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Uneven Growth of Sectoral Composition and Widening Regional Disparities

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The convergence theorem states that when growth accelerates, regions that are well-endowed grow faster than the others, but once the law of diminishing returns sets in, growth rates converge due to differential productivity, bridging the gap in income levels. India’s GDP accelerated since the 1980s; the average GDP growth rate in 1950s-1980s period averaged 3.6 percent. The 1980s saw a growth rate of 5.6 percent which shot up to 6 percent in the post-reform period. In the case of India’s economic growth, however, the most defining characteristic is its unevenness in growth – the simultaneous existence of impressive GDP rates and widening inequality across states, which threatens to aggravate poverty and socio-political unrest. Examining Regional Disparity Across States Growth Rate of per capita SDP (1980-2000) Regional disparity in standard of living, as measured by per capita SDP at constant prices, have accentuated in the 1990s. In the 1980s, Assam recorded the lowest per capita SDP ...
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INDIAN ECONOMY VS COVID-19

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The COVID-19 Pandemic is first and foremost a human disaster in 2020 threatening lives and wellbeing of the global community. Society needs to strongly collaborate to protect people’s lives and health, manage mid-term implications and look for sustainable solutions. With the growing number of coronavirus cases in India, the government has locked down transport services, closed     public and private offices, factories and restricted mobilization, though of late restrictions are gradually being relaxed. The economic impact of Covid-19 has been significant and broad-based. India is now the 3rd most affected country after US and Brazil in terms of confirmed Covid-19 cases. As of 27 July, India has 1.5 Mn confirmed cases with test positivity rate of 9%. The outbreak of the Pandemic has led to unprecedented situations along all fronts. Recently, IMF in its report projected the Indian economy to contract by -4.5 percent in 2020, which is the slowest Indian growth that it has in it...
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Location: Mumbai, Maharashtra, India
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BOUNDED RATIONALITY AND CONTEXT INFLUENCE IN DECISION MAKING

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Bounded Rationality is an idea that humans are somewhat rational with several important limitations. This is a challenge to a framework known as the rational choice theory that assumes that people are generally rational. Rational choice theory is widely used in social sciences and underpins a large number of theories in economics. To have a better understanding of bounded rationality, imagine that you are an investor who invests in stock market. You may only have a few minutes to consider a stock trade. Here faced a time constraint. Now, a stock trade may involve hundreds of variables and a high level of uncertainty such that it is not possible for an individual to make an optimal decision in a few minutes. Often, the context and the framing of the information influence an individual’s judgement and decision making. This phenomenon is called Cognitive bias. People usually tend to over rely on the first piece of information they receive and then use it as a baseline for comparison. This...
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CONSUMER PREFERENCES

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Life is like a giant store. Every day you wake up and you confront with thousands of goods you might buy. People are always trying to make themselves as well-off as possible. Some of those goods on offer at the store may help you to make you better off. So how do you decide what to buy from the store of life? In order to decide what to buy from the store, you first have to consider your preferences for various types of quantities and goods. Normally, a responsible individual will also have to consider his budget when deciding what bundles of goods to buy but let’s start by imagining that there are no constraints and you can buy whatever you want. But even now, you will have to think about your preferences. And because you are not just a millionaire, you are a rational millionaire, these preferences are going to follow some rules.  First , when you are considering two bundles of goods you either prefer one or the other or you are indifferent between the two. Second , your preferenc...
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