Indian Economy and Neoliberal Globalization: Finance, Trade, Industry and Employment

407 Pages·2022·5.496 MB·English

by  Murali Kallummal (editor), Santosh Kumar (editor), P L Beena (editor)

Indian Economy and Neoliberal
Globalization
This book assesses the effects of globalization and neoliberal economic
regimes in low- and middle-income countries, primarily on industries,
investment and trade; finance and credit; and employment, gender and
development.
The volume – written to honour the rich academic work of the eminent
economist Professor C. P. Chandrasekhar – addresses issues which are
relevant to emerging economies and their concerns around development,
investment, financial planning and adopting new technologies. It analyses
the new financial systems and institutions and the dominance of global
finance in policymaking in these countries and their effects in the post-
pandemic period. It examines the changing contours of finance, trade and
labour models and laws in developing countries to assess the risks and
concerns of economic crises and challenges. The volume does justice to
an assessment of the macroeconomic and developmental implications of
neoliberal policies in India while offering an insightful overview of the new
economic practices and policies. It also offers suggestions and measures to
address concerns regarding banking and global liquidity, reinforce robust
strategies for growth in both small and large industries and bring in reform.
This book will be of interest to scholars and students of economics,
political economy, finance and trade, development studies and South Asian
studies.
P L Beena is Associate Professor at the Centre for Development Studies,
Thiruvananthapuram, Kerala, India.
Murali Kallummal is Professor at the Centre for WTO Studies, Indian
Institute of Foreign Trade, New Delhi, India.
Santosh Kumar is Associate Professor of Economics in Department of
Commerce, Shri Ram College of Commerce, University of Delhi, India.

Indian Economy and
Neoliberal Globalization
Finance, Trade, Industry and
Employment
Essays in the honor of C P Chandrasekhar
Edited by P L Beena, Murali Kallummal
and Santosh Kumar
First published 2023
by Routledge
4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
605 Third Avenue, New York, NY 10158
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2023 selection and editorial matter, P L Beena, Murali Kallummal and
Santosh Kumar; individual chapters, the contributors
The right of P L Beena, Murali Kallummal and Santosh Kumar to be
identified as the authors of the editorial material, and of the authors for their
individual chapters, has been asserted in accordance with sections 77 and 78
of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
utilised in any form or by any electronic, mechanical, or other means, now
known or hereafter invented, including photocopying and recording, or in
any information storage or retrieval system, without permission in writing
from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and explanation
without intent to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
A catalog record has been requested for this book
ISBN: 978-1-032-34713-4 (hbk)
ISBN: 978-1-032-38216-6 (pbk)
ISBN: 978-1-003-34399-8 (ebk)
DOI: 10.4324/9781003343998
Typeset in Sabon
by Deanta Global Publishing Services, Chennai, India
Contents
List of Figures vii
List of Tables xi
List of Contributors xv
Foreword xvii
1 Introduction 1
P L BEENA, MURALI KALLUMMAL AND SANTOSH KUMAR
2 Is Global Economy Heading towards a Sovereign Debt Crisis? 20
ABHIJIT MUKHOPADHYAY
3 Global Liquidity and Emerging Market Economies 40
S. KRISHNAKUMAR
4 Our Preoccupation with Speculation and its Consequences for
Commodity Derivatives Markets in India 58
ROSE MARY K ABRAHAM
5 Rural Credit and Growth in Indian Agriculture 88
AKANKSHA PRATIK SONKER
6 Decline of DFIs in India during Post-Financial Liberalisation 129
SANTOSH KUMAR
7 Impact of India’s Bilateral Investment Treaties on FDI
Quality: A Firm-Level Analysis 158
AMRITA GOLDAR
vi Contents
8 India’s Tariff Jumping FDI: A Case of Overseas Investment
Flows under ASEAN-India FTA 175
MURALI KALLUMMAL AND SOMDUTTA BANERJEE
9 Mergers and Acquisitions and Antitrust Implications:
Evidence from the High-Tech Manufacturing Sector 206
P L BEENA AND SMRUTI RANJAN SAHOO
10 Industrialisation and Role of MSMEs in India: With a special
Reference to Punjab 232
JATINDER SINGH
11 Bridging the Gap: A Critical Assessment of the Digital Divide
in India 251
GAUTAM KUMAR JHA
12 Liberalisation of Petroleum Product Prices in India:
Expectation and Reality 287
ANIMESH KUMAR
13 An Enquiry into India’s Labour Market Flexibility: Learning
from the Literature 310
DEVANGANA JHA
14 Female Employment in the Retail Trade Sector in India 324
BINDU OBEROI
15 Women’s Workforce Participation and Spousal Violence:
Insights from India 346
ARPITA BISWAS AND ANJANA THAMPI
Index 373
Figures
2.1 Trends in general government gross debt, 2016–26 22
2.2 Trends in average term to maturity and debt to average
maturity (2021) 23
2.3 Trends in debt ratios of low-income countries 26
2.4 Trends in debt ratios of middle-income countries 27
2.5 Trends in debt ratios of East Asia and Pacific, excluding
high-income countries 28
2.6 Trends in debt ratios of South Asia, excluding high-
income countries 29
2.7 Trends in debt ratios of Europe and Central Asia,
excluding high-income countries 31
2.8 Trends in debt ratios of Middle East and North Africa,
excluding high-income countries 32
2.9 Trends in debt ratios of Sub-Saharan Africa, excluding
high-income countries 33
2.10 Trends in debt ratios of Latin America and Caribbean,
excluding high-income countries 34
3.1 Cross-border claims of banks 43
3.2 US dollar credit to non-financial sector outside
the United States 45
3.3 US dollar credit to non-financial corporations outside the
United States 46
3.4 Cross-border credit in $ trillions (loans and debt
securities to different developing country regions: 2000–20) 47
3.5 Total reserves (excluding gold) in $ billion 52
3.6 Foreign exchange reserves of India as a share
of the external debt 52
3.7 Private Equity Investment Flows ($ billion) to India with
the number of deals 53
viii Figures
4.1 Price movements with and without futures markets 59
4.2 Movement of chana spot prices before and after the ban 66
4.3 Turnover over the years in commodities which were
suspended for trading 68
4.4 Category-wise share of commodity derivatives over
the years 69
4.5 Exchange-wise share in commodity derivative turnover 70
4.6 Percentage of open interest to turnover at NCDEX
and MCX 72
4.7 Speculative Interest in exchange traded segment across
the globe 72
5.1 Population per Branch of Scheduled Commercial Banks 91
5.2 Credit per Capita 94
5.3 Sectoral Distribution of Bank Credit of Scheduled
Commercial Banks 96
5.4 Growth in Credit by Commercial Banks in
Principal Sectors 97
5.5 Targets and Achievements of Agricultural Credit 100
5.6 Credit Intensity of Agriculture 101
5.7 Credit to GDP Ratio 101
5.8 Composition of Commercial Banks’ Advances
to Agriculture 104
5.9 Composition of Credit According to Loan Size 107
5.10 Composition of Direct Institutional Credit for Agriculture 108
5.11 Annual Growth of Agricultural Credit and
Agricultural GDP 116
5(A) Lending to Sensitive Sectors by Commercial Banks 125
6.1 Financial assistance sanctioned and disbursed by
development banks (Rs. million) 137
6.2 Sector-wise share in cumulative financial assistance
sanctioned by development banks up to 1991–92 (%) 138
6.3 Financial assistance sanctioned and disbursed by DFIs 140
6.4 Assets of DFIs as percentage of commercial banks’ assets 141
6.5 Difference of state-wise share in cumulative assistance
sanctioned between pre- and post-financial liberalisation
periods 143
6.6 HHI for state-wise share in financial assistance sanctioned 144
6.7 RBI’s financial assistance to DFIs as percentage of RBI’s
total assets 147
6.8 Domestic financial resources for Indian industries 148
6.9 Long-term liabilities and assets of SCBs as percentage of
their total liabilities and assets 149
Figures ix
6.10 Size-wise distribution of resource mobilisation 150
6.11 Region-wise average share of distribution of resource
mobilisation (equity issues) for 2010–20 151
6.12 Foreign financial resources for Indian corporate sector 152
6.13 Share of foreign financial resources as percentage of total
financial flows to commercial sector 152
8.1 Total Notification of RTAs/FTAs: 1948 to 2021 176
8.2 ASEAN–India FTA’s Inflows and Outflows of FDI: 2000
to 2019 (USD bn.) 179
8.3 Decadal FDI Investment Flows of AIFTA Share to Global
Flows: 1970 to 2019 180
8.4 The Growth Rate of FDI Flows of AIFTA Partners 1997
to 2019 180
8.5 India and ASEAN Goods Trade 1988 to 2020 (USD bn.) 184
8.6 OFDI Flows of India 185
9.1 Value and distribution of M&As in terms of ownership 207
10.1 Growth rate of MSME and overall industrial sector
production 241
11.1 Fixed Telephone Subscription (per 100 People) Across
Income Groups 257
11.2 Fixed Broadband Subscriptions (per 100 People) Across
Income Groups 257
11.3 Individuals Using the Internet (% of population) Across
Income Groups 258
11.4 Mobile Cellular Subscriptions (per 100 People) Across
Income Groups 258
11.5 Fixed Telephone Subscription (per 100 People) Across
South Asia 259
11.6 Fixed Broadband Subscriptions (per 100 People) Across
South Asia 259
11.7 Individuals Using the Internet (% of Population) Across
South Asia 260
11.8 Mobile Cellular Subscriptions (per 100 People) Across
South Asia 260
11.9 Teledensity in India: 1996-2021 (%) 264
11.10 Rural-Urban Teledensity Gap 1996-2021 (%) 264
11.11 Share of Wireless Subscribers (%) 269
11.12 Share of Wireline Subscribers (%) 269
11.13 Service Area Wise Rural-Urban Gap in Internet
Subscribers 271
11.14 Households With Computer and Internet Facilities 272