Author: cprindia

RAJIV KUMAR PARTICIPATES IN PANEL DISCUSSION ON ET NOW
ECONOMY

Rajiv Kumar participates in a discussion (full video above) on ‘remonetising’ India, a Times Network initiative, after the expiry of the 50-day-deadline

Earlier this week, the Narendra Modi government extended the distribution of free foodgrains under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) for another five months till November 2021. The move reinforced the primacy of “food” – more specifically, rice and wheat channeled through the public distribution system (PDS) – in its social safety net programmes during the current pandemic.

Till 2019-20, annual offtake of rice and wheat from the Food Corporation of India’s (FCI) godowns averaged hardly 62 million tonnes (mt); it actually fell from almost 66 mt to just over 60 mt between 2012-13 and 2017-18. Much of this comprised PDS rations under the National Food Security Act (NFSA) of 2013. This law, passed during the previous United Progressive Alliance (UPA) regime (https://bit.ly/3pChsfv), entitles 81.35 crore Indians to receive at least 5 kg of wheat or rice per month at Rs 2 and Rs 3 per kg, respectively. The annual foodgrain allocation under NFSA – which includes a higher 35-kg monthly ration for 2.37 crore families identified as “poorest of the poor” under the Antyodaya Anna Yojana – is estimated at nearly 55 mt.

Under PMGKAY, the NFSA beneficiaries were provided an extra 5 kg grain per month free of cost during April-November 2020. While that translated into an additional allocation of over 32 mt, actual lifting under PMGKAY, the Atmanirbhar Bharat Package (for returning migrant labourers) and assorted schemes launched in the wake of the Covid-19-induced lockdown last year totaled about 31.5 mt.

The chart below shows offtake of rice and wheat from the Central pool crossing an all-time-high of 93 mt during 2020-21, roughly 50% higher than the previous fiscal year. This was largely courtesy of PMGKAY, which has been re-launched this year as well, following the pandemic’s second wave. The Modi government initially allocated the 5-kg extra free grain per month to NFSA beneficiaries only for May and June 2021. But on June 7, the Prime Minister announced its extension up to Diwali, i.e. November. That is expected to, again, boost offtake by an estimated 28 mt in 2021-22.

Offtake is for fiscal year (April-March) and inclusive of lifting under other welfare schemes and open market sales.

Source: Department of Food and Public Distribution.

But it is not only food offtake that has hit an all-time-high. Government agencies have, as on June 9, procured 42 mt of wheat and 55 mt of rice from the 2020-21 crops. This, as can be seen from the next chart, has broken even the record 39 mt and 52 mt that got procured in the previous year. The Modi government has, in the post-pandemic period, both distributed as well as procured more rice and wheat than ever before!

rocurement is for crop year (July-June); figures for 2020-21 are as on June 9.

Source: Department of Food and Public Distribution.

While the spike in offtake is a result of the pandemic – free food has arguably been the single biggest relief intervention, ahead of even MGNREGA (another UPA legacy programme), for those worst affected by the economic disruptions after March 2020 – the increased procurement is, perhaps, a fallout of the movement against the Centre’s farm reform laws. The minimum support price (MSP) value of the paddy and wheat bought by government agencies since October 2020 – the three farm laws got passed the previous month – comes close to Rs 237,000 crore. Approximately 39% of that amount has gone to Punjab and Haryana, whose farmers have been at the forefront of the protests. The Modi government’s going all out to convince farmers, that its reform laws aren’t aimed at ending the MSP-based procurement regime, can be seen in paddy and wheat purchases from Punjab scaling new highs in the 2020-21 crop year. Record grain paddy procurement has been its strongest defense against allegations of being anti-farmer!

This links up with a third record. Even after the unprecedented 93 mt-plus offtake, stocks of rice and wheat in the Central pool crossed the 100 mt-mark for the first time on May 1, surpassing the previous high of 97.27 mt reached on June 1, 2020. The chart below shows that stock levels have been rising since 2017, reversing a declining trend of the preceding 4-5 years.

Stocks include rice equivalent of un-milled paddy.

Source: Department of Food and Public Distribution.

If stock accumulation has primarily to do with the political economy compulsions of MSP-based procurement, Covid-time distress has actually provided an opportunity for whittling down FCI’s massive grain mountain. FCI’s “economic cost” of procuring, handling, transporting, storing and distributing grains was estimated at Rs 39.99 per kg for rice and Rs 27.40/kg for wheat in 2020-21. The subsidy on the 31.5 mt of grains (20.8 mt rice and 10.7 mt wheat) distributed free of cost under PMGKAY and other special relief programmes would have, then, worked out to around Rs 112,500 crore. The actual cost, though, would have been lower, because FCI also incurs interest and storage expenses in holding excess stocks in its godowns. This “carrying cost of buffer”, pegged at Rs 5.40/kg in 2020-21, is saved even when grain is given out free. The corresponding annual savings on 31.5 mt would have been in excess of Rs 17,000 crore. Similar savings would accrue on the 28 mt additional grain allocations under PMGKAY for 2021-22.

Source: Department of Commerce.

Now is the final record: 2020-21 saw all-time-high PDS offtake, government procurement and stock buildup. It also saw the country exporting a record 19.8 mt of rice and wheat. On paper, virtually this entire quantity that got shipped out was grain procured from the open market. According to the department of food and public distribution, a mere 75,000 tonnes of wheat and 4,000 tonnes of rice were exported from the Central pool in 2020-21. This was wholly on “humanitarian grounds” through the Ministry of External Affairs.

Foodgrain exports from India have been significantly aided by the surge in international prices. The UN Food and Agriculture Organization’s Cereal Price Index hit a 95-month-high in May. While the hardening of global prices has definitely helped, the competitiveness of Indian rice and wheat may have also been enabled by recycled/leaked grain from the PDS (https://bit.ly/3vjVm2I). Given the massive quantities that were offered free/near-free under PMGKAY/NFSA, it should not surprise if some of this grain got diverted to the open market or even exports.

But at the end of the day, it is the abundant crop produced by farmers that has made all four records – PDS offtake, procurement, stocks and exports – possible even amidst the country’s worst pandemic in over a century.

Find all previous notes as part of the series here:

• Can rural play “savior” again? Agricultural seasons and COVID-19 waves by Mekhala Krishnamurthy and Harish Damodaran
• Where is food inflation headed? by Harish Damodaran
• Has MGNREGS Helped the Rural Economy in 2021? by Yamini Aiyar, Avani Kapur and Harish Damodaran
• Employment U-turn: Rural India is India’s main employer by Harish Damodaran and Yamini Aiyar
• Agricultural Households and Farming Income: An initial analysis of variations in income from farming and other sources among agricultural households in India by Harish Damodaran, Mekhala Krishnamurthy and Samridhi Agarwal
• Carbohydrates to proteins and back: How dietary and cropping diversification seems to have gone into reverse by Harish Damodaran, Mekhala Krishnamurthy and Samridhi Agarwal.
• Mapping India’s livestock economy by Harish Damodaran and Samridhi Agarwal.
• Unlocking the potential of Ganna Pradesh
• The Future of MSP by Harish Damodaran
• The Return of Food Inflation: Why its Different this time by Samridhi Agarwal and Harish Damodaran

BLOG BASED ON NEW WORKING PAPER BY DEEPAK SANAN
ENERGY RESEARCH

The ongoing farmers’ agitation is a pointer to the stark global reality that successful reform programmes have been consultative and accompanied by a comprehensive outreach exercise designed to allay concerns of all stakeholders. Policymakers in the power sector would do well to carefully study the contours of the farmers’ agitation before going ahead with the ambitious reforms programme unveiled in May this year. A roll back of the proposed electricity reform (as a smaller sub text) is part of the demands being raised by the farmers.

Electricity reform was the first of the ‘lockdown reforms’ unveiled by the Government of India. The proposed amendments to the Electricity Act 2000, announced on 17th April, 2020 were followed by a letter from the Finance Ministry on 13th May, 2020 to fast forward action by states on some of the proposed amendments. Agriculture reforms came later but have of course taken centre-stage now.

There are several parallels in the two reforms initiatives. Many issues and tradeoffs are similar. Free markets and consumer choice versus the reality of market imperfections. Issues pertaining to the degradation of the environment, financial viability, prices, incomes and access, the roles of the centre and the states, fears, genuine or otherwise, of exploitation by faceless corporates, balancing the interests of consumers and producers.

In agriculture, the affected party quickly understood the body blow being dealt to them and began to rally its numbers to force a dialogue. A nationwide debate has begun. In electricity, possibly because the bill is still at the draft stage and that consequences may be more diffuse, less evident, seemingly more distant, the response has been more muffled. Still, the fact is that there are issues of import and that there is cause for concern, may be equally pressing in relation to this sector. There is an opportunity to introspect.

Evaluating recent proposals to reform the power sector in India is a paper that seeks to fill this gap by flagging facts and scenarios worthy of further debate and discussion. Through a simple scenario building exercise, this paper cautions that the parlous financial position of the distribution utilities after lockdown requires that “reforms” follow “recovery”. The concurrent roll out of stringent reform measures on several fronts during a period of severe financial stress could seriously impair the prospects of a viable power sector in the near future. This, in turn, will not only hamper our planned promotion of renewables- based electricity but act as a brake on the entire process of economic recovery. In designing the reform itself, lessons from the experience of earlier sectoral reform programmes and recommendations emerging from the limitations of the general architecture of central interventions need to be taken on board. The current exercise may hold no hope for an electricity sector in which the problems hold no easy answer.

FULL VIDEO OF THE DISCUSSION
URBAN ECONOMY URBAN GOVERNANCE

Watch the full video (above) of the discussion on ‘Fractal Urbanism: Residential-segregation in Modernising India‘ featuring Andaleeb Rahman.

The presentation showed how residential caste-segregation is independent of city size, using the first-ever large-scale evidence of neighbourhood-resolution data from 147 of the largest cities in contemporary India (the sample includes all cities in India with at least 0.3 million residents in 2011). This analysis sheds new light on one of the central conundrums in Indian urbanism — the persistence of caste segregation across the country, and across cities of varying sizes. It documents how patterns of residential caste segregation in the largest metropolitan centres with over 10 million residents closely track patterns in much smaller cities that are nearly two orders-of-magnitude smaller. This finding punctures a hole in one of the central normative promises of India’s urbanisation — the gradual withering of traditional caste-based segregation. These national findings are complemented by a unique census-scale micro-data containing detailed elementary caste (jati) information for nearly five million urban households in Karnataka. The analysis provides further fine-grained evidence of how segregation within the wards at census-block scales accounts for a significant part of the city scale patterns of segregation and is a central driver of ghettoisation of the most spatially marginalised groups in urban India — Muslims and Dalits. The authors offered several hypotheses and explanations and discussed implications for urban planning, policy, as well as broader modernisation theories.

Andaleeb Rahman is currently a Postdoctoral Associate at Cornell University. His research interest lies in the area of food policy and ethnic politics.

The question and answer session that followed can be accessed here.

As Kashmir continues to be on the boil for over 60 days now, a factual trajectory of the history of the state and its conflict (from 1947 till 2006) is captured in this primer by the late B G Verghese of CPR.

The primer was written with the objective of educating people, given the lack of easily accessible literature on the subject, and presents the central story of the Jammu and Kashmir (J&K) conflict post 1947–in a series of snapshots.

From the history of its invasions, coups, and accession, to the account of the UN resolutions, to the resulting Indian, Pakistani and Chinese territorial control of the erstwhile princely state of J&K in 1949, the following wars, the many attempts at the peace process–including the origins of the plural, multi-ethnic and multi-lingual tradition of Kashmiriyat–the primer is an important reference point for understanding and contextualising the current situation of the state.

A visual timeline of the highlights from the primer can be accessed above.

VIDEO RECORDING OF CPR-CSH URBAN WORKSHOP
URBAN GOVERNANCE

Watch the full video (above) of the preliminary findings presented by Sanjeev Vidhyarthi from his research on the actors shaping the fast growing Indian cities and their metropolitan regions.

The findings focus both on the changing perception of spatial plans, as well as the range of urban actors and how their plans are beginning to shape Indian urban regions in unprecedented ways.

Sanjeev Vidyarthi is an Associate Professor of Urban Planning and Policy at the University of Illinois, Chicago.

EXCHANGE OF VIEWS BETWEEN EXPERTS FROM INDIA AND AUSTRALIA
POLITICS INTERNATIONAL POLITICS

Watch the full video (above) of a public forum organised by the Centre for Policy Research, which brought together experts from Niti Aayog (government of India’s think tank) and Australia, to discuss policy reforms, and how these can be enacted.

There was an exchange of views between the two coutnries on how to manage the policy environment, assess and analyse government and non-government stakeholders, and effect good policy. Particularly, since designing and implementing effective policy reform in multi-tiered complex democracies is difficult and challenging, especially where there are vocal and entrenched interests and stakeholders involved.

ANALYSING THE PM’S RESPONSE
POLITICS KASHMIR INDIA-PAKISTAN

SOUTH ASIA
CPR faculty G Parthasarathy comments on the Prime Minister taking stock of the situation in Kashmir following the death of Burhan Wani on DD News.

A LITERATURE REVIEW AND ANNOTATED BIBLIOGRAPHY BY SUSAN E CHAPLIN
SANITATION URBAN SERVICES RIGHTS

Susan E Chaplin finds that existing literature provides little evidence of how sanitation inequalities impact the daily lives of poor women and girls.

What is the research about?

In this working paper, Susan Chaplin examines existing literature to find out what is known about how inequalities in urban sanitation access impacts the lives of poor women and girls, who have to queue up each morning to use public toilets, or have to decide which open defecation sites are the least dangerous to use.

How was the research conducted?’

The 68 articles and reports discussed in this literature review were largely collected using Google Scholar searches and the website Sanitation Updates, which provides regular email alerts on recently published journal articles and reports. Most of the evidence-based research and grey literature focused on India, Bangladesh, Kenya, Uganda, Malawi and South Africa

What are the key findings?

Despite the focus on gender inequalities and sanitation in low income countries, within development goals, programmes, and projects, only 16 articles and reports either addressed gender inequalities or used gender analysis in examining results from their research projects.
The urban sanitation inequalities faced by working women, along with those who were ageing, disabled or living on pavements, has been largely ignored in the literature.
The linkages between gender-based violence and the lack of urban sanitation are poorly researched, documented or addressed in practice.
There is a lack of understanding in urban sanitation policies of how gender inequalities create toilet insecurity for millions of women and girls.

Conclusion

To understand how gender inequality operates at multiple levels across societies in the cities of the Global South, in relation to sanitation access, there is a critical need for better data collection which is gender aggregated. Most national statistics, at best, often just provide a very broad overview of sanitation facilities at the household level. These statistics don’t provide an adequate overview of the everyday lives of poor women and girls who are compelled to develop strategies to cope with lack of access to safe sanitation facilities. For many poor women and girls, this specifically means finding ways to cope with gender-based violence that occurs around community/public toilets and open defecation sites.
There is an urgent need to develop gender-sensitive understanding of the heterogeneous nature of slums and informal settlements, the diversity of the people who live in them, and the relationships between them, if urban sanitation inequalities are to be addressed to meet Sustainable Development Goals.
Data and research is also needed on how this lack of access impacts poor women and girls, women working in informal sectors, women with disabilities, ageing women, and homeless women. The understanding created by this new research could then be used to develop more appropriate and effective strategies to reduce gender inequalities in urban sanitation provision.

FULL VIDEO OF PANEL DISCUSSION AS PART OF CPR DIALOGUES
SOUTH ASIA INTERNATIONAL POLITICS

Watch the full video of the panel discussion on ‘Geopolitics and Geo-Economics in a Changing South Asia’, organised as part of CPR Dialogues, featuring Nimmi Kurian, Zorawar Daulet Singh, Ambassador Shivshankar Menon, chaired by Srinath Raghavan.

The contemporary phase of international politics is full of uncertainty and fluidity. The US is unable to enforce its writ over the system, nor is it able to supply the public goods necessary to produce a stable and flourishing world economy. Rising powers are contending for new roles and seeking to reshape the rules that govern world order. If we step back, however, what we notice is actually a recurring cycle in world history. A pattern of struggle and competition where each epoch has ultimately produced a larger and more dynamic process of capital accumulation and international division of labour. After a struggle for leadership, the baton passes towards a new contender who resuscitates world order and assumes the onus of managing the process of economic globalisation. Does the present phase portend such a scenario? What aspects of the ongoing power transition are similar to the past and what is distinct? Can the dominant power and its rivals arrive at a modus vivendi that avoids a zero-sum confrontation?

Coming to India and its region, the changing international environment has profound consequences. Both the geoeconomic order – an open world economy where capital and goods could move relatively freely between states – and a peaceful geopolitical setting underwritten by a great power peace has enabled India since the end of the last Cold War to focus on economic growth and development. Profound changes to this status quo imply that policymakers and strategic thinkers are being called upon to supply fresh ideas and frameworks for India’s foreign policy.

If unrelenting pressures on globalisation do continue to increase, it would imperil South Asia’s economic story. Short of finance capital, non-renewable energy resources, and industrial technologies, South Asia’s transformation for the past two decades has been intrinsically linked to reliable access to economic resources from other high-income and emerging economies. Any disruption to trans-national and trans-continental interdependence, will naturally push the region to look within it own socio-economic base to sustain its economic transformation. This would place greater responsibilities on India to safeguard not only its own economic prospects but supply public goods and assist its neighbours too. And, there is no sensible reason why India must seek to do this alone with its scarce resources and growing domestic claims. Cultivating diverse partnerships are, therefore, not a luxury but a strategic necessity. Setting the terms and shaping how other major powers with greater economic heft engage with the South Asia is one of the central challenges for India’s foreign policy. What have been missing from Indian debates are more sophisticated approaches to the multitude of regional visions and connectivity ideas that are being espoused by several great powers. Can India leverage its unique location at the crossroads of many of these geoeconomic visions provides to mediate and steer Asia’s political economy evolution in directions that advance its interests?

Furthermore, a fundamental assumption – indeed a sacrosanct premise – for India’s strategic thinking in the post-Cold War period has been internalising the reality of one preponderant power centre that shaped political and economic life across the globe. This structural setting – unipolarity as it was described by many – led to a basic Indian foreign policy framework of a sustained, albeit gradual and tentative at each step, integration into the US-led order as well as of course a transformation in bilateral relations with the US and its key allies. This has been a bipartisan strategy and for the most part it could be claimed that Indian policymakers accomplished this process within the broad confines of strategic autonomy with some success. But given the geopolitical changes now underway, without a careful strategic readjustment and a sensible assessment on Asian geopolitics, India’s foreign policy risks losing the advantages that might accrue from a multipolar Asia. How should India reimagine its place in this diffusion of global power and disintegration of the unipolar consensus?

The panel explored these and related themes to understand what possible roles can India realistically adopt to shape the ongoing power transition in a way that advances its domestic transformation and security along with a stable Asian and world order.

Srinath Raghavan is a Senior Fellow at CPR.

Nimmi Kurian is a Professor at CPR.

Zorawar Daulet Singh is a Fellow at CPR.

Ambassador Shivshankar Menon is the former National Security Advisor and Indian Foreign Secretary.

The question and answer session that followed can be accessed here.

Coverage of the panel by ThePrint (digital partner for CPR Dialogues) can be accessed here.