R.S. Tiwari

Pressure of Domestic Demand and Export Performance in India

Homepage Manual Contents Navigation

CONCLUDING REMARKS

Various studies undertaken on theoretical as well as on operational grounds do not tend to explain the testable relationship between domestic demand and export performance in an economy. Our analysis with the help of multiple regression models and compound growth rates tend to explain that "growing domestic demand" is an important explanatory variable and, is positively, associated with the export performance of bicycles in India over the period 1960-61 to 1974-75 at 1960-61 prices. And thus, hypothesis developed by Linder and others is found to be firmly acceptable in our analysis at the level of individual export product item, bicycle and import country level.

Explanation of export performance in India has received a growing importance since 1960's, mainly because Indian relative export shares in the world export market started deteriorating at a much rapid pace than earlier. And hence, it was realised that some improvements in the foreign exchange earnings could be brought about through export performance of bicycles. It also helps to a certain extent in achieving the objective of economic self reliance which is well realised thrust of planned Indian economy.²⁸ Resource allocation strategy in favour of bicycle industry seems to be economically viable from our findings from the point of long run trade prospects as well as internal economic welfare implications.²⁹ This finding disapproves the view occasionally held that resource allocation strategy does not have economic rationale in Indian economic context. However, in order to examine the feasibility of resource allocation strategy at a macro level from the point of view of export performance in India, an analysis of exports of engineering goods, under the pressure or resource constraint would have to be meaningfully examined at a more disaggregated manner at product and market level.