Author: cprindia

FULL ACCESS TO THE JOURNAL ARTICLE, CO-AUTHORED BY NAVROZ K DUBASH
ENVIRONMENTAL JUSTICE CLIMATE RESEARCH

Carbon emissions—and hence fossil fuel combustion—must decline rapidly if warming is to be held below 1.5 or 2 °C. Yet fossil fuels are so deeply entrenched in the broader economy that a rapid transition poses the challenge of significant transitional disruption. Fossil fuels must be phased out even as access to energy services for basic needs and for economic development expands, particularly in developing countries. Nations, communities, and workers that are economically dependent on fossil fuel extraction will need to find a new foundation for livelihoods and revenue. These challenges are surmountable. In principle, societies could undertake a decarbonization transition in which they anticipate the transitional disruption, and cooperate and contribute fairly to minimize and alleviate it. Indeed, if societies do not work to avoid that disruption, a decarbonization transition may not be possible at all. Too many people may conclude they will suffer undue hardship, and thus undermine the political consensus required to undertake an ambitious transition. The principles and framework laid out here are offered as a contribution to understanding the nature of the potential impacts of a transition, principles for equitably sharing the costs of avoiding them, and guidance for prioritizing which fossil resources can still be extracted.

The full article can be accessed here.

Watch the full talk (above), where Devesh Vijay tracks changes in demography, occupations, incomes, consumption patterns in villages and slums on Delhi’s margins using surveys, focus group discussions, interviews and life sketches. The study was constructed in two working class communities within the National Capital Region, in 1988-89, and again in 2013-14.

To listen to the lively discussion that followed, tune in to the Q&A Session.

SEWA GRIH RIN’S EXPERIENCES IN HOME FINANCE
ECONOMY

Watch full video of the talk (above) where Shruti Savio Gonsalves, CEO at Sewa Grih Rin Limited (SGRL), explains the challenges and solutions that emerged during SGRL’s journey of financial inclusion of informally employed and housed people, in particular, women.

SGRL is leveraging an extensive membership network of over 2 million poor, self-employed, informal women in 14 different states of India to fulfil a dream of increasing access to decent housing and a sound living environment.

To listen to the lively discussion that followed, tune in to the Q&A Session

BLOG BY JISHNU DAS, YAMINI AIYAR AND JEFFREY HAMMER
HEALTH POLITICS

As the country prepares for the launch of Ayushman Bharat on September 23rd, sceptics may wonder whether this time is truly different. Ayushman Bharat, or Pradhan Mantri- Jan Arogya Yojana (PM-JAY) as it is now called, will attempt to bring millions of poor Indians into a structured health insurance scheme, integrating the latest technology and coordinating between state agencies, insurance firms or state trusts, third-party administrators and thousands of public and private hospitals.

We have been here before. And the same thorny implementation issues are likely to plague Ayushman Bharat, as its predecessor, the Rashtriya Swasthya Bima Yojana (RSBY) and other state-specific insurance models.

If there was one key lesson from that experience, it was this: Even as we have become sick and tired of poor quality and services in the public sector, public funding for the private sector will be no panacea. Not because the private sector can’t perform better, but because, in addition to the old adage that the private sector behaves like the public sector in direct proportion to the subsidies it receives, health insurance brings with it its own set of special concerns.

Good medical care ensures both that the patients receive what they need and do not receive what they do not need. A functioning health insurance system therefore must ensure three different purposes: Patients are not under-treated (the hospital turns you away; doesn’t give you an expensive medicine you need) patients are not over-treated (the hospital gives you an unnecessary procedure or medicines) and patients are not over-charged (you pay more than the price of the service as determined by the insurance scheme).

Ensuring this requires massive investments in adaptive price setting, legislation, third-party monitoring, quality improvements in public sector hospitals and ultimately significant investments in skilled capacity. Increasing government involvement in these five areas will be a critical precondition for fulfilling the promise of a healthier India.

Pricing: If prices could be set such that hospitals always acted as the patient’s best advocate, many of these problems could be solved—and many of the additional issues we discuss below would not arise. But unfortunately, accurately pricing services and ensuring that government gets what it pays for is an almost impossible problem, with perhaps no efficient solution. Prices need to fulfill the dual function of ensuring “neither too much, nor too little”. But if costs for the same procedure differ across hospitals (not only due to quality, but also due to location and capacity), a single price across hospitals can never ensure that both constraints are effectively met, and in fact, it is certain that these prices will never be the “right” prices.

When the price is too low for a hospital, it will either choose not to enroll in the scheme, or it will deny services. When the price is too high, the hospital will make additional profits, or worse, try to convince patients to receive the service even when it is not needed. Reports of unnecessary hysterectomies under RSBY followed from such erroneous pricing.

The fact that a stent will be reimbursed at Rs.40,000 but a heart bypass at Rs 1.2 Lakhs immediately highlights the problem. Even if administrators can perfectly determine what operation the patient received, there is nothing stopping a hospital from choosing the operation that grants higher profits. Why stop at a stent if the bypass nets additional profits? It may be possible to setup complicated verification methods, but problems like “upcoding” (inserting a stent but coding a bypass and perhaps just outright fraud) become more likely the greater the deviation in prices from each hospital’s cost structure.

Getting prices right is the central dilemma in any insurance program and one that all countries struggle to solve. But the one thing that countries implementing large-scale programs have in common is a large analytical and data center that continuously examines procedures, procedure coding and charges from the insurance scheme. Prices have to be frequently negotiated and updated based on the data, and this is a job for specialized teams of hundreds in each state. The precondition for better pricing is state capacity.

Third-party monitoring: Given that we will never get prices exactly right (and for the first decade they may be wildly off), hospitals may both under-treat and over-charge. One of the trickiest problems in RSBY was the denial of services. In the districts where it was implemented, as highlighted in a 2017 study by Karan, Yip and Mahal, RSBY had little to no impact on financial protection for households . One (good) reason could be that people were now accessing health services for conditions that they earlier could not afford to—the impact of RSBY shows up on life, rather than on money.

But two more troubling problems are equally likely. The first is outright denial of services. In West Bengal, in a district one of us was studying, the private hospital would not honor the cards. Patients would turn up, and would be turned back. In the West Bengal case, prices for some procedures were set too low for the hospital to make a profit on these cases, and therefore it made no financial sense for hospitals to cater to these conditions. There have been other cases where patients have been turned back because hospitals were not being reimbursed for their claims on a timely basis. The second is that hospitals may increase the prices of the service and force patients to pay out-of-pocket. Subsidies to providers are shared among the provider and the consumer depending on demand and supply elasticities. If there is only one hospital in the district, the hospital knows that patients have little choice but to pay up.

The problem with denials and top-up pricing is that they do not show up in routine administrative data—the RSBY card was not used; the payment was off the books. Grievance redress and call centers may prove useful, but only if they can immediately influence the outcome for the patient. The RSBY tried to deal with this problem through stated guidelines that allowed local NGOs and partners to setup health desks in hospitals to help patients navigate the scheme and the hospital. Unfortunately, there were few takers. Crucial to the success of Ayushman Bharat therefore is the creation of an eco-system of mediators and facilitators that will serve as a link between the scheme, third party insurers and the hospital. The proposed ‘Arogya Mitras’​ are a step in the right direction, but will require both the authority and the ability to guide patients through hospital care, perhaps in direct opposition to the hospitals’ own objectives. That they will be hired by the private hospitals themselves in several states sets up a direct conflict of interest and undermines their potential to be vigilant observers.

Regulation and Insurance Fraud: In tandem, the scheme will require dedicated teams with supporting legislation to control fraud. Ajay Shah, Ila Patnaik, Shefali Malhotra and Shubho Roy have shown that all 17 insurance ombudsman offices in India are currently vacant with a backlog of 9000 complaints. Gaps in the current regulatory framework imply that there is no established procedure for settlement of claims, redress of consumer behavior against rejection of claims or even penalties for rejecting claims in in violation of existing regulations. This in turn creates incentives for regular violation of norms by insurance companies. Not surprisingly, the complaints rate in India is orders of magnitude higher than comparable jurisdictions across the globe. The success of Ayushman Bharat is now intrinsically tied not only to the functioning of the health department, but also the criminal justice and court systems. For Ayusham Bharat to succeed, on September 23rd the Government of India must unveil not just an insurance plan but a new, stronger legislative framework for regulation and insurance fraud.

Improving Government Hospitals: Finally, there is no getting around the critical need to strengthen government hospitals. In the long run, well-functioning public hospitals will provide a much-needed backstop against predatory practices, denial of service and overcharging in the private sector. Especially in districts where competition is limited, public hospitals will limit the monopoly power of the private sector, flush with the new money from the scheme. A framework for transferring resources from the scheme to help government hospitals improve their quality is just as important as funding flows to the private sector.

Capacity: All of this with require significant investments in state capacity. As in the RSBY state governments will handle most of the implementation and this will require an interest, willingness and, above all, capacity within state governments to make massive investments in the administrative structure. Some numbers may help.

In the United States, the (largely) single-purchaser Medicare scheme employs 6000 people to cover 44 million beneficiaries. These are all highly trained administrative staff handling insurance audits, pricing and medical records; dealing with anti-trust cases and fraud and examining billing issues in each state. Consider U.P where the scheme may cover 50% of the population, or 100 million people. That would imply that the administrative staff to run a single purchaser scheme should be above 10,000. But the RSBY headquarters in UP had 42 staff including a Chief Executive Officer, Nodal officer, contractual staff and medical officers. Bihar employed about 10 full-time staff and even in southern states with a longer history running large scale health insurance programs, offices remain thinly staffed. The Tamil Nadu state office as well as, Arogyashri in Telengana employ fewer than 100 staff each. The point is simply this. Running a scheme as complex as a large-scale health insurance program requires people. To be successful, Ayushman Bharat must be prepared to make such large-scale investments in human resources at state government headquarters. Since the expertise currently does not exist (at least at this scale) we will have to develop the necessary institutions that will train these professionals.

The foundational pillars will still not ensure that patients receive the care they need, or even that they won’t emerge in a worse condition than they were when they entered. Clearly, that should be the key focus of Ayushman Bharat. But we won’t get there without first getting the institutional architecture right.

It would be a huge mistake to think that we can deliver care without improving state functioning by devolving responsibilities to the private sector. We can’t. In fact, with a scheme like Ayushman Bharat, our state capacity now needs to go far beyond the health sector to complex regulation, industry practices, the police and the courts. This is a challenge for the entire country. And it is the metric against which the Ayushman bharat should be monitored and what the government should be held accountable for.

Jishnu Das is a Senior Visiting Fellow, Centre for Policy Research. Yamini Aiyar is the President and Chief Executive, CPR. Jeffrey Hammer is formerly Charles and Marie Robertson Visiting Professor of Economic Development at the Woodrow Wilson School of Princeton University.

The Government of India passed three farm reform bills- The Farmers’ Produce Trade And Commerce (Promotion And Facilitation) Bill, The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, and The Essential Commodities (Amendment) Bill, in the Monsoon Session of the Parliament. The passage of these bills has led to widespread protests by farmers across the country. It has also raised critical concerns over the direction in which agricultural reforms should go, the nature of these three bills and the process through which they were passed in Parliament.

In this episode of CPR’s podcast, ThoughtSpace, Yamini Aiyar, President & Chief Executive of CPR, speaks with Dr Mekhala Krishnamurthy, Senior Fellow and Director, State Capacity Initiative at CPR and Associate Professor, Ashoka University, and Ajay Vir Jakhar, Chairperson, Bharat Krishak Samaj. Krishnamurthy and Jakhar are India’s most prolific commentators on agriculture and have deeply studied agricultural reforms. They shed light on what the current reforms mean for the Indian farmer and the future of agriculture in the country.

In an earlier episode of ThoughtSpace, Dr Mekhala Krishnamurthy discussed how the government could strengthen the mandi system to truly double farmers’ incomes. Listen here.

Scholars at CPR have closely followed these developments and studied their implications for agriculture. Read their analysis below:

• In Hindustan Times, Yamini Aiyar and Mekhala Krishnamurthy highlight how the farmers’ agitation at Delhi’s doorstep exposes deep fault lines and new possibilities in the politics of representation, reform and Centre-state relations. They shed light on the need for a renewed politics of trust to truly reform agriculture.
• In an article published in Hindustan Times in October, they had examined the federal implications arising out of the way in which the farm laws were passed in Parliament. They highlighted the need for political statesmanship and consensus-building for genuine cooperative federalism to reform agriculture.
• In a discussion on India Ahead News, Mekhala Krishnamurthy analyses whether farmers will get better prices for their produce with the entry of big companies. She highlights the need to strengthen the farmer’s terms of engagement in the agricultural markets through investment.
• a discussion on India Ahead News, Yamini Aiyar discusses why the farmers’ protest is an important political moment. She highlights that no country has made a structural transformation from agriculture to industrialisation without first enhancing agricultural productivity. She explains that our failure to do so has led to a deep agrarian crisis, amplified consistently due to policy decisions over the last few years and the economic crisis India now confronts.
• How have we arrived at a point where the effect of laws promulgated to enable freer trade in agricultural produce has led to the State erecting extraordinary physical barriers to prevent farmers, the producers, from entering the capital city to protest and place their demands? In this video, Mekhala Krishnamurthy discusses  key aspects of the farm laws to contextualise the ongoing farmers’ agitation.
• In ThePrint, Mekhala Krishnamurthy analyses the issue of licensing and registration of farm produce buyers. She writes, under the new law, farmers won’t know if the PAN-wielding buyer has been registered, and also won’t have access to timely and updated price information in trading areas. Furthermore she highlights that agricultural marketing laws as a whole—need to be re-examined keeping in mind the basic principles, processes, investments, and institutions essential to create the robust and supportive regulatory architecture that agricultural markets in India actually need.
• In ThePrint, Asim Ali analyses the opposition to the farm laws despite the fact that the agricultural reforms push had all the features and sensibilities of Narendra Modi’s distinctive middle-class politics of aspiration. He highlights that Modi’s middle-class constituency is essentially a coalition of two strikingly distinct classes — the traditional middle classes and the neo-middle classes. These two classes are bound together more by a sensibility and a loose ideological orientation rather than any concrete interests, and these hard limits have become apparent in the farmers’ protest.
• In a discussion organised by ThePrint, Mekhala Krishnamurthy highlighs how the current farm laws ignore the first principles of reform, which include good price discovery & mechanism to ensure good price settlement for farmers. She underscores the need to to see farmers as active economic agents who deserve investment & support and the need to preserve the diversity and complexity of India’s agricultural systems.
• In Hindustan Times, Shoumitro Chatterjee highlights the need for a credible risk mitigation strategy. He sheds light on the linkages between the level and volatility of farmer incomes and underscores that freer and integrated markets will make their incomes even more volatile.

FUTURE OF THE VIBRANT, ROADSIDE MARKETPLACES IN INDIA

Watch the full video (above) where Durba Chattaraj describes the world of ‘little box retail’, small roadside shops, which line a major national highway in West Bengal. She argues that while these retailers form the center of local economic and social life, a majority of them are unauthorized structures. She uncovers the unusual way in which the municipality taxes these unauthorized structures, through the creation of informal ‘trade licenses’ in an attempt to mediate the dissonance between the law and actual practice in everyday life in India.

As India proceeds on the path of highway modernization and road widening, it becomes important to question the future of these vibrant, and unauthorized, roadside marketplaces.

DISCUSSION WITH AUTHORS OF THE UPCOMING 6TH ASSESSMENT REPORT OF THE INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE
CLIMATE RESEARCH

On 1 October 2019, the Initiative on Climate, Energy and Environment (ICEE) at the Centre for Policy Research (CPR) and The Energy and Resources Institute (TERI) organised a discussion on climate policy and action with authors of the upcoming 6th Assessment Report of the Intergovernmental Panel on Climate Change (IPCC). This event was held in the backdrop of the second IPCC Lead Author Meeting for Working Group III (Mitigation of Climate Change), in which global experts met in Delhi to assess global progress toward reducing the rate of climate change.

The panelists included Fei Teng (Associate Professor and Deputy Director, Institute of Energy, Environment and Economy, Tsinghua University, China), Harald Winkler (Professor, University of Cape Town, South Africa), Heleen de Coninck (Associate Professor, Department of Environmental Science, Radboud University, The Netherlands), Karen Seto (Frederick C Hixon Professor of Geography and Urbanisation Science, Yale University, USA), and Roberto Schaeffer (Professor, Energy Economics, Universidade Federal do Rio de Janeiro, Brazil).

The conversation was moderated by Navroz K Dubash (Professor, CPR and Coordinator, ICEE) and Ritu Mathur (Senior Fellow, TERI).

About the Speakers

Fei Teng is Associate Professor and Deputy Director at the Institute of Energy, Environment, and Economy, Tsinghua University, and Lead Author (Chapter 17) for The Working Group III contribution to the IPCC Sixth Assessment Report. His research interests include energy and climate policy analysis using modeling tools, and the international climate regime.

Harald Winkler is Professor, University of Cape Town, and Coordinating Lead Author (Chapter 4) for The Working Group III contribution to the IPCC Sixth Assessment Report.

Heleen de Coninck is Associate Professor in innovation studies at the Environmental Science department at Radboud University, and Lead Author (Chapter 16) for The Working Group III contribution to the IPCC Sixth Assessment Report. Her research interests are international climate policy, energy technology and innovation. Before joining Radboud University, she worked for over 10 years at the Energy Research Centre of the Netherlands (ECN). She was one of the Coordinating Lead Authors of the IPCC Special Report on limiting warming to 1.5°C, which was published in 2018.

Karen Seto is the Frederick C Hixon Professor of Geography and Urbanisation Science at Yale University, and Coordinating Lead Author (Chapter 8) for The Working Group III contribution to the IPCC Sixth Assessment Report. She is one of the world’s leading experts on contemporary urbanisation and global change. Her research has generated insights on the links between urbanisation and land use, food systems, biodiversity, and climate change.

Roberto Schaeffer is Professor in Energy Economics at Universidade Federal do Rio de Janeiro, and Coordinating Lead Author (Chapter 3) for The Working Group III contribution to the IPCC Sixth Assessment Report. Dr Schaeffer’s main area of competence is in integrated assessment of climate change and coupled energy-economy climate modelling. In 2007, Dr Schaeffer was a co-recipient, with a number of scientists, of the 2007 Nobel Peace Prize for research contributions to the IPCC.

Navroz K Dubash – Professor, CPR, and Coordinating Lead Author (Chapter 13) for The Working Group III contribution to the Sixth Assessment Report. He is the editor of the forthcoming book, India in a Warming World: Integrating Climate Change and Development (Oxford University Press).

Ritu Mathur – Senior Fellow, TERI, and Lead Author (Chapter 4) for The Working Group III contribution to the Sixth Assessment Report. She heads the Centre for Integrated Assessment and Modeling at TERI, and her research focuses on examining and addressing the multiple connections between climate change, energy security and sustainable development.