Archives: Briefs Reports

The sustained economic growth and structural transformation of the Indian economy has resulted in increased growth of cities and towns. However, lack of investment in basic infrastructure and the low state capacities together deepens the vulnerability of marginalised communities in these urban areas. Similar phenomenon is well recognised and studied in rural areas as rural distress, however, it remains relatively understudied in Indian towns and cities. The distress in urban areas is veiled under the binaries of slum/non-slum, poor/non-poor. It is important to move beyond these binaries and focus on identifying geographies of distress for better targeted policy interventions and investments.

This research discusses a framework to conceptualize and measure urban distress in the Indian context. Urban distress emerges as the result of mismatch between the requirements of an urban growth and the capacity of the key stakeholders to address these needs. We conceptualize urban distress at two levels – macro and micro. Macro urban distress is the measure of distress at the city level focusing on economic and physical and social infrastructure availability while the micro-urban distress aims to measure the household level residential, occupational, and social vulnerabilities. We analyse social, economic, and demographic data from Population and Economic census to measure and analyse macro and micro distress in Class 1 cities of select states.

The research underscores level of distress in cities that varies based on the size of the city and the nature of economic growth at both the state and city scales. Results of the analysis emphasises the potential for managing the urban growth in an equitable manner by formulating strategies based on the scale and socio-economic context within which urbanisation is taking place. This framework can help the cities to ‘build back better’ as we recover from the ongoing pandemic and steer inclusive development in the face of emerging challenges including climate change.

The NITI Aayog released the National Monetisation Pipeline (NMP) in July 2021 (NITI Aayog 2021) as part of a pool of innovative and alternative financing sources expected to fund about 15 to 17 per cent of the National Infrastructure Pipeline, which is targeted at `111 trillion over five years, i.e., `22 trillion annually, i.e., about £ 220 billion. Of this, asset monetisation is expected to contribute about ` 6 trillion or about £ 60 billion over FY 22 to FY 25.

In 2021-22, the budget projected revenue from privatisation, listing, etc. of ₹ 1.75 trillion but the revised estimates expected to raise about ₹ 0.78 trillion. The estimate for 2022-23 is lower, at under ₹ 0.7 trillion. However, not all monetisation receipts will be on budget since some of the assets are owned by non-departmental and/or corporate entities, and revenues would accrue to them, separate from the budget. For example, the resources raised by monetising existing transmission service agreements of Powergrid would be extra budgetary.

Figure 1 shows the expected shares of monetisation revenue by sector. In 2021-22, the government was on target, reporting ₹960 billion (about £ 9.6 billion) in monetisation revenue. Of this, roads were about 24%, power about 10%, and mining about 61% of which coal mining generated over 41%. These include 390 km of road in InvIT and three toll-operate-transfer (TOT) concessions, transmission assets of PowerGrid and an operational hydel project of NHPC, 22 coal blocks and 31 mineral blocks.

The ongoing conflict in Ukraine could lead to adjustments to the asset monetisation program. It impacts the demand for assets in multiple ways, viz. (a) a reduced demand for emerging market assets (b) a possible switch from riskier to safer assets domestically and, for the private sector (c) a possibly reduced appetite for investment (anticipating a slower growth outcome, driven by challenges of high oil prices and reduced ability of government to provide stimulus), which in turn would reduce the the private sector’s need to monetise assets to fund new investments. As such, the increase in risk premium may affect realisations and it behoves us to consider the effects of risk on ways to monetise assets.

The COVID-19 pandemic has underscored the importance of social security for protecting workers against economic shocks, and for smoothing consumption during downturns. As forces such as technological advancement and climate change continue to upend lives and livelihoods, social security is critical for building resilience. In the long run, it is both a contributor to, and evidence of, rising living standards and a growing consumer base. At the same time social security is fundamental in enabling a productive and resilient workforce to support the country’s aspirations to export more and to invite greater investment.

As the Indian government negotiates new trade and investment agreements, these efforts must be accompanied by a robust social security system. Inadequate social security, both in scope and scale of benefits, is a structural challenge that keeps the country’s labour force trapped in low-productivity, low wage, informal work; its shortcomings serving as a barrier to realising the economy’s potential with implications for trade and investment partners.

In recent years, major forces ranging from technology to the pandemic are restructuring India’s economy and its labour market. India has seen slowing growth, and an ailing labour market that is reflected in its declining labour force participation; stubbornly high informal employment; and an uptick in unemployment. All of this is compounded by a demographic bulge that underscores the need for large-scale job creation (Appendix 1). These adverse trends deepen inequality and threaten the sustainability of economic growth (Berg and Ostry, 2011).

At its core, social security has three broad functions:

» First, to provide access to healthcare. Evidence suggests that health-related expenses can drive millions into poverty (Selvaraj, Farooqui, and Karan, 2017; Berman, Ahuja, Bhandari, 2010).

» Second, to serve as a safety net in the face of contingencies such as loss of income, disability, old age, and other such events. These tenets are defined by the International Labour Organization’s Social Security Convention, 1952 (No. 102) and the Social Protection Floors Recommendation, 2020 (No. 202) (Appendix 2). Access to these benefits can be linked to employment or be between the government and the worker. In this category, there is significant focus on life insurance and pension plans with states providing a range of different options.

» The third function goes beyond standard notions of social security to include job and income support through schemes such as the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which to date is possible in rural but not yet in urban areas – developments around instituting an Urban Employment Guarantee notwithstanding. MGNREGS is also an effective mechanism to help the rural economy build resilience towards low-to-medium intensity climate risks. (Kaur, et al., 2019).

The pressing question is whether the existing architecture for social security can be defragmented into a simple and inclusive system that serves all three of these functions.

Yet India’s heterogenous labour market, in the absence of universal coverage, makes it hard to extend coverage. At the broadest level, India has a ‘dual economy’ in which workers are categorized into informal or formal employment. For workers in the formal sector, the main mechanisms for social security are through the Employees’ Provident Fund Organization (EPFO) and Employee State Insurance Corporation (ESIC). The new Code on Social Security 2020 and draft rules clearly express the government’s intent to extend social security access to unorganized workers. Currently though, its provision is channelled through a complex set of ‘schemes’ that not only leave many without coverage, but which the government in office has the liberty to alter or withdraw as it sees fit. This is further complicated by the fact that much of the fragmentation happens at the state level. This brief provides an overview of the current state of India’s social security system and raises questions about how to best streamline and restructure the current fragmented approach to iteratively move toward universal provision that extends coverage to more people.

Preparation of this work is supported by the British High Commission, New Delhi, under the UK-India Economic Policy Program.

As a vulnerable developing country with a low per-capita historical contribution to climate change, India’s climate commitments are situated within the context of its multiple development objectives, which highlights the need for adopting multiple co-benefits approaches to lowering its emissions trajectory.

In line with this, towards supporting international progress on reducing emissions within the framework of the Paris Agreement, at COP 26 Prime Minister Modi announced India’s five ‘Panchamrit’ pledges for enhanced climate action relating to non-fossil and renewable energy (RE) capacity and emissions. Among these, the pledge to achieve emissions intensity reductions of 45% below 2005 levels by 2030 is noteworthy for its economy-wide scope and implications. Since it depends on both total emissions and GDP in 2030, it will reflect progress on overall mitigation actions – including the other ‘Panchamrit’ pledges – as well as India’s growth pathway, and serves as a partial short-term indicator of emissions in the context of India’s macroeconomic and development trajectory.

This paper offers suggestions for the data needs and immediate sector actions that can help realise this pledge, within the more comprehensive requirements to realise a longer-term low-carbon development transition.

Preparation of this work is supported by the British High Commission, New Delhi, under the UK-India Economic Policy Program

The pandemic made digital healthcare an integral part of our lives in various forms, including teleconsultations, exchanging digital records and now linking health outcome (vaccination) to identity, anywhere, anytime, through the Co-WIN site, which can also, inter alia, be accessed through the Aarogya Setu app. Now, visualise an ecosystem where, just like vaccination, all the medical tests and procedures related to an individual were stored in the cloud, available, anywhere, anytime, whenever demanded by the individual or someone authorized by the individual. That is the goal of a personal electronic health record (EHR) linked to a unique health ID – currently termed the ABHA Number (Ayushman Bharat Health Account number).

The thrust of this policy brief focuses on the various aspects of human interface with the EHR ecosystem, presents possible challenges to implementation, and possible actions to overcome those challenges.

Preparation of this work is supported by the British High Commission, New Delhi, under the UK-India Economic Policy Program.