Author: cprindia

 

India’s air quality presents a major public health crisis. In this series we showed that, first, most Indians face air quality year around that is multiple times higher than safe levels. Second, the health risks are pervasive and deep, affect healthy and vulnerable people, and are particularly harmful for our children. Third, air pollution is hard to solve because it is a multi-headed problem; industry, transport, biomass/waste burning and dust all contributing significantly, and each has its own political, regulatory and technical challenges. In this final article, we conclude that current efforts to solve air pollution are highly inadequate and suggest a way forward.

The current air quality regulatory architecture is built around the Environment (Protection) Act 1986, the Air (Prevention and Control of Pollution) Act 1981, and rules and notifications issued under each. The central and state pollution control boards are responsible for monitoring and enforcing emission regulations. A National Clean Air Plan is still in the works, and some cities and regions have begun working on their own plans and policies.

The national conversation has mostly been shaped by the regulatory architecture of Delhi and the National Capital Region, which has received disproportionate attention. This includes a Comprehensive Action Plan (CAP) and a complementary Graded Response Action Plan to trigger emergency actions when pollution levels cross particular thresholds. Many of these actions are driven by the Supreme Court’s orders. The court regularly intervenes to promote implementation, often in response to reports by the Environmental Protection (Prevention and Control) Authority, which was established by the court 20 years ago. Given its role as a template nationally, Delhi provides a useful test case to assess effectiveness of pollution control measures. So how has Delhi fared?

It is important to start by recognising the positives. The list of actions proposed in documents such as the CAP, and those directed by the judiciary, are useful, and if implemented, would make a difference. Some of these actions have already been implemented, such as shutting down the Badarpur power plant. Some very significant policy changes have been put in place, such as banning petcoke and setting a date for clean Bharat VI fuel standards. Air quality monitoring has improved, particularly in Delhi, and the formulation of an air quality index has helped public awareness.

However, it is hard to avoid a sense that the existing and planned pollution control approach as a whole is failing the citizens of Delhi-NCR. First, the CAP is organised around an unprioritised laundry list of no less than 93 different actions under 12 heads, each assigned to a relevant agency. While this list is indeed comprehensive, it is not strategic in identifying the most important actions, setting realistic timelines, and ensuring accountability. Indeed, for many actions the deadlines – ranging from ‘immediate’ to three months – have already passed with little apparent consequence to the relevant agency for inaction.

Second, many of the actions ignore or assume implementation and enforcement challenges. For example, one action demands “strict enforcement of air pollution control measures in all industries,” including unauthorised ones. Yet, there is no consideration of the technical challenge of monitoring dispersed industries, enforcing the law when the very existence of many industries is illegal, and the political blowback due to political connections or job loss. Without addressing these underlying issues, enforcement agencies are placed in an untenable situation. Using the CAP to suggest that pollution control regulations are all in place, and that ‘only’ enforcement challenges remain is disingenuous. Pollution regulation has to be re-designed with an eye to credible enforcement, while also considering other institutional and regulatory challenges.

Third, not all actions are amenable to an administrative solution. Some, such as closing the Badarpur power plant, are stroke-of-the-pen solutions. But for many actions, some combination of regulatory, administrative, political, technical and behavioural solutions are needed. For example, addressing industrial emissions requires enhancing monitoring ability and institutional capacity, and legal and regulatory changes. Crop burning has proved resistant to an administratively provided technical solution – subsidising “happy seeders”.

Finally, there is no effort to communicate to the public the rationality of the plan and lay out markers of progress. For citizens to accept financial or convenience costs and agree to change behaviour requires conviction that the plan fairly distributes costs, and will be effective in driving toward results.

Again, this is not to suggest there has been no progress. But it is to argue that India’s citizens deserve better than moderate, ad hoc and episodic progress, that risks getting overwhelmed by rising emissions. There is little to be gained by generating yet another wish-list of actions. What, then, is to be done? Air pollution control has to be built around a virtuous cycle of growing citizen pressure for political action, demonstrated success, and strategic long-term action built around robust regulatory institutions.
First, air quality has to be driven up the political agenda by highlighting the true costs of air pollution to health, quality of life and economic output. At a recent public hearing in Delhi, the AAP representative pleaded helplessness pointing to pollution sources outside Delhi, the BJP airily dismissed pollution as the price of economic aspirations, and the Congress failed to show up. In the forthcoming elections, public action groups and citizens could demand that all parties outline clearly their actions on air quality in their election manifestos. The political class should no more be able to loosely argue that unhealthy air is the cost of ‘progress’.

Second, because public pressure can turn into frustration or fatalism if it is not productively channeled, we need a limited number of concrete, achievable, and significant actions suitable for each jurisdiction. Critically, these should be defined for each major source, to signal progress is being made on each front. For example, in Delhi, buying and operating sufficient public buses while simultaneously inducing a large-scale behavioural shift toward public transport would curtail a rapidly growing pollution source. Early wins that include public action alone will not solve the problem, because air quality is not determined by any single source. But they do address key sources, and help bring the public in as active stakeholders and not just passive recipients of distant administrative action.

Third, and most important, a strategic re-think of our regulatory and policy framework is required, keeping in mind the particular characteristics of each source. For industrial pollution, physically monitoring and chasing individual industries throughout a region is infeasible; regulators should instead rely more on remote monitoring of credible data and clever enforcement. For crop burning, delving beyond a technological quick fix to consider upstream measures is required, like incentivising a shift in cropping patterns based on understanding farmers’ concerns. Given the dispersed nature of pollution sources, developing an ‘airshed’ based regulatory architecture that transcends cities is important.

India is waking up to the costs of air pollution. But we have only taken initial, reactive measures toward addressing the challenge. We now need to move to systematic actions built on the foundations of political pressure, public engagement and strategic institutional action.

Navroz K Dubash is Professor at Centre for Policy Research. Shibani Ghosh is a Fellow at Centre for Policy Research. Santosh Harish is a Fellow at Centre for Policy Research.

This article is the fourth article in a four-part series on India’s air pollution. The original article, which was published in the Hindustan Times on December 22, 2018, can be found here. For more information on CPR’s work on air pollution, visit the Clearing the Air? project page.

In this Series:

Understanding the Curse of Air Pollution (1/4)

Public Health in India a Casualty of Air Pollution (2/4)

Delhi Has a Complex Air Pollution Problem (3/4)

Air pollution: India’s waking up, but there’s a long way to go (4/4)

As Narendra Modi visited Iran in May, and completed a five nation tour (Aghanistan, Qatar, USA, Switzerland, Mexico) in June, CPR faculty analyse what these visits mean, with a special focus on Iran and the US:

G Parthasarathy writes in the New Indian Express that in signing the Chabahar deal with Iran, allowing India access to West and Central Asia through the Iranian port of Chabahar, Mr Modi has marked an important milestone in building a partnership with Iran, bypassing Pakistan. While this is a positive signal, India cannot take anything for granted, and must build on this beginning in the coming months.
In the Takeaway from Tehran, Srinath Raghavan similarly writes that the recent visit by Mr Modi may have given India another opportunity to craft a strategic relationship with Iran, and increase its influence on West Asia, but the challenge lies in the delivery.
In When will the U.S. accommodate India’s strategic interests?, Brahma Chellaney writes that despite the symbolism of warming ties between India and the US, India’s strategic interests are yet to be accommodated by the US, including India’s inclusion in the NSG, where China has emerged as the main political opponent. In spite of promising to facilitate India’s admission in the NSG, the US has invested little political capital in furthering this.
In India & US: aligning rhetoric & reality, Shyam Saran analyses the various dimensions of Mr Modi’s visit to the US, and asserts that the compelling logic of a strategic Indo-US partnership will endure in a complex and uncertain world, even if the trajectory of the expected outcomes may vary.
Srinath Raghavan too analyses the implications of Mr Modi’s visit to the US and the joint statement released, writing in The Wire that even though Modi ‘has gone further than any previous prime minister in positioning India in the strategic orbit of the US’, India continues to remain the weaker player, and has failed to factor in the likely reactions of adversaries like China.
In Embracing Washington comes with a price, Bharat Karnad also deconstructs Modi’s U.S. policy at various levels, writing that ultimately even as Western leaders will be friendly, they will advance their own national interests, leaving ‘India to wax eloquent about shared democratic values’.

Watch the full video (above) of the talk by Valérie Clerc, where she discusses precarious settlements, which are home to nearly one billion people across the world.

Through this talk, Clerc analyses urban policies pertaining to these informal settlements, which have not often followed the recommendations of international institutions, advocating the legalisation and improvement of living conditions in such precarious spaces.

Valérie Clerc is a Research fellow at the French National Research Institute for Sustainable Development – IRD, and a member of the CESSMA Centre for Social Sciences Studies on Africa, America and Asia in Paris.

The Q&A session that followed can be accessed here.

Watch the full discussion (above) between Srinath Raghavan and Mukul Kesavan on nationalism, organised by Indus Syndicate at India International Centre, New Delhi.

Watch the full video (above) of the conversation with Olivier Mongin, co-organised by Centre de Sciences Humaines (CSH), Institut Français India (IFI) and CPR. The author was in conversation with Senior Visiting Fellow, Marie-Hélène Zérah and related his work to the Indian urban environment and introduced perspectives from her involvement with the research collective on subaltern urbanisation.

The starting point was Olivier Mongin’s book City of Flows (‘La Ville des flux’, published in 2013), which reflects on the trajectory of cities in an era of globalisation. For him, there is an ongoing ‘de-territorialisation’ process in the cities, which avoids regulation, because of their integration into a vast global movement materialised by flows. He argues in favour of the urgent need to rethink urban values, which have taken various forms and semantics through history, and which are vital to envision a more integrative future for cities.

Olivier Mongin, is an essayist and publisher, with a multidisciplinary background in history, anthropology, and literature and was the editor of the journal Esprit from 1988 to 2012.

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

Watch the full video (above) of the launch of ‘A Just Jobs Index for India: How do Indian States Fare in the Creation of Just Jobs?’ by CPR and JustJobs Network (JJN).

India’s ailing labour market threatens the fragile optimism that underpins the nation’s aspirations. Urgent action is required to create a more job-rich economy that harnesses the productive potential of India’s population and raises living standards for all.

To further this critical policy imperative, JJN, with support from the Azim Premji University, has developed a JustJobs Index (JJI) – a comprehensive, data-driven tool to measure the quantity and quality of jobs – at the state level in India. This index, the first of its kind to measure both the quantity and quality of jobs, broadens the discourse on employment beyond the incomplete metric of unemployment. The report analyses the factors driving state-level rankings.

Panellists at the launch included:

Amitabh Kant, Chief Executive Officer, NITI Aayog
Dilip Chenoy, Secretary General, Federation of Indian Chambers of Commerce and Industry (FICCI)
Partha Mukhopadhyay, Senior Fellow, CPR
Anurag Behar, Vice Chancellor, Azim Premji University and CEO, Azim Premji Foundation
Sabina Dewan, President and Executive Director, JustJobs Network and Senior Visiting Fellow, CPR
The Index and the report can be accessed here.

Why is the study important?

The numbers of out-of-school children (OOSC) put out by various official sources in India, show wide variations. For instance, the Ministry of Human Resource Development (MHRD) survey by Social and Rural Research Institute – Indian Market Research Bureau (SRI-IMRB) estimate of this figure is around 6 million, while for the same year 2014, the National Sample Survey (NSS) figure is around 20 million.

The problems lie not just in the definitions of OOSC used by different sources but also in the systems of collecting and collating data as well as the methods of estimation used by each source:

For instance, all school-based information defines an out of school child as one that is enrolled one year and not the next and/or continuously absent for a certain period of time. Household level data of never enrolled is not included in these estimates. Besides, school data is collected only by teachers who may have a conflict of interest in relation to some indicators, such as inflating student attendance for purposes of mid-day meal allocations and or preserving their own jobs, which are dependent on enrolment figures. Teacher may also be under pressure from parents to not strike names of children off the records.
Drop-out rates, which are estimates based on subtracting days of continuous absence over a period of time from the enrolment figures also vary from state to state (two weeks of absence in Karnataka to three months in Gujarat). This makes inter-state comparisons extremely difficult.
Further, these estimates do not take into account sporadic or irregular attendance, which is known to be very high in most rural schools.
Finally household level data on never enrolled also tends to be highly inaccurate due to i) lack of records on births and deaths and, ii) each data collection agency posing the question in a different way, eliciting a different response from the household. Lack of standardisation across basic indicators thus obscures the data count.
These anomalies call for a closer look at the issues around estimation of OOSC, particularly the attendance patterns of children, with special emphasis on sporadic or irregular attendance, as that has an impact on learning levels as well. With learning outcomes dominating the policy discourse on education, unpacking the links between attendance and learning and its distribution across social categories is therefore important.

This study of out-of-school children was undertaken in order to understand the phenomena of OOSC through an intensive micro-study of all children in a single Gram Panchayat (GP or Panchayat).

How was the study conducted?

It is based on a household survey that provides the population of children in the GP who attend schools located within the boundaries of the Gram Panchayat, as well as a survey of all enrolled children in schools located within the GP.

This enables a mapping of children from the household survey data and school data to obtain a final sample of children from the Panchayat attending schools located in the Panchayat. Thereafter the attendance of these mapped children is tracked through the course of one academic year by making bi-weekly visits (before and after the serving of the Mid-Day Meal (MDM)) to capture attendance patterns of the children.

The study surveys every school age child in the selected Panchayat, who attends school in the Panchayat region, with the intention of:

delineating OOSC by gender, social category and other household factors that might have an impact on attendance rates;
deciphering the attendance patterns and hence the extent of real drop -outs among children according to gender and social category.
The major emphasis of the current study is thus to provide a methodological framework to broaden the scope of defining OOSC by highlighting important issues that have hitherto been neglected in the estimation and analysis of out of school data.

Findings from the study:

The tracking of attendance and the patterns it discerns tells us the following:

Irregular or sporadic attendance is a huge phenomena–more than twice the number of children who recorded continuous absence are actually sporadically absent–but not recorded in the official figures related to OOSC.
Children who are never enrolled constitute an ‘invisible’ category as far as the system is concerned, as they are not recorded in any official document within the education system.
Extremely poor birth registration records exacerbate the problem of invisibility of children not in school.
There are wide variations in the attendance of children from different social groups, including gender, which need further research in order to develop strategies for mainstreaming them.
Various pressures–both at the societal and the school level–have led to overstating attendance of children in the school records to the detriment of children and their chances of improving their learning levels. This is reflected in the difference between the school records and head count data collected during the survey.
Policy implications of the study findings:

The survey results in several policy implications. These include:

First, a better data regime, that accounts for OOSC in a more robust as well as realistic manner, taking into account sporadic absence as well as the invisible children;
Second, adjusting the school calendar to align it with the agricultural cycle of the area permitting children who are needed by the families in peak season to do so, without disrupting their education;
Third, management of a local database by the Panchayat for purposes of data validation as well as tracking basic indicators such as student and teacher attendance, in addition to improved birth and death registration. For some indicators, community authentication would be helpful to check for anomalies that creep in, especially in instances where teachers may have an incentive in misreporting. While this authentication may not be very precise, it would help to red flag some figures, which could then be cross checked using more rigorous methods.
Fourth, developing an early warning system to help identify children at the risk of dropping out so that the school administration and community may take steps early on to prevent the eventual dropping-out of the child.
The full report can be accessed here.

The views shared belong to individual faculty and researchers and do not represent an institutional stance on the issue.

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The cost and reliability of electricity and logistics is a major drag on our manufacturing ambitions. Sewage from our cities is killing our rivers. Yet, infrastructure has fallen off the policy radar, despite continuing challenges – evident most vividly in the financial sector’s non-performing assets. What is wrong and how can we fix it? We outline the key actions that need to be taken in the major sectors to make the sector financially viable and support our economic goals.

Electricity

Today, when our installed capacity is a multiple of our expressed demand (which, admittedly, may be less than our need), the objective of 24X7 power supply to consumers – whether industrial, residential or commercial – at efficient and competitive prices, should be within reach. What is stopping us?

Many of the challenges in power have been addressed elsewhere by other colleagues, so I will be brief here. Renewable energy capacity in India has grown rapidly – as befits the progenitor of the International Solar Alliance. Installed capacity of wind, solar, small hydro (less than 25MW) biomass and other such sources have grown seven fold from 11,125MW (8% of grid capacity) in March 2008 to 77,642 MW (22% of grid) in March 2019.

The share of generation from these sources is now 9%. Yet, the share of thermal sources, primarily coal, remains at 78% – except that it now operates at an inefficient 60% plant load factor instead of 74% in 2008. We have been running to stay in place. The rising share of renewables has replaced the lack of growth in large hydro sources, an outcome which may admittedly have other environmental benefits. Integrating the full spectrum of non-fossil fuel resources into the grid is thus more difficult than just increasing capacity of renewable sources. So, we may get to our 175 GW capacity target and yet not achieve much in terms of transforming the carbon-intensity of our electricity supply.

Gas plants, the vaunted mitigators of climate elsewhere, remain almost unutilised – running at just about one fifth of their capacity, less than half of levels ten years ago, largely because current tariff and access regimes make them uncompetitive and they have no fuel supply. Our troubles with domestic gas exploration – KG D-6 for example – has led to relative stasis in gas related investment. Even as the LNG market is being increasingly delinked from oil, with recent prices in Asia dropping to multi-year lows1, our terminals remain underutilised and under-connected. A world where a gas plant can import fuel, land it at a convenient terminal and transport it to its plant by paying an access charge to a network operator seems very far away.

There is one root cause: DISCOMs that do not collect money for power they sell. This one cause has many other manifestations – protective regulators who are reluctant to allow open access, tariff regimes without time-of-day prices, overgenerous feed-in mandates for renewable power, lavish cost-plus tariffs for legacy centrally owned plants with priority power purchase agreements with states, etc.

Given the complicated mess that our power sector has been in over the past many years, spanning all governments, transcending this will need a number of actions, across the generation, transmission and distribution segments. I advocate three, focused on tariffs.

First, industrial and commercial tariffs need to fall, leading, hopefully, to a spurt in jobs. They are much more than the cost of supply, ostensibly to subsidise residential and agricultural consumers.

We cannot kill industries to keep DISCOMs alive. The network has the technical capacity to achieve this objective – especially for industries that receive power at higher voltages. DISCOMs have used their universal supply mandate as an excuse to prevent industries from accessing competitively priced power. Allowing DISCOMs to even procure incremental power and supply them at competitive prices to paying industrial consumers is in the realm of state governments. The alternative is open access – part of our electricity legislation for several years – but limited in its application by our state electricity regulators, a short-sighted approach to protecting DISCOMs.

Second, residential and agricultural tariffs can be rationalised, and in some segments, raised. In the era of direct benefit transfers and income support schemes, price subsidies have outlived their utility. The reduction in fiscal support to the DISCOM can be redirected to targeted consumers as a cash transfer, to insulate them from the effects of the rise in tariffs. A more rational tariff regime may also lead finally to complete metering (one can trace exhortations to meter all feeders back to twenty years ago), and a credible accounting of electricity consumption.

Third, we need to extensively expand time of day pricing. Today, those that consume low cost baseload power bear the burden of higher price peaking (and other) power because of averaging of tariffs. This is being debated for a long time is even used in some segments in some states. It can also make the gas plants, at a time of low LNG prices, competitive, reducing our carbon footprint.

These tariff actions will create the enabling conditions for ensuring that our grid is no longer bankrupt. There will still be much work to revitalise DISCOMs and address the hysteresis of long years of embedded political economy constraints, before they can be made viable. But, this is a better way than UDAY and the creation of a national distribution company, which is a heart bypass, without changing unhealthy habits. At most, if necessary, the Union can support the states in DISCOM reform by advancing bridging loans to tide over revenue shortfalls in the initial stages, if any.

There are many other areas for action. These include enabling a network that can integrate renewable power at the scale it is being envisaged; rationalising and modernising our coal plants – the capacity glut allows us to take some of them offline, temporarily, or even permanently, if necessary; streamlining our gas pipeline grid and pricing to allow gas plants to compete and provide balancing capacity for a renewable heavy grid, etc., etc. There are also many actions that need to be taken to grow an energy related manufacturing sector. But, all of that is only possible when the final cash generating end of the sector – distribution – is viable and healthy. It is time we took this head on.

Telecom

The telecom sector, bar one firm, seems to be struggling despite increasing use, so much so, that one wonders whether the public monopoly before telecom liberalisation will return in a different avatar. Despite rapid growth and the spread of smartphones, we are yet to ensure that a seamless network covers our country with both reliable data and voice. Why are we in this situation?

One major reason is that spectrum is mispriced. It should be virtually free in sparsely populated rural areas. Unless there is congestion, there is no reason to price it. Yet, our current spectrum pricing model makes rural spectrum as expensive as that in cities. This is because Licensed Service Areas (LSAs) are congruent with telecom circles, i.e., states, mixing areas that are both abundant and scarce in spectrum. This does not allow rural spectrum to be separated and affects spectrum availability across the LSA. Auctions are not necessarily efficient if the good being sold is incorrectly bundled. Instead, spectrum needs to be defined in much smaller geographical units (see Box).

If one moves to define and sell spectrum over smaller geographical units, aggregate revenue may remain the same but places with excess spectrum may get more service providers. But, even if it falls, one must question whether the rationale for spectrum allocation is to raise fiscal resources or whether it is to expand connectivity across the country.

Another reason is that telecom services may be priced below economic cost, an issue for the sector regulator and Competition Commission of India to examine. If even the growing firm is sustained more by infusions outside the sector than its own surplus, then, as 5G becomes the standard, whether Huawei’s or Qualcomm’s or whoever’s – China has already awarded licenses to four firms – we may find that Indian telecom sector is too under-resourced to adopt the new technology. This would not be a good outcome. Cheap prices now is too high a price to pay for outdated technology later.

Finally, our Universal Service Obligation Fund was supposed to bring data to our rural communities and transform their access to education and health. Yet, instead of schoolchildren learning from high bandwidth rich digital content, they are addicted to low bandwidth social media separating one from the other. Aadhaar often falters, as biometric machines cannot access stable data connections.

Logistics

Twenty years ago, the government levied a rupee of cess on petrol and diesel, to fund national highways, rural roads and, lest one forget, rail over bridges. The humble but path-breaking cess of 1999 is now the monster eight rupee road and infrastructure cess that no one protests paying. Why, then is our logistics still so outmoded?

Highways

There has been substantial investment in highways in the last administration. The adoption of models like Hybrid Annuity reversed a slump caused by concession models that transferred excessive risk to the private sector, who, regardless had bid aggressively for projects. Public sector banks lent to them on the back of projected cash flows that never materialised. Post the Lehman crisis in 2008, banks were left holding unfinished projects. Most of these have now been restructured and restarted. However, the sector still to solve three challenges:

(a) Barrier free movement for freight road traffic – trains, after all, are not stopped at state borders
(b) Ensuring maintenance of the national highway network
(c) Avoiding white elephant highways, while retaining an appropriate risk-reward framework
For a long time, open road tolling was not possible because offenders could not be identified, absent a national vehicle number database. Now we have one – VAAHAN – and we have e-way bills too. Can we remove all our toll plazas and move to toll gantries, beginning with high traffic routes?

For highways on the BOT model, on annuity or hybrid annuity concessions, there is a built-in mechanism to penalise operators for poor maintenance. Is that working? What about highways on a BOT-capital grant model or those being tolled by NHAI? As the highway network expands and begins to age, a transparent mechanism to monitor and maintain the quality of roads needs to be rolled out.

Finally, hybrid annuity models do not transfer traffic risk to the private concessionaire. As the network grows beyond the obvious congested routes, there is a risk that roads will get built where there is no traffic, even in the near future. To forestall this, we should switch to concession models that limit the transfer of periodic traffic risk, but still retain transfer of lifetime traffic risk – like Least Present Value of Revenue models. For this, we need to familiarise our financial institutions with such methods.

PMGSY: Rural Roads

The construction of 600,000 plus kilometres of rural roads, over the last twenty years, across governments of different political persuasion is testimony to the consensus over rural connectivity. Many states now have supplementary rural roads programmes financed from their own budgets. It has undoubtedly played a major role in moving our workers off the farm, to new activities and locations. The maintenance of this network should now be our primary concern. The initial PMGSY contracts had a built in maintenance period, many of which have now concluded. An institutional mechanism to maintain the PMGSY network needs to be put in place. One model can be the performance based CREMA contracts of Argentina, broadly similar to the initial PMGSY contracts, but for rehabilitation and maintenance, with penalties for not meeting performance outcomes.

Railways

Even the lowest tariff freight train makes more money than the Rajdhani. We need to shift the conversation around Railways from passenger to freight – a critical logistics function essential to support manufacturing. Currently, track capacity is exhausted running passenger trains. In the short term, it is necessary to: (a) prioritise signalling investments on a war-footing to expand capacity and (b) rationalise passenger trains, by combining capacity and retiring trains.

In order to determine which trains to retire, the Railways needs to develop the ability to cost each train, which it currently does not do. The passenger subsidy numbers bandied about are an artificial construct and an over-aggregated exercise. Developing this costing methodology is a priority.

The Dedicated Freight Corridors should also free up capacity by taking traffic away from existing lines. The transport of coal, which still makes up about half of Railway’s traffic, will slow down or even decline as coal power is reduced and produced progressively at the pithead. Can Railways fill this freed-up capacity with other cargo, containerized or otherwise, and with revenue generating passengers? Can it become a logistics company from a mere transporter from one station to another? The strategy that is chosen will have implications for number and types of locomotives and rolling stock. The e-commerce parcel segment is a good way to start this transformation. It will force the Railways to deal with inter-modality, a necessary ingredient for its medium term survival.

Suburban passenger services are urban public service obligations. This activity needs to be separated and costed and then funded separately, as for example the urban metro rail projects.

Finally, the Railways needs financial engineering. Today, a huge portion of its revenue is spent on pension benefits for its retirees. This is an obligation that will progressively reduce over time, as the effect of the National Pension Scheme begins to show. Railways can restructure this predictable liability to reduce its current expenditure and free up resources for investment. Will it do so?

Port

Today, JNPT is quite possibly no longer the Indian port that handles the most containers. That position is likely held by Mundhra, a port owned by the Adanis, connected by a joint venture rail track to the Delhi-Mumbai rail corridor. Mundhra has an unfair advantage – it can decide its prices, JNPT cannot. The tariffs at our major ports (i.e., those owned by the Union government) are determined by the Tariff Authority for Major Ports, an anachronistic holdover in a competitive sector. The Tariff Guidelines notified this year are a far cry from the price flexibility that Mundhra enjoys.

Not only are the tariffs rigidly determined, the structure of our major port concessions are designed to make it costly for our traders to transport. Between a third and a half of the tariff is shared with the government, depending on the port and berth, since the gross revenue share is the bid parameter. It means that tariffs could be reduced by half in some cases and the port would still be viable. Like spectrum, this is again an instance where the urge to raise fiscal resources prevailed over the need to ensure competitive logistics costs for our industry. It is time to take three actions.

First, disband institutions like TAMP, treat ports as a competitive sector, with tariff freedom for operators and improved competition oversight. This should be accompanied with a move away from a revenue share concession structure to a fixed concession fee.

Second, invest in port connectivity to spur inter-port and intra-port competition. The rising share of non-major ports indicates that there is growing inter-port competition, even with problems in road and rail connectivity. Added to this is intra-port competition, when there are multiple operators in a port.

Third, we need to re-examine our approach to coastal shipping. Our eastern ports, together with ports in Bangladesh, Myanmar and Thailand, can act as a sea-bridge to our northeast and integrate our industry with South East Asian value chains. The Bay of Bengal will buzz with crisscrossing ships.

Together, these actions, across road, rail and ports, along with regulatory action and investment to facilitate multi-modal transport, will reduce our logistics costs and make industry more competitive.

Water Treatment

Every major city in India kills at least one river. Even as Chennai dries and Mumbai drowns, Delhi blithely pollutes the Yamuna. Our farms mismanage water and our cities poison it. Yet, with the possible exception of the National Mission for Clean Ganga, there is little programmatic effort – like the National Highways Authority for India for highways – to preserve our rivers and water bodies.

This is not just a matter of building sewers and sewerage treatment plants – a significant portion of such treatment capacity lies unused. We also need to consider the reckless destruction of even groundwater resources by industries that dispose their waste underground, aided by incapacitated pollution control boards – the corridor from Vatva to Vapi rivals the worst polluted areas of China – and the damage caused by chemical run-off from overuse of pesticides and fertilizer in agriculture.

More than inland waterways, river inter-linking and large dams, we need focus on wastewater.

The Digital Future

Even as we address these basic issues, digital technologies are changing the way infrastructure is provided, operated, charged for and maintained across sectors. These technologies permit services to be delivered more efficiently, less expensively, use less resources, cause less damage to the environment and reach a wider user base. This will not happen automatically or quickly but the process can be accelerated with an appropriate mix of regulatory mechanisms and financing tools.

The availability of funds is not the constraint that will restrain growth of digitally enabled infrastructure. The challenge is to design projects to balance risk and reward in a way that providers are incentivised to serve users well, while financiers are insured from the realisation of uncontrollable risks.

One such financial risk is the fast-obsolescing nature of these technologies, where yesterday’s cutting edge is tomorrow’s discard. This structural risk can slow down the adoption of socially beneficial technologies. Slow adoption can also be engineered by those who will lose their investments from new technologies. This will need public action in terms of financing models and regulatory oversight.

Conclusion

Our infrastructure models are still operationally inefficient, financially fragile and future-unready, both in terms of technology and the environment. For too long – across governments – we have focused on making money from infrastructure rather than seeing it as a service that can power growth and enable the transformation of India. If we did manage to convince our private sector to invest enough to get us to 8%+ growth, we will hit a wall of infrastructure constraints. We have lived too long off our earlier investment in the past few years. We cannot do so any longer.

1 Henry Hub, the US local benchmark and increasingly an alternative basis, vis-à-vis oil, for export pricing, has stayed below USD 3 per mmbtu for three fourths of the time over the last five years.
2 This is to avoid situations where spectrum trading leads to licences that are too small to be practical, resulting in inefficient use of spectrum and unnecessary administrative costs.

The Centre for Policy Research, Delhi in association with the Global Integrity Anti-Corruption Evidence Research Programme (GI-ACE) hosted a workshop focused on ‘Audit and Anti-Corruption Measures in India’ with a special focus on the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the Pradhan Mantri Gram Sadak Yojana (PMGSY). The workshop took place on Tuesday, 24th September 2019 and was conducted at the Centre for Policy Research. The co-conveners of the workshop were Amrita Dhillon, who is currently Professor of Economics at King’s College London and Yamini Aiyar, President and Chief Executive of the Centre for Policy Research.

The workshop sprung from a belief in the necessity to bring together government officials, policy activists, and researchers to deliberate on finding possible complementarities with two seemingly opposite methods of ensuring transparency and reducing inefficiency in government schemes. While policy activists have focused on the power of public audits as a forum to bring to light inefficiencies and corruption and have sought to formalize them into schemes thereby empowering beneficiaries, the government seems to have shifted to a technology based approach to deliver greater efficiency and target corruption. With a view towards securing a holistic view of this question, the workshop was successful in bringing together participants from the government, civil society, and academia. They ranged from organizations such as the Ministry of Rural Development, Comptroller and Auditor General’s Office, Indian Statistical Institute, Social Accountability Resource Unit, IDInsight, Azim Premji University, Accountability Initiative and the Brookings Institution to name a few.

The first session was chaired by Farzana Afridi from the Indian Statistical Institute and titled ‘Leakages in Central Schemes, Centralised Monitoring and Interaction with New Technologies.’ It featured speakers from academia, policy practitioners, and the government who each sought to contextualize their experience within the ambit of either framing anti-corruption policy or studying its efficacy on the field.

Yamini Aiyar from the Centre for Policy Research began the session by recounting her experiencegleaned from having observed the implementation of MGNREGA since its inception and closely studiedsocial audits in the MGNREGA. She pointed to the importance of the scheme as an experimental ground for governance and citizen engagement through vehicles like social audits. However she also cautioned against an overemphasis on corruption at the cost of building state capability for effective implementation and the tensions between greater decentralization and anticorruption efforts. To reduce leakages, she underscored the importance of the need for enhancing capacities of the panchayats while roping in the government to be a part of the social audits which can be a rich source of feedback to judge the workings of their technological interventions. This was a point also echoed by Karan Nagpal, an economist at the consulting group IDInsight, who drew upon the firm’s groundwork experience as well as his own doctoral thesis research which emphasized the need to build capacity at the grassroots to overcome the difficulties that arise from a technological intervention.

The government officials who attended the session provided an invaluable insight into how the establishment looks at the issue of corruption through the lens of auditing and how technological innovations are conceived, adopted, tweaked and finally institutionalized.

Alka Upadhyay, Additional Secretary at the Ministry of Rural Development, detailed how the Ministry has moved to plug the main sources of leakages in the MNREGA—namely wage siphoning, creation of fake beneficiaries and assets not getting created. According to her, aside from the oft cited Direct Benefit Transfer, an important technological intervention to obtain a finished asset has been geotagging- particularly in the PMGSY. She also highlighted the Ministry’s efforts to ensure transparency across multiple levels while still acknowledging that more needs to be done in this matter; an example cited was the possibility of making data on road maintenance mapped through geotagging and MIS publicly available thereby making it a powerful tool for social audits. Another area of improvement mentioned by her was in empowering citizen monitoring and building better mechanisms to track their complaints.

Sunil Dadhe—Director General of Audit (Central Expenditure)—sought to demystify the Audit approach to handling corruption. He explained the three approaches that Audit employs: a system-oriented approach which focuses on the system that creates a scheme where delivery doesn’t match expectations, a result-oriented approach which is focused on meeting pre-decided targets, and a problem-oriented approach which looks at specific instances that enhance audit risks. He highlighted the need to embrace technology in audits and bring about correlating data sets across various fields—something China has done to better combat air pollution.

An interesting point that arose during these discussions was the role of the citizen in demanding accountability. Keshav Desiraju, who retired as Secretary, Health & Family Welfare, spoke about how the state expects the citizen to demand accountability and is not predisposed towards providing it; a factor which perhaps explains the social audit falling out of favor as an anti-corruption measure.

The second session was chaired by Amrita Dhillon and titled ‘Accountability Initiatives.’ The speakers in this session were practitioners and civil society activists from the social audit sphere who provided an incisive view on how grievance redressal works at the ground level and the multiple roles played by social audits as mechanisms for increasing awareness, providing a platform for complaint redressal and, formulating processes for grievance redressal against mistakes caused by technological intervention.

Rakshita Swamy from the State Accountability Resource Unit (SARU) built on the points made in the previous session by Sunil Dadhe and pointed out that Social Audit reports have great potential to be used in compliment to CAG audit reports—a practice already in place in Maharashtra and Andhra Pradesh. While highlighting the importance of an audit as a mechanism for spreading awareness and demanding accountability, they are also rich sources of qualitative data which can explain the ‘who, why, and how’ of scheme operations.

Anjor Bhaskar, faculty at Azim Premji University, drew on his fieldwork experiences in Jharkhand to illustrate the role social audits play as grievance redressal mechanisms when technological interventions create a plethora of new problems, probably most commonly seen with the stories of starvation deaths coming out of Jharkhand due to PDS denial caused from inefficient Aadhar linkage. Rajendran Narayanan, also at Azim Premji University, provided more detailed case studies expressing what he termed his “wariness about the techno-utopian way of making schemes efficient.” An interesting observation that Narayanan brought up was the use of messaging services like WhatsApp by frontline bureaucrats to convey decisions which obfuscates accessibility and erases trails which citizens cannot appeal against later.

A second point that Bhaskar sought to underscore was the availability of multiple datasets of rich data with the government but none of them are available for public scrutiny. The most obvious one he highlighted was the lack of Action Taken Report (ATR) availability in the public domain or on the internet. Another opaque avenue rich with data that he mentioned was the possibility of studying Gram Panchayat Development Plans (GPDP) to better understand the workings of the panchayat as well as its priorities.

Anindita Adhikari, currently a PhD student at Brown University, shared experiences from fieldwork conducted in Bihar as part of her ongoing doctoral thesis. She sought to explain the widespread adoption of Jaanchculture or a culture of inspections, often unplanned, random ones, comprising of surprise checks, individual checks, Lokpal inspections and, social audits. It was found that a lot of these random visits and checks are not explicitly audited but a way of maintaining a regular flow of work. However, it was observed that some of the reports coming out of these social audits were ambiguous and difficult to take action on. Another important factor was that panchayats were being kept out of the process of the social audits pointing to the need for giving them more formal responsibility when it comes to social audits.

The workshop culminated with a note of thanks delivered by co-convener Amrita Dhillon who drew notice to the breadth of topics covered throughout the day as well as appreciation for the sheer diversity of experts around the table. The daylong session was a fascinating, and rare, insight into a topic where two major stakeholders- the government and civil society are often at loggerheads, unable to see the other’s side. By bringing not just representatives from these two sectors, but also formal academics and private practitioners, the workshop helped foster substantive discussions based on a holistic understanding of the sector and generated avenues for further improvement, study, and implementation.