• Structural Changes, Industry and Employment in the Indian Economy: Macro-economic Implications of Emerging Pattern

The recent pattern of structural changes raises a few basic questions relating to sustainability of development process, on the one hand, and equity and employment, on the other. How far is the decline in the importance of agriculture without corresponding increase in the share of industry, particularly manufacturing, and growing importance of the services sector represents a sustainable pattern of development? Is it a reflection and consequence of greater integration of Indian economy in the world economy as part of the globalisation process, on the one hand, and changing nature of the industrial, particularly manufacturing, sector where its linkages with agriculture and services, rather than its size as such, assumes greater importance? With the stagnant share of industrial sector in the economy and its declining employment potential, will the services sector expand fast enough to provide employment to increasing labour force? Will such an expansion be induced by growth in the industrial sector or will take place independently? These and other related issues arising out of the on-going changes in the structure of output and employment in the Indian economy are not only interesting from the an analytical academic viewpoint, but have strategic implications for the sustainability and equity of economic growth.

The Institute has been carrying out a research programme on the subject with the sponsorship and financial support from the Indian Council of Social Science Research (ICSSR). The three-year programme covers six major themes and within them a number of studies are being carried out as listed below:

Theme 1  Growth and Structural Changes in Indian Economy

1. Growth and Structural Changes in Output in India since Independence: A Study Report, Surajit Mazumdar click to download
2. Changing Structure of Rural Economy of India, P.P. Sahu & T.S. Papola

Theme 2  Employment Implications of Structural Changes

3. Growth and Structure of Employment, T.S. Papola & P.P. Sahu

Theme 3  Growth and Structure of Industry 

4. Growth and Structural Changes in Indian Industry, T.P. Bhat
5. Small and Large Industry Linkages, Jesim & P.P. Sahu
6. Inter-Regional Disparities in Industrial Growth and Structure, T.S. Papola click to download
7. Structural Changes in Indian Private Corporate Sector, K.V.K. Ranganathan & M.R. Murthy

Theme 4  The Services Sector

8. Growth and Structure of Services Sector in India, Jesim Pais

Theme 5  Income Distribution, Demand-Supply Balance and Prices
                (modified to mainly include issues of disparities and inequalities of various kinds)

9. Disparities in Pattern of Consumption Expenditure, Satyaki Roy click to download
10. Changes in Factor Shares, Satyaki Roy
11. Human Development: Structural and Changes across States, Satyaki Roy

Theme 6  Trade

12. Structural Changes in India’s Foreign Trade, T.P. Bhat click to download
13. Import Intensity of India’s Exports, Mahua Paul
14. Role of States in Exports, Mahua Paul

Studies 1, 3, 5, 6, 9, 12 and 13 have been completed and their reports/papers are available. Other studies are at different stages of progress and are expected to be completed during January-March 2012.

A two-day workshop was organised during 7-8 July 2011 to discuss the findings of the above studies scope and preliminary findings of theree other studies on corporate sector, services sector and exports by states. About 50 scholars participated in the workshop. The seven studies listed above have been revised and finalised incorporating the comments and suggestions received in the Workshop.

A programme-end seminar is planned to be organised in April 2012. Prof. T.S. Papola is the Principal Coordinator and Prof. M.R. Murthy is the co-coordinator of the programme.

• Sustainable Development: Emerging Issues in India’s Mineral Sector

The project is funded by Planning Commission. A field study for the project has been initiated. Visits were made to a few selected mines in Jharkhand and Orissa where extensive discussions and interviews were held with the mining executives, local community representative and government officials. Further visits are planned to Goa and Karnataka in the coming months. Nilmadhab Mohanty is the Project Director.

• Employment Challenges in North-Eastern States of India: Role and Potential of the Unorganised Manufacturing Sector

Based primarily on secondary data sources such as the NSS reports on unorganized manufacturing sector, this study analyses the critical issues of employment challenges and potential in eight north-eastern states of India. The study is supported by the V.V. Giri National Labour Institute, Noida. Partha Pratim Sahu is Principal Researcher.

• Crony Capitalism and Contemporary India

In his speech at the inauguration of the ISID Campus on 1st may 2007, the Prime Minister raised the queries - Are we encouraging crony capitalism? Is this a necessary but transient phase in the development of modern capitalism in our country? Are we doing enough to protect consumers and small businesses from the consequences of crony capitalism? At other fora he also expressed his concern about the cancer of corruption and issues relating to corporate social responsibility. The comments attracted considerable media attention for quite some time, and evoked sharply divergent responses.

As a part of the Institute's ongoing research on the Indian corporate sector, a Symposium on Crony Capitalism has been envisioned by the ISID in the first week of October 2007 with the idea of getting together academics, policy makers, jurists, journalists, and other concerned citizens for initiating a serious public debate on the following questions:

• Has liberalization actually changed the relationship between businesses and Government functionaries and officials into an arms-length one, or do individual businesses still benefit from special relationships with those occupying positions of authority?
• Have the old concerns about concentrated economic power exercising a disproportionate influence in the determination of public policy priorities ceased to be of relevance because big business houses are now subject, in principle, to the pressures of market competition and vast areas of economic activity have been freed from entry restrictions?
• Are the new and more limited mechanisms of regulation and monitoring of private economic activity adequate for ensuring that such activity does not go against the general good?
• Given the propensity of those in authority to mobilize resources whether for organizational purposes or to satisfy the desire to accumulate wealth, have some newer avenues been brought into play and reliance on some existing ones increased?
• Is crony capitalism a transient phase as posed by the Prime Minister? What do the experiences of western market-based democracies suggest in this regard?

The proceedings of the Symposium will include presentations by members of the ISID faculty based on their research as well as expositions by a panel of eminent scholars. It is hoped that the discussion at the symposium will also throw up ideas about the areas on which research at the Institute can focus on in the future.

• Survey of Corporate Governance in India

Regulators, policy makers and investor bodies could benefit from regular studies on the practical implications and efficacy of corporate governance provisions. Regular studies are also necessary because there is no single model of good corporate governance. Even if the form of corporate governance is the same, due to differences in ownership structures, legal provisions, level of shareholder awareness and knowledge, etc., country experiences could differ.

In spite of the well-recognised importance of the subject, there are very few in-depth studies on corporate governance practices in India. The Institute plans to take up a research programme on various aspects of corporate governance. It intends to operationalise it through a Survey of Corporate Governance. Broadly, the studies would aim at ascertaining the efficacy of the CG Code, identify the weaknesses and suggest measures to improve the associated rules and regulations within the overall objective of fostering healthy development of the Indian corporate sector and in the process improve the overall understanding of the sector.

Some of the topics that would be examined under the programme include:

1. Ownership structure with emphasis on business groups and nature of controlling interests' shareholdings;
2. Composition of company boards with emphasis on independent directors and Audit, Remuneration and other Board Committees;
3. Protection of minority shareholder interests in buyouts, delisting, mergers, restructuring, etc.;
4. Nature, significance and trends in related party transactions including inter-corporate investments and loans;
5. Governance issues in privatised/partially divested public enterprises and FDI companies; and
6. Responsiveness of companies to other stakeholder interests.

These issues would be analysed at various levels of dis-aggregation like size, ownership categories, industry, region, age of the company, extent of internationalisation, etc.

The study is being taken up internally by the faculty.

• Internationalization Process of Indian Pharmaceutical Industry

The pharmaceutical industry is perhaps among a few sectors in the Indian economy whose foundation is built on the process of internationalization. During the first stage of internationalization—over 1947–69—inward FDI and imports served as the initial channels of overseas business links for the industry. Since then the internationalization profile of the industry has undergone significant changes overtime. Now, domestic pharmaceutical companies are leading this process by adopting a host of new strategies like exports, green field direct investment abroad, acquiring overseas companies, contract manufacturing and research and strategic alliances with global firms. The global growth of Indian pharmaceutical industry from a mere importer and distributor of drugs and pharmaceuticals to an innovation-driven cost-effective producer of quality drugs has been contributed by a host of strategic government policies in the past.

The study tries to explore the role of government policies in the internationalization of Indian pharmaceutical industry, different forms of internationalization and their impact on the competitiveness and growth of the industry. It also examines the competitive strength of the industry relative to global peers on pharmaceutical value-added, productivity, research and development and trade performance.

The study is being taken up internally by the faculty.

• Indian Multinationals in Global Economy

Outward FDI has emerged as the most preferred route of internationalization for Indian companies in the 1990s. The numbers of both green field investment and overseas acquisition by Indian companies have grown dramatically in the recent past. The present study would like to investigate three issues—(i) firms from which sectors are investing trans-border, (ii) where are they investing, and (iii) what implications such activities have for Indian economy. It would analyze the causes and motivations of Indian firms becoming multinationals. The emphasis would be on country-specific factors like policy regime with respect to trade, foreign investment and technology, sectoral characteristics like market structure and domestic competition, sectoral government policies, product characteristics, suitability to the country's factor endowments, etc., and firm-specific factors like firm size, technology, exports, and so on. Different types of motivations for multinational activities involving horizontal FDI (market accesses, efficiency seeking, strategic asset seeking, natural asset seeking, and gaining insider status in trading blocks) and vertical FDI (accessing raw materials, establishing trade-supporting infrastructure) will receive attention. The changing characteristics of Indian multinationals will be discussed with reference to the TWMNE Theory proposed on multinationals from developing countries.

The study would undertake detailed case studies of three industries, namely Indian Software Industry (one from services sector), Pharmaceutical Industry (one from manufacturing sector), Indian Petroleum and Gas Sector (one from natural resource sector) and case studies on top three Indian multinationals to further understand the phenomenon. It is hoped that this study would derive strategic policies for India to suitably manage its emerging multinationals to derive maximum economic gain.

The study is being taken up internally by the faculty.

• Changing Pattern of Corporate Ownership and Implications for Monitoring Company Managements

The basic purpose of stock market is to provide capital for investment and liquidity for the investors. The need for such capital is expected to increase with size of the enterprise. For large companies to emerge and function effectively, there is a need to pool risk capital which individual entrepreneurs cannot bring in on their own or with the help of relatives, friends and acquaintances. Theories emerging from the experience of US and UK demonstrate that in modern corporations management and ownership are divorced from each other because of widely dispersed shareholding. Evidence from other countries, however, differs significantly. There is an extensive and growing body of literature to understand the relationship between ownership pattern and corporate management.

Traditionally shareholding pattern of large Indian companies is characterised by low promoter holdings and substantial stakes of public financial institutions. In the post-liberalisation period, entry of foreign institutional investors and mutual funds and Indian companies being permitted to raise capital from abroad and the compulsions for private managements to ward-off takeover threats, freedom for companies to have much higher level of foreign equity and the policy thrust to let companies raise capital directly from investors are the factors which could influence the ownership patterns. Theoretically, large investors are expected to help monitor managements better while dispersed shareholding would be to the advantage of professional managers. High promoter stake, however, has dual implications. On the one hand, since promoters in most cases are also in the management, it would align the interests of managements with that of other shareholders. The high promoters stakes may however, be used to hurt minority shareholders' interests.

The study seeks to trace the changes in the shareholding pattern of listed companies in the context of the role of stock market as a provider of risk capital and as a monitoring institution. Shareholding data of more than 2,500 Bombay Stock Exchange listed companies has been collected and is being examined at the categories of promoters, institutional investors, other corporate bodies and individual shareholders.

The study is being taken up internally by the faculty.

• Under the media centre, it is proposed to undertake research on the following aspects:

1. The growth and Development of the media industry: The Growth of Balaji Telefilms and its competitive outcomes for the development of the television industry in India: A historical study of the Balaji Media Business House and factors leading to its prominence and its survival strategies.
2. Advertising war and struggle for markets/ Advertising marketing strategies and search for spaces.
3. National Media Policy and Economic and Cultural Imperatives.
4. Looking at the growth of the FM network its policy implications, business model and issues of social responsibility and implication for growth of a democratic culture.
5. Representation of industry in the context of national development: A semiotic analysis of three major English dailies during the decade of the 90's.
6. The Emergence of the Business Channels a study of structure, content and relationship with the industry.

It is also proposed to organise Seminar on Media Industry: Issues and Concerns in December 2007. The issues involved are: i) Issue of Growing Media Monopolies; ii) Increasing Entry of Global Players and its Economic Implication for the National and Regional Players; iii) Government Policy and Its Implications; iv) Issues related to Media Structure and Management; and v) Implication of Media Economics on the Changing Pattern of Content of: a) News, b) Serials, c) Reality Shows, d) Sport Broadcasts, e) Films.