library and Rabindranath Tagore......Subodh Gopal Nandy
15.Tagore's Humanistic Approach to religion....Jashobanta Roy

NOBEL LAUREATE RABINDRANATH TAGORE IS AN ACTIVIST

Dr.Debesh Bhowmik (Retired Principal)

(Associated with International Institute for Development Studies,Kolkata)

Key Words-Rural development,rural industialisation,environment,cooperative movement,

JEL-B00,L60,Q10,Q50

I.Introduction

Rabindranath Tagore got Nobel Prize in literature in 1913.All know that he was a great poet. But all should know that the poet was an activist. In every sense he was an activist not only in literature but also in rural reconstruction or in integrated rural development through various activities like setting up of cooperative bank,rural industries,rural health and education,grain banks,mechanization in agriculture,expansion in marketing and cooperatives, creating clean environment,reducing poverty and hunger so forth and so on. In this context ,Tagore said himself that people’s poverty cannot be ameliorated by writing poems but it needs practical works. We must come on to do it physically and unitedly.

In this paper, we endeavour to study the Tagore’s activities in various dimensions of mode of thinking as well as implementations in social, political and economical spheres where Tagore worked ethically, morally, patiently, socially and economically to attain above mentioned goals.

II.Economic thought of Tagore

The economic thought of Rabindranath was originated from his ethics of life through humanitarism as was envisaged from colonial rule. His economic thoughts were influenced from the ideas of Raja Rammohan Ray,Bankim Chandra Chattopadhyay,Prem Chand Lal,Dada Bhai Naoroji,Gobinda Ranade,Ramesh Chandra Dutta,Horace Plunkett ,Gavrilo Kojick, Dr.H.G. Timbers,Daniel Hamilton,and Leonard K.Elmhirst.Although he was mostly indebted to his ancestors. As a poet , his thought spread over nature along with man and his value of labour , social depression, illiteracy and superstition which he observed from the society harms human development. His literary appeal to people to integrate national and western thoughts helped national movement as well as openness.

In 1920,about Rammohan Ray,he wrote, “Rammohan Roy was the first great Indian in our age who had profound faith and large vision to feel in his heart the unity of soul between the East and the West. I follow him, though he is practically neglected by his countrymen.”

In literary works, he thought in this way,

“farmers are cultivating in the fields

Weavers are weaving cloths, fishermen through nets

………………..

The man who are neighbours of peasants’ life

Acquired close relationship by dint of words and activities.

He who lives in earth nearby

I am eager to listen to the words of that poet.”

In the “Sonar Tori”, he described the economic condition of the peasants ,helmsman, temple, housewife, vividly which is as follows;

“In the golden fields farmers are cutting

Ripe paddy

Small boats are sailing

Helmsman are singing in boat

bells are ringing in far temple

Housewives going to river brinks

Housemen walking on rural paths

Coming towards village hats.”

How Rabindranath thinks for peasants was described by Dr.Karunamay Mukhopadhyay-the Head of Economics Department as,

“No single aspect of the peasant’s life the poet would ignore; his budget, his happiness, health, education,  culture, mode of living, his attitude, even his sense of beauty and joy,-the joy of creation, as the poet would call it.”(Mukherjee,1962)

He was an admirer of “Drain theory “ of Naroji, and Ramesh Dutta’s “Economic History of India”. He was also loved the rural development and urbanization theory of Ranade because Rabindranath thought complete economic development of rural India where he read “Bangadesher Krishak” of Bankim Chandra.

Rabindranath believed that the poverty of the rural peasants can be eliminated by dint of increasing income and equal redistribution of income.  He read the book “Reconstruction and Education in Rural India” of Premchand Lal and commented as follows;

“Most of us who try to deal the poverty problem think of nothing but a greater intensive effort of production, forgetting that this only means a greater exhaustion of materials as well as of humanity. This only means giving exaggerated opportunity for profit to a few, at the cost of the many. It is food which nourishes, not money .It is fullness of life which makes one happy, not fullness of purse. Multiplying materials intensifies the inequality between those who have and those who have not, and this deals a fatal wound to the social system, through which the whole body is eventually bled to death.”

III. Activity in Agricultural economics

Rabindranath always felt that Indian economy is based on rural economics. Development of rural economics implies the development of India.He believed that colonial rule destroyed the rural economy through exploitation. He was observed the deprivation ,exploitation by landlord, superstition, illiteracy and debt trap of poor peasants of India as well as of Bengal. He wanted to reform tenancy system of peasants,to feed the farmers from debt trap, to turn them into self reliance especially in education, health, crop cultivation and culture. He said , “We have to take village law and order in our hands. We have to teach, to preserve, to save the sons of the peasants, and will make the development of the agriculture by ourselves. “In the tenancy system, Rabindranath thought in other ways. He believed that if the peasants are allowed to transfer the ownership of lands which would ultimately move to the money lenders via loans and thus their sorrows will not end. On the other hand, he wanted the farmers to be self reliance. Therefore, he said that the actual ownership of land is of farmers not landlords. Without implementing cooperative farming in cultivation, the agricultural development is not possible. Primitive method of cultivation should be abandoned replacing new technology in agriculture. As a landlord , he said, “I feel pity to see the poor tenants who are helpless and innocent as children of god. They have no alternative if I do not give them anything by myself.”(Tagore,1975).He did not accept socialist system of land ownership and distribution of wealth ,yet as an activist he was forced to say, “When I am unable to understand to anybody that our self relied sector is agriculture. So in rural areas, some work programme should be started immediately and now,I put my pen into the ear and I must to say that I myself enter into this exercise  now”. (Tagore,1947)

His drives are as follows.

1] In 1905,he set up “Patisar Agricultural Bank” to relief the farmers from the aggravation from money lenders. At 12% interest rate lending facilities were given from which many farmers were freed from debt from money lenders ,some of which stop their businesses. Later he deposited his Nobel Prize money. It lasts 22 years. Rabindranath himself collected money from the performance of dance drama, songs, in every corner of India for saving this bank. Ultimately, it turns into Viswa-Bharati Central Cooperative Bank in 1927 with the initiative of Rabindranath Tagore.

2] Rabindranath Tagore felt that without technological improvement Indian agriculture would not be improved. He thought that in order to resuscitate rural life, agriculture,which is the basic economic resources of the people must be improved.He ,therefore,desired that Santosh and he must go abroad to get technical training in agriculture and animal husbandry so that after our return we could help him. Rathindranath  used tractor at Patisar.He sent his son with Santosh Majumder and Nagendranath  Ganguli to America ( Illionis University) to learn agricultural degree. In 1909 Rabindranath with his son Rathindranath set up agricultural farm near Silaidaha in a vested land where he used modern equipments like tractor, thresher, seed, etc .Even they set up an agricultural laboratory where soil tests were done. There they tried to use crop rotation system of farming in the cash crops .And they tried to prepare manure by earthing hilsa with calcium carbonate . There the farmers tried to learn ploughing of cash crops like tamato, patato, sugarcane, Maize etc. They used 80 bighas of land for using new technology and farming in Silaidaha. Even before establishing agricultural farm ,Rabindranath himself experimented ploughing of Madras rice, American maize during 1899.He wrote to Jagadish Bose, “The prospect of my farming is well. I brought seeds of American maize whose saplings are growing speedily.I cropped Madras seeds of rice that will not frustrate me”.Once D.L.Roy came there and advised Rabindranath to cultivate patato. He sent the seeds of potatoes to Rabindranath and the poet usually planted them. Although the Silaidaha farm faced a huge loss in patato but they did not let loose of farming it. Even the poet encouraged the farmers to cultivate grape,date-palm,cabbage,and banana etc . Rathindranath (1908),wrote, “ Please encourage them to grow in their homestead land, on the boundaries of the fields and wherever possible pineapples, banana, date palm other fruit trees. Good and strong fibers can be obtained from the leaves of pineapple. The fruit is also easily marketable. Tapioca can be grown as hedges and tenants should be taught how to extract food materials from its roots. It would be profitable if they could be inducted to cultivate potatoes. Try again to sow the seeds of the American maize which have been kept in the office”.

3] In 1922,Rabindranath set up Sriniketan where he established “Surul farm” which is christened as Department of Agriculture,Santiniketan,later on.In Surul farm, livestock farming was introduced. Agricultural research was done here, he himself experimented to produce Chinese nuts, rice and chilly. Leonard K.Elmhurst-who was an agricultural economist and was the President of International Conference of Agricultural Economics and British Society of Agricultural Economics and British Royal Society of Forestry and was the founder of Indian Society of Agricultural Economics-advised Rabindranath to improve the fertility of the soil by using manures like potassium, nitrogen, iron, calcium, sulphur, phosphorous, and magnesium etc.Premchand Lal wrote, “Special emphasis is laid upon the selection of seeds, rotation of crops, green manuring, preservation of manure –,and the use of improved implements which are quite within the reach of the peasants.”(Lal,1932). He visited “Krishi Bhawan” of Russia where farmers are trained in farming with technical training how to increase agricultural productivity through modern technology and he was influenced by those Krishi Bhawans which were set up consisting of some villages throughout the country. He implemented those training processes in Sriniketan where variety of cash crops like tamato,patatoe,sugarcane,bit,carrot,cotton plant, pulses, cauliflower, sayabin,maize,pine apple,banana,guava,papaw, were cultivated and even some spices were produced experimentally. In 1922 ,jute,and millet were cultivated in the farm of Sriniketan. Through crop rotation ,protection of soil erosion and dryness of the soil were maintained.

4]  In 1928, Fishery education and training was introduced in Ballavpur and Sukhsayar where a south Indian expert started with bee keeping to bring out honey.In 1933,dairy farm and goatery which were preceded by poultry ,started in 1924 in Sriniketan. All these novelty of actions in agricultural development spread over the nearest villages and even in Birbhum and other districts.

5] To aim at expansion of agricultural marketing of agri-outputs, he introduced village fairs. In 1905 at Shilaidaha, the name of fair was “Katyani Mela” where songs of baul, kirtan,tarja, panchali were arranged along with selling of agri-products and handicrafts. In 1907,he also introduced “Rajrajeswari Mela” where Jagadindranath Roy of Maharaja of Natore and Achariya Jagdish Chandra Basu were present.

6]Rabindranath had strong vision in the sense that he introduced the “Grain Bank” to meet up emergency food crisis in times famine and other natural disasters so that poor farmers can take grains in terms of loan by which they can maintain livelihood and concentrate in other activities in agriculture. Now ,it is transformed into FCI by which public distribution system is maintained.

7] He was the pioneer of thinking and implementing to keep rural statistics that can cover population,education,health,gender dimensions,shelter,agricultural statistics including production of various crops and agri-business etc, during various time periods.(Tagore,1962).On the recommendation of Tagore,Bhupesh Ray-the officer of Shilaidaha started to collect data on socio-economic surveys with help of  the youths. This activities of Tagore was taken from Russian agricultural statistics collection methods.Kalimohan Ghosh had collected agricultural statistics at Shantiniketan by that method.He published book on statistics of Ballavpur in 1926 and book on statistics of Roypur in 1933.(Chatterjee,1934). “The survey of two villages has been completed by Babu Kalimohan Ghosh,superintendent of the Institute  and the information has been published in the two booklets. They are full of interesting information and well worth a perusal.”-said  Sukumar Chattopadhyay. Later on ,national level surveys were conducted in 1934 and 1939 respectively by Dr.Hasim Amir Ali  on “Three villages economic studies on rice” and by Dr.Sudhir Chandra Sen on “Economics of paddy cultivation,irrigation problems of West Bengal, rural marketing in Bolpur Bazar” which were assets of statistics on rural economy of Shantiniketan that helped in future studies on pre-colonial agriculture.

8] Rabindranath synthesized literary  appeal and culture with rural agriculture through natural expression that can affect villagers and farmers intensively so that cultivation along with their live style might be synchronished towards national interest. In 1928 ,15 July Rabindranath introduced “Hallakarshan” ceremony where he himself involved in ploughing  which was accompanied with hymns, recitation, dance and songs. Elmhurst, Pandit Bidhusekhar Shastri, Nandala Basu were present there and helped Rabindranath in every sphere.About Hallakarshan ,he wrote, “How valuable is the agricultural education was known from Ramayan by the Aryans. Sita was glorified by the line of  Hallakarshan and Ram turns the plots of Ahalyabhumi   into cultivable. Once upon a time, this Hallakarshan joined north and south by breaking the father of forest.”

9] In 1923, a Primary School for Girls was established in Sriniketan to enhance their status in the society through education. By 1939, there were night classes for children and adults unable to attend schools. There was a mobile library-the first of its kind in Bengal [still in operation in many districts of Bengal (especially Birbhum) and different states as well]. An early form of distance education was initiated through Lok-Siksha Samsad (Peoples Education Council, 1937), a society which organized study at homes and examinations for persons who could not attend school. A special education section was added later to handle some other educational areas. The Lok-Siksha-Samsad was included under this section; so was training centre for primary school teachers, called Siksha Charcha Bhavan. In training primary teachers, the centre supplemented the government curriculum with music, agriculture, sanitation, scouting and craft-training to create a more holistic approach.

10] The Village Boys and Girls Scout (Brati Balak Organization) was initiated by the poet in 1922. The basic objectives of the programme were to develop the Second Line of Leadership among the children of the villages. The broad objectives of the programme were: (a) to develop the spirit of community services; (b) to undertake physical exercise; (c) to develop active leadership; (d) to develop an awareness of natural equilibrium and environment education.

IV. Activity in Industrialisation

Economic thoughts of Rabindranath on industrial development lie not only on rural industrial expansion but also on the development of large scale industries. First of all, he tried to start rural industries like handicrafts for which he established “Shilpa Bhawan” in 1922 where printing of cloths, book binding, batik, lac works were started with the guidance of Pratima Devi . Rathindranath added tannery in to it. In 1928, pottery,weaving,and crafts were introduced in it.In 1951,ViswaBharati renamed it into “Shilpasadan” .Rabindranath Tagore wanted to expand rural cottage industries so that rural wealth may increase but he liked to create manufacturing industries when he said, “To save the nation is to open industries but it is not started because of the interest of national and foreign monopolists and money lenders. They own our industries……”.  Even he was opposed on monopoly expansion in India. But he was not on the same opinion on Gandhian thought of industries with the Charka. For this ,he had to confront with several criticism from important personalities in India. On the other hand, he was interested to produce consumption goods for poor with the help of improved and modern technology. He sent Manindra Chandra Sen to Japan to learn use of modern technology for weaving.10 power looms and some preparatory machines were purchased from Japan from which production of clothes had been started in 1936.In 1937,11 handlooms,5 Swidil weaver machines,and 10 handlooms ran at Shriniketan where several trained youths worked there and it was spread over 36 villages.The weavers collected cottons from Shriniketan .They weaved with certain designs and qualities and marketed throughout India. For expansion of tanning, Pratima Devi brought some designs of technology from Italy. In Shriniketan,shoes,bag,suitcase,book binding were produced in the tannery industry including leather handicraft which includes leather moneybag, handbags of women, belts which had a great market outside India.

******IX. Conclusion 

Rabindranath is not only a poet of Nobel Laureate but also he was a philosopher and economic thinker in real sense because all of his economic thoughts were implemented in Shantiniketan, Shriniketan, Shilaidaha and other nearest villages .He wished that his villages would be self-reliance in every respect from which efforts for freedom could be raised from the exploited farmers against the colonial emperor during the course of national freedom movement in India. His integrated rural development approach is a continuous process of conflict between rich and poor, continuous integration between east and west, old and new, culture and education, and education and livelihood as well as continuous conflict between self reliance and independent. His views pertaining to eco-ethical human living and sustainable rural development scattered in various works throughout his life and we made an attempt to assemble them to bring out his economic vision.

 

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India’s Retail Sales of ECommerce: An Econometric Analysis

IJSRP, Volume 7, Issue 2, February 2017 Edition [ISSN 2250-3153] India’s Retail Sales of ECommerce: An Econometric Analysis       Dr.Debesh Bhowmik Abstract: The paper studied the behavior of total retail sales of ecommerce in India during 2005-2020 with the help of semilog and exponential trend model and Bai-Perron(2003) test for structural shift and Hodrick-Prescott Filter (1989) model for smooth trend and ARIMA(1,1,1) model for stationary and we relates its relationship with internet users,credit and debit card users and GDP growth rate during 2005-2015 with the help of double log multivariable regression model although Johansen cointegration test(1988) and VEC model(1996)were applied to relate growth with retail sales of ecommerce. ............... [VIEW FULL PAPER]      [DOWNLOAD]    link for download http://www.ijsrp.org/research-php-0217.php?rp=p626175         India’s Retail Sales of ECommerce: An Econometric Analysis Dr.Debesh Bhowmik (Retired Principal,Associate Editor-Arthabeekshan-Journal of Bengal Economic Association) Abstract The paper studied the behavior of total retail sales of ecommerce in India during 2005-2020 with the help of semilog and exponential trend model and Bai-Perron(2003) test for structural shift and Hodrick-Prescott Filter (1989) model for smooth trend and ARIMA(1,1,1) model for stationary and we relates its relationship with internet users,credit and debit card users and GDP growth rate during 2005-2015 with the help of double log multivariable regression model although  Johansen cointegration test(1988) and VEC model(1996)were applied to relate growth with retail sales of ecommerce. The paper found out those retail sales of ecommerce in India during 2005-2020 has been increasing at the rate 41.93% per year which is significant and it is exponentially increases at the rate of 0.728% per year which is more acceptable and significant whose residual test confirmed that exponential series has heteroscedasticity , autocorrelation ,partial autocorrelation  and serial correlation problems. The retail sales of ecommerce in India during 2005-2020 do not follow random walk and random walk with drift which is strengthened by variance ratio test but it consists of three upward structural breaks in 2007,2010 and in 2013.Yet it is turned into smooth trend line from cyclical path by H.P.Filter model. But its ARIMA(1,1,1) model showed the series is unstable and nonstationary. The paper also showed that one percent hike in percent of population of internet users led to 1.931% increase in retail sales in ecommerce during 2005-2015 in India which is significant at 1% level. Besides, one percent increase in debit card users and GDP growth rate led to 1.267% increase and 1.768% decrease in retail sales in ecommerce significantly but it has insignificant positive relation with credit card users. When growth is dependent variable ,then growth and debit card users are significantly positively associated but when retail sales is dependent variable then internet users and retail sales are positively associated significantly. Granger Causality test confirmed that total retail sales in ecommerce(x1) ,percent of population using internet(x2), number of credit (x3)and debit cards(x4),GDP growth rate of India (y) during 2005-2020 showed bidirectional causality except X2 does not Granger Cause X1and  x2 and x4 have no causality. Johansen cointegration test assures that GDP growth rate and retail sales in ecommerce are cointegrated in the order CI(1) in which VEC model is unstable, diverging  and error correction is speedy and significant in the equation Δyt. The paper states that Ecommerce in India grew so fast that it ranks second preceded by China and it may constitute 4% of GDP within 2020 where India needs improved infrastructure,control fraud e payment and  e security, develop e-Customs and e-taxation,minimize regulatory gap,and many others policies recommended by several institutions. Key words- retail sales of ecommerce, internet users, credit and debit card users, GDP growth rate, structural break, Granger-Causality, cointegration , VECM JEL-C32,M21,M31,M48 I.Introduction E-commerce ─ broadly defined as the use of the Internet as a platform for sales, sourcing, and exchange of market information ─ is playing an important role in supporting global economic growth. Latest market research data predicts that the share of e-commerce of total sales will reach 12.4% in 2019.  Industry surveys suggest that e-commerce industry is expected to contribute around 4 percent to the GDP by 2020. In comparison, according to a NASSCOM report, by 2020, the IT-BPO industry is expected to account for 10% of India’s GDP, while the share of telecommunication services in India’s GDP is expected to increase to 15 percent by 2015. With enabling support, the e-commerce industry too can contribute much more to the GDP.  Around 90% of the global e-commerce transactions are stated to be in the nature of B2B, leaving meagre 10% as B2C e-commerce. Case of India is no different where most of such transactions are in the nature of B2B. Moreover Indian e-commerce industry is characterized by “Market Place” model. McKinsey Global Institute estimated that the Internet contributes an average 3.4 percent in developed countries and 1.9 percent of GDP in aspiring countries. In some aspiring countries, such as Taiwan and Malaysia, the Internet contributes to GDP at levels similar to those in developed countries. This is due to their strong net exports of ICT goods and services. In line with other aspiring countries, the Internet’s contribution to India’s GDP — what we call its iGDP — is moderate today, at 1.6 percent, or $30 billion in GDP. At 1.6 percent of GDP, India’s iGDP is comparable in size to key service sectors, such as hotels and restaurants, and utilities.India’s share of Internet-linked GDP at about 3.2 percent.Even in 2015, when aggregate Internet penetration is projected to reach 28 percent, the penetration of India’s rural population is likely to remain at a low 9 percent, compared with urban penetration of 64 percent. India’s likely Internet penetration of 28 percent in 2015 will be far less than the projected global average of 43 percent. To achieve a penetration of nearly 40 percent by 2015, which would be similar to China’s Internet penetration at that date, India would need to have notched up more than 500 million Internet users. Institute’s projections indicate that by 2015 India is likely to have a base of more than 100 million Internet-enabled smart devices and more than 150 million consumers with low cost, high speed Internet access. By 2015, India’s 330 million to 370 million projected Internet users will constitute an estimated 12 to 13 percent of the global Internet user base, the second-largest national group of Internet users worldwide behind only China. If India puts itself on an accelerated trajectory towards higher penetration to reach 500 million Internet users by 2015, the iGDP could be as high as 3.3 percent. Global Retail Development Index-2016 showed that China ranks one in this index followed by India. China scored 72.5 where as India scored 71.0.Chinese national retail sale stood 3.46 billion US dollar followed by 1009 billion US dollar of India. A.T. Kearney’s 2016 FDI Confidence Index ranks China second-a signal of its continued attractions to foreign investors.GDP growth improved case of doing business and better clarity regarding FDI regulations puts India in second place. India is now the world’s fastest growing major economy overtaking China. Retail demand is increasing driven by urbanization, an expanding middle class and more women entering the workforce. India’s strong ranking reflects foreign retailer increased optimum in the 1 trillion US Dollar retail market and its vast potential. In ecommerce, government now permits 100% FDI for on line market places, with some caveats to create a level playing field. In this paper, we endeavour to show the behavior of total retail sales of ecommerce during 2005-2020 and its nexus with internet users,credit and debit card users and GDP growth rate of India during 2005-2015 ....................   The paper concludes that retail sales of ecommerce in India during 2005-2020 has been increasing at the rate 41.93% per year which is significant and it is exponentially increases at the rate of 0.728% per year which is more acceptable and significant whose residual test confirmed that exponential series has heteroscedasticity ,autocorrelation ,partial autocorrelation  and serial correlation problems. The retail sales of ecommerce in India during 2005-2020 do not follow random walk and random walk with drift which is strengthened by variance ratio test but it consists of three upward structural breaks in 2007,2010 and 2013.Yet it is turned into smooth trend line from cyclical path by H.P.Filter model. But its ARIMA(1,1,1) model showed the series is unstable and nonstationary. The paper also concludes that one percent hike in percent of population in internet users led to 1.931% increase in retail sales in ecommerce during 2005-2015 in India which is significant at 1% level. Besides, one percent increase in debit card users and GDP growth rate led to 1.267% increase and 1.768% decrease in retail sales in ecommerce significantly but it has insignificant positive relation with credit card users. When growth is dependent variable ,then growth and debit card users are significantly positively associated but when retail sales is dependent variable then internet users and retail sales are positively associated significantly. Granger Causality test confirmed that total retail sales in ecommerce(x1) ,percent of population using internet(x2), number of credit (x3)and debit cards(x4),GDP growth rate of India (y) during 2005-2020 showed bidirectional causality except X2 does not Granger Cause X1and  x2 and x4 have no causality. Johansen cointegration test assures that GDP growth rate and retail sales in ecommerce are cointegrated in the order CI(1) in which VEC model is unstable, diverging  and error correction is speedy and significant in the equation Δyt. The paper states that Ecommerce in India grew so fast that it ranks second preceded by China and it may constitute 4% of GDP within 2020 where India needs improved infrastructure, control fraud e payment and  e security, develop e-customs and e-taxation, minimize regulatory gap, and many others policies recommended by several institutions.    References APEC Business Advisory Council,2015, Driving Economic Growth Through Cross-Border E-Commerce in APEC: Empowering MSMEs and Eliminating Barriers, University of Southern California, Marshall School of Business, November Bai,Jushan and Pierre Perron.,2003,Critical values for multiple structural change tests, Econometrics Journal,Volume-6,72-78 Elseoud, Mohamed Sayed.,2014, Electronic Commerce And Economic Growth In Saudi Arabia, International Journal of Economics, Commerce and Management ,United Kingdom Vol. II, Issue 5, Enders,Walter.,2011,Applied Econometric Time Series. Wiley Student Edition. Global Express Association,2016, Cross-border E-commerce – Engine for Growth Suggestions for Enabling Growth, Position paper, January. read from www.ijsrp.org

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