Climate change constitutes a significant threat to agricultural productivity, particularly in India, where nearly half of the population relies on agriculture for their livelihoods. The sector is increasingly exposed to rising temperatures, irregular precipitation patterns and the intensification of extreme climatic events. While previous studies have identified climate-induced yield reductions in staple crops, much of the existing evidence is based on short-term analyses and lacks a comprehensive evaluation across diverse crop groups. This study addresses this limitation by employing a panel dataset covering 20 crops across 20 Indian states from 1966 to 2016 to assess both historical impacts and projected outcomes under shared Socioeconomic Pathways (SSP) climate scenarios. The analysis employs crop-specific, non-linear panel regression models that incorporate key climatic variables, including temperature, precipitation, wind speed and evapotranspiration, alongside critical non-climatic factors such as mechanisation, irrigation and fertiliser application. The findings indicate that crops like rice and wheat are most adversely affected by rising temperature, whereas crops like pearl millet and cotton exhibit greater resilience, though cotton remains highly sensitive to precipitation variability. Pigeon pea and sesamum benefit from increased evapotranspiration up to a threshold, beyond which yields decline. By the end of the twenty-first century, the combined effects of rising temperature and precipitation are projected to substantially reduce the yields of pigeon pea and maize. The adoption of High-Yielding Varieties (HYVs) demonstrates notable productivity gains, especially for pearl millet and rice. These findings underscore the urgent need for targeted adaptation strategies, including climate-resilient crop varieties, water-saving technologies and diversified cropping systems to enhance agricultural resilience.
This research explores the firm-level drivers of cross-border Mergers and Acquisitions (M&A) within the BRICS nations, focusing on characteristics such as size, profitability, leverage and operational efficiency. Using a unique dataset of 157 firms from 2004 to 2023 and employing binary logistic regression analysis, the study finds that market capitalisation and return on assets significantly increase the likelihood of M&A activity, while higher tax rates act as a deterrent. Leverage also shows a positive association, indicating that firms strategically use debt to finance international expansion. By highlighting the critical role of financial health and tax efficiency in shaping Outward Foreign Direct Investment (OFDI), the study provides actionable insights for corporate leaders and policymakers. Unlike prior research that primarily examined macroeconomic or country-level factors, this paper advances understanding on cross-border M&A by focusing on the firm-specific determinants of M&A in emerging economies.JEL Codes: G34, G32, F21, O16
Geopolitical threats have long been a cause of concern for the global energy market. The increase in oil prices and related economic impacts have caused wariness on the part of stockholders due to the unpredictability of impacts. It is against this background that the current paper examines symmetric spillovers of oil to 12 Asia-Pacific stocks through M-GARCH and wavelet coherence analysis. It attempts to unveil the short-term and long-term behaviour and shifts in developed markets versus emerging markets. DCC-GARCH estimates the time-varying correlations of bivariate data, while GO-GARCH estimates the fine covariance structure using 13-variate data. Comparison between the methodologies produces a more detailed description of volatility interdependencies. Based on a horizon of 3,898 observations over a longer time, the analysis is enriched by detecting time-frequency interactions in wavelet coherence, facilitating an understanding of different time frames. The findings on Australian, Singaporean, Thai and Vietnamese spillovers provide trading participants and policymakers with additional evidence and information to manage risk in the context of market volatility across global markets.JEL Codes: C58, F30, G11, G15
The paper aims to analyse income inequality among agricultural households in Gujarat. As a first step, the study investigates the degree to which agricultural households rely on farming as a source of livelihood. Evidence shows that agriculture constitutes a significant component of household income in the state, contributing nearly 61 per cent of the total income earned by agricultural households. However, a closer look at monthly farm earnings presents a concerning picture. Almost one-third of agricultural households receive less than Indian Rupee2,000 per month from farming alone. In addition, the distribution of farm income is highly uneven, with the top 10 per cent of agricultural households accounting for nearly half of the total farm income. Even when income from all possible sources is considered, about 11 per cent of agricultural households continue to earn less than Indian Rupee2,000 per month. A decomposition of inequality by income source further indicates that farm income contributes significantly to overall income disparities, whereas wage income tends to reduce inequality. Households with a relatively smaller share of income from farming depend largely on wages and salaries for their livelihood, while earnings from non-farm businesses remain relatively modest. These findings clearly indicate that improving farm income in isolation cannot enhance overall household welfare unless accompanied by the creation of adequate and stable wage employment opportunities in rural areas. Taken together, the results point to the need for an integrated rural policy framework that combines agricultural reform with employment generation and social security to ensure more equitable and sustainable livelihoods.JEL Codes: D31, Q12, O15
This study investigates the financial soundness of commercial banks in India during the period 2005-2024, which was marked by extreme economic turmoil owing to Black Swan events, such as the Global Financial Crisis of 2008, demonetisation in 2016, and the worldwide lockdown due to the COVID-19 pandemic. Bank-specific ratio indicators and macroeconomic variables have been used in the paper, and long-run industry effects have been captured using a dynamic two-step Generalised Method of Moments (GMM) estimation. The results point to a strong endurance in bank profitability, driven by internal balance-sheet fundamentals. Asset quality has a consistently negative impact across all ownership groups, while managerial efficiency emerges as the most positive. Public sector banks are primarily stabilised by capital and liquidity buffers, reflecting their greater reliance on regulatory safety nets. The sector's post-2008 crisis resilience is highlighted by the relative insignificance of macroeconomic factors and the impact of the demonetisation shock. COVID-19 had a neutral or positive effect, mainly due to the extensive support measures implemented by the Reserve Bank of India (RBI). In contrast, the 2008 crisis had a negative impact, primarily because of the limited effectiveness of the policies in place. Robustness checks using alternative profit indicators confirm the consistency of the results. Therefore, this study provides empirical evidence for the long-term stability and financial resilience of the Indian banking system.JEL Codes: G21, E44, E52, C26
This article examines how intergovernmental transfers and borrowing autonomy influence the revenue effort of Indian states using panel data for 28 states from 2000 to 2019. Applying two-way fixed-effects specification and robustness estimations, the study tests whether fiscal transfers and expectation of bailouts lead to a compromise in fiscal behaviours in terms of revenue effort. The estimates show that market borrowing improves revenue effort by promoting fiscal discipline, while borrowing from the Centre weakens it, indicating the prevalence of soft-budget constraints. Transfers do not significantly reduce revenue effort once state-specific and time effects are controlled, suggesting that low fiscal effort is largely structural. This is again validated by the significant positive impact of revenue decentralisation, which consistently enhances revenue effort across all specifications, highlighting the role of fiscal autonomy. Disaggregated estimates for the general and special category states reveal stronger decentralisation effects for special category states and mild transfer disincentives for general states. The results highlight that the underlying factor behind the lower revenue effort of Indian states is institutional and structural, though borrowing autonomy and transfer dependency also have a limited impact. The findings stress that empowering states through greater fiscal autonomy, clearer accountability and limited reliance on bailouts is the key to improving sub-national revenue performance.JEL Codes: H2, H21, H3, H7
The National Family Health Survey has consistently documented a sharp rise in overweight and obesity among Indian adults. Among women of reproductive age, the prevalence of obesity has nearly doubled in the past 15 years-from 12.6 per cent in 2005-2006 to 24.0 per cent in 2019-2021. The existing literature highlights a strong association between household economic status and the incidence of non-communicable diseases (NCDs) such as hypertension, diabetes and heart disease. However, the growing burden of overweight and obesity elevates NCD risk even among economically disadvantaged groups. Evidence from developing countries remains limited, partly because NCDs develop gradually and their links with obesity are difficult to establish using cross-sectional data. Drawing on a panel of 24,547 women aged 15-49 years, this study examines the risk of developing NCDs among overweight and obese women in India. Multivariate logistic regression models were employed to identify the correlates of NCD onset, and robustness checks were performed to assess how changes in obesity status influenced disease risk. The findings reveal that while wealthier women face a higher overall risk of developing NCDs, this risk is also shaped by the body mass index (BMI) status of women. Importantly, the rich-poor gap in NCD prevalence diminishes once women become overweight or obese. Although much of the existing literature emphasises the role of socio-economic and demographic factors in NCD development, this study suggests that their influence may be substantially offset by lifestyle and health behaviour modifications that help in maintaining a healthy BMI among reproductive-age women.JEL Codes: I12, I14, I18
As India's economy becomes more integrated with global capital markets, the foreign exchange (FX) exposure of non-financial corporations deserves closer scrutiny. This article presents the first firm-level empirical study of foreign-currency borrowing by Indian non-financial corporations, using a matched panel of 38,589 firms from 2009 to 2023. Using local projections, we estimate how changes in balance-sheet fundamentals-leverage, export intensity, profitability, asset returns and the interest coverage ratio-translate into different forms of foreign borrowing. We find that when leverage increases and export intensity rises, firms raise foreign-currency borrowing, whereas weakening profitability is associated with lower foreign borrowing; responses vary by instrument and by firm type. State-owned enterprises (SOEs) and small and medium-sized enterprises (SMEs) appear particularly vulnerable, often increasing FX exposure when fundamentals deteriorate. India ranks mid-table on corporate dollarisation but near the bottom on hedge ratios. A stress test that simulates a 20 per cent rupee depreciation shows that 12 per cent of firms have an interest coverage ratio below one, revealing hidden vulnerabilities. The findings suggest the need for granular FX exposure disclosure, calibrated hedge norms and differentiated prudential oversight. As India pursues its 2,047 growth ambitions, effective FX risk management is a core pillar of macroeconomic and financial stability.JEL Codes: F31, G15, G32, O16
This perspective is an attempt to understand the linkages between trade in value added and employment in India's formal manufacturing sector. The article uses the techniques of panel data and simple time-series regression analyses. The main contention of this study is that trade in value added positively influences employment in the manufacturing sector. This research has a potentially immense impact on India's future industrial policies, especially considering the country's strong focus on the manufacturing sector in recent years. Initiatives such as 'Make in India' and 'Production Linked Incentive' schemes highlight this emphasis. Given the imminent significance of global value chains for the country's manufacturing and economic landscape, the outcomes of this research would greatly assist stakeholders in India's manufacturing sector towards devising and executing pro-industrial policies, with a key focus on socio-economic factors, particularly employment.JEL Codes: F10, F14, F16, J39
This study empirically examines the relative effectiveness of print and digital media in promoting self-funded retirement plans as a pathway to financial inclusion in India. Using data from the NABARD All India Financial Inclusion Survey (NAFIS) 2016-2017, and applying propensity score matching to mitigate selection bias, we compare how exposure to print and digital media influences household participation in voluntary retirement schemes. The findings reveal that for every 1,000 households, approximately 4.5 households that accessed financial information through digital media subscribed to a self-funded retirement plan, compared to only 2.5 households reached through print media. Nearly 80 per cent of Indian households remain without any retirement plan, with substantial state-level disparities in subscription patterns. By clearly distinguishing between traditional and digital communication channels, this study advances understanding of how information delivery shapes financial behaviour. The findings contribute to the policy discourse on effective communication for financial inclusion, offering guidance for prioritising digital outreach in national financial literacy initiatives.JEL Codes: G53, D14, I38, O16, L82
We evaluate the earnings and conversion disadvantages that persons with disabilities face in India, which has amongst the highest numbers of persons with disabilities globally. Our study is unique in that we use two major nationally representative household surveys consisting of over 85,000 households, alongside a qualitative study to explore the nature and the magnitude of these disadvantages. We find that persons with disabilities and the households they live in experience lower earnings (earnings gap) and incur higher costs of translating those earnings into living standards (conversion gap). Because of such costs, persons with disabilities and the households to which they belong are likely to be at disproportionately higher risk of being poor. These disadvantages vary across gender, by rural-urban residence and by severity of disability and considerably exceed government contributions to the well-being of people with disabilities.JEL Codes: I15, I18, I31, J3 J7
The study offers an insightful comparative static analysis of national energy savings, emphasising the intricate interactions between trade-induced spillover effects and feedback dynamics. Developing an interregional input-output (IRIO) model, it focuses on the world's three largest carbon-emitting economies: China, the USA and India. Through a series of compelling simulation scenarios rooted in a tripartite energy-saving climate treaty, the research uncovers significant revelations. These simulations shed light on the profound impact that carbon-constraining initiatives in non-free-rider economies can have on the energy consumption of free-rider economies. Remarkably, the findings illustrate that the USA, in all simulated scenarios, achieves substantial energy savings by shifting its production activities to China and India. On the other hand, China capitalises on the energy demands transferred from India and the USA, resulting in noteworthy energy savings. India emerges as a non-free-rider economy capable of conserving energy when the USA behaves as a free rider; however, it struggles to achieve similar savings when it operates as a free rider itself. This analysis not only highlights the intricate web of energy interactions among these economies but also underscores the potential for cooperative efforts in tackling global energy challenges, ultimately paving the way for a more sustainable future.JEL Codes: C67, F64, Q43, Q48
This study extensively analyses the relationship between the inflow and outflow of foreign direct investment (FDI) and their impact on India's economic growth. Utilising secondary data spanning the period 2000 to 2024, the research employs the vector error correction model to rigorously investigate the short-term and long-term dynamics among the relevant economic variables. The findings of the analysis reveal a complex and multifaceted interplay between FDI flows, trade openness, exchange rates, market size, infrastructure development and the overarching economic growth of India. Specifically, the results indicate that FDI inflow exerts a positive influence on India's gross domestic product (GDP), suggesting its role in stimulating economic expansion. Conversely, the study also finds that FDI outflow has a negative effect on GDP, implying potential implications for domestic capital and investment.JEL Codes: C32, F21, F43, F62, O53
Often, we need to examine the efficacy of development programmes using different methods of impact evaluation. The primary challenge of an ex-post impact evaluation is forming a suitable comparison group to obtain the correct counterfactual. This is particularly true for programmes that have universal coverage. In the absence of a suitable comparison group, generally, reflexive methods are used, which often leads to a biased estimate of the programme impact. This article suggests an alternative method of impact evaluation that may be used for programmes having universal coverage, but there are some breaks in the provision of benefits of the programme. Instead of forming a comparison group with units not having the programme benefits, this method examines the outcome of the treatment group at several time points, either in the presence or in the absence of the programme benefits. This article also demonstrates an application of the proposed method in the context of the Mid-Day Meal (MDM) programme in rural India. The method helps estimate the impact of the MDM programme on the daily attendance of children in primary classes. The findings suggest that the MDM programme had a positive effect on average daily attendance of children, particularly for girls and students from the disadvantaged classes.JEL Codes: I21, I28, C31
The river Ganga's ecological significance in the spiritual landscape of India gives it a unique economic and socio-cultural eminence. Using the framework of ecosystem services evaluation and people's perception, this study explores the willingness of riverine fishing communities to pay towards initiatives aimed at restoring the quality of Ganga River water. The article is based on a published NCAER report entitled, 'Livelihood and health challenges of riverine communities of the River Ganga' (Pohit et al., 2020). A primary survey of 800 fishermen was undertaken along the upstream and downstream of the river Ganga in two states of India, Uttar Pradesh (UP) and West Bengal (WB), during January-February 2020. First, a theme-based content analysis was conducted to map the community's perception. It reflected the implications of river water pollution on the livelihood of fishermen and the cultural values associated with the Ganga separately for the two states. Second, a contingent valuation exercise was undertaken, which found that 34 and 25 per cent of the fishermen, respectively, in UP and WB, were ready to pay towards the cleaning of the Ganga. Income constraint was the main reason limiting the willingness to pay, followed by perceptions that river restoration was the government's responsibility. Only 11 per cent of the respondents in both states agreed to accept any compensation for their livelihood implications in lieu of more pollution. Interestingly, our regression analysis shows that fishermen who were willing to accept compensation were at lower odds of paying towards cleanliness.JEL Codes: Q51, Q53, Q57, I31, R58
In this article, we examine how households from disadvantaged social groups in India adapt through migration to climate-related shocks. We examine the relative importance of factors like social networks and public intervention in enabling adaptation to slow-onset climate change. We use household- and village-level data from two consecutive waves of the Indian Human Development Survey and gridded weather data from CRU at the University of East Anglia for our analysis. Our results indicate that, in India, major changes in dryness significantly increase migration, but disadvantaged social groups facing climate change are less likely to migrate. Social networks do not play any significant role in the migration behaviour of disadvantaged groups facing these changes. Efficient implementation of poverty alleviation programmes does improve the probability of migration among these groups. JEL Codes: O15, Q54
Low levels of learning outcomes persist among schoolchildren in low- and middle-income countries, despite the focus on increased access to education. This study examines the impact of two government incentives—scholarships and free tuition—on the educational outcomes of children aged 8–11 years in India using the nationally representative dataset, India Human and Development Survey-2 (IHDS 2). To estimate the effect of government incentives on children’s learning outcomes, we use propensity score weighting, with the treatment being free tuition and scholarships. Our findings indicate that scholarships are negatively associated with learning outcomes, particularly in writing and math. However, these effects are not statistically significant when controlling for socio-economic and school-related factors. Similarly, free tuition is linked to lower learning outcomes, and the negative effects increase after accounting for control variables and could reflect pre-existing deprivations or learning gaps that remain to be addressed. These findings highlight the mixed impacts of government incentives on education outcomes in India. The study also emphasises the importance of socio-economic factors and school characteristics in shaping learning outcomes, highlighting the need for a multifaceted approach when evaluating the effectiveness of government incentives. JEL Codes: I21, I24, I28
Youth face various choices regarding their activity status, such as early entry into the labour force, pursuing further education or being Not in Education, Employment or Training (NEET), as well as early marriage for women. This study analyses the role of social networks and their gender differential on these three activity status choices of Indian youth (15–29 years) in 2011 to 2012 using IHDS-II data. The study uses two types of social network variables: (a) the number of ties with any or all persons in a medical profession, teacher and government servant, and is similar to the degree centrality measure in the social network literature, and (b) the nature of ties, which measures the intensity of connection with these people categorised them as strong, arising from same family or caste, weak or none. Estimates from the multinomial logit model show that having more ties increases the odds of choosing education over an early entry into the labour force. On the nature of ties, we find that having access to strong ties increases the odds of being either in education or NEET over an early entry into the labour force for males. For females, strong ties favour education or NEET over employment, while other types of ties favour employment and reduce their odds of being either in education or in NEET. The information on social network types available in the data set is limited, in particular the absence of peer networks, to carry out a richer analysis. Nevertheless, this study contributes both towards the social network literature and assessing the determinants of youth activity status for the first time in India. JEL Codes : I23, J16, J24, J64, N30, P36
We assess India’s inflation-targeting regime at the eight-year mark. The Reserve Bank of India continues to be a flexible inflation targeter: it responds to both the output gap and inflation when setting policy rates. It has become neither more hawkish nor more reactive with the transition to inflation-targeting. Evidence points to improved outcomes: inflation is lower and less volatile, inflation expectations are better anchored and the transmission of monetary policy is more effective. Given this record, radical changes such as broadening the RBI’s monetary mandate, abandoning the target in favour of a more discretionary regime, targeting core instead of headline inflation or altering the target and tolerance band would be risky and counterproductive. One obvious area for improvement entails updating the weight of food prices in the CPI basket. We estimate the correct weight of food at today’s per capita income to be closer to 40 per cent instead of the current 45.8 per cent. This would likely fall further to around 30 per cent in a decade from now due to the projected increase in per capita incomes. This correction should ameliorate concerns about the design and practice of the current inflation targeting regime. JEL Codes: E5, E52
This study examines the effect of the world’s largest school-feeding programme, the Mid-Day Meal (MDM) programme, on dropout and retention among schoolchildren in India. Data from the India Human Development Survey (IHDS) Rounds 1 (2004–05) and 2 (2011–12) were used. The sample included individual-level information on schoolchildren aged 5–10 years in IHDS-1 who turned 12–17 years in IHDS-2. Bivariate and logistic regression analysis was used to examine school dropout and retention rates by MDM consumption patterns and factors associated with them among schoolchildren. The findings suggest that schoolchildren having MDM support in their younger years had a lower dropout rate. Participants who received early and persistent MDM support were more likely to be retained in school. Participants residing in urban areas or living farther from school were more likely to drop out, while those receiving scholarships were associated with higher retention in school. JEL Codes: H52, I21, I22, I28, Q18
