Author: cprindia

India’s move to electrify every village and household in the country has been lauded as a success. Building on decades of targeted programmes and public investments by multiple governments, the country completed 100% village electrification in April 2018; a year after, it has electrified nearly all ‘willing’ households. Despite the time it took to get here, these achievements are important milestones in India’s development trajectory. But does connecting households to the electric grid resolve the electricity access challenge? The answer depends on whether electrons flow through the wires and whether all consumers are served equally and adequately.

For electrons to flow and for there to be power for all, a vital policy issue to be considered is about the role to be played by the Government of India (GoI). Given the concurrent status of electricity, can the sector be a ‘perfect crucible for making effective the cooperative-competitive federalism experiment that is now India’?1

Challenges of Electricity Access

Once connected to the grid, consumers face multiple challenges to stay plugged in and realize the full benefits of electricity services. From the perspective of the poor, there are three key challenges that need to be overcome: unreliable supply, poor consumer service, and unaffordable bills.

Although India has become power surplus, many homes, especially those located in rural and low-income areas, have to bear with intermittent and poor quality supply. While government reports indicate 16-24 hours of supply to all homes, several surveys find lower supply hours, particularly, in the evening hours. Prayas Energy Group’s Electricity Supply Monitoring Initiative found that less than 20% of rural locations receive continuous supply during 5-11 p.m. This pattern of unreliable supply can be explained by an inherent disincentive to serve the poor. While India’s average monthly household electricity consumption is as low as 90 kWh,2 most households consume less than 50 kWh.3 India follows a consumption slab-based tariff system, where initial consumption slabs are charged significantly below the costs. This is one reason why electricity distribution companies (discoms) lose more than 50% of their cost in supplying to low-consumption consumers.4

Metering and billing irregularities are common, particularly in rural areas. The human resources of discoms have declined even as their consumer base has increased, leading to lower frequencies of meter reading and billing. Many discoms raise bills once in two months. In several cases, the first bill after the connection is raised after several months. Accumulated dues are often unaffordable to low-income households and increases the likelihood of payment default and subsequent disconnection. Irregular billing also causes a trust gap between discoms and consumers. A recent survey in Uttar Pradesh finds that consumers who are billed monthly are more likely to pay on time and in full amount; but those who are not billed regularly do not believe that their bill is based on actual consumption and are likely to default on payment.5

A major barrier to electricity access remains the concurrence between economic poverty and energy poverty. At the launch of Saubhagya, seven states (Uttar Pradesh, Bihar, Odisha, Jharkhand, Assam, Rajasthan and Madhya Pradesh) accounted for two-thirds of the un-electrified households in India. These states are home to about two-thirds of India’s population living below the poverty line (BPL). Discoms in these states are already highly indebted, accounting for 42% of accumulated debts of all discoms as on March 2016. Discoms in these seven have higher losses and revenue gaps than national averages. Despite continued state government subvention (or payment to discoms), all these discoms have been consistently running at a loss, accounting for about 47% of the loss in the electricity distribution business. In 2015-16, subventions to discoms amounted to 10% of these seven states’ collective gross fiscal deficit and accounted for 40% of total subvention from all states. The recent push for financial turnaround of discoms through a centrally designed scheme – Ujwal Discom Assurance Yojana (UDAY) – has not achieved the desired results in many states.6 The fiscal space of these states and discoms is cramped by the need to accommodate the electricity subsidy. On the other hand, existing subsidized lifeline tariffs in these states are, ironically, higher than in states with high electricity access.7 Media reports suggest that 3.5 million households in Uttar Pradesh are unwilling to get an electricity connection despite the connection charge waiver and subsidized tariff at 50% of the actual costs.8

The Centre’s Helping Hand​

The responsibility for electrification has been shared by governments at the Centre and states. Successive governments at the Centre have played an important role through sustained policy directives, targeted programmes and financial support. Creation of a dedicated financing agency in 1969 – the Rural Electrification Corporation (REC) – helped boost village electrification in the 1970s and 1980s, when two-thirds of India’s villages were electrified. To address low household electrification, the Centre launched Kutir Jyoti Yojana in 1989, with budgetary allocations to provide single-point light connections to BPL households. Rajiv Gandhi Grameen Vidyuti Karan Yojana, launched in 2005, extended free electricity connections to about 22 million BPL households, in addition to others who paid for their connection; it also electrified more than a million villages by 2014. The last 18,000 villages were electrified under Deen Dayal Upadhyaya Gram Jyoti Yojana, launched in 2015. Between 2017 and 2019, the central government sponsored an aggressive household electrification drive – the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) – to connect more than 26 million households to the electricity grid. With multiple interventions spread over decades and multiple governments, the Centre’s thrust has been to connect villages and households to the electric grid, through funding the costs of erecting poles and stringing wires.

The state governments, with oversight on electricity distribution, have manoeuvred to keep electrons flowing through the wires. The key to the states’ approach is redistributive welfarism: charging commercial and industrial consumers higher rates to keep electricity affordable for farmers and low-income homes. However, the pattern of electricity provisioning has been intricately shaped by electoral priorities, creating perverse incentives for serving the poor. The result is a low-level equilibrium where the poor are locked into cheap but intermittent, low-quality electricity. Because quality is low, many consumers feel empowered to default on their dues. The forces of inertia have prevailed over reform interventions to rationalize prices and enable cost recovery. Moreover, intermittent supply impacts business competitiveness. A survey conducted in Bihar, Odisha, Rajasthan and Uttar Pradesh suggests that 40% of rural enterprises rely on non-grid electricity sources as grid supply is unreliable and expensive.9

The Centre’s thrust on connecting villages and households to the electricity grid has been realized, but is only a step towards universal access to modern energy. In 2014, a joint initiative between the Centre and the states – 24×7 Power for All – was launched. It had a state-by-state strategy and shared goal to ensure round-the-clock supply to all consumer categories starting from April 2019. Despite a strong political mandate, the goal seems to be far from realized. Achieving universal access to electricity will require addressing problems around reliability, affordability, quality of supply and service that are persistently present across states. The new government at the Centre will need to revive its helping hand to support its state counterparts in dealing with diverse electricity access challenges that are entrenched in state-level political economies.

The Way Forward

The challenges to universal electricity access at the state level and are, in part, beyond an individual state’s capacity to address. Given that the poorest states will have higher costs of universal access, the Centre needs to lend a hand. Simultaneously, the central government will need to steer planning and governance for better coordination and coherence across states. The Centre will thus continue to play a significant role in pursuing the goal of universal electricity access. Towards this, we suggest the following priority actions for the new government.

Beyond Redistributive Welfarism to Productive Power

To achieve universal access, India’s electricity policy needs a paradigm shift from ‘redistributive welfarism’ (that prioritizes subsidized costs for the poor while compromising on the quality of service) to ‘productive power’ (that empowers and enables the poor to pay for better quality service through productive use of electricity).

Last year, the government proposed a set of amendments to the National Tariff Policy (NTP). These were aimed at a shift away from consumer category-wise tariff to a progressive load and consumption-based tariff for all. While this will not address the cross-subsidy burden on large commercial and industrial consumers, it will make electricity affordable to small industries and entrepreneurs that are currently charged a cross-subsidizing tariff.

Implementing these proposed amendments to the NTP in a time-bound and phased manner to make electricity affordable for productive use by the poor will be an important step. Availability of reliable electricity is necessary, but not sufficient to mobilize its productive use. The Centre will also need to develop a broad strategy around ‘productive power’, seeking to promote rural industries and businesses (such as agro-processing and cottage industries) with the required financial and infrastructure support.

Revisiting the Definition of Electrification

The existing definition of electrification, set out in 2004, emphasizes the existence of a basic electricity infrastructure, keeping the focus on grid expansion and household access to the grid. Now that the grid has reached nearly all homes, it is important to revisit the definition, with a focus on ensuring access to reliable and affordable electricity for all.

Holding Discoms Accountable for Performance

Providing productive power requires that discoms are held accountable for performance. While the Electricity Act of 2003 (EAct) has made provisions for standards of performances (SoPs) to be met by the discoms, compliance and monitoring remain low, with significant discrimination across consumer categories. There is a need to implement a stricter legislative mandate for SoP compliance and equal treatment of consumers. Available technologies could be harnessed to monitor discoms’ performance in this regard. The Centre has been promoting smart meters for automation of billing and consumer accountability. These meters can also be used to monitor supply quality and for consumer information. In 2013, the Centre made an attempt to make discoms and the respective state governments accountable by presenting a Model State Electricity Distribution Management Responsibility Bill. Rajasthan is the only state government to have enacted this bill. Some of the provisions of this bill were included in UDAY, but without any legislative mandate. These efforts can serve as a template for developing a framework to hold the discoms accountable for their performance.

Better Consumer Protection

The EAct included provisions for consumer protection. While the institutions for consumer grievance redressal – Consumer Grievance Redressal Forums at discom level and Ombudsman at state level – have been put in place, these avenues remain dysfunctional and often influenced by the discoms.10 There is a need to strengthen these institutions to protect the interests of consumers, hold the discoms accountable, and build trust between the two. This will require raising consumer awareness on the existence of forums for grievance redressal and making these forums accessible to all. Regular analysis of grievance records is required to understand patterns and discoms’ performance. These analyses must be accessible to the public and used to make discoms accountable. The grievance redressal forums need to be redesigned to function independently from the discoms.

Alternative Service Delivery Models

The technological transformation in the sector, led by greater penetration of renewable energy, is likely to cause disruption in the electricity distribution structure. Discoms are likely to lose predictability in business and their significance as instruments of redistributive welfarism.11 There has been resistance to past attempts to restructure the distribution business for efficiency gain – through promotion of franchisees and cooperatives, and separation of carriage and contents. The future uncertainties in electricity distribution necessitate planning for alternative service delivery models to ensure that the poor are not left out. The Centre needs to play the role of a catalyst by steering the planning at the state level, without imposing a single, standard model. Diversity in approaches and models will be crucial to manage state-level economic forces and specific electricity demands.

Strengthening the Rural Distribution Network

While the electricity grid has been extended to all corners of the country, the distribution network in rural areas remains fragile and prone to frequent breakdown. Although rural areas presently have low energy demand, the potential for demand growth is high. Distribution networks will require significant upgrades to meet future demand. As the discoms have little incentive to invest in rural networks and many states lack fiscal capacity, the Centre will be required to continue investing in the rural distribution network, until such time as rural consumers climb onto the virtuous cycle of receiving better service and being willing to pay more for quality. The Centre has been supporting urban distribution network upgrades through successive programmes, such as APDP (2001), APDRP (2002), R-APDRP (2008) and IPDS (2014). Similar interventions are required to upgrade rural distribution and ensure quality supply to consumers based in rural areas.

The Subsidy Conundrum

Even though the key to electricity reform in India is tariff rationalization, there is no doubt that, for the time being, electricity supply to the poor needs to be subsidized. These subsidy needs are concentrated in poorer states with limited fiscal space. In an interesting development, in the proposed amendments to the EAct and NTP, the Centre has proposed to make subsidies a collective responsibility of the central and state governments. This is an important shift away from the earlier model where subsidy was the sole responsibility of the concerned state governments. If implemented, this would allow the subsidy-based approach to electricity to continue, with a shift from a rate payer-based cross-subsidy system to a tax payer-based fiscal subsidy system.

The Centre also seeks to promote direct benefit transfer (DBT) for subsidy payment to ensure better targeting. A reform in the subsidy mechanism, seeking to better target and rationalize subsidy, is an urgent need. But the proposed approaches are not free from limitations. Managing electricity subsidy demands with tax revenue will require the electricity sector to assert its claims for support in competition with several other possible uses of these funds; it will also limit the ability of states and regional political parties to make electoral use of electricity pricing, introducing political uncertainty. In addition, identifying and targeting legitimate subsidy demands to use DBT remains a challenge.12

The Centre’s past guidelines to reduce and eliminate cross-subsidies in a timebound manner and raise revenue from low-paying consumers have been resisted by states. Rather, cross-subsidization and the gap between costs and revenue have gone up in several states. The new government must prioritize the subsidy conundrum and develop a transition plan to gradually reduce subsidies without compromising essential service for the poor. It should consider state-specific political economy forces and must embed a strategy to promote ‘productive power’ to enable the poor to pay. Large-scale adoption of specific tools or solutions should be based only on successful pilot experiments, after careful consideration of the costs and benefits; a strategy to manage the costs to losers from subsidy reform must be included.

Erecting poles and stringing wires across a country like India is an important step. But the work remains complete until high quality reliable power that enhances rural productivity is made available to India’s poor. This must be the agenda, going forward.

Other pieces as part of CPR’s policy document, ‘Policy Challenges – 2019-2024’ can be accessed below:

The Future is Federal: Why Indian Foreign Policy Needs to Leverage its Border States by Nimmi Kurian
Rethinking India’s Approach to International and Domestic Climate Policy by Navroz K Dubash and Lavanya Rajamani
India’s Foreign Policy in an Uncertain World by Shyam Saran
Need for a Comprehensive National Security Strategy by Shyam Saran
A Clarion Call for Just Jobs: Addressing the Nation’s Employment Crisis by Sabina Dewan
Time for Disruptive Foreign and National Security Policies by Bharat Karnad
Multiply Urban ‘Growth Engines’, Encourage Migration to Reboot Economy by Mukta Naik
Schooling is not Learning by Yamini Aiyar
Clearing Our Air of Pollution: A Road Map for the Next Five Years by Santosh Harish, Shibani Ghosh and Navroz K Dubash
Protecting Water while Providing Water to All: Need for Enabling Legislations by Philippe Cullet
Interstate River Water Governance: Shift focus from conflict resolution to enabling cooperation by Srinivas Chokkakula
Managing India-China Relations in a Changing Neighbourhood by Zorawar Daulet Singh
Regulatory Reforms to Address Environmental Non-Compliance by Manju Menon and Kanchi Kohli
1 GoI, Economic Survey 2015-16, Volume I (New Delhi: Department of Economic Affairs, Ministry of Finance, Government of India, 2016), 162.
2 Radhika Khosla and Aditya Chunekar, ‘The journey towards energy savings begins from home’, Mint, 8 June 2018.
3 Ashwini Chitnis, Sripad Dharmadhikary, Shantanu Dixit, Srihari Dukkipati, Ashwin Gambhir, Ann Josey, Sreekumar Nhalur and Ashok Sreenivas, Many Sparks but Little Light: The Rhetoric and Practice of Electricity Sector Reforms in India (Pune: Prayas Energy Group, 2017).
4 Sreekumar Nhalur, Ann Josey and Manabika Mandal, ‘Rural Electrification in India: From “Connections for All” to “Power for All” ’, Economic and Political Weekly 53(45) (2018): 31-37.
5 Karthik Ganesan, Kapardhi Bharadwaj and Kanika Balani, Electricity Consumers and Compliance: Trust, Reciprocity, and Socio-Economic Factors in Uttar Pradesh (New Delhi: Council on Energy, Environment and Water, 2019).
6 Amandeep Kaur and Lekha Chakrabarty, ‘UDAY Power Debt in Retrospect and Prospects: Analyzing the Efficiency Parameters’, NIPFP working paper 244 (New Delhi: National Institute of Public Finance and Policy, 2018).
7 Ashwini K. Swain, ‘In a state of energy poverty’, The Hindu, 11 May 2018.
8 Utpal Bhaskar, ‘UP lowers electrification target, claims all households electrified’, Mint, 31 January 2019.
9 Shalu Agarwal, Nidhi Bali and Johannes Urpelainen, Rural Electrification in India: Customer Behaviour and Demand (Smart Power India & Initiative for Sustainable Energy Policy, 2019).
10 Ashish Khanna, Daljit Singh, Ashwini K. Swain and Mudit Narain, ‘Transforming Electricity Governance in India: Has India’s Power Sector Regulation Enabled Consumers’ Power?’, World Bank policy research working paper 7275 (Washington DC: World Bank, 2016).
11 Navroz K. Dubash, Ashwini K. Swain, and Parth Bhatia, ‘The Disruptive Politics of Renewable Energy’, The India Forum, forthcoming.
12 Ashwini K. Swain, Parth Bhatia and Navroz K. Dubash, ‘Power politics at play,’ The Hindu, 9 October 2018.

Can India Achieve Sustained Fast Growth? The Two Faces of Indian Capitalism
In the last few years, India seemed to have achieved the symbolic goal of growing faster than China (at least according to official statistics) and was frequently hailed as the fastest-growing large economy in the world (Figure 1). The Spring 2019 IMF World Economic Outlook forecast continued optimistic prospects, with a slight acceleration in growth to 7.5% by 2020, even as China and the advanced economies are projected to decelerate.

Figure 1: India overtakes China in the growth stakes

Source: World Bank

Is India’s fast growth sustainable? Recent economic data indicates declining consumption, anaemic private investment, diminished corporate performance, agricultural distress and slowing GDP growth. (Questions have also been raised over the statistical robustness of recent growth.) Rathin Roy, of the Prime Minister’s Economic Advisory Council, has raised the issue of structural problems leading to a ‘middle income trap’, linked to inequality and associated failures in productive employment growth.1 The 2018 Economic Survey also referred to the challenges of productive transformation, human capital and agricultural distress.2

India’s economy holds great potential, but there is a big risk that this will not be translated into reality. Relative to its income level, India has both a highly diversified economy and well-developed organizational capabilities in the business sector. These presage multiple opportunities to upgrade, reinforcing classic forces for ‘convergence’ as the country catches up with those at the technological frontier. These forces are complemented by the (potential) demographic dividend as young cohorts enter the labour force.

However, on current trends, India is en route to the Latin American path, in which episodes of fast growth tend to stall in the long run. Signs of Latin Americanization lie in the consolidation of what has been referred to as ‘oligarchic capitalism’, with its drawbacks of widespread informalization, rising extremes of inequality, and a corporate-financial nexus of bad assets that risks growth and macroeconomic stability.

Our interpretation of a middle income trap in this paper is an essentially political-institutional account, embedded in the nature of the relationship between the state and business and between the state and society. Indian capitalism has two faces: dynamic, competitive and productivity-oriented; and connected, rent-extracting and corrosive politics. Some sectors and companies are more ‘rent-extracting’ than others. But many face both ways. Large Indian companies – such as the Reliance and Adani groups – seem to have both high productivity and high levels of influence. Then, beyond the corporate business sector, there are immense numbers of self-employed, small and medium-sized firms in the informal sector.

These features resonate vividly with characteristics of Latin America capitalism. This can be seen as having three types of enterprise: connected plutocrats with major influence over the state system (such as Carlos Slim in Mexico, and other Mexican billionaires), the rest of the business sector (that struggles with regulation, poor infrastructure and weak skill development), and a very large number of small-scale/informal enterprises (with weak access to formal credit, legal recourse, infrastructure and modern productive support systems). Countries such as Mexico and Brazil had their episodes of fast growth and then got stuck in a mix of low productivity, inefficient social policy, and periodic macroeconomic crisis.

As in Mexico or Brazil, capitalism in India operates in a system that is characterized by both formal rules and less formal deals. ‘Deals’ refer to both broad understandings and particularistic relations between the state and business. But ‘rules’ also matter. Rules can be in tension with deals when the latter aim to subvert the former, but hybrid arrangements – such as when rules are applied in the implementation of deals – are common. Carlos Slim got his big break through the (legal) privatization of Mexico’s telecom company by the then president, Carlos Salinas. Most of Mexico’s other billionaires were also launched then. And this was when Mexico was already significantly richer than India today.

Rules matter when implemented well; they play the essential role of providing credible threats and penalties for unlawful deal-making, in addition to dealing with the array of concerns over standards, safety and protection. But an over-regulated, rule-based economy can crowd out investment and stymie growth. India’s economy has evolved from being a case study in over-regulation to, functionally, a hybrid of rules and deals. Of the business-politics nexus, it can be said that ‘the relationship can no longer be understood as either developmental or crony capitalist: it is both’.3

India’s major growth acceleration occurred in the 2000s. It involved a striking growth in aggregate – and, in particular, private – investment and exports. Both faces of capitalism were manifest. There were significant strides in business capabilities and capitalist institutions. However, even as GDP skyrocketed, India’s growth story was dogged by concerns over high-level corruption and rising inequality. A series of scams over natural resource allocation helped consolidate public anger around entrenched politician-business links, spurring a national anti-corruption movement. An elite coterie of Indians was seen to be pulling the strings of politics and business, and public sentiment rallied around these societal shifts.

While household surveys suggest inequalities are still much lower in India compared to Latin America, there is evidence of continued concentration of wealth and incomes at the top of the distribution. Combining tax data with household survey data, Chancel and Piketty estimate a large increase in the income share of the top 1%, matched by a corresponding decline in the share of the bottom half of the population (Figure 2).4 By this measure, the difference in income growth between the top and the rest of the distribution was even greater than in China and the US – both notorious for their inequality rise (Table 1).

Figure 2: The rising concentration of income in India

Table 1:

A more specific manifestation of growing inequality is the rise in wealth of India’s billionaires, almost all of which is fuelled by business success (Figure 3).

Figure 3: The wealth of India’s top ten billionaires rose rapidly between 2014 and 2018

Source: Forbes.com

A crucial heritage of the period of heady growth has been a dramatic rise in reported non-performing assets (NPAs) in the banking system. NPAs are products, at least in part, of past state-business links, especially between public sector banks and influential businesses. NPAs were over 14% of gross advances in 2018 for public sector banks, with a still-high 8% for net NPAs (net NPAs are net of provisions) (Figure 4).

Figure 4: A large rise in Non-Performing Assets, especially in public sector banks

Source: DBIE, RBI

This rise in NPAs, alongside recent setbacks to India’s shadow banking industry, is a crucial constraint to the flow of credit and private investment, which has stalled in recent years. Gross capital formation as a percentage of GDP is hovering around 31%, its lowest since 2003 (Figure 5). Reported new investment proposals have also been falling steadily since 2015 (Figure 6).

Figure 5: The rise and fall of India’s investment rate

Source: World Bank information base

Figure 6: The rise and fall in investment proposals

Source: CMIE

Resolving the NPA crisis, an increasingly important policy priority in recent years, is necessary but not sufficient. The informal sector continues to dominate the economy, with over 80% of non-agricultural workers employed by the informal sector and Micro, Small, and Medium Enterprises (MSMEs) contributing over a third of GDP. Yet the IFC estimates that formal credit channels account for only 16% of debt financing in the MSME sector.

The Urgency of Action
Why is a focus on the functioning of Indian capitalism so important for the incoming administration?

For every administration that fails to put in place the institutional and policy preconditions for dynamic, inclusive development, there is a permanent loss in productive and human potential. Failure to act now means another cohort of India’s youth being substantially ill equipped to participate in productive work, fostering further increases in inequality.

Even more critical is the risk of further entrenchment of business elites, with respect to their links to both the state and minority shareholders, creating an oligarchic capitalism that heightens resistance to future institutional transitions to dynamic, competitive capitalism.

Furthermore, the global economic context is much more anaemic than the ‘sweet spot’ of the early 2000s. Long-term growth is slowing throughout Europe and the US. Even China – the main autonomous source of growth in the global economy – is in the midst of both a long-term slowdown as its economy matures, and concerns over financial fragility.

Finally, global technological change will increase incentives for increased automation in the economy. This is likely to have profound effects on the work opportunities for India’s labour force, with as yet ill-understood consequences.

These developments will have major distributional dimensions that threaten political stability. The interaction between a consolidation of oligarchic capitalism and the less favourable global context is why the risk of a Latin American style middle income trap is so salient.

A Policy Agenda
Whether India realizes its growth potential or gets stuck in a middle income trap depends on both policy choice and institutional design. Avoiding the Latin American path of oligarchic capitalism and widespread informality involves building the basis for a dynamic, inclusive and competitive capitalism. This requires, in the resonant phrase of Raghuram Rajan and Luigi Zingales, ‘saving capitalism from the capitalists’.5 Rebuilding state-business relations in an open, competitive rules-based fashion is essential. We outline six complementary areas. The complementarity is critical, as is an overarching theme that without institutional deepening with respect to accountability, autonomy and transparency, these policies will be subverted.

(1) Resolution of NPAs: Critical to real credit flows, investor sentiment and the broader macroeconomic health of the system is the effective resolution of NPAs. While the Insolvency and Bankruptcy Code (IBC) has set out a sound framework to resolve NPAs and shift power from promoters to creditors, translating the promise of the IBC into practice remains a challenge. RBI data available until January 2019 indicates that resolution has been approved in 66 cases so far, unlocking INR 800 billion for creditors. But the pace of resolution lags the Act’s guidelines – egregiously, in some cases. In addition, continued vigilance is required to ensure that tight eligibility guidelines for potential buyers do not translate to increased corporate concentration in key sectors. Underpinning the broader NPA challenge is the need to sustain the autonomy of the central bank, whose independence must be protected and unchallenged by the executive.

(2) Competition: Dynamism and innovation require competition. Many sectors are already concentrated, and there are risks of further concentration – in the consolidation following resolution, and in the future via network effects in platform-based sectors. This is vividly illustrated by the debates in Europe and the US over platform-based companies. This requires an empowered, autonomous competition authority, and also continued innovations in regulation in the wake of technological change. Mexico actually created a strong, autonomous competition authority, with a dynamic head who could not be removed by the executive. But its action on anti-competitive behaviour (including of billionaire-linked companies) got stuck in the judiciary – with lessons for India. Infrastructure and natural resources are a special case: while auctions are an important step, implementation is again crucial. The most notorious Latin America-wide corruption scandal of the recent past, involving the Brazilian conglomerate Odebrecht, involved a series of contracts won in competitive auctions for PPPs. The Achilles heel was in the renegotiation phase, when concessionaires often extract big advantages. An alternative design is to make renegotiation also subject to credible, third-party scrutiny and decision-making with transparent processes.

(3) Better rules: Shifting the balance to rules-based interactions requires better rules. There has been a plausible focus on the ‘Doing Business’ indicators and healthy interstate competition on the rankings. However, international evidence finds that these notional measures are often completely unrelated to actual experience, which depends on implementation. The GST reform should help in the long term, but the costs of participation often still seem to outweigh the benefits, especially for informal firms. Of specific importance are the complex areas of land acquisition and labour policy. While there has been a tendency amongst economists to fetishize labour flexibilization as the missing ingredient for labour-intensive industrialization (it is no panacea), the goal has to be delinking social protection from the labour contract if inefficient informalization is to be discouraged; this is a specific bridge to comprehensive social policies.

(4) Facilitating implementation: The bureaucracy has in the past been in the production line of converting politican-business deals into the prevailing rules. With the (desirable) anti-corruption motif, there is widespread reference to the ‘chilling’ effects on approval, from both business and bureaucrats. Some reduction in the excessive legal risks for bureaucrats have come with changes in the 13(1)(d) regulation in 2018 – which previously criminalized bureaucrats for any loss to the government, even if there was no intent – but the effects are still unclear. Additional action, such as new third-party processes for contract renegotiation just referred to, can help. This is an area where concerted exploration of implementation design is important.

(5) Inclusion: Deepening institutional support for small-scale and informal enterprises will require a whole suite of policy changes across sectors and along the value chain. Providing more robust support to MSMEs, including those in rural areas, will require enhanced infrastructure provision (along the lines of the Pradhan Mantri Gram Sadak Yojana), a deepening of financial inclusion and access to credit, a data-driven reorientation of NRLM and urban skilling programmes, and finally, a revamping of CSR towards leveraging corporate comparative advantage in favour of supporting business enterprises instead of government programmes.

(6) Industrial policy: Finally, there is a potentially important role for sector-specific industrial policy. In this regard, India has both successes and failures. The auto industry has benefited from a series of state actions that led to a productive sector strongly integrated with global value chains, notably in Tamil Nadu. Sector-specific public goods, such as on National Automotive Testing and R&D Infrastructure Project, are also examples of successes. By contrast the Special Economic Zone policy often became associated with land deals. Effective 21st century industrial strategies require both close cooperation with the business sector and a focus on sector-specific public goods (rather than a bias towards protection or tax breaks), but also sufficient autonomy from business lobbies – or especially a politician-business nexus – to avoid consolidation of inefficiency and rent-extraction. Credible sunset clauses to support are one example of an instrument.

This is only an outline of policy domains. While the complementarity between them is vital, even more important is the way in which the state behaves in their implementation. And key to this are the checks and balances that lie at the heart of the accountability mechanisms that underpin state behaviour.

These are of two complementary kinds. First, there are checks and balances within the state: fundamentally in the independence of the judiciary, but also the full array of regulatory agencies, and the incentives that they face. India has had plenty of experience of accountability institutions, notably in the long-term independence of the Election Commission and the Supreme Court. Both, however, are increasingly seen as subject to influence, with critical actors in both taking unprecedentedly public measures to decry perceived threats to institutional autonomy and conduct.

Second, there is the pressure from civil society, whether (weakly and imperfectly) via periodic elections, or through ongoing civil society activism over state performance, via many mechanisms. This is heavily influenced by the availability of information, for which the various kinds of media play a central role. Unfortunately, the traditional media in India is largely owned by big business, and mostly supine on state business concerns.

There is room to strengthen both the mechanisms of accountability that belong with the state, and those that belong with civil society. What is needed is a genuine counterbalance in institutional and societal terms, complemented by strengthening, not weakening, of the capabilities of the state. For while India has a tradition of very high-quality individual state actors and a reputation for an overbearing state presence, a real issue is weaknesses in state functionality.

The Latin American experience shows that growth can occur for a while under conditions of oligarchic capitalism and widespread informality. India has immense economic potential, for which the business sector is crucial. However, unless there is a comprehensive agenda of policy and institutional change to create a dynamic capitalism, there is a risk of a Latin Americanization of India’s path that will consolidate a middle income trap of low productivity growth and entrenched inequality.

Other pieces as part of CPR’s policy document, ‘Policy Challenges – 2019-2024’ can be accessed below:

The Future is Federal: Why Indian Foreign Policy Needs to Leverage its Border States by Nimmi Kurian
Rethinking India’s Approach to International and Domestic Climate Policy by Navroz K Dubash and Lavanya Rajamani
India’s Foreign Policy in an Uncertain World by Shyam Saran
Need for a Comprehensive National Security Strategy by Shyam Saran
A Clarion Call for Just Jobs: Addressing the Nation’s Employment Crisis by Sabina Dewan
Time for Disruptive Foreign and National Security Policies by Bharat Karnad
Multiply Urban ‘Growth Engines’, Encourage Migration to Reboot Economy by Mukta Naik
Schooling is not Learning by Yamini Aiyar
Clearing Our Air of Pollution: A Road Map for the Next Five Years by Santosh Harish, Shibani Ghosh and Navroz K Dubash
Protecting Water while Providing Water to All: Need for Enabling Legislations by Philippe Cullet
Interstate River Water Governance: Shift focus from conflict resolution to enabling cooperation by Srinivas Chokkakula
Managing India-China Relations in a Changing Neighbourhood by Zorawar Daulet Singh
Beyond Poles and Wires: How to Keep the Electrons Flowing? by Ashwini K Swain and Navroz K Dubash
Regulatory Reforms to Address Environmental Non-Compliance by Manju Menon and Kanchi Kohli
The Numbers Game: Suggestions for Improving School Education Data by Kiran Bhatty
Safe and Dignified Sanitation Work: India’s Foremost Sanitation Challenge by Arkaja Singh and Shubhagato Dasgupta
Safeguarding the Fragile Ecology of the Himalayas by Shyam Saran
Female Labour Force Participation: Asking Better Questions by Neelanjan Sircar
Towards ‘Cooperative’ Social Policy Financing in India by Avani Kapur
Understanding Land Conflict in India and Suggestions for Reform by Namita Wahi
Regulating New Technologies: Three Central Principles by Ananth Padmanabhan
Back-end First: A National Agenda for India’s Agricultural Markets by Mekhala Krishnamurthy
In Need of Structural Repairs: The Social Justice Project by D Shyam Babu
1 ‘Can’t run world’s fastest growing economy on employment support… Must create employment: PMEAC member Rathin Roy’, Indian Express, 26 May 2019, https://indianexpress.com/article/india/rathin-roy-indian-economy-employ….
2 Government of India, Economic Survey of India 2017-18 (New Delhi: Government of India, 2018).
3 Aseema Sinha, ‘India’s Porous State: Blurred Boundaries and the Evolving Business-State Relationship’, in Business and Politics in India, edited by Christophe Jaffrelot, Atul Kohli and Kanta Murali, (New Delhi: Oxford University Press, 2019).
4 L. Chancel and T. Piketty, ‘Indian Income Inequality, 1922-2014: From British Raj to Billionaire Raj?’, CEPR Discussion paper 12409 (Washington, DC: Center for Economic and Policy Research, 2017).
5 Raghuram Rajan and Luigi Zingales, Saving Capitalism from the Capitalists: Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity (New York: Random House, 2003).

Bihar Election 2015: Commentary and Analyses
ELECTION STUDIES POLITICS

The Bihar state elections resulted in a clinching victory for Grand Alliance (Mahagathbandhan) and the return of Nitish Kumar as Bihar’s chief minister. At CPR, Neelanjan Sircar, Bhanu Joshi and Ashish Ranjan captured the election cycle through in-depth analyses based on extensive field work and data.

Their commentaries have been published as op-eds in a series in The Hindu and as working papers/data analyses on CPR’s website. Find below a complete chronological compilation to date:

Series on Bihar elections in The Hindu:

Bihar polls: the shifting goalposts​
It’s not about caste or beef, but vikas
How will Bihar shake out?
How Modi surrendered Bihar
​After Bihar, politics seeks a new normal
Working papers and analyses:

The Battle for Bihar: Understanding the Upcoming 2015 Election
“What do Bihar’s Voters Want?”
“How Will Bihar Shake Out?”

BY ACCOUNTABILITY INITIATIVE
FISCAL DEVOLUTION SOCIAL SECTOR SCHEMES BUREAUCRACY

Accountability Initiative (AI) released a series of blogs over the month of August, interpreting their research on fiscal devolution (State of Social Sector Expenditure 2015-2016) in response to the Fourteenth Finance Commission’s (FFC) recommendations to increase the fiscal autonomy of states.

AI studied 19 state budgets to come up with a first comprehensive analysis of the FFC recommendations and its implications for devolution, federalism, and social sector investments in India. Its blog series is highlighted below:

Winners and Losers: How the 14th Finance Commission Recommendations Impacted State Revenues: Avani Kapur analyses the impact of fiscal devolution to states and whether increase in tax devolution was offset by cuts in Centrally Sponsored Schemes. Read the full blog here.

What Has Changed for Centrally Sponsored Schemes (CSSs) in 2015-16: Yamini Aiyar discusses how the top down, one-size fit all model of Centrally Sponsored Schemes (CSS) gives little flexibility to states in implementing social policy related programmes, even as the CSS play an important role in ring-fencing money for social policy programmes. Read the full blog here.

The 14th Finance Commission (FFC) and Social Sector Spending: Vikram Srinivas and Avani Kapur analyse state budgets to discuss how states are using greater fiscal autonomy proposed under the FFC recommendations, and find that all states intend to spend more money on the social sector in 2015-16. Read the full blog here.

The 14th Finance Commission and the Way Forward in States: Vikram Srinivas and Priyanka Roy Choudhury write that for effective usage of money through decentralisation, states must ensure a detailed budgetary process and quality data to make informed decisions. This calls for both measures of capacity building and strengthening accountability. Read the full blog here.

The Future of Centrally Sponsored Schemes in the New Era of Devolution: Yamini Aiyar offers specific ways in which the CSS can be best structured to serve the needs of the states as the country adapts to a new era of fiscal devolution post the recommendations of the FFC. Read the full blog here.
AI also ran a tweetathon focusing on findings from six states (Maharashtra, Chhatisgarh, Rajasthan, Bihar, Karnataka, Tamil Nadu) out of a total of 19 state budgets studied, which capture the key impacts of fiscal devolution on social sector investments and public service delivery. The full storification of the #PAISA2016 tweetathon can be accessed here.

As Bihar votes the Grand Alliance into power, the Accountability Initiative (AI) at CPR analyses the transformation of elementary education reforms in Bihar over the first two terms of Nitish Kumar, unpacking the successes and challenges. .

Through its working paper titled Education Reforms: Bureaucracy and the Puzzles of Implementation–A case study from Bihar, AI traces the changes introduced in the early years of the Nitish government, and focuses the analysis on the transition made from strengthening education infrastructure to improving learning outcomes through an innovative policy called ‘Mission Gunvatta’ (MG).

‘Mission Gunvatta’ was introduced in 2013 in an effort to improve learning outcomes through interventions aimed at strengthening governance and pedagogy in Bihar’s elementary school classrooms. An important innovation incorporated into the programme was a policy decision to regroup children in classes 3-5 according to learning levels and teach them using materials and activities appropriate to each level, as opposed to the traditional age-grade systems. This was based on a pilot undertaken in partnership with the NGO Pratham in Jehanabad and East Champaran districts in Bihar

The paper by Yamini Aiyar, Ambrish Dongre and Vincy Davis highlights the strengths and weaknesses of implementation processes on the ground, and points to a new set of administrative challenges that the new government will face as it moves on to address the critical problem of addressing learning outcomes.

Read the full paper here: Education Reforms: Bureaucracy and the Puzzles of Implementation–A case study from Bihar.

For a shorter piece, visit the International Growth Centre’s (IGC) website, which funded the research.

ANALYSIS OF THE RESULTS

By rejecting Raghubar Das, Jharkhand sends a message to the BJP by Rahul Verma
Rahul Verma writes in explaining the negative vote swing against the Bharatiya Janata Party (BJP) in the last six months. Verma highlights that the party shouldn’t impose leaders with no mass base; must address the economy; and should be prepared for a tough poll cycle ahead. Addressing the loss of Raghubhar Das, he writes that ‘when an incumbent chief minister loses along with many of his cabinet colleagues there’s a straightforward interpretation of the mandate. Voters have outrightly rejected the existing government.’ Verma further elucidates the need for the opposition to create and campaign on an alternative ideological vision to challenge the BJP’s hegemonic position.

Urban-rural divide, disgruntled regional allies sparked poll reversal in Jharkhand by Neelanjan Sircar
Neelanjan Sircar writes in highlighting that the BJP cannot disregard its coalition partners to win at the state level, despite its national dominance. He analyses reasons behind the party’s poor performance in Scheduled Tribe and urban areas. Further he writes, ‘it is time for serious introspection for the party, as it heads into important contests in Delhi and Bihar.’

BJP can continue with its ideological projects, but they won’t work until Modi govt fixes economy by Rahul Verma
Rahul Verma writes in Talkpoint by ThePrint about whether the Narendra Modi-Amit Shah combine is no longer a decisive factor in state elections. Verma writes that while the Modi-Shah duo is still by far the best election team any party can hope for, of late, the BJP has been witnessing electoral reversals at the state level. He highlights that the party is now contesting as an incumbent party and voters are judging it by its performance. In addition, the party is not following the coalition dharma, forcing smaller parties to come together for survival. Lastly, Verma points to the unprecedented economic slowdown, highlighting that until the Modi government does not fix the economy, its ideological projects will not work.

Proving most exit polls wrong, the National Democratic Alliance (NDA) crossed the mid-way mark in the 243-member Bihar Assembly, winning 125 seats. The Bihar election of 2020 has been especially significant due to several reasons. This is the first state election in the country since the COVID-19 pandemic. What do the results mean for the future of the state and its leaders, particularly Nitish Kumar? How will the verdict affect the course of coalition politics? As young leaders like Tejashwi Yadav and Chirag Paswan emerge, how will the political dynamics in the state change? And what does this verdict tell us about the popularity of BJP and particularly Prime Minister Modi?

Watch (above) the video of the discussion on ‘Analysing the Bihar Election Result’ organised by CPR and the Trivedi Centre for Political Data, Ashoka University (TCPD). The discussion featured Vandita Mishra (Opinion Editor, The Indian Express); Taberez Neyazi (Assistant Professor, National University of Singapore); Gilles Verniers (Co-Director, TCPD & Assistant Professor, Ashoka University and Senior Visiting Fellow, CPR); Neelanjan Sircar (Assistant Professor, Ashoka University and Senior Visiting Fellow, CPR); and Rahul Verma (Fellow, CPR).

Scholars at CPR have closely followed the electoral developments in the Bihar. Read the analysis below:

In Hindustan Times, Rahul Verma analyses how the NDA managed to turn the rising tide against Nitish Kumar, Tejashwi Yadav’s failure to build on the groundswell of support evident in his rallies, and why the exit polls went wrong. Verma writes that the Bihar verdict confirms that elections are won and lost during the campaign and that our focus must remain on understanding the opportunities and constraints each campaign reflects.
In Hindustan Times, Neelanjan Sircar highlights how the tables have turned in the NDA with BJP no longer relying on Nitish Kumar and his JDU to stay in power in Bihar. Sircar writes, in this new era, politics in Bihar will revolve around the competition between a nationally dominant BJP with Modi at the helm and a resurrected RJD led by an ascendant Tejashwi Yadav.
In Economic Times, Gilles Verniers observes that this election confirms a long tradition in Bihar of political fragmentation. He notes that the result shows a vast gap in performance between members of both coalitions. Further, Verniers highlights that local volatility is an important factor contributing to the aggregate outcome.
In Hindustan Times, Gilles Verniers and Samridhi Hooda analyse why women’s representation went down in the Bihar election despite an increase in the number of women candidates from major parties. They highlight that it is only when women find substantial representation across parties that we can hope to see a change.
In Hindustan Times, Neelanjan Sircar analyses the affect of centralisation of welfare by the BJP and Modi. Sircar highlights that the sheer popularity of Modi, and the “vishwas” that voters have placed in him, has changed the way the state-level leaders must do politics.
In a discussion on Mirror Now, Yamini Aiyar and Neelanjan Sircar discuss BJP and JDU’s electoral performance. Aiyar highlights that the BJP’s ability to centralise welfare schemes and mobilise the electorate around it has lead to its success. This she says, left Nitish Kumar facing the consequences of anti-incumbency. Sircar highlights that Nitish Kumar won’t have bargaining power and may have to bend on the will of his alliance partner, given that the BJP has a strike rate of 67%, compared to JDU, which had a strike rate of 37%.
In a discussion on India Today, Rahul Verma highlights key takeaways from the Bihar verdict. He highlights that elections are decided during the campaign phase and the party that remains vigilant to what is happening on the ground wins.
In Hindustan Times, Gilles Verniers and Basim U Nissa analyse the role of caste in Bihar politics. They highlight that the inclusive strategy that most parties claim to follow in Bihar does not ultimately translate into substantial political empowerment of non-dominant groups, which remain fragmented and divided.
In Scroll, Gilles Verniers, Mohit Kumar and Neelesh Agrawal decode the Bihar verdict in 32 charts. They analyse that except for perhaps the Congress, all the other parties can find some reason to be satisfied with the result. Further, they highlight that the NDA won the election by the skin of its teeth and the diminishing popularity of Nitish Kumar almost cost them the election.
In ThePrint, Asim Ali and Ankita Barthwal highlight how the BJP’s success in an assembly election is determined, above all, by its ability — or inability — to make ideological issues salient. They further analyse that the party manages to win handsomely as a challenger, often aligning with non-dominant castes to mount an attack on existing power equations in the state. As an incumbent, however, the BJP has had only a modest showing.
In Scroll, Gilles Verniers, Basim U Nissa, Neelesh Agrawal and Mohit Kumar analyse the profile of the new Bihar assembly. They find that most MLAs are male, fairly well-educated, rich, in contradiction with the law and tend to belong to groups that exert local dominance.

1. Is the draft EIA 2020 significantly different from EIA notification 2006? What do you make of this new draft?

At first glance it seems that the draft EIA 2020 is not very different from the 2006 notification read with all its amendments, executive clarifications and the court directions that were already in effect between 2006 and now. This draft pulls it all together into one document. So for those who have been tracking EIA changes, it is not surprising. There are some incremental changes like exemptions for a few more sectors, procedures made lenient for a few more, some more penal provisions for violations and such .

From these, it’s tempting to conclude that we were at a point in 2006 and now we are a few steps below or beyond it. But this is not really the case. What makes this draft so unique is that this is the government’s thinking when our economy is crashing like never before. Not only is ours going downhill but the economic world order is practically changing with the covid lockdowns across the globe. So while the language in the draft is old, everything around in the world has changed.

This draft creates a complacency that may be dangerous. The draft makes one feel like this is familiar and that things just got a bit worse. But that is the farthest thing from truth because all the assumptions that the EIA system is based are under question now. Due to the recession, we may not have many major projects coming up, then why have an approval granting machine? If projects do come up they may not have funds or may not want to invest funds in environmental measures and they may want all kinds of resources handed to them cheaply so they can reap profits even in a recession. If this is a possibility we are looking at, should we not be thinking carefully before we put this EIA system in place? Instead the proposed clauses have an audaciousness or a bravado about them as if nothing has changed.

2. The draft EIA 2020 has been notified at a time when there is a massive economic slowdown due to COVID-19. If notified, will EIA 2020 boost economic growth by simplifying processes for industries and infrastructure?

Environment Approvals cannot boost the economy. This myth has been propagated by successive governments by calling approval procedures a hurdle, hindrance or a bottleneck. The Ministry has made the frequency of approvals and ease of securing them as its target objective based on this misplaced logic. And it keeps reproducing this false narrative of environment vs development.

Speedy approvals may at best help to secure investments from the market and finances from banks in the short term. At worst, if approvals are given to the wrong projects, they can bring entire sectors if not the whole economy down. We have examples of this in the coal-gate of 2014 and the hydel-gate of the Northeast dams. The real estate sector is also a good case in point. Approved projects can also get stuck really badly because people are affected by them and take measures to protect their communities and environmental resources. These are usually the people ignored by the speedy approval procedures.

Achieving economic growth actually needs very careful economic planning at various levels. And growth does not have to come at the cost of the country’s people. So far we have seen no sign of such careful thought for the economy from this government.

3. What does the draft EIA 2020 mean for India’s environment? How does it affect existing environmental standards?

The draft now brings 43 sectors within its regulatory purview but it thins down the regulatory process for them. The draft lays out a six step process and many definitions, giving the impression that there is an elaborate process of scrutiny in place, before a project is approved. However, all this needs to be read with the range of exemptions and provisos. For instance many projects would only require an Environmental Permission (EP) without detailed assessments or public hearings. The draft is also extremely lenient towards expansion and “modernisation” projects that basically use more advanced technologies or raw materials. For instance all projects can enhance their capacity by 10% without any appraisals and just an online application. The draft proposes that the regulators take the project’s word for these aspects.

The draft sets severe limits on the quality of project appraisal, provides for a standard terms of reference for almost all project assessments, increases the validity of the approval period. It gives exemptions to more sectors from public consultation, allows lighter monitoring and compliance protocols for projects. These are all examples of lowering the standards of environment regulation of projects. This is not the direction we must be going in at all given climate change is a harsh reality all around us.

4. How does the draft EIA impact people? Does it have enough provisions for impacted communities to be heard?

Common people have always been and continue to be peripheral to the EIA notification. We say this knowing fully well that the public hearing process has been in the notification since 1997, and it still remains here with its form and purpose watered down a lot. For example: The EIA 2006 notification had reduced the scope of public hearings to only comment on a draft EIA report. So when people came to the hearing to speak about how profoundly the project would take away their resources, these public hearings simply ticked the procedural boxes. As you know as a reporter of these issues, even though many public hearings have seen almost total opposition to a project, that project has been approved by the government.

Yet, this public space is very important for all of us. As people who may be affected by projects, we need information about the project, we need to know from the proponent of the project why they think it’s a good idea to promote it and we need our views about the project to be heard by all parties. This is a reasonable expectation to have in a democracy. In fact, it is the democratic nature of the public hearing that gives the EIA process its legitimacy. Without this, project decisions would be a blatant resource grab. So irrespective of whether people can freely talk at these hearings, the government concludes that it has heard people.

Public hearings are still these in the notification but it has been contained a lot by reducing the notice period from 30 to 20 days and by exempting many projects from public hearings altogether. There is a clause in the draft that says that there should be no postponement of date, time, venue of a public hearing unless some untoward emergency situation occurs and the postponement will be done only on the recommendations of concerned authorities.

5. There is a contentious provision in the draft on regularising EIA violations or projects which have already come up without following due process. What will be the impact of this provision? Can we expect more projects to violate?

This is one of the more significant aspects of the Draft EIA 2020. This is a big public admission from the government that the EIA system suffers from a great number of violations and this is systemic. This acknowledgment has come due to the hard work of many people and organisations who have pointed to project violations, documented them and taken them to task. It seems that the government is ready to admit that development projects have operated outside the framework of law.

So the question now is whether this problem of rampant violations should be handled through statutory law or through government regulation? In this proposal the government is trying to deal with violations like they are remediation projects. But what about the legal liability of these projects that have operated with impunity?

We are not very confident that the government can carry through this attention it wants to give to violations because it has historically played a facilitative role to development projects in its job as an environmental regulator. Now it seems difficult to think that this same institution can restrain projects and extract from them the much needed remediation and compensation costs. Actually these are matters of justice and need to be taken up by a much higher and powerful agency because affected people are waiting for not just the remediation of ecosystems destroyed by these projects but also compensations of various kinds for all their suffering in terms of health, loss of livelihoods and trauma. Given our economic situation now, industry will try to externalise these liabilities further. In this situation, victims of environmental degradation should not be treated as anti-developmentalists for seeking justice.

Listen to the full audio of the talk (above) by Samuel Asher from the University of Oxford where he shares findings from a comprehensive study on the Pradhan Mantri Gram Sadak Yojana (PMGSY).

Asher discusses the links between the lack of rural infrastructure, employment, and economic outcomes. He highlights that poor rural transportation infrastructure is a major constraint on the sectoral allocation of labour in low income countries, elaborating on the impact of the PMGSY in enabling local workers to access external labour markets.

More information about the talk can be found on the event page, and the full paper, which was presented can be accessed here.