New Ventures’ influence on the Growth of SME Employment, Production and Exports in India: Does Institutional Credit matter?

New ventures are considered to be a major source of small firm growth. In Indian context the contribution of new ventures in terms of new employment, production and exports has largely remained unexplored. It is equally important and unexplored, the significance of the contribution of bank credit to the growth of new ventures in India. This paper is an attempt to throw light on these two aspects. The research is based on secondary data of the liberalized period provided by Ministry of Micro, Small and Medium Enterprises, Government of India and Reserve Bank of India. To analyze the influence of bank credit growth on new ventures and the influence of new ventures on growth of additional employment, additional production and additional exports, we used a Bi-Variate Vector Auto Regression. Based on the model generated, Granger causality tests are conducted to obtain the results. The study found that rate of growth of bank credit causes the number of new ventures, implying any increase in the rate of growth of bank credit will be beneficial to the growth of new ventures. The study also concluded that new ventures are not causing the growth of additional employment or additional production. However new ventures cause the growth of additional exports. This is reasonable as entrepreneurs start their new ventures with minimum possible employment and relatively low rate of capacity utilization and they come up to take advantage of the process of globalization by catering to the international market.

Groundwater Management in India:Physical, Institutional and Policy Alternatives

Groundwater constitutes a vital natural resource for sustaining India’s agricultural economy and meeting the country’s social, ecological and environmental goals. It is a unique resource, widely available, providing security against droughts and yet it is closely linked to surface-water resources and the hydrological cycle. Its availability depends on geo-hydrological conditions and characteristics of aquifers, from deep to alluvium, sediment crystalline rocks to basalt formations; and agro-climate from humid to subhumid and semi-arid to arid. Its reliable supply, uniform quality and temperature, relative turbidity, pollution-safe, minimal evaporation losses, and low cost of development are attributes making groundwater more attractive compared to other resources. It plays a key role in the provision of safe drinking water to rural populations. For example, already almost 80% of domestic water use in rural areas in India is groundwater-supplied, and much of it is being supplied to farms, villages and small towns. Inadequate control of the use of groundwater, indiscriminate application of agrochemicals and unrestrained pollution of the rural environment by other human activities make groundwater usage unsustainable, necessitating proper management in the face of the twin demand for water of good quality for domestic supply and adequate supply for irrigation, ensuring equity, efficiency and sustainability of the resource. Groundwater irrigation has overtaken surface irrigation in the early 1980s, supported by well energization. It is estimated that there are about 24 million energised wells and tube wells now and it is driven by demand rather than availability, evident through the greater occurrence of wells in districts with high population densities. Apart from aquifer characteristics, land fragmentation and landholding size are the factors that decide the density of wells. The ‘rise and fall’ of local economies dependent on groundwater can be summarized as: the green revolution of 1980s, groundwaterbased agrarian boom, early symptoms of groundwater overdraft, and decline of the groundwater socio-ecology. The social characteristics and policy interventions typical of each stage provide a fascinating insight into the human-resource dynamics. This book is a compilation of nine research papers discussing various aspects of groundwater management. It attempts to integrate knowledge about the physical system, the socio-economic system, the institutional set-up and the policy environment to come out with a more realistic analysis of the situation with regard to the nature, characteristics and intensity of resource use, the size of the economy the use generates, and the negative socioeconomic consequences. Complex variables addressed in this regard focusing on northern Gujarat are the stock of groundwater available in the region, its hydrodynamics, its net outflows against inflows, the economics of its intensive use (particularly irrigation in semi-arid and arid regions), its criticality in the regional hydroecological regime, ethical aspects and social aspects of its use. The first chapter by Dinesh Kumar and Singh, dwells on complex groundwater socio-ecology of India, while emphasizing the need for policy measures to address indiscriminate over-exploitation of dwindling resources. The chapter also explores the nature of groundwater economy and the role of electricity prices on it. The next chapter on groundwater issue in north Gujarat provides a description of groundwater resource characteristics followed by a detailed analysis of the groundwater depletion and quality deterioration problems in the region and their undesirable consequences on the economy, ecosystem health and the society. Considering water-buyers and wellowning farmers individually, a methodology for economic valuation of groundwater in regions where its primary usage is in agriculture, and as assessment of the groundwater economy based on case studies from north Gujarat is presented in the fourth chapter. The next chapter focuses on the extent of dependency of milk production on groundwater, which includes the water embedded in green and dry fodder and animal feed. The study made a realistic estimate of irrigation water productivity in terms of the physics and economics of milk production. The sixth chapter analyses the extent of reduction in water usage, increase in yield and overall increase in physical productivity of alfalfa with the use of the drip irrigation system. The chapter also provides a detailed synthesis of the costs and benefits associated with the use of drip irrigation systems. A linear programmingbased optimization model with the objective to minimize groundwater use taking into account the interaction between two distinct components – farming and dairying under the constraints of food security and income stability for different scenarios, including shift in cropping pattern, introduction of water-efficient crops, water- saving technologies in addition to the ‘business as usual’ scenario is presented in the seventh chapter. The results show that sustaining dairy production in the region with reduced groundwater draft requires crop shifts and adoption of water-saving technologies. The eighth chapter provides evidences to prove that the presence of adequate economic incentive would encourage farmers to adopt water-saving irrigation devices, based on the findings of market research with reference to the level of awareness among farmers of technologies and the factors that decide the adoption of water-saving technologies. However, now the marginal cost of using electricity for agricultural pumping is almost zero. The economic incentives are strong and visible only when the farmers are either water-buyers or have to manage irrigation with limited water from tube-well partnerships. The ninth chapter explores the socio-economic viability of increasing the power tariff and inducing groundwater rationing as a tool for managing energy and groundwater demand, considering the current estimate of the country’s annual economic loss of Rs 320 billion towards electricity subsidy in the farm sector. The tenth chapter suggests private tradable property rights and development of water markets as the institutional tool for achieving equity, efficiency and sustainability of groundwater use. It identifies the externalities for local groundwater management and emphasizes the need for managing groundwater by local user groups, supported by a thorough analysis of groundwater socio-ecology in India. An institutional framework for managing the resource based on participatory approach that is capable of internalizing the externalities, comprising implementation of institutional and technical alternatives for resource management is also presented. Major findings of the analyses and key arguments in each chapter are summarized in the concluding chapter. Case studies of the social and economic benefits of groundwater use, where that use could be described as unsustainable, are interesting. The benefits of groundwater use are outlined and described with examples of social and economic impacts of groundwater and the negative aspects of groundwater development with the compilation of environmental problems based on up-to-date research results. This publication with a well-edited compilation of case studies is informative and constitutes a useful publication for students and professionals.

Modern energy access to all in rural India: An integrated implementation strategy

Expanding energy access to the rural population of India presents a critical challenge for its government. The presence of 364 million people without access to electricity and 726 million who rely on biomass for cooking indicate both the failure of past policies and programs, and the need for a radical redesign of the current system. We propose an integrated implementation framework with recommendations for adopting business principles with innovative institutional, regulatory, financing and delivery mechanisms. The framework entails establishment of rural energy access authorities and energy access funds, both at the national and regional levels, to be empowered with enabling regulatory policies, capital resources and the support of multi-stakeholder partnership. These institutions are expected to design, lead, manage and monitor the rural energy interventions. At the other end, trained entrepreneurs would be expected to establish bioenergy-based micro-enterprises that will produce and distribute energy carriers to rural households at an affordable cost. The ESCOs will function as intermediaries between these enterprises and the international carbon market both in aggregating carbon credits and in trading them under CDM. If implemented, such a program could address the challenges of rural energy empowerment by creating access to modern energy carriers and climate change mitigation. (C) 2011 Elsevier Ltd. All rights reserved.

Achieving universal rural energy access in india: A low carbon pathway

India's energy challenges are three pronged: presence of majority energy poor lacking access to modern energy; need for expanding energy system to bridge this access gap as well as to meet the requirements of fast-growing economy; and the desire to partner with global economies in mitigating the threat of climate change. The presence of 364 million people without access to electricity and 726 million relying on biomass for cooking out of a total rural population of 809 million indicate the seriousness of challenge. In this paper, we discuss an innovative approach to address this challenge, which intends to take advantage of recent global developments and untapped capabilities possessed by India. Intention is to use climate change mitigation imperative as a stimulus and adopt a public-private-partnership-driven ‘business model' with innovative institutional, regulatory, financing, and delivery mechanisms. Some of the innovations are: creation of rural energy access authorities within the government system as leadership institutions; establishment of energy access funds to enable transitions from the regime of "investment/fuel subsidies" to "incentive-linked" delivery of energy services; integration of business principles to facilitate affordable and equitable energy sales and carbon trade; and treatment of entrepreneurs as implementation targets. This proposal targets 100% access to modern energy carriers by 2030 through a judicious mix of conventional and biomass energy systems with an investment of US$35 billion over 20 years. The estimated annual cost of universal energy access is about US$9 billion for a GHG mitigation potential of 213Tg CO2e at an abatement cost of US$41/tCO2e. It is a win-win situation for all stakeholders. Households benefit from modern energy carriers at affordable cost; entrepreneurs run profitable energy enterprises; carbon markets have access to CERs; the government has the satisfaction of securing energy access to rural people; and globally, there is a benefit of climate change mitigation.