Jammu and Kashmir (J&K) and Himachal Pradesh (HP) are the two northern states of the Indian union. The two neighbouring states are mountainous and backward as compared to the rest of the country. Of the two, J&K has more natural resources and population. On the contrary, HP, over time, has demonstrated higher outcomes in terms of basic indicators, gross state domestic product (GSDP) and economic growth. This article examines these two economies and attempts to compare them on the basis of their respective efficiencies in industrial production. Although data on GSDP show that HP has grown over time and has surpassed that of J&K in 2017–2018, technical efficiencies of the two regions, as drawn from Annual Survey of Industries (2017), are low and converging. Stochastic frontier results demonstrate that industrialisation in both regions is labour-intensive. Tobit regression results point to low contribution of inputs towards technical efficiency. Also, minimal use of communication and technology, low profits and weak policies contribute negatively in the direction of the technical efficiency of the firms in the two regions. The results specifically imply that in the region of J&K, government support and interventions are needed to address both endogenous and exogenous factors contributing to firms’ inefficiencies.
The analysis of gender in conflict and fragile situations is an emerging area of research. Little to no attention has been paid to it up until very recently. There is scant scholarly work available that directly addresses this issue, and there is no research on the relationship between gender and low intensity conflict in Kashmir. It is in this light that the current research note has been written. It traces the broad impact that conflict has had on the lives of women living in the Kashmir region, the conflict centric part of Jammu and Kashmir. Through this research note it is established that the women in Kashmir have been exposed to the shock of unpredicted fragility, and the study is further endorsed by some instantial ethnographic case studies. These shocks have impacted them economically, psychologically and socially. Generations of women have been suffering from the negative impact of the conflict. Alhough disastrous for the most part, women have gradually developed some resilience. With time more and more Kashmiri women have been striving towards gaining economic independence by learning skills, by the acquisition of education and by being gainfully employed.
The process of research and development (R&D) is characterised by improvisation, improvement and innovation based on information, knowledge and experimentation. It is the key to modern industrial development. Theoretically, firms are supposed to invest in R&D in order to enhance their existing offering and stay in business, given the competitive globalised market. The Indian economy is characterised as one of the growing global economies. Industrialisation process in India is dominated by the micro, small and medium enterprises (MSMEs). A low level of operation keeps these firms on a small budget, thus making the sector non-conducive in conducting firm-specific R&D. The current article is an empirical elucidation of the MSMEs’ industrialisation process in light of industry-specific R&D. The study is based on the Annual Survey of Industries data, analysing the national-level industrialisation process for 3 years from 2016 through 2018. The article finds that the overall MSME sector-specific R&D atmosphere in the country is not satisfactory. There is no correlation and symmetry between the level of industrialisation across states, average output and the R&D process. The findings of the article recommend a change in the industrial policy with a focus on the growth and development of industry-specific R&D.
Around 60.6% of health expenditure in India originates from private spending or out-of-pocket expenditure. Such large health spending has a tendency to sink sizeable number of people into poverty and deepen the already poor into more appalling conditions. This article makes an attempt to study the impact of health expenditure on poverty levels in the Jammu and Kashmir (J&K) region of India using micro-level data (68th round of National Sample Survey Organisation [NSSO]). First, a region-wise poverty profile is estimated, then, poverty deepening and incidence of catastrophic health expenditure is measured. Finally, socio-economic determinants of catastrophic health expenditure are estimated using logit and probit models. The results show that the poverty levels further increase by around 2% (estimated 185,000 individuals) on account of out-of-pocket health expenditure. Also, poverty gap increases, deepening the economic distress of the poor people. The highest gap is observed in most vulnerable areas, such as hilly and geographically disadvantageous regions. An estimated 9.6% of population in J&K spends catastrophic out-of-pocket health expenditure and 2.6% spend more than their capacity to pay. Married, higher per capita expenditure groups, and socially weaker sections exhibit increased probability of experiencing health catastrophe while as higher levels of education decreases this likelihood.
The standard method of poverty estimation uses unadjusted per capita income or expenditure to calculate population below the poverty line. However, recent empirical advancements have validated this method to be essentially flawed in nature. It does not take into consideration nor allows for household composition and economies of scale. Empirical investigations have confirmed the facts that the measures of poverty and inequality are sensitive to various choices of equivalence scales. Therefore, standard measures provide mostly overestimated poverty and inequality estimates. Further, poverty measurement across groups or overtime is sensitive to different poverty lines and measures. Any alteration in these can reverse the ranking. The current research attempts to test adult equivalence and scale economies in Jammu and Kashmir region to validate whether poverty estimates are sensitive to these scales or not. It also employs stochastic dominance technique to check whether poverty reduction is robust through time over a wide range of poverty lines and measures. The paper does so by employing three waves of monthly consumption expenditure rounds conducted by National Sample Survey Organization. For sensitivity analysis, the paper estimates FGT, Gini and Atkinson indices. Despite being industrially backward and politically fragile, J&K has shown better economic indicators than most other Indian states. The findings of the current study validate lower poverty in the region and at the same time discover a growth in inequality over time. While a mixed result is derived for adult equivalence, the economies of scale highlight the fact that standard measures are overstated and welfare rank reversal ensues when household size and gender of household is tested for. Further, stochastic dominance results show that poverty reduction is only robust during 61st and 66th round, and not during 66th and 68th rounds.
The micro, small and medium enterprises (MSMEs) are the backbone of the community development in the developing world. In the fragile and backward regions, it is the micro enterprise that is considered to be the engine of growth and development. Being labour-intensive and requiring lesser capital input, the micro unit start-ups demand lesser investment in plant and machinery, attracting more and more potential entrepreneurs. Over the time, such units gain experience and knowledge becoming more efficient. This article studies the firms located in the fragile and geographically remote region of Jammu and Kashmir. The article uses a panel of 15 years from 2002 to 2016 based on the Annual Survey of Industries data. Using the Stochastic Frontier Analysis, the article studies the MSMEs and the micro units. From the post-estimation, technical efficiency scores are attained for both MSMEs and the micro units. The results reveal that the micro units are more efficient than the MSMEs in general. Tobit regression is used to estimate the technical inefficiency model to determine the factors that contribute to the inefficiency present in the micro units. The results show that there is a negative relationship between the efficiency of the micro unit firms and the asset-liability ratio and the loan-liability ratio, while there is a positive relationship between the private ownership of the firm and the efficiency level. Age of the firm is considered separately to validate the ‘learning theory’ by Jovanovic. The article concludes by suggesting that the government must provide adequate boost and a big-push to the micro units in order to eradicate the widespread unemployment and fragility in the region. JEL Classification: F61, L25
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