Archives: Event

Niyati Agrawal, Monami Dasgupta, Anand Sinha, Ashwani Bhatia,
Krishnamurthy Subramanian and Rajesh Chakrabarti 

in conversation with 
Ananth Narayan

In recent times, financial markets have seen an increase in consumers seeking better returns through innovative investments to secure their wealth and savings. This has led to diversification of investments from old and trusted avenues to newer areas of investment.

However, many investors are generally not well-informed about the products they are about to buy. It has been observed that when given full disclosures, consumers are 80-90% less likely to buy high-risk financial products. Although financial managers are expected to act as securers of consumer interests, they are often guided more by incentive structures rather than the needs of investors. Consequently, consumers may end up buying financial products that do not meet their goals. The result is usually mis-selling, wherein consumers with little-to-no knowledge about the risks involved are left feeling short-changed.

What are the ways in knowledge-asymmetrical financial markets can shift attitudes from caveat emptor (buyer beware) to caveat venditor (seller beware)? How can regulators and banking institutions meaningfully craft sale incentive systems towards informed consumer decisions? And lastly, how can a system of informed consumer decision-making be crafted for an India flush with investors?

On Tuesday, March 23rd, NCAER hosted Monami Dasgupta and Niyati Agrawal of Dvara Research to present their research on the latest and most egregious instance of mis-selling of AT1 bonds. The presentation was based on the paper that Niyati and Monami have co-authored with Monika Halan, Misha Sharma, and Madhu Srinivas, titled Impact of Information Disclosure on Consumer Behaviour: Case of AT1 Bonds.  This was followed by a panel discussion by leading experts Krishnamurthy Subramanian, Chief Economic Advisor, Government of India, Ashwani Bhatia, Managing Director at the State Bank of India, Anand Sinha, former RBI Deputy Governor and Rajesh Chakrabarti, Dean at the Jindal Global Business School. The discussion was moderated by Ananth Narayan, Additional Director, Yes Bank. A press release for this webinar is available on this page.

NCAER released its second Land Record and Services Index (N-LRSI) 2021, revealing that almost all States/Union Territories have shown an improvement in their efforts to digitize land records compared to the previous year. Madhya Pradesh has emerged as the top performer for the second year in a row, followed by West Bengal, Odisha, Maharashtra and Tamil Nadu.  While Madhya Pradesh and Tamil Nadu have maintained their positions, West Bengal has moved up four ranks, from rank six to two. Odisha and Maharashtra, which ranked second and third in N-LRSI 2020, has fallen by one rank each to take up rank three and four in this year’s index.

This is the second edition of the Index, which has been supported by Omidyar Network India, through its Property Rights Research Consortium initiative which aims to enable evidence-based solutions for securing land, housing and property rights in India. The N-LRSI 2021 is based on data collected over 2020-21 on two aspects of the supply of land records—the extent of digitisation of land records and the quality of these land records.

Access to land is a critical factor for economic growth and poverty reduction.  For government, industry, and citizens to be able to use this asset effectively and to minimise disputes, it is important to have access to reliable land and property records. Digitizing these land records is critical for ensuring India’s economic growth, as accessible, high quality records not only helps increase the visibility and availability of land for large-scale investment opportunities, but at an individual level, also makes it possible for the public to transact land and use it for seeking credit in a dispute-free environment.

Over the years, different states have made significant progress in making their land records digitally available to citizens. The N-LRSI aims to understand the extent of this progress and existing gaps and to identify measures to improve land records in each state. The N-LRSI 2021 is an integral part of the NCAER Land Policy Initiative (N-LPI) launched in 2019 with the aim of filling the gaps in economic research, policy analysis, and systematic data on land.

Speaking at the launch, Shilpa Kumar, Partner, Omidyar Network India said “Accurate and reliable data with regards to the ownership and details of land and property can help every Indian to ascertain their land assets and enable easier transfer and access to credit. Given that land & property is the largest asset class in the country, the impact of accessible property records can have a substantive impact on improving lives.  We hope that this index will continue to nudge state governments to focus on digitisation of records, as well as provide policymakers a tool that will provide them evidence-based insight to create more effective and targeted approach towards property rights.”

Team leader Deepak Sanan at NCAER noted that “It is a matter of great satisfaction that objective of the N-LRSI has fructified to a considerable extent. Mean scores on the index have risen by more than 16% in one year. The N-LRSI has clearly demonstrated potential as a credible instrument that can enable progress in the goal of creating more comprehensive, accurate, accessible and user-friendly land records and processes across the country.”

Talking about the next steps for the N-LRSI, project co-leader Professor Devendra B Gupta said, “The first two round construction of the N-LRSI primarily used supply-side data during 2019-20 and 2020-21, including proxies for measuring access for citizens, for assessing the extent of digitisation and gauging the quality of land-records services offered.  For the next round, we envisage a demand-side survey of citizens to gauge the level of public awareness and satisfaction in using digital land records and associated services.”

Dr Shekhar Shah, Director General at NCAER said, “The latest edition of the N-LRSI emphasises on accessibility of the land records through the Accessibility Index, which reveals a concerning gap between the quality of records and user access to the same. With States increasingly focusing on improving the ease of land markets transactions, the future editions of the N-LRSI will aim to adjust the components and the weights assigned to them to ensure that the Index can incorporate these indicators.”

N-LRSI was first launched in February 2020 to gauge the performance of all states and UTs on the extent of its digitisation process for land records and services, and the overall improvement in the quality of the record as a result of the digitisation process. This edition of the N-LRSI, conducted a year later, offers an opportunity to measure the progress made by the various states/UTs on the parameters that formed the basis of N-LRSI 2020. It also assesses the extent to which the recommendations made to various states/UTs in N-LRSI 2020 were considered for implementation.

Key findings from the Index:

• The Index, which measures the performance of 32 states and UTs across four broad parameters—digitisation of textual and spatial records, computerisation of the registration process, and the quality of land records—finds that 29 states and UTs have shown positive change or retained their scores in 2020-21. As a result, the mean N-LRSI score across the 32 States/UTs has shown an increase of 16.6% in 2020-21, from 38.7 in 2019-20 to 45.1 in 2020-21 (out of the maximum score of 100 points). While in 2019-20, only one state scored more than 70 points, there are now 5.
• Among the states which have reported an improvement in its N-LRSI scores, seven of them have recorded an improvement of over 10 points, five have noted an increase between 5 to 10 points, and 16 states have shown an improvement of less than 5 points. The states of Bihar, Karnataka, Tripura, West Bengal, Andhra Pradesh, Himachal Pradesh and Kerala have reported the most improvement.
• Factoring for the ‘extent of digitisation’ alone, Bihar shows maximum improvement, followed by West Bengal, Tripura, and Karnataka. While the scores for Puducherry and Chhattisgarh have shown a decline owing to the decline in rate of digitisation as seen on the Department of Land Resources’ portal, the scores for Assam have shown a decline as the few digitised copies of RORs that were available in 2019-20 are not available online now.
• In terms of the ‘quality of land resources’, Karnataka is the leading state in terms of improvement over 2019-20, followed by Bihar, Tripura and Goa. However, eight states have reported a decline in this parameter, which includes the Andaman and Nicobar Islands, Uttarakhand, Gujarat, West Bengal, Rajasthan, Lakshadweep, Tamil Nadu, and Jharkhand.

N-LRSI Scored 2020-21 and 2019-20

Another key performance indicator includes Accessibility, which evaluates states and UTs based on the ease of access, comprehensiveness of the information available, the design and user interface, and the efficiency of the help and assistance functionalities on their respective land records related web platforms. Odisha, West Bengal, Karnataka, Bihar and Uttar Pradesh are the top performing states in this Index.

Five investor education workshops with financial regulators

Workshop III: Investor Education and Protection in the National Pension System

NCAER’s newly established Investor Education and Protection Fund (IEPF) Chair Unit’s hosted the third of the series of five workshops on Investor Education and Protection. This workshop, focusing on the National Pension System was held virtually.

India’s 2014 Pradhan Mantri Jan Dhan Yojana programme helped create robust digital financial services, increasing the proportion of those above the age of 15 with a bank account to nearly 80% in 2017, compared to just about 35% in 2011. Digitization has brought banking to many more during the pandemic. The National Strategy for Financial Education 2020-25 recognizes the unique challenges of creating a financially aware and empowered India, and the need for convergence of efforts by multiple stakeholders that regulate and manage India’s financial resources.

Even as half of India’s population is under the age of 60, population projections suggest that by 2050, one in five Indians will be over the age of 60, as compared to the current figure of one in 12 (Financial security for India’s elderly, CRISIL 2017). This means that India’s transition from a largely young country to an ageing one must be supported by a robust pension system which provides for its elderly.

The current pension system in India is fragmented, with multiple schemes for the working and retired population—some of which are regulated by the Pension Fund Regulatory Development Authority (PFRDA). Of these, two schemes are of particular importance, namely the National Pension System and the Atal Pension Yojana. As of November 2020, the combination of these schemes covers over 38 million subscribers. Both these schemes require pensioners to decide the proportion of their income they wish to invest and how, as well as choose a Pension Fund Manager in select cases,  a difficult decision that impacts the returns on retirement. This means that pensioners must be able to foresee their requirements 40 years in the future and decide upon a pension that would be sufficient for retirement. This kind of foresight requires specific investor education strategies to help them realize the full potential of their investments.

The third NCAER workshop in its investor education and protection series focused on the National Strategy’s operations in the Indian National Pension System. This workshop featured insights from from leading experts as well as new pension systems regulator PFRDA. Supratim Bandyopadhyay, Chairperson, PFRDA, delivered the keynote address and the workshop was chaired by Deepak Mohanty, Whole -Time Member (Economics), PFRDA. Madnesh Kumar Mishra, Joint Secretary (Pension), Department of Financial Services at the Ministry of Finance outlined the government’s perspective on the subject.

The NCAER workshop series was inaugurated on December 16, 2020 with a keynote address by RBI Governor Shaktikanta Das, followed by the first workshop on the securities market. This series of five NCAER workshops covers investor education issues in securities market, insurance, pension funds and credit markets. These workshops with key regulators are an opportunity for participants to both learn from key regulators about their strategies for investor education and to contribute to refining the priorities for action and for creating relevant further research and knowledge base in this area.

Yamini Aiyar, Nishant Chadha, Pinaki Chakraborty, Rajat Kathuria, Shekhar Shah

The Union Budget 2021-22 was presented in Parliament on February 1, 2021 by the Minister of Finance, Ms. Nirmala Sitharaman. All eyes have been on this COVID-19 Budget as the race between the virus and the vaccine quickens against the backdrop of the worst economic downturn in independent India’s history and the worst the global economy has seen in a century.

The Government of India’s Economic Survey 2020-21, released on January 30, has already pointed to the need for continuing a big fiscal push to grow and sustain demand that could nudge the economy back to a strong, medium-term, growth trajectory. The Survey suggests that this could boost tax revenues and help India get back on to a sustainable fiscal path with debt/GDP declining. The 15th Five Institute Budget Seminar sought to answer: what fiscal impulses will the FM have provided in the Union Budget to help India catch up with its 2019-20 real GDP levels and simultaneously cut the headline deficit? How well will the Budget have provided for reviving jobs and incomes, particularly for those at the bottom of the income pyramid, in informal jobs, in high-contact services, and in MSMEs? What direction will the Budget set for the longer-term development prospects for India as it moves through its demographic transition and its society ages? Besides providing for vaccinating close to a billion Indians, what will the Budget point to for improving India’s health and education systems, building on the lessons learnt from the Coronavirus pandemic? How well will it spur the deeper structural reforms needed to overcome the scarring from the pandemic, to improve the investment climate and the ease of doing business, and to boost and sustain India’s medium- and long-term competitiveness in global trade?

The heads of the five institutes, the Centre for Policy Research (CPR), the Indian Council for Research on International Economic Relations (ICRIER), the India Development Foundation (IDF), the National Council of Applied Economic Research (NCAER), and the National Institute of Public Finance and Policy (NIPFP), came together once again on February 8, 2021 in the Five-Institute Budget Seminar in these difficult Coronavirus times to provide a longer-term development and reform perspective on the 2021-22 Union Budget. The Five-Institute Budget Seminar is organized by rotation and the landmark 15th session was organized by CPR, the head of which, Yamini Aiyar, moderated the session. The 5-Institute Budget Seminar series started in March 2007 under Shekhar Shah’s initiative and guidance.