India - Economic Indicator Analysis

Articles and papers

http://www.oecd.org/dataoecd/54/48/34898082.pdf


Chitre, V. S.( 1982), " Growth Cycles in the Indian Economy ," Artha Vijnana, 24, 293- 450.

___ (1991), " Fluctuations in Agricultural Income , Public Sector Investment, World
Economic Activity and Business Cycles in India ", in H. Osada and D. Hiratsuka (eds.),

Business Cycles in asia , Institute of Developing Economies, Tokyo.
___(2001)," Indicators of Business Recessions and Revivals in India :1951-82", Indian
Economic Review , Vol. XXXVI, no. 1 ,2001.

Dua, P. and A. Banerji ( 1991 ) , '' An Index of Coincident Economic Indicators for the
Indian Economy", Journal of Quantitative Economics, Vol. 15, No. 2

____(2001) ,"An Indicator Approach to Business and Growth Rate Cycles : The case of
India ", Indian Economic Review, Vol. 36, No. 1 .

Hatekar, N. (1994), "Historical Behaviour of the Business Cycles in India: Some Stylized Facts for 1951-85", Journal of Indian School of Political Economy, Vol.6, No. 4.

Mall O.P. (1991),"Composite Index of Leading Indicators for Business Cycles in India ", RBI Occasional Papers , Vol 20, no. 3.

Nakamura J. (1991), "Fluctuations of Indian Economy, " in H. Osada and D. Hiratsuka
(eds.), Business Cycles in Asia , Institute of Developing Economies, Tokyo .

Reserve Bank of India (2002b), Report of the Working Group on Economic Indicators.

Jaya Mohanty, Bhupal Singh and Rajeev Jain (2003), Business Cycles and Leading
Indicators of Industrial Activity in India.

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Chitre presented evidence of synchronous movements in respect of a large number key economic processes including non-agricultural NNP, industrial production, capital formation, money stock, bank credit, etc. Chitre (1982) identified 15 indicators of growth cycles in India and constructed diffusion index and a composite index of these indicators and on the basis of these, characterized the Indian economy as having passed through five growth cycles in the overall economic activity during the period from 1951 to 1975.


Dua and Banerji (1999) have used the NBER approach to determine the dates of Indian business cycles and growth rate cycles and have reported six business cycle recessions in the Indian economy:


Business cycle recessions (India)

􀂾 November 1964 to November 1965
􀂾 April 1966 to April 1967
􀂾 June 1972 to May 1973
􀂾 April 1979 to March 1980
􀂾 March 1991 to September 1991
􀂾 May 1996 to February 1997

In a subsequent paper (2001), they have identified leading indicators and constructed a CLI index designed to anticipate business cycle and growth rate cycle upturns and downturns. However, the component series are not published in the above study.


Mall (1999) studied the cyclical behaviour of output variables such as real GDP,
non-agricultural GDP, GDP from manufacturing, trade; IIP, index of sales of private
corporate sector, etc. and has concluded that non-agricultural GDP can be taken as a
reference series for tracking business cycles in India. Using spectral analysis method, he has constructed a composite index of leading indicators to forecast cyclical movements in IIP from manufacturing sector.

A Working Group of the Reserve Bank of India (2002) on economic Indicators in
2001 examined the information base for the analysis of business cycles and explored the leading indicators approach for study of business cycles and forecasting. The working group seems to have taken the recommendation of Mall (1999) and used IIP as the reference series of non-agricultural GDP. Considering the IIP as the reference series, six series viz., Narrow money (M1), Non-food credit, WPI(raw materials), Production of coal and aluminium, and rail good traffic originated have been identified as leading indicators and the composite index has been constructed based on principal component analysis.

Chitre (2001) studied the business cycles in India for the period 1951-1982 and,
presented a selected list of leading, coincident and lagging indicators and the turning points and the diffusion index for the indices. Some of the
selected leading indicators are production of iron and aluminum, electricity generation, cheque clearances, etc.



Mohanty et al (2003) attempted dating of business cycles in India based on Bry-Boschan procedure and have identified 13 growth cycles of varying duration from 1970-71 to 2001-02. They have reported that average duration of recessions is higher at 16 months as compared to expansions with average duration of 12 months and the average of the cycles is 27 months.