Econometetric modelling of the indian silk industry / by Gopal Naik, Santosh Kumar Singh [and] Nalini Govind

This study aimed at understanding and quantifying the relationship between the important variables of the various sub-sectors of the Indian silk industry through an econometric simulation model, and using the model for forecasting as well as policy simulations. The estimated model consisting of 11 equations performed reasonably well in terms of goodness of fit of the individual equations, theoretically consistent signs and significance of the coefficients, and short-and long-term predictability. Forecasts of the endogenous variables of the system was made for the period 1991-92 to 2000-01 which indicated that the growth in the industry will slow down as compared to the previous decade. Policy simulations were undertaken to assess the changes in the import price of raw silk, export price of fabric and regulation of the quantity of imports of raw silk on the silk industry. While imports and exports were closely linked, their impact on the silk industry was not very high. It was also revealed that the income of the consumers and mulberry acreage have significant influence on the industry. Since further increase in mulberry acreage is difficult, more attention has to be given for increasing productivity of mulberry areas.