Archives: Working Papers

In October 2015, the Ministry of Environment, Forest and Climate Change released a Draft Environment Laws (Amendment) Bill 2015 proposing amendments to the Environment (Protection) Act 1986 and the National Green Tribunal Act 2010. The stated objective of the Bill is to provide ‘effective deterrent penal provisions’ and to introduce the concept of monetary penalty. It also aims ‘to minimise the exercise of discretion and make an unambiguous framework’. This paper summarises the text of the Bill and analyses whether it will complement the environmental objectives the parent laws espouse. It discusses some of the major concerns relating to the proposed amendments under three broad themes: environmental damage and penalties, adjudicating authorities and rule making powers. It concludes that although penalties that effectively deter violators are certainly the need of the hour, the proposed amendments are unlikely to achieve this objective.

The Indradhanush framework with its seven pronged plan was unveiled by Finance Minister Mr Arun Jaitley on 14th August 2015 for revamping Public Sector Banks (PSBs) of India. In this paper, we look at the deteriorating profitability, asset quality, capital position of PSBs along with previous bank recapitalisation expenditure of the government. The seven reform initiatives in Indradhanush are compared with Nayak Committee recommendations. We summarise that Indradhanush does not propose any ground-breaking reforms for the PSBs. Re-capitalisation or infusion of capital into PSBs is its central theme. This opens up a debate on whether the capital infusion is adequate for all banks. Given various constraints for the government, we feel Indradhanush is definitely the step in the right direction. It does incorporate some of the initiatives mentioned in Nayak Committee report but does not fully embrace the essence of the bold Nayak recommendations. PSBs accounting for 70 percent of the banking system and saddled with high NPAs will be an impediment to growth unless the government acts fast to revamp this sector.

After three decades of double-digit growth, China is slowing as it is rebalancing its economy from export-driven to less-volatile domestic consumption driven economy. The paper looks at the impact of China slowdown on India through different channels. Even though India is usurping China as the fastest growing major economy in the world, Indian economy being a fifth of the Chinese economy and also less material intensive can hardly substitute for China as a global growth driver. China has emerged as the largest trading partner of India but India’s trade still remains less vulnerable to Chinese slowdown directly as India’s services exports account for as much as 50% of India’s overall exports (merchandise and services). On the other hand, China’s total FDI investment in India has been miniscule $1.2 billion till September 2015 and India’s infrastructure sector, with its massive investment needs, can be the natural destination for Chinese investments. India reaped the indirect benefit of lower commodity prices in terms of narrower CAD, softening inflation, lower interest rate, increased government fiscal bonanza, all of which contributed to greater macro-stability in India. It was also found that a 50bps decline in China’s growth rate is likely to lower India’s growth by 30bp in the short run.

The 2015 Bihar election represented a stunning reversal of fortune for the National Democratic Alliance (NDA), led by the Bharatiya Janata Party (BJP). In the 2014 national election, the NDA won 172 out of 243 assembly constituency (AC) segments. But in the 2015 Bihar election, just 18 months later, the NDA won only 58 ACs. In this piece, we investigate electoral data from the Election Commission of India (ECI) to provide a nuanced picture of the shift in Bihar. We argue that poor party coordination within the NDA, in addition to campaign dynamics, account for the magnitude of the NDA’s defeat. Prior to 2014, the JD(U) and the BJP were in alliance together under the NDA banner, but the JD(U) left the coalition over the choice of Narendra Modi as prime ministerial candidate and decided to contest the 2014 election alone. In 2014, without the JD(U), the NDA won 31 out of 40 parliamentary constituencies, with the JD(U) winning just two seats. In the 18 months between the 2014 and 2015 election, once bitter foes, Nitish Kumar and Lalu Prasad Yadav, and their respective parties, Janata Dal (United) [JD(U)] and Rashtriya Janata Dal (RJD), joined forces along with the Congress to form the mahagathbandhan or Grand Alliance to defeat the NDA. The NDA, comprised of the BJP, the Lok Janshakti Party (LJP) and the Rashtriya Lok Samta Party (RLSP) in 2014, stayed intact and added a new party, the Hindustani Awam Morcha (HAM), to its ranks. In the election post-mortem, many have offered explanations for the NDA’s reversal of fortune. Finance Minister Arun Jaitley has argued that the NDA’s poor performance was due to the “social arithmetic” of caste and less about the its message or campaign strategy (1). Observers of the Grand Alliance have pointed to campaign manager Prashant Kishor’s effective campaign strategy and coordination across all parties in ticket distribution and voter mobilization (2). Our data analysis suggests that the outcome of these elections was less about caste arithmetic and more about the poor coalition strategy of the BJP. In particular, the ways in which the BJP treated its allies contributed to the magnitude of the NDA’s defeat. At the same time, we find that although the parties in the Grand Alliance coordinated their efforts better than the NDA, they did not attract more voters than in 2014.

Pupul Jayakar was influenced deeply by theosophy and became a follower of one of its best known spiritual masters, J. Krishnamurti. One of my treasured possessions is an autographed copy of her celebrated biography of the spiritual guide and teacher. This was her gift to me in the midst of the Festival of India in Japan in 1987/88, which I regard as one of our most successful forays in cultural diplomac y, showcasing the breathtaking range of cultural experiences that India has to offer. The Festival in Japan, just like the earlier Festivals in the US and France, was meticulously choreographed by Pupul Jayakar. As coordinator of the Festival in the Indian Embassy in Japan, I had the rare privilege of working closely with her, putting in place nearly 30 events – performing arts, theatre, exhibitions, fashion shows and film festivals, which eventually covered as many locations throughout Japan. Japanese TV channels carried Festival related programming of over 100 hours, all without cost, bringing Indian culture as a living phenomenon into the homes of millions of Japanese. And over this veritable cultural feast presided Pupul Jayakar, not inappropriately known as the Czarina of Indian culture. I am honoured to have been invited to deliver this address in her memory.

We were warned not to take the bus from Silchar to Guwahati. Unfortunately, the train was fully booked, so we had no other option. As soon as we left the city limits of Silchar, we began to make our way through the soggy, bumpy mess that was supposedly the route to Guwahati. We could only discern that this was intended to be a road by the fact that a few other buses, trucks and cars were similarly trying to maneuver through this muddle. A fellow traveler offered, “Roads in Sikkim and Meghalaya have improved in the last five years; here we still search for a pucca road.

Muslims comprise 34 percent of Assam’s population, and this population may play a large role in the outcome of Assam’s election. In this piece, CPR researchers Bhanu Joshi, Ashish Ranjan, and Neelanjan Sircar examine the complex contours of the Muslim vote in Assam, with a particular focus on the Lower Assam region where seven of the thirteen districts have a majority of Muslims. They argue that there is no discernible Muslim “vote bank” and any understanding of the role Muslims will play in this election requires a significant amount of nuance.

This study attempts to understand the effectiveness of education governance, specifically the monitoring function, through the perspectives of frontline officials in India. It locates institutions within social and political structures marked by deep inequalities and analyses the manner in which these institutional arrangements influence the behaviour of frontline officials. It finds that poor state capacities in terms of inadequate resources and systemic infirmities contribute significantly to ineffective monitoring. In addition, the social distance of frontline bureaucrats from their clients reinforces their low levels of motivation, preventing them from using discretion to achieve official objectives.

Financial incentives including government support grants for infrastructure creation, health and education development in many countries is contingent on where people live. In India, the allocation of critical government subsidies explicitly recognises urban population as a criterion for budgetary allocation. Yet, the fundamental question about what is an urban area and what does it entail to be recognised as an urban settlement in India remains understudied. This paper aims to understand the definitional paradigm of statutory towns in India. We create a novel dataset of all state laws in India on the constitution of urban local governments. We analyse the eligibility criteria that would qualify any area to become urban local bodies under the law in different states and find large variation among states. In our dataset, only fifteen of the twenty-seven states explicitly define and have laws on urban settlements. Within these fifteen states, we find that many small and transitional urban areas violate the eligibility criteria laid down by the state laws constituting them. We further find that states which do not provide statutory laws rely on executive fiat, i.e. it is the prerogative of the state government to declare the creation of a statutory town. What then becomes or “unbecomes” urban in these states is open to dispute. The full extent of this variation and reasons thereof can open up new avenues of scholarship.

It is now almost axiomatic that cities are the engines of growth. Historically, federal support programmes have focused on rural areas, but over the past fifteen years, the need to devise such programmes for urban local bodies has come to be recognised, with JNNURM in its various forms, being the most visible early manifestation. This trend has continued, even strengthened, in this government and among the menu of urban support programmes on offer from the Government of India, the vision of the city as the engine of growth is most clearly evident in the Smart City Mission, with its focus on area based development – like an engine within the city. Yet, even in the mainstream economics literature, while there is evidence for cities as places of higher productivity, there is less evidence for cities as drivers of growth – with learning being the primary driver and urban primacy being an important obstacle. The primary questions are whether cities are places of learning, whether there are identifiable mechanisms of such learning and the kind of city institutions – economic, social and political – that facilitate such learning. This paper will interrogate the empirical characteristics of such urban institutions in India in the context of the theoretical literature and learning mechanisms that emerge from international evidence. In particular, it will argue that the nature of the labour market, which is largely contractual, the transfer of rural fragmentation in social relations to cities and the absence of city-level political agency, all reduce the potential of the city as a location of learning economies. For cities to even have the possibility of being engines of growth, we need to ensure that drivers of these engines are in place and we have a mechanism to think about paths to follow.