Author: cprindia

PART 4 OF A BLOG SERIES BY THE CENTRE FOR POLICY RESEARCH (CPR) AND PRAYAS (ENERGY GROUP)
ENERGY RESEARCH

The series is titled ‘Plugging in: Electricity consumption in Indian Homes’.

Electricity consumption debates, for the most part, focus on high-rise residential and commercial establishments, often ignoring low-income housing. The rationale for this omission is the low level of electricity use in affordable housing, with the assumption that little is at stake from its consideration in national energy and climate debates. This, however, may no longer be true.

As India urbanises, housing has been unable to keep pace. The housing shortage is reported to be near 19 million units, with low-income households accounting for the largest proportion. The government’s ‘Housing for All’ programme aims to fill this gap by providing affordable housing for 20 million households by 2022. This new construction will partly condition future energy use from the provision of basic services, with increased access to electricity and commercial appliance markets. In this post, we examine the most basic use of electricity within affordable homes – lighting.

Lighting forms a large share of electricity services availed by low-income homes and consequently the electricity bill. Technologically, LED bulbs provide the largest reduction in lighting electricity consumption, without reducing the amount of light provided, and with a lifespan that is up to 25 times that of an ordinary bulb. However, LED bulbs cost more, which can deter the willingness of households to pay. As described in this series’ previous post, the government’s UJALA scheme has increased the use of LEDs by bringing down costs and increasing awareness. However, the programme’s impacts on low income households, those with the potential for maximum benefits, are not yet clear.

Are lower income households purchasing technologically advanced LED bulbs? We conducted a survey in 2017, about a year after the launch of the UJALA scheme, in Rajkot, Gujarat to examine lighting services in low-income homes. This is part of an ongoing study on energy use in low income urban households under the CapaCITIES project. We find LED penetration in the sample surveyed is remarkably high at 63% of all bulbs (Figure 1).

Figure 1: LED penetration in the affordable housing sample (stock level)
Source: Rajkot affordable housing energy survey (Khosla et al., in preparation)

Household assets and LED penetration

To understand this high rate of LED use, we categorise results according to the three types of government affordable housing: BSUP or Basic Services for the Urban Poor (built 2007 onwards); EWS or Economically Weaker Sections; and LIG or Low Income Groups housing (EWS and LIG are built under the Housing for All programme, 2015 onwards) (Figure 2). The categories broadly correlate to income – BSUP residents, on average, being the poorest in the sample, and LIG, the best off.

Figure 2: Household LED penetration rates
Source: Rajkot affordable housing energy survey (Khosla et al., in preparation)

Figure 2 shows that the widespread use of LEDs is especially true for EWS and LIG categories, with more than 90% having at least one LED. Tube lights, CFLs, and incandescent bulbs on the other hand have lower penetration rates in these homes. Further, homes are buying more than one LED. The mode number of LEDs in a EWS home is three, and in LIG homes is five. This is within the number provided under the UJALA scheme in Rajkot, which is up to 10 subsidised LEDs per home at Rs. 80 per 9W bulb.

We also find that LED ownership, standardised for home sizes, is correlated with household assets or their ability to consume (Figure 3). Richer homes buy more LEDs, though a degree of incandescent bulbs persist in the system. And while Figures 2 and 3 show a strikingly high rate of LED use, they also show that not all homes have made this transition. Specifically, BSUP homes – which are of the lowest-income of the three categories – have about half the LED penetration compared with EWS and LIG homes (Figure 2) and the mode number of LEDs owned in BSUP homes is zero.

igure 3: Lighting ownership across the consumption asset index (standardized for number of rooms)
Source: Rajkot affordable housing energy survey (Khosla et al., in preparation)
Awareness of the LED scheme

Why do some households buy LEDs and others don’t? Is the difference a function of households’ awareness of the LED scheme (Figure 4)?

Figure 4: Awareness rates of the LED and Smart Cities schemes
Source: Rajkot affordable housing energy survey (Khosla et al., in preparation)
Awareness of the LED scheme maps on to the ownership of LED bulbs in housing types. EWS and LIG homes are much more aware about the scheme, and own many more LEDs, while the reverse is true for BSUP. To test if awareness about government schemes was generally high, or whether this was particular to UJALA, we also asked households of their awareness of the Smart City scheme which is well advertised in the city. Less than 1% of households reported awareness of this flagship city scheme – compared with high awareness of UJALA.

At the same time, it is not that all households know about the LED scheme – especially not the poorer BSUP homes. We find from discussions with residents that the most successful scheme awareness measure was the information that persons (predominantly men) got at the local utility bill payment centre. Bill payers could purchase LEDs at the payment centre itself, including with no upfront cost and monthly instalments, an option available by a third of the purchasers as per scheme representatives. Learning about a money saving scheme at the point of bill payment worked well to motivate participation. In addition, media campaigns for the scheme were important for those who spent time watching TV or listening to the radio, especially women. However, homes with different circumstances, such as in the lower income BSUP homes – where electricity connections and payment structures could be informal; the radio and TV were used less; and bills were paid by younger family members because of multiple jobs – did not benefit similarly. In the next round of LED deployment, unpacking these differences in scheme awareness will be important to influence path dependent lighting use patterns.

In the next post, we move from lighting to appliances and examine the efficiency impacts from India’s standards and labeling programmes.

This piece is authored by Radhika Khosla and Ankit Bhardwaj at the Centre for Policy Research.

This blog series is also available on the Prayas website here.

Other posts in this series:

• Electricity Consumption in Indian Homes
• Trends in India’s Residential Electricity Consumption
• India’s LED Lighting Story
• The Efficiency of Appliances
• Appliances used in Affordable Housing
• Electrifying the National Capital Region
• Exploring the different uses of household appliances
• Role of human behaviour in driving electricity use

IN CONVERSATION WITH NEELANJAN SIRCAR, BHANU JOSHI AND ASHISH RANJAN
ELECTION STUDIES POLITICS

CPR researchers Neelanjan Sircar, Bhanu Joshi, and Ashish Ranjan did extensive field work in Assam and Bengal during the elections, and shared their insights on Upper Assam and Barak Valley; the Muslim vote in Assam; and on the Poriborton (change) brought about by Mamata Banerjee in Bengal.

Drawing on their field experience over the past couple of months, they share below their thoughts on the big wins for the BJP in Assam and the TMC in Bengal.

What are your thoughts on the TMC and Mamata Banerjee’s landslide victory in Bengal?

Neelanjan: The Left-Congress Alliance has been left in a very bad shape, and they will have to re-assess everything. To begin with they need to find a state level neta (leader) who resonates with the people, and identify a major gap that the TMC is not addressing. The problem was they had no real campaign issue this time. Interestingly, the Congress won many more seats than the Left, which has officially reduced the Left to the third party, despite it having a larger vote share.

Bhanu: In the absence of a political script for the Left-Congress Alliance, what we saw clearly was that rural Bengal was backing Mamata, and the Left had completely lost the rural connect. They will have to introspect and seriously think about how to rebuild this connect.

What this victory means for Mamata Banerjee is that she will have a strengthened position in the Rajya Sabha, and can negotiate more effectively with the Centre to mend the flagging finances of Bengal.

Ashish: Mamata Banerjee will also have to focus on the creation of new jobs, which is a huge demand, or things will be difficult in Bengal, going forward.

Neelanajan: Mamata’s ground-level control is crucial to her ability to deliver on promises, like roads. At the same, this same control has yielded a significant amount of fear and violence. This was evident during the election season. There is a real concern about this spinning out of control. It is an open question whether she can control it or not, but she must be wary of the possibility of the situation going awry, as it did for the Left.

Ashish: Due to her style of operating, which runs on her charismatic authority, Mamata Banerjee does not have an organisational structure, unlike the Left. If she cannot restrict goons in her party, either the cadre will rebel or leave the party. This would make things very difficult for her in 2021.

Thank you for those insights on what TMC’s victory means for Bengal. What are your thoughts on the BJP’s victory in Assam?

Bhanu: Assam is a very complex state, but the way it has voted decisively goes to show that the binaries we create to understand the political contexts no longer hold. The theory of vote-bank politics does not work, Muslims are no longer a vote-bank. Out of the 49 constituencies in districts with more than 50% Muslim population, 15 have voted for the BJP, and the rest are divided among the other parties. There is some complexity in the methodology but could we have thought five years ago that BJP would be ruling two states—Jammu and Kashmir and Assam—with the highest Muslim population? No.

Today, people are voting for development, and the BJP ran a much better campaign on the ground in Assam, focused on developmental issues. This shows that when political parties plan elections, they need to be very prepared because they are reaching out to a very sophisticated voter.

Ashish: Now that the BJP has come to power, it will be interesting to see how they manage the Bangladeshi Muslim migrant issue, which they have been ideologically opposed to.

Neelanjan: We have looked at three Eastern states so far, Bihar, Assam, and Bengal, and it is clear that the defining narrative has been of development—of a certain sort. Development that is extremely visible, tangible, and this has brought a new dimension back into politics. It indicates a certain kind of accountability that the voter now demands of the party in power, and this is a very positive trend, not just for the states, but for India as a whole.

NEW WORKING PAPER BY S CHANDRASEKHAR, MUKTA NAIK, SHAMINDRA NATH ROY
URBAN GOVERNANCE MIGRATION

Beyond summing up salient migration trends from existing data sources; a new working paper by researchers from Centre for Policy Research and Indira Gandhi Institute for Development Research (IGIDR) builds on a critique of the estimations made by the Economic Survey 2017 to outline fresh ideas for developing leading indicators that will help inform policy. This is particularly needed because even as Indian policymakers are increasingly recognising the linkages between migration, labour markets and economic development, the lack of frequently updated datasets limits our understanding of migration.

We recognise the contribution of the Economic Survey in using innovative approaches to measure migration, viz. the age cohort metric that tracks age-cohorts across census periods and the measurement of mobility through the sale of unreserved railway tickets. However, we also see limitations – for instance, the high levels of work-related movement outlined in the Survey seems to be at odds with the challenges India is facing with job creation and also incongruent with indicative data from Census 2011 that shows a decline in the importance of work in the reasons for migration. These inconsistencies need additional exploration.

The relatively low estimation of migration by the first method (Census 2011) and the higher estimation by the second (Economic Survey 2017) speaks to discrepancies in how we define and understand different kinds of mobilities and migration in the country. For instance, we discuss how the high levels of seasonal migration and commuter movement revealed by analysing Census and NSSO (National Sample Survey Office) data demands urgent policy response especially on transportation and mobility. In fact, given relatively stable geographies of migration in India, receiving states can leverage data to evolve migrant-inclusive policies with a focus on cities, which are increasingly important destinations for migrants. These may require specific interventions in affordable housing, transport, basic services, political inclusion, skilling and livelihood. Moreover, portability of social benefits for inter-State migrants is an urgent area where inter-State mechanisms need to be strengthened.

Following the Economic Survey’s effort, we contend that the exercise of improving data on migration and commuting need not be restricted to revamping government surveys. Innovative ways of improving collecting information and tracking movement could include leveraging administrative data collected by the government through digital databases ranging from sources like birth and death registrations to scheme-related data. Ticket sales data from state road transport corporations, especially on routes where daily commuting is the norm, would be particularly useful for commuting-intensive destinations. Trails of ‘big data’ left by user transactions and digital activity, particularly mobile phone usage, are also areas that must be explored, subject to privacy considerations. Triangulating multiple datasets is important to improve data-driven policy reforms that can help India plan for those individuals who change locations permanently as well as those who move seasonally.

The thinking for this paper has emerged from the extensive work on migration done under the Strengthen and Harmonize Research and Action on Migration (SHRAMIC) initiative supported by the Tata Trusts, in which IGIDR, CPR and the National Institute of Urban Affairs (NIUA) have been involved as knowledge partners. Further, many insights emerge from the authors’ involvement, in the capacity of members and research support, with the Working Group on Migration established by the Ministry of Housing and Urban Affairs (MoHUA), Government of India and chaired by Partha Mukhopadhyay at CPR. Further impetus for the paper was provided by robust discussions on migration estimates fuelled by innovative approaches used in the Economic Survey 2017. The Economic and Political Weekly has recently accepted this paper for publication.

FULL VIDEO OF THE DISCUSSION
INTERNATIONAL POLITICS

Watch the full video (above) of the discussion on the Global Rise of Populism across the world (Denmark, France, Germany, Italy, Turkey, UK, US, Asia), where Bruce Stokes shares findings from Pew Research Center’s surveys on public attitudes behind this populist backlash.

The surveys explore the reasons behind voters’ growing distrust of elites, including perceptions about ‘well-being’, ‘global importance’, ‘inequality’, ‘immigration’, ‘terrorism’, ‘crime’, ‘economic growth’, and more.

Stokes is the Director of Global Economic Attitudes at Pew, a US-based fact tank that has conducted surveys in 85 countries since 2002, including in India. The discussion was organised in collaboration with JustJobs Network.

5 March 2019
Green industrial policy is a timely idea for India to explore
CLEARING THE AIR: MONTHLY COLUMN IN THE HINDUSTAN TIMES BY NAVROZ K DUBASH
AIR POLLUTION POLITICS

In the second instalment of a monthly op-ed series in the Hindustan Times entitled Clearing the Air, Professor Navroz K Dubash argues that green industrial policy is a timely idea for India to explore.

How can India simultaneously grow and create jobs, attend to its growing environmental crisis, and proactively address inequality? Conventional thinking holds that these objectives can only be achieved sequentially — grow first and clean up later; or grow first and redistribute later. An emergent set of ideas suggests we can do better.

The core idea emerges from a debate over the role of the government in development policy. Should the government limit itself to providing law and order, fiscal health and enabling well-functioning markets, as argued in the Washington Consensus of the 1990s-2000s? Or should it actively steer the course of development — an approach which resulted in the East Asian miracle growth in South Korea and Taiwan in the 1970s-80s — through the use of industrial policy that targets key directions and sectors?

This debate takes on new salience and energy in the light of India’s environmental crisis and the global challenge of climate change. To address these challenges will require a wholesale restructuring of the economy through upstream shifts in technology and infrastructure investments. Facilitating this requires more active government intervention beyond end of pipe pollution regulations and environmental taxes.

To make matters even more complex, inequality and justice are a necessary part of this conversation. Big shifts bring disruptions, and these disruptions are far more politically viable if they actively create opportunities for those who may otherwise be left behind.

Globally, this discussion is moving from the shadows to the mainstream. China is actively steering its economy to provide competitive advantage in the renewable energy industry. Discussion of a Green New Deal in the US has progressives calling for a green transformation of infrastructure that mainstreams climate change considerations while creating jobs. And street protests over a fuel tax in France have spurred European conversation on whether green policy is viable without actively considering social inequality.

This conversation is deeply salient to India. First, for a country growing at 6-8%, up-front directional shifts can have a big impact. India has an opportunity to choose more environmentally sustainable pathways in areas such as rail, housing, and energy demand. Without active steering, India could lock itself into an energy inefficient and environmentally poor growth path.

Second, as countries face global climate change, being green is likely to bring global competitive advantages. For example, can India become a world leader in integrating energy efficiency, or in modelling frugal forms of resilience to climate impacts, which other developing countries can emulate?

Third, India has already experimented, with some success, with State-led nudges, notably in the area of promoting LED lights through public procurement policies. But to fully exploit the opportunity, a strategic approach that draws on the full suite of industrial policies — careful subsidy and incentives, innovation, public investment and procurement — need to be brought into play.

Fourth, India has to proactively internalise questions of distribution and justice if we are to undergo a green transition. For example, a shift to renewable energy will invariably bring costs to coal-rich states, without upfront efforts to develop new sources of livelihoods and support for communities.

Can India successfully develop a green industrial policy, or, to use the metaphor of the day, can we Green India by Making Green in India? There is at least one cautionary note: Doing industrial policy well requires a very nimble State. Given the history of the licence raj, industrial policy should ideally not try to pick winners but “pick the willing” — companies keen to take advantage of green industrial policy — in the words of economist Mariana Mazucatto, a thought leader in this emergent area. But, to do so, the State has to have the strategic capacity to identify growth areas, understand the needs and constraints of industry sufficiently to develop complementary policies, yet have enough autonomy not to be captured by industry.

Recent experience with direction setting by the Indian government suggests a rush to announce dramatic new pathways but a lack of capacity to build the underlying support structure. We proclaim renewable energy or electric vehicle targets, but fail to anticipate the consistent and careful policies required to support them. For example, ongoing research on green industrial policy by Easwaran Narassimhan, a PhD scholar, finds that the solar mission’s efforts to create a domestic solar industry and support solar jobs fall far short. Not least, the third pillar, proactive engagement with the distributive justice agenda, is conspicuous by its absence.

Green industrial policy is a timely idea for India to explore. We need jobs, we need greening, and we cannot achieve both without addressing distributive questions. Nor can we postpone any of these objectives. But the conditions for success are stringent, and include a far more capable State.

Navroz K Dubash is a Professor at the Centre for Policy Research. This is the second article in a monthly op-ed series in the Hindustan Times entitled ‘Clearing the Air.’ The original article, which was posted on March 4, 2019, can be found here.

Read more in the Clearing the Air series:

• India needs environmental governance
• Our clean air plan is a missed chance
• Can India grow now and clean up later? No, it can’t
• How to Avoid the Middle Income Trap

CPR-NAMATI TEAM PUTS IT IN PERSPECTIVE
ENVIRONMENTAL JUSTICE

The recent news regarding the cancellation of a fine imposed on the APSEZ (Adani Ports and Special Economic Zone Limited) for environmental non- compliance by its Waterfront Development project (WDFP) in Mundra, Gujarat has set off a series of clarifications by the Ministry of Environment, Forests and Climate Change.

The Ministry’s institutional response to this project will have a bearing on how corporate non- compliance of environment law is legally treated by environmental regulators.

However, this issue and the clarifications offered by the Ministry cannot be understood without the history of the project’s violations that have been recorded by several teams as well as official authorities.

The CPR-Namati Environment Justice Program works on understanding the regulatory and institutional challenges to enforcement of environmental laws. As part of its ongoing work, it has tracked the regulatory history of this project, which is shared below:​

The conditions under which this project came to be set up in this part of the Kutch coast have been reported as a favour to the company by the then political party in power in the state. The project was granted environmental clearance under the Environment Impact Assessment Notification in 2009. After the project was established, the Environment Ministry issued two show cause notices in 2010 and 2013. These raised issues of mangrove destruction, illegal siting of project staff’s residential township and non-compliance of other conditions of the environmental clearance.

In 2012, the CPR- Namati Environment Justice Program, that works on issues of environmental compliance, collaborated with the Mundra Hitrakshak Manch (Forum for the protection of Mundra) to undertake a research study of the environmental compliance of the project. The report titled ‘Closing the Enforcement Gap: Findings of the Community Led Groundtruthing of environmental violations in Mundra, Kutch’ was published in 2013. The report presented detailed evidence on non-compliance using satellite images, photographs, impact studies and local testimonies. This was officially submitted to the Environment Ministry.

Even as the study was being done, the Central government set up a committee headed by Centre for Science and Environment’s Sunita Narain in September 2012. It was to look into the complaints received by the ministry on environmental violations and the “severity of issues involved”. From what is known publically, the Committee undertook field visits and spoke to affected people as well as the APSEZ officials. It put out its report in 2013 which stated on page 81 that ‘there is incontrovertible evidence of violation of EC condition and non-compliance…’. The report took the stance that ‘it is not possible or prudent at this stage to halt or cease its operations.’

Articles in The Hindu and The Economic Times pointed out that the report did not provide any methodology or legal basis for calculating the fine of Rs 200 crores and it called this fine an ‘Environment Restoration Fund’. The damage caused due to the violations was not only to the environment, but also to fishing families, coastal pastoralists and farmers who had suffered livelihood and economic hardships for years. Along with being major legal offences, violations of environment law lead to social, economic and psychological costs borne by scores of poor and vulnerable citizens in whose neighbourhoods these projects operate.

This WFDP is located within Adani’s SEZ (Special Economic Zone) in Mundra. On 13 January, 2014, the Gujarat High Court (HC) observed that the operations of the SEZ were being carried out without an environment clearance. The HC questioned the Adanis’ stand on operating with a ‘deemed clearance’. The High Court also directed the Ministry to take a decision on whether environment clearance should be granted to the SEZ post facto. In July, 2014, this approval was granted.

Setting aside the two show cause notices and the observations of the Committee regarding repeated violations, the Ministry raised doubts over whether the violations had ever occurred.

In file notings received through a Right to Information (RTI) application in 2015, the Ministry concluded that the APSEZ is not a violator. The Ministry concluded that while mangrove destruction and other damage had taken place it could not be attributed to the company. The RTI documents reveal that the Company disagreed with the violations observed by the Committee. The RTI documents can be accessed here.

The recent article that stated that the Ministry has ‘dropped’ the penalty has sent it into a huddle. The Ministry is reported to have issued a statement that they will impose an ‘open ended financial commitment’ that could be greater than the Rs 200 crores fixed by the Narain Committee as well as ensure that restoration of the landscape is undertaken

It remains unclear how this fine will be computed and whether it will be legally tenable when the 2009 project approval letter emphatically states that non compliance of clearance conditions can lead to the revocation of the environment clearance.

A comparison of Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) demand and supply of work between the first quarter of FY 2020, when the national lockdown was in place and the first quarter of FY 2021 when the second wave was at its peak offers a useful window into understanding the extent to which MGNREGS has provided robust support to rural India and the role of the Government in ensuring relief and protection to the vulnerable during the deadly second wave.

Demand vs Supply

In 2020, when the ravages of COVID-19 and associated policies became visible, the MGNREGS provided a much needed the lifeline to most of India’s rural poor. Budgets were enhanced significantly. In FY 2020-21 Rs. 1.1 lakh crore (including payments due)[1] was spent on the scheme. As many as 7.55 crore households[2] across the country were given work through the year. However, demand for work consistently outstripped supply. A clear indicator that rural distress and unemployment persisted despite the opening up of the Indian economy in June 2020 after the national lockdown was lifted and a relatively healthy growth in agriculture.

In 2021, as the second wave hit, rural India suffered this time from the combination of health and economic shock. Once States began to announce lockdowns, unemployment rates rose once again. In April and May 2021, the Centre for Monitoring the Indian Economy (CMIE) recorded national unemployment rates at 7.97 in April and 11.90 per cent in May[3]. Unemployment in rural India increased from 7.13 percent in April 2021 to 10.63 in May 2021[4]. However, unlike in 2020, MGNREGS work was not provided at the scale needed.

In the first quarter of 2020, when the national lockdown was in place, (months of April, May and June 2020), demand for work under MGNREGS rose to new highs, touching 4.47 crores in June, the highest of the year[5]. Despite this sudden, massive increase in work demand, the response was robust and work availability high. May in particular saw 3.73 crore households demanding work, and 88.5 per cent of this demand, or 3.3 crore households were provided work[6]. MGNREGS not only proved to be the most important entitlement protecting India’s workers, it also proved to be elastic. Expanding, at speed, when needed and contracting when demand was low. It is important to note however, that despite this expansion, demand consistently outstripped supply.

Conversely, for the same months of 2021, not only was overall demand for work lower than in 2020, but supply of works was even lower. In comparison to the high of 4.47 crore households who demanded work in June of the previous year, 3.5 crore households demanded work in June 2021 – the highest of the year so far (as on 8th July, 2021)[7]. Despite this lower demand for work, the overall supply of works has been even lower for May and June 2021 than in the same months of 2020. This means that even though fewer people were turning to MGNREGS in rural areas this year, lesser work (and therefore, income) was being provided under the scheme. In May 2021, 2.76 crore households sought work through MGNREGS[8], but only 2.22 crore households (80.3 per cent) received work[9]. While the figures for June 2021 continue to be revised, current numbers suggest an even starker difference in the work demand met between June this year and the last. States like Madhya Pradesh, Rajasthan, Bihar, and Tamil Nadu met much less demand for work in 2021 over these three months than they did last year[10]. In contrast, the proportion of unmet demand in Uttar Pradesh, Maharashtra, Kerala and West Bengal was higher last year than this.

 

High pending liabilities

One of the long persistent challenges with MGNREGS implementation has been the delays in payments from one financial year flowing into the next year, because of bottlenecks in fund availability. Many states start the new financial year with pending liabilities or unpaid wages or material costs that need to be paid off as soon as new budgets are announced and monies released at the start of the financial year. The problem with high pending liabilities is that new budgets allocations are used to meet these liabilities and governments’ resorts to rationing demand, creating a vicious cycle of delayed payments.

In the first quarter of FY 2021, this all too familiar pattern unfolded, except this time given high rural distress, the costs have been higher. Nation-wide, total pending liabilities for FY 2021 was Rs. 9,810 crores[13]. There are important State wise differences. Madhya Pradesh opened the financial year with pending liabilities amounting to 697.57 crores[14]. As on 15th July 2021, the State has already utilized 98.17 per cent[15] of its available funds. A similar pattern has unfolded for Chhattisgarh, Himachal Pradesh and Uttarakhand, all states with high liabilities of previous years, also registered high rates of fund utilization. Demand for work has not abated in these States. In the first quarter of FY 2021, unmet demand in Madhya Pradesh was 18,42,054, for Chhattisgarh, it was 9,05,930, and for Uttarakhand, it was 1,24,938 households respectively[16]. It is likely therefore that these states will once again close the year with high pending liabilities and indulge in demand rationing, unless budgets are expanded.

Bihar’s case remains unique here: despite high rates of unmet demand for work and pending liabilities, its utilization of the available funds stands at only 83.49 per cent[17].

State	% Utilisation (’21-’22)
Chhattisgarh	90.94
Tamil Nadu	64.7
Madhya Pradesh	98.17
West Bengal	57.8
Uttarakhand	92.09
Karnataka	63.59
Bihar	83.49

This pattern of high unmet demand (despite relatively lower ‘demand for work’ in 2021) and high utilization of funds is indicative of the fact administrative prioritization of providing ‘relief’ has been missing. In May 2020, the Government of India announced a relief package with substantially enhanced budget allocation for MGNREGS. This resulted an immediate increase in supply of MGNREGS works for much of rural India. Perhaps expecting the economy to be back on a recovery path in the FY 2021 budget, fund allocations were reduced from a total of Rs. 1,11,500 crores in FY 20[19] to Rs. 73,000 crores in FY 21[20]. Once the COVID-19 second wave hit, there was the expectation that MGNREGS would once expand to respond to the increased demand. However, this has not happened. It is often argued that budget allocations for MGNREGS are irrelevant because this is a ‘demand based’ program and funds are made available based on labour budget estimates provided from the ground. However, the reality is that when budget allocations are low, governments resort to rationing demand. Relatively low demand compression in 2021 is indicative of precisely this phenomenon. The fact that despite lower demand, work supply could not keep up is also indicative of the fact that claims that funds for MGNREGS are elastic are false. Low availability of funds inevitably means demand remains unmet thus undermining the ‘demand based’ entitlement that lies at the heart of the MGNREGS.

Looking forward

Last year, the COVID-19 lockdown-related distress mainly affected the non-agricultural sectors of the rural economy. The reasons for this was first, agricultural activities were exempted from any lockdown restrictions, and second, a very good monsoon. 2019 and 2020 were both surplus monsoon years and they produced bumper harvests. That, in combination with record MGNREGS person-days job generation, helped contain rural distress to an extent.

This year, the monsoon’s progress has not been up to initial forecasts. Unseasonal pre-monsoon showers (this May was the wettest May in 31 years) seemed to have disrupted normal heating patterns required for the formation of low pressure areas. As a result, the start of the monsoon season (June-September) saw an initial burst of high rainfall, only to stall after the third week of June. In fact, the northern limit of the monsoon has not moved at all since June 19 and only revived in mid-July. The Met Department’s latest forecasts suggest that the monsoon activity will revive from around July 10. But precious time has already been lost. The bulk of sowing of kharif crops happens between mid-June and mid-July. The crop sown after mid-July will not have enough time for vegetative growth, which will ultimately have a bearing on crop yields. Also, the enhanced possibility of the development of “negative Indian Ocean Dipole” conditions during July to September (most global climate models are predicting this) casts a cloud over the monsoon’s performance in the remaining part of the season.

There is thus a need to be proactive in pushing MGNREGS and planning for a sub-par agriculture year. The number of COVID cases is falling in rural areas and economies are slowly opening up. However, India is staring at the possibility of a long months of persistent rural distress. The time for action is now.

This note, part of the Understanding the Rural Economy series by CPR, has been authored by Yamini Aiyar, Avani Kapur and Harish Damodaran with research support from Ragini Rao Munjuluri and Samridhi Agarwal. Read other notes in the series:

FULL VIDEO OF LECTURE
RIGHTS

Watch the full video (above) of the lecture on ‘Hate Speech or the Speech We Hate’ featuring Salil Tripathi.

What constitutes hate speech and what makes it dangerous? The term hate speech has been defined loosely and takes different interpretations for the speaker and the listener. The speakers who express views forcefully believe they are expressing their right to speak freely. The listeners consider the speech they don’t like or agree with as hate speech. Laws impose restrictions on free speech in most jurisdictions, and litigation can restrict free expression of ideas. But sustained hate speech can kill – genocides begin with normalisation of hatred through speech – action follows later, as examples from Rwanda and Bosnia show. A new framework, which distinguishes between hate speech and dangerous speech can provide clarity to distinguish between speech that promotes hate and violence and the ideas we hate but are merely controversial, provocative, hurtful, shocking, and disgusting for some. Negotiating that space is the challenge for democracies in the age of the Internet.

Salil Tripathi is the Chair of the Writers in Prison Committee of PEN International, since 2015. He is an award-winning journalist and writer.

WATCH VIDEO OF THE CONSULTATIVE WORKSHOP
POLITICS

Watch the two-part video (Part 1 above) of a workshop, which discussed the findings of a two-year-long project called ‘Newly created states and Inclusive Development: The subnational political settlements of Jharkhand and Chhattisgarh’. The research was conducted collaboratively by CPR and the Effective States and Inclusive Development (ESID) research cluster at the University of Manchester, UK.

The research analysed the trajectories of development by the ‘sub-national political settlements’ in the states of Jharkhand and Chhattisgarh in two domains. These included mining and the provision of food subsidies through the Public Distribution System. Both formed in 2000, Jharkhand and Chhattisgarh are comparable for their high incidences of poverty, poor tribal populations, and vast reserves of mineral wealth.

Participants at the workshop included experts from the National Institute of Public Finance and Policy, ESID research centre, King’s India Institute etc.

READ THE PAPER BY KANCHI KOHLI
ENVIRONMENTAL JUSTICE

This essay examines the role of India’s 2006 Forest Rights Act in the procedures that regulate transfer of forest land to large infrastructure projects. Specifically, it shows the gap between the legally mandated requirements and how these are implemented in project approval processes. This is illustrated through a case study of the coal mining approvals in the Hasdeo Arand forest region in the central Indian state of Chhattisgarh. The essay also outlines the different actors who have influenced the discourses on forest rights of Adivasi and other forest dwelling communities and what they identify as factors that challenge the implementation of this law on the ground. It juxtaposes this analysis in the context of the recent decision of the Supreme Court of India on eviction of forest dwellers and examines whether that would bring in any structural change in the way the law is implemented.