E-commerce and Economic Development

Topics: Economics, Electronic commerce, Macroeconomics Pages: 141 (44952 words) Published: March 17, 2011
E-commerce and Economic Development
(A Study Sponsored by the South Asia Network of Economic Research Institutes)

Mahesh C Purohit Vishnu Kanta Purohit

Foundation for Public Economics and Policy Research
133, SFS, Ashok Vihar-IV New Delhi-110052
Phone: 27463008; 27427758 Fax: 27142802 e-mail: director@fpepr.org website : www.fpepr.org


E-commerce and Economic Development
(A Study Sponsored by the South Asia Network of Economic Research Institutes)

Mahesh C Purohit Vishnu Kanta Purohit

Foundation for Public Economics and Policy Research
133, SFS, Ashok Vihar-IV New Delhi-110052
Phone: 27463008; 27427758, Fax: 27142802 e-mail: director@fpepr.org, website : www.fpepr.org



The Foundation for Public Economics and Policy Research is an autonomous, nonprofit organization whose major functions are to carry out research, undertake consultancy work , and conduct training in the area of public economics and policy. The Foundation undertook this study, at the instance of the South Asia Network of Economic Research Institutes (SANEI). The main objective of this study is to highlight the fact that e-commerce is one of the most important factors that will revolutionise economic growth in a country like India. The study examines the issue of how the rise of e-commerce affects the suitability of various concepts and practices in the tax systems and in the long run, the overall economic development of the country. In doing so, the study takes Andhra Pradesh as a case study to have a thorough detailed analysis for making useful policy recommendations. The study is the result of the collective effort of the team of the staff members of the Institute. It was planned and guided by Mahesh C. Purohit and Vishnu Kanta Purohit, who prepared the final draft of the study. The authors are, however, indebted to Ajay Sawhney, Secretary, Information Technology and Communication Department; R. P. Sisodia, Director E-seva Kendra; Samir Sharma, Commissioner of Industries, and V. Bhaskar, Commissioner of Sales Tax for their very useful discussions on the subject during the course of their field visit to Hyderabad. Thanks are also due to A. L. Meena, who provided excellent research assistance through out the tenure of this study and to R. Srinivasulu, who also provided research assistance during the initial period of the study. The Governing Body of the Foundation does not bear any responsibility for the contents or views expressed in the report. The responsibility rests with the authors, in particular, the leader of the team.

New Delhi February 25, 2005

Mahesh C Purohit Director



Page Preface List of Tables List of Exhibits List of Annexures Executive Summary The Issues Introduction Statement of the Problem Review of Literature Methodology of the Study Objectives of the Study Scheme of Presentation 2 Concept, Process and Infrastructure for E-commerce Concept of E-commerce Process of E-commerce E-commerce as an Instrument of Transformation of Purchasing Process Infrastructure for E-commerce Convergence Bill 2000/2001 Current Status Growth of e-commerce Conclusion 3 Digital Divide and E-commerce Strategy The Global Scenario E-commerce in India The Digital Divide The ICT and the Economic Development: The Strategy for India ii 37 8 i iv v v vi




International Initiatives in E-commerce Initiatives by International Organizations Initiatives by National Governments and Regional Organizations Convergences



Issues in Taxation of E-commerce Principles of Taxation for E-commerce Issues in Administration of Taxes E-commerce Challenges for VAT



Role of E-commerce in Economic Development: A case study of Andhra Pradesh Measuring Economic Impact of E-commerce Methodology E-commerce and Economic Development ICT in Andhra Pradesh E-governance Initiatives Essentials of e-governance- Framework in Andhra Pradesh Conclusion



Policy Imperatives Reducing...

References: Abrol, R. K. (1996), “Electronic Banking”, IBA Bulletin, Vol.18 (1), January, Mumbai. Administrative Staff College of India (2003), “Study on The Digital Divide in India”, (mimeo), submitted to Department of Telecommunications, Ministry of Communications & IT, Government of India, New Delhi. Ahmad, N. (2003), “Measuring Investment in Software”, STI Working Paper 2003/6, OECD, Paris. Allen Helen, John Haqwkins and Setsuya Satol (2001), “Electronic Trading and its Implications for Finalizing the Systems”, BIS Papers No. 7, BIS Basle. Bajaj, Kamlesh K. (1999), “E-Commerce: The Cutting Edge of Business”, Tata McGrawHill, New Delhi. Bajpai, N. and A. Dokeniya (1999), “Information Technology-Led Growth Policies: A Case Study of Tamil Nadu”, Development Discussion Paper 729, Harvard Institute for International Development. Banerjee, Abhijit V. and Esther Duflo (2000), “Reputation Effects and the Limits of Contracting: A Study of the Indian Software Industry”, Quarterly Journal of Economics, Vol. 65(3), pp. 989-1017. Bassanini, A., S. Scarpetta and I. Visco (2000), “Knowledge, Technology and Economic Growth: Recent Evidence from OECD Countries”, OECD, Economics Department, Working Paper 259, Paris. Bayles, D. (2001), “E-commerce Logistics and Fulfillment; Delivering the Goods, Upper Saddle Rive”, NJ, U.S.A., Prentice Hall PRT. Bhatnagar, Subhash (2004), “E-government from Vision to Implementation: A Practical Guide with Case Studies” Sage Publications, New Delhi. Bhatnagar, Subhash and Robert Schware (2002), “Information and Communication Technology in Development”, (eds.), Sage Publications, New Delhi. Blond, C. (2001), “Analysis of the Determinants of Transaction Costs”, OECD Development Centre, Paris, mimeo. Brewer, Harold (2001), “E-commerce and Community Banking”, Commercial Lending Review, Vol. 16(3), pp.48-52. Burgess, Robin and Anthony J. Venables (2003), “Towards a Microeconomics of Growth”, ABCDE, held at Bangalor, World Bank. Carreker, J. D. (2000), “Banks and E-commerce Transforming Old Economy Practices into New Economy Business”, Commercial Lending Review, Vol. 15(4). Castells, M (1996), “The Information Age: Economy, Society, and Culture”, Vol. I: The Rise of the Network Society, Blackwell, Oxford, UK.
Chaston, Lan (2004), “Knowledge-Based Marketing: The Twenty-First Century Competitive Edge”, Response Books, Sage Publications, New Delhi. CII (2003), “India Broadband Economy: Vision 2010”, Discussion Paper, CII National Broadband Economy Committee, New Delhi. Colecchia, A and P. Schreyer (2001), “ICT Investment and Economic Growth in the 1990s: Is the United States a Unique Case? A Comparative Study of Nine OECD Countries”, STI Working Papers 2001/7, OECD: Paris. Colecchia, A. and P. Schreyer (2001), “The Impact of Information Communications Technology on Output Growth”, STI Working Paper 2001/7, OECD, Paris. Department of Information Technology (2000), “Action Task Report on IT Action Plan” (Updated in October 2000). Doenberg, Richard (1999), “Electronic Commerce and International Taxation,” Kluwer Law International, London. Eischen, K. (2000), “Information Technology: History, Practice and Implications for Development”, CGIRS Papers Series 2000-4, Center for Global, International and Regional Studies, University of California. Elumalai, Dr K. (2001), “Legal Regulation of Cyber Crimes-Salient Features of Information Technology Act 2000”, Paper Presented at the Conference on Cyber Laws and Legal Education, organized by Nalsar University of Law, Hyderabad. Fariselli, Patrizia (2003), “E-commerce for Development: A General Framework”, in Goldstein Andrea and David O’Connor (eds.), Electronic Commerce for Development, OECD, Paris. Fraumeni, Barbara (2001), “E-Commerce: Measurement and Measurement Issues”, American Economic Review, Vol. 91(2). Gillis, M Arthur (2000), “In-House or Outsource? Still a Popular Question”, ABA-Banking Journal, June, pp.51-56. Goldstein, A. and D. O’Connor (2000), “E-Commerce for Development: Prospects and Policy Issues”, Development Centre Technical Paper No. 164, OECD, Paris. Goolsbee, A. (2000), “In a World Without Borders: The Impact of Taxes on Internet Commerce”, Quarterly Journal of Economics, Vol. 115(2). Government of Canada (1997), “Preparing Canada for a Digital World”, Final Report of the Information Highway Advisory Council. Government of India (1996), “Selected Tax Policy Implications of Global Electronic Commerce”, Department of the Treasury Office of Tax Policy, New Delhi. Government of India (2000), “The Information Technology Act, 2000”, Ministry of Communications & IT Department of Telecommunications, New Delhi. Government of India (2001), “Report of the High Powered Committee on Electronic Commerce and Taxation”, Central Bord of Direct Taxes, New Delhi.
Government of India (2003), “ Indian Telecommunication Statistics- 2004”, Ministry of Communications & IT Department of Telecommunications Economic Research Unit, Statistics Section, New Delhi. Government of India (2003), “Study on the Digital Divide in India”, Department of Telecommunications, Ministry of Communications and Information Technology, New Delhi. Government of USA (1998), “National Taskforce on Information Technology and Software Development”, National Information Centre, New Delhi. Gretton, P., J. Gali and D. Parham (2002), “Uptake and Impacts of ICTs in the Australian Economy: Evidence from Aggregate, Sectoral and Firm Levels”, paper prepared for the Workshop on ICT and Business Performance, OECD, Paris, 9 December 2002, Productivity Commission, Canberra, Australia. Guasch, J.L. and J. Kogan (2001), “Inventories in Developing Countries: Levels and Determinants- A Red Flag for Competitiveness and Growth”, Working Paper 2552, World Bank, Washington, D.C. Gust, C. and J. Marquez (2002), “International Comparisons of Productivity Growth: The Role of Information Technology and Regulatory Practices”, International Finance Discussion Papers, No. 727, Board of Governors of the Federal Reserve System, Washington, DC, May. Hawkins, R and A. Prencipe (2000), “Business-to-Business E-commerce in the UK: A Synthesis of Sector Reports Commissioned by the Department of Trade and Industry”, mimeo, SPRU, University of Sussex. Heeks, Richard (2001), “India’s Software Industry: State Policy, Liberalisation and Industrial Development”, Sage Publications, New Delhi Jorgenson, Dale W. (2001), “Information Technology and the U.S. Economy”, The American Economic Review, Vol. 91(1), pp. 1-32. Joseph, Ghislain T.J (2004), “Electronic Commerce and the United Nations Model Double Taxation Convention”, International Tax Review, Vol. 32 (8-9), pp. 387-401. Joseph, K.J. (2004), “Transforming Digital Divide into Digital Dividend: The Role of South-South Cooperation in ICTs”, Research and Information System for the NonAligned and Other Developing Countries, New Delhi. Joshi, V C (2004), “E-finance: Log in to the Future!” Response Books, Sage Publications, New Delhi. Kapsinow, S. (1999), “ Using Fulfillment Services for E-commerce, E-commerce Guide, 15 April, htt://www.internet.com Kaushik, P.D.(1999), “Global Electronic Commerce: Implications for India”, Rajeev Gandhi Foundation, New Delhi Keniston, Kenneth and Deepak Kumar (2004), “IT Experience in India: Bridging the Digital Divide”, eds., Sage Publications, New Delhi.
Kim, Heon-Goo (2004), “The role of IT on the Korean economy under IMF control”, Journal of Policy Modeling, Vol. 26, pp. 181-190. Kirkman, G and Sach, J D (Harvard University), and Cornelius P, and Schwab, K (World Economic Forum) (2002), “The Global Information Technology Report 2001-2002: Readiness for the Networked World”, (eds.), Oxford University Press. Kulkarni, V S, (2004), “Reforms in Telecommunications Sector: Some Issues”, in Singh, Ravishankar Kumar (eds.), Economics Reforms in India, Abhijit Publications, Delhi-100094. Lambert, Howard (1998), “VAT and Electronic Commerce: European Union Insights Into The Challenges Ahead”, Tax Notes International, November 23, 1998, pp.1645-53. Leeuwen, G. van, and H.P. van der Wiel (2003a), “ICT, Innovation and Productivity”, CPB Report 2003/II, CPB Netherlands Bureau of Economic Policy Analysis, The Hague. Lefebvre, L.A and E. Lefebvre (2000), “E-commerce and Virtual Enterprises: Issues and Challenges for Transition Economies”, paper prepared for the United Nations Economic Commission conference on Global Electronic Commerce, Geneva, 19-20 June. Loundes, J. (2002), “Business Use of Internet in Australia”, Melbourne Institute Working Paper No. 20/02, Melbourne Institute of Applied Economic and Social Research, Melbourne. Lucking-Reiley, D. and D. Spulber (2001), “Business-to-Business Electronic Commerce”, Journal of Economic Perspectives, Vol. 15 (1). Mattoo, Aaditya and Schuknecht, Ludger (2000), “Trade Policies for Electronic Commerce”, World Bank, Washington. May, A. Thorton (1997), “Electronic Commerce: Three Truths for IS, Leadership Series, Computer World, April. Mclure, Charles E., Jr. (1999), “Electronic Commerce and the State Retail Sales Tax: A Challenge to American Federalism”, International Tax and Public Finance”, Vol. 6 (2), pp. 193-224. NASSCOM (2001), “Internet & E-commerce – The Indian Scenario”, National Association of Software & Service Companies, August, New Delhi, www.nasscom.org/ it_industry/int_ecomm_home.asp National Task Force on Information Technology and Software Development (1999), “ IT Action Plan I, IT Action Plan II, and IT Action Plan III”. (1998, 1999) O’Connor, David (2003), “E-commerce for Development: Between Scylla and Charybdis” in Goldstein Andrea and David O’Connor (ed.), Electronic Commerce for Development, OECD Publications, Paris. OECD (2000), “Summary of the Methodology for Accessing the Dynamics and Impacts of Electronic Commerce”, WPIL As Hoc Technical Expert Group, Paris OECD (2000), “The Economic and Social Impacts of Electronic Commerce: Preliminary Findings and Research Agenda, Paris. 121
OECD (2001), “Taxation and Electronic Commerce: Implementing the Ottawa Taxation Framework Conditions”, OECD Publications, Paris. OECD (2001), “Understanding the Digital Divide, Background Documentation for the OECD Emerging Market Economy Forum on Electronic Commerce”, Dubai, UAE, 16-17 January. OECD (2003b), “ICT and Economic Growth- Evidence for OECD Countries, Industries and Firms, Paris. OECD (2004), “The Economic Impact of ICT: Measurement, Evidence and Implications”, OECD, Paris. Rangarajan, C. (2004), “E-commerce and its Implications”, Inaugural Address at The National Seminar on E-commerce and Economic Development, organized by The Foundation for Public Economics and Policy Research, New Delhi, December 11, 2004. Sample, Bill et al. (2002), “Taxation of Electronic Commerce in India”, Presented to Central Board of Direct Taxes, India, by Nishith Desai Associates, Mumbai. Schneider, Gary P. (2004), “Electronic Commerce”, Thomson, United Kingdom. Schreyer, Paul (2000), “The Contribution of Information and Communication Technology to Output Growth: A Study of the G7 Countries, STI Working Papers 2000/2, OECD, Paris. Singh, Didar (2002), “Electronic Commerce: Issues of Policy and Strategy for India”, ICRIER Working paper 86, New Delhi. Singh, Nirvikar (2003), “India’s Information Technology Sector: What Contribution to Broader Economic Development?” Working Paper No. 2007, OECD Development Center. Sudarsan, P.K. (2004), “India’s Software Exports: Growth and Important Intensity”, Asian Economic Review, Vol. 46 (2), pp. 294-301. Timmers, Paul (2000), “Electronic Commerce: Strategies and Models for Business-toBusiness Trading”, John Wiley & Sons, Ltd., New York U.S. Department of Commerce (2000), “Falling through the Net IV: Toward Digital Inclusion”, Department of Commerce. UNCTAD (2002), “Building Confidence: Electronic Commerce and Development”, United Nations, New York. United Nation (2003), “ E-commerce and Development Report 2003” United Nations Conference on Trade and Development, UNCTAD Secretariat, New York and Geneva. Whiteley, David (2002), “E-Commerce: Strategy, Technologies and Applications”, Tata MecGraw-Hill Publishing Company Limited, New Delhi. Wilkie, Simon (2004),"Introduction to the Special Issue on Telecommunications", Journal of Public Economics Theory, Vol. 6(4), pp. 537-539.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • E Commerce Essay
  • E-commerce Business Plan Essay
  • E-commerce: Electronic Commerce and Implementation Essay
  • e-commerce Essay
  • E-commerce Essay
  • E commerce Research Paper
  • Essay on The E-Commerce Model of IKEA
  • e-commerce chapter 1 Essay

Become a StudyMode Member

Sign Up - It's Free