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Another Gendered Demographic Dividend: The Rise of Sonless Families and their Transformative Adaptations

NCAER organised a hybrid seminar on Another Gendered Demographic Dividend: The Rise of Sonless Families and their Transformative Adaptations by Dr Keera Allendorf, Indiana University, on Monday, November 7, 2022.

Dr Allendorf’s paper suggests that a neglected consequence of declining fertility is the likely rise of families with children of one sex—only sons or only daughters. Increases in sonless families, in particular, may present a gendered demographic dividend that weakens patrilineal family systems. Drawing on 88 demographic surveys and two censuses, Dr Allendorf describes trends in shares of families with only daughters and only sons from the early 1990s to around 2015, in India and several other Asian countries. Increases in ‘sons-only families’ were universal where numbers of children fell. The growth of ‘daughters-only families’ was suppressed in India and other patrilineal contexts, but these sonless families still rose in 13 of the 18 countries where the numbers of children declined.

Dr Allendorf also examines one potentially transformative adaptation in India—mothers expecting to rely on a daughter, rather than a son, for old age support. Using panel data from the India Human Development Survey (IHDS), she compares how expectations of old age support changed from when women were newly married and did not yet have children to a period seven years later when they did have children. Women with sons kept or further embraced patrilineal expectations that a son would provide support. On the other hand, sonless mothers largely gave up patrlineal expectations, turning to daughters or away from children altogether.

Speaker

Keera Allendorf is an Associate Professor of Sociology at Indiana University. Her research focuses on family, gender, and health, primarily in India and Nepal. She investigates how and why family behaviours vary and change over time and how family behaviours shape well-being. In her current projects, she examines adaptations of sonless families and explores Indian Americans’ views and experiences of family life. She is also a co-investigator in the ongoing third round of the India Human Development Survey. Her articles have appeared in the American Journal of Sociology, Demography, and Population and Development Review.

The NCAER Mid-Year Review of the Indian Economy, 2022-23

The National Council of Applied Economic Research (NCAER) and India International Centre (IIC) organised an insightful, expert commentary, and a lively debate on “The Mid-Year Review of the Indian Economy, 2022-23” on November 5, 2022, at IIC. The NCAER Mid-Year Review (MYR) carries forward the tradition started by Dr Malcolm Adiseshiah at the IIC in 1976 through Malcolm and Elizabeth Adiseshiah Trust.

The NCAER macro team led by NCAER Director General, Dr Poonam Gupta and IEPF Chair Professor, Dr Mridul Saggar, presented an analysis of the current economic situation and developments pertaining to the economy during the financial year 2022-23 so far and likely near term outlook.

Professor Arvind Panagariya, Columbia University and Visiting Distinguished Professor at NCAER, chaired the session. Mr Amitabh Kant, India’s G20 Sherpa and Dr V. Anantha Nageswaran, Chief Economic Adviser to the Government of India, discussed the MYR. 

Following are the highlights of NCAER’s Mid-Year Review of the Indian economy for the fiscal year 2022-23:

Global Outlook:

  • On the global front, a slowdown is a certainty, and there are concomitant risks of a recession in the Euro Area and the US next year.
  • The projected global growth for the next few years till 2026 is pegged at 3.7 per cent while the corresponding figures are 2.4 per cent for the Advanced Economies and 4.5 per cent for the Emerging Markets and Developing Economies.
  • The world over, inflation has surged to a 26-year high, catching central banks behind the curve, and their response has been seen in aggressive synchronous monetary policy tightening this year.

Economic Outlook for India:

  • NCAER’s economic outlook for India is based on an analysis of key high-frequency indicators. Of these, a majority of the indicators, including tax collection; sales of automobiles and tractors; credit growth; mobility of air and rail traffic; platform-based employment indicators; bond yields; exports of services; and the Purchasing Manager’s Index (PMI), have shown buoyancy.
  • On the other hand, two indicators, viz., the exports of goods and non-FDI capital flows have shown a weakening.
  • Of some concern is the rise in inflation, especially in the prices of food, particularly vegetables, and the rise in oil prices. Inflation has, in fact, exceeded the upper range of the target for several months and has averaged at 7.2 per cent during the current fiscal year, until September 2022.
  • The bank credit scenario offers some scope for optimism. Gross Non-Performing Assets (NPAs) too have declined to 5.3 per cent in 2022-23 from 5.9 per cent in 2021-22.
  • The fiscal tracker shows that fiscal outcomes for the year 2022-23 are on track. The Central Government has already collected more than 50 per cent of the budgeted receipts for the year till the end of Q2 of 2022-23, and has incurred less than 50 per cent of the budgeted expenditure for the year during the same period. As a result, it has so far recorded only 38 per cent of the fiscal deficit budgeted for the year. This indicates that the Government is on target to control the fiscal deficit, going forward.
  • Overall, the long term fiscal math is, however, sticky. While both tax and non-tax revenue have been growing slowly, the revenue expenditure stands at 24.7 per cent of GDP for the current year. Meanwhile, capital expenditure has been growing but continues to remain small at about 4.6 per cent of GDP in 2022-23.
  • Public debt is expected to decline very slowly unless the economy grows at a faster rate. Consequently, the fiscal space will remain constrained.
  • There have, however, been a number of positive developments, including the introduction of GST; expansion of the tax base; ensuring better tax compliance and greater transparency; and the shift toward capital expenditure.
  • The outlook of the financial markets is also favourable. While bond yields have been anchored, India’s equity markets have outperformed global and emerging markets.
  • Developments in the external sector and their implications for India’s economic outlook are particularly important because of the global context which will influence our Balance of Payments position.
  • Exports have grown very well in the last 15 months but we have seen some softening of that momentum in the last 2-3 months. This will have some impact as India has not decoupled from the global trade outlook. In fact, only a handful of countries, most notably Vietnam (which has made significant gains in exports), have bucked the global trend in this sphere. Our services exports are resilient to the global slowdown in trade but our merchandise exports have been vulnerable to the slowdown.
  • The oil price channel has so far had a major impact on India’s growth figures. While the oil price initially increased to about $100 earlier this year, it eventually settled at about $90-95. The World Bank has projected oil price at $92 next year, and the Indian economy is expected to be resilient to this figure. Significantly, the importance of oil prices for the Indian economy will continue to decline as we improve energy efficiency, which will also make the economy quite robust.
  • As regards the capital flows, FDI flows are stable but portfolio flows are volatile, with the outflows from India amounting to about $35 billion in the last one year. India is doing well in attracting FDI, but can do even better.
  • India receives capital inflows of about $75 billion a year, as per the last five-year average, which include FDI, portfolio flows, NRI deposits, and external commercial borrowings. There is still a current account deficit of about $30 billion a year.
  • This year, capital inflows are expected to be smaller and the current account deficit would be larger, resulting in a net balance of payments gap of about $40-50 billion.

Summary of the MYR Findings:

  • In conclusion, it may be summarised that the Indian economy is showing growth and resilience during the year, despite an unprecedented grim global environment.
  • However, the Indian economy is routinely subjected to shocks such as global demand shocks, capital flow volatility shocks, oil price shocks, and vegetable price shocks.
  • Building resilience to these shocks would thus enable the Indian economy to grow in a more stable fashion.
  • Some of this resilience, at least on the capital account side, can be a part of the G-20 agenda.

During the discussion, the Chair, Professor Arvind Panagariya noted, “My forecast for growth of the Indian economy for the year 2022-23 would be about 8 per cent. This is because during the first quarter of the year, we have already achieved a growth figure of 13.5 per cent of GDP. In order to achieve a growth of 8 per cent, we need to touch a total of 32 per cent for the four quarters of the year, and having achieved 13.5 per cent in the first quarter, we need to achieve a total of 18.5 per cent in the remaining three quarters, which is absolutely doable. ”     

Reflecting on the economic indicators during the year and the concomitant analysis in NCAER’s MYR, Mr Amitabh Kant suggested, “All our high-frequency indicators, as also reflected in the NCAER MYR, are robust and underscore the resilience of the Indian economy. The two important indicators that need attention and a response are rising commodity prices and depreciating currency in the face of the strengthening of the US dollar.” He also said, “We have achieved success in many areas, especially in manufacturing, and now we need to focus on the sunrise sectors and the green transition sectors.” According to him, one of the key measures will be asset monetisation, while the others would be increasing the plugging of private resources into infrastructure, boosting public-private partnerships, and focusing on increasing disinvestment. He also surmised that India could be the first country worldwide that would develop at an unprecedented rate without any carbonisation.

Providing a very comprehensive overview of the economic outlook, the Chief Economic Adviser, Dr Anantha Nageswaran stated, “India’s bond yields are doing much better than those of others, which is indicative of the prevailing macroeconomic stability in India despite the opposite global trends.” He argued that the projections, including both the optimistic and pessimistic ones, should, however, be taken with some degree of scepticism because of the ‘unknown unknowns’”. “Among these ‘unknown unknowns’ are the central banking measures, which could lead to negative interest rates in Europe during the coming decade, stemming both from the Global Financial Crisis of 2007-08, and the impact of the pandemic and the response to it by the advanced economies,” he said.      

The NCAER Director General, Dr Poonam Gupta pointed out, “The global outlook is both challenging and uncertain, but the available high-frequency indicators that the NCAER Mid-Year Review has taken into account highlight the resilience of the Indian economy.” She also said that the worrying indicators globally were the rise in inflation in all advanced economies, policy tightening by the US Fed and other central banks, and softening of both global growth and global trade, which could impact the Indian economy too.

The IEPF Chair Professor, NCAER, Dr Mridul Saggar highlighted the need for maintaining macro-financial stability amid the sharp slowdown in global growth and tighter financial conditions expected next year on the back of further monetary tightening.

 

 

 

NCAER-IMF Panel Discussion on Regional Economic Outlook for Asia and Pacific

NCAER and the International Monetary Fund (IMF) organised an in-person panel discussion on the IMF’s latest Regional Economic Outlook for Asia and Pacific on 31 October 2022, at the Tamarind Hall, India Habitat Centre, New Delhi.

Dr Krishna Srinivasan, Director of the IMF’s Asia Pacific Department, made a presentation on the latest assessment for the region focusing on large medium-term output losses, which could be 9 per cent of GDP for the region, and the need to build greater resilience in the region. He highlighted the need for fiscal consolidation in view of elevated public debt levels and cautioned that elevated corporate debt has increased scarring risks. He noted, “While there is no panacea for productivity losses due to pandemic scarring, digital technologies can increase efficiency, deepen financial inclusion, and open new markets.” He also added that fragmentation can affect trade and slowdown growth.

The other members of the panel included: Dr Anantha Nageswaran, Chief Economic Adviser to the Government of India; Dr Rakesh Mohan, President and Distinguished Fellow, Centre for Social and Economic Progress (CSEP); Dr Poonam Gupta, Director General, NCAER; Ms Sonal Varma, Chief Economist (India and Asia ex-Japan), Nomura; and Dr Mridul Saggar, IEPF Chair Professor, NCAER, who moderated the discussion.

The Chief Economic Adviser, Dr Anantha Nageswaran said that “India is expected to clock better growth than IMF’s projections next year aided by enhanced capital formation.” He added that fiscal consolidation is needed to bring inflation down, and said, “Asset monetisation receipts could be used to lower government debt, which would be the best stimulus for the economy”.  He also maintained that the debt-to-GDP ratio did not pose any sustainability concern and could come down due to asset monetisation.

Dr Rakesh Mohan, President and Distinguished Fellow, Centre for Social and Economic Progress (CSEP), cautioned that while we were on the right track in reducing debt levels, we should not be complacent about financial repression. He emphasised the need for keeping inflation expectations anchored, pointing out that though in the U.S., inflation was high, inflation expectations remained hinged.

Highlighting the need for fiscal adjustment, the NCAER Director General, Dr Poonam Gupta pointed out that fiscal outcomes have been sticky and mentioned, “Debt may decline very slowly over the next five years and macro shocks can change the trajectory.” She also advocated the central bank swap lines amongst the G20 countries to be extended to all economies during the pandemic.

Ms Sonal Varma, Chief Economist (India and Asia ex-Japan), Nomura, raised risks of stagflation and pointed out that “central banks will bring down inflation even if it leads to recession but Asia is relatively better placed than other economies. As far as India is concerned, an export slowdown will lead to moderation in demand.”

Summing up the discussion at the seminar, Dr Mridul Saggar noted, “It is common economic sophism that fiscal policy can be assigned to prop up growth while monetary policy is assigned to bringing inflation under control. Instead, gradual fiscal consolidation is needed to moderate demand.” He also highlighted the need to address climate risks faced by small island economies.

Money vs Kudos: The Impact of Incentivizing Local Politicians in Tamil Nadu

NCAER organised an in-person seminar on Money vs Kudos: The Impact of Incentivizing Local Politicians in Tamil Nadu with Dr Vijayendra Rao, Lead Economist, Development Economics, World Bank.

Following is an Abstract of the paper based on which Dr Rao made his presentation.

Despite growing awareness of various limitations of electoral democracy, there is a relative lack of evidence on effective policy interventions to improve the performance of elected officials and motivate them to act more equitably. In this paper, the authors report results from an experiment where they randomly assign elected presidents of village panchayats in Tamil Nadu to one of two incentive schemes (or a control group); a financial incentive which rewards better performing presidents with a higher public budget, and a non-financial incentive which awards them a certificate demonstrating their achievement with an information campaign to disseminate it. The authors find that both incentives improve access to public investments and private transfers in the villages of incentivized presidents. The non-financial incentive also leads to a more equitable between-hamlet allocation of resources within the village, and this effect is more acute with officials who face potentially more competitive elections.

Vijayendra (Biju) Rao is a Lead Economist in the Development Research Group of the World Bank. He works at the intersection of scholarship and practice. He integrates his training in economics with theories and methods from anthropology, sociology and political science to study the social, cultural, and political context of extreme poverty in developing countries. He has published widely in leading journals in Economics, Political Science, and Development Studies in topics that include gender, culture, political economy, participation, deliberative democracy, and mixed-methods.  His most recent book, co-authored with Paromita Sanyal, is Oral Democracy: Deliberation in Indian Village Assemblies (Cambridge University Press). He is a Fellow of the International Economics Association and a member of the Canadian Institute for Advanced Research. He received his PhD in Economics from University of Pennsylvania.

Global Financial System: Fractures, Fissures, and Fragmentation

NCAER organised an in-person seminar on Global Financial System: Fractures, Fissures, and Fragmentation by Mr Udaibir Saran Das, a senior international financial policies expert.

In his presentation, Mr Udaibir Das noted that economic and financial uncertainty has spiked once again and pointed to six fissures in the global financial system (GFS): (i) contagion effects that may arise from non-bank financial intermediaries, whose share in the markets and interconnectedness has increased, (ii) endogeneity of capital flow, (iii) growing importance of macro-financial channels of propagation of protuberance of shocks to financial stability, (iv) challenges for surveillance and monitoring of systemic risk amid growing ability of asset managers in transmitting global liquidity that has come about with a sharp rise in private debt, (v)  hidden leverage in market-based finance, emanating especially from digital finance and climate finance with added risks from sanctions and cyber frauds, and (vi) risks that may surface with needed ex-ante whistleblowing tools.

He also warned that the doom loop (bank-sovereign getting inseparably exposed to each other) was getting longer and thicker, and that channels of crisis were shifting in many ways. He added that financial conditions were getting tighter, reflected in rising costs of external borrowing by emerging markets. The two crucial aspects of the GFS are the ‘connectedness conundrum’ and the ‘endogeneity of finance.’ The connectedness conundrum is driven by the persuasive viewpoint of the neo-liberals to liberalise and let market forces prevail. Cross-border financial intermediation is taking place across new players and new platforms. In this backdrop, the following questions assumed importance:

• What money should be used to facilitate international economic transactions?
• How should such money be managed?
• What should the nature of the relationship between national currencies be?
• How should credit be created and allocated at the international level?

Mr Das also drew focus on the critical priority for the GFS to take care of climate finance needs to build upon climate resilience. The world urgently needed to transit to low-carbon, just and sustainable development path. While this was a collective action problem, unwieldy protracted negotiations were taking place. The financing needs were large, estimated at US$4-5 trillion per year through 2050. Both physical and transitional risks were important. Unattractive risk-return profiles in unproven markets and lack of scalable quality projects, besides shortage of adaptation finance, were hindrances, but a lot of toolkits were in works.

He concluded that repair, reforms, and a ‘do whatever it takes’ approach were needed to address fractures, fissures, and fragmentation in the GFS. He called for a panoptic policy approach with an integrated policy framework and a concrete architecture.

At the end of his talk, Mr Udaibir Das engaged in a brief fire-side chat with Dr Mridul Saggar, IEPFA Chair professor, NCAER, who had earlier during his career with the central bank coordinated the India FSAP 2017 from the side of the Indian authorities. Dr Saggar pointed out that while uncertainty has risen of late, it was well below the GFC levels. Also, global financial regulatory reforms had built strong capital and liquidity buffers to cope with new shocks. He, however, outlined the risks to macro-financial stability emanating from increasing digitalisation of the economy, which while not yet acquiring systemic proportions necessitate deeper surveillance and regulation of the financial system.

The seminar ended with a Q & A session in which Mr Das took questions from the floor. In the floor discussion, the NCAER Director General, Dr Poonam Gupta flagged the issues of performance of emerging markets, the phenomenal increase in public debt, and the rise in inflation both in India and across the world.

Dr Pallavi Choudhry, Senior Fellow, NCAER, pointed out that the risk profile of the US banking system has fundamentally changed after the repeal of the Glass Stegall Act and that the Dodd-Frank Act hadn’t essentially addressed the problem.

Udaibir Saran Das is a former central banker and a senior international policy expert on the financial system and central banking policies. He has worked in different capacities at the International Monetary Fund, the World Bank, the Bank for International Settlements, the Bank of Guyana, and the Reserve Bank of India. Mr Das has been closely associated with the work of the Financial Stability Board and other international standard-setting bodies, including the Basel Committee for Banking, and was on the faculty of the Questrom School of Business at Boston University. Mr Das has managed the global Financial Sector Assessment Program (FSAP) and participated in developing internationally accepted strategies, policies, and tools for systemic risk analysis, financial stability monitoring, stress testing, debt and reserves management, and sovereign wealth funds. He has led macro-financial surveillance and capacity-building missions to advanced, emerging, and developing markets such as China, France, Indonesia, Japan, Korea, Mongolia, Tanzania, The Philippines, and the United Kingdom. Until recently, Mr Das oversaw financial and monetary sector developments in Asia, the Pacific, and Europe for the IMF. His current areas of study focus on how the ongoing demographic, climatic, and technological transformation is altering the financial policies landscape and its implications for global practices and emerging markets.

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