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A Glass Half Full: Changes in Indian Standards of Living since 2012

NCAER is organizing a seminar by Professor Sonalde Desai on “A Glass Half Full: Changes in Indian Standards of Living since 2012”. Dr Partha Mukhopadhyay, Senior Fellow at Centre for Policy Research, will discuss the paper.

The National Sample Survey (NSS), the flagship survey providing information on standards of living in India, has recently come under criticism as the National Sample Survey Office (NSSO) chose not to release the results of the 2017-18 NSS Consumption Expenditure Survey. The NSSO has noted that the data quality for this survey is unreliable.  One of the challenges facing the interpretation of consumption data over this period is the difficulty in disentangling long-term, secular changes in consumption expenditure from the short-term shock caused by the November 2016 demonetisation, which led to a cash shortage and is believed to have adversely affected the incomes of small businesses, informal workers, and others dependent on cash, and therefore their consumption.  In her paper, Desai uses data from the India Human Development Survey (IHDS) to provide an independent assessment of changes in living standards for 4,828 households in the states of Bihar, Rajasthan and Uttarakhand during 2011-12 and 2017, and compares these to the changes in living standards between 2004-05 and 2011-12, based also on the IHDS.

Sonalde Desai holds a joint appointment as Professor at NCAER and Professor of Sociology at the University of Maryland. She is the Director of NCAER’s National Data Innovation Centre. At NCAER and Maryland, she leads the India Human Development Survey, India’s only nationally representative longitudinal, household panel dataset, with IHDS1 in 2004-05, IHDS2 in 2011-12, and IHDS3 scheduled to start data collection in 2020. IHDS data have been used by over 9,000 users worldwide and has led to nearly 500 papers and dissertations. Desai is a demographer whose work deals with social inequalities based on gender and class in education, employment and maternal and child health, and locates such inequalities within the political economy of the country or region. While much of her research is on India and South Asia, she has also done comparative studies in Asia, Latin America and Sub-Saharan Africa. Desai has published widely in a number of sociology and demography journals, including the American Sociological Review, Demography, Population and Development Review and Feminist Studies. She has a PhD in Sociology from Stanford University, an MA in Sociology from Case Western., and a BA in Sociology from the University of Bombay.

For queries, please contact Ms Sudesh Bala at sbala@ncaer.org or on 91-11-2345-2722.

A Glass Half Full: Changes in Indian Standards of Living since 2012

NCAER is organizing a seminar by Professor Sonalde Desai on “A Glass Half Full: Changes in Indian Standards of Living since 2012”. Dr Partha Mukhopadhyay, Senior Fellow at Centre for Policy Research, will discuss the paper.

The National Sample Survey (NSS), the flagship survey providing information on standards of living in India, has recently come under criticism as the National Sample Survey Office (NSSO) chose not to release the results of the 2017-18 NSS Consumption Expenditure Survey. The NSSO has noted that the data quality for this survey is unreliable.  One of the challenges facing the interpretation of consumption data over this period is the difficulty in disentangling long-term, secular changes in consumption expenditure from the short-term shock caused by the November 2016 demonetisation, which led to a cash shortage and is believed to have adversely affected the incomes of small businesses, informal workers, and others dependent on cash, and therefore their consumption.  In her paper, Desai uses data from the India Human Development Survey (IHDS) to provide an independent assessment of changes in living standards for 4,828 households in the states of Bihar, Rajasthan and Uttarakhand during 2011-12 and 2017, and compares these to the changes in living standards between 2004-05 and 2011-12, based also on the IHDS.

Sonalde Desai holds a joint appointment as Professor at NCAER and Professor of Sociology at the University of Maryland. She is the Director of NCAER’s National Data Innovation Centre. At NCAER and Maryland, she leads the India Human Development Survey, India’s only nationally representative longitudinal, household panel dataset, with IHDS1 in 2004-05, IHDS2 in 2011-12, and IHDS3 scheduled to start data collection in 2020. IHDS data have been used by over 9,000 users worldwide and has led to nearly 500 papers and dissertations. Desai is a demographer whose work deals with social inequalities based on gender and class in education, employment and maternal and child health, and locates such inequalities within the political economy of the country or region. While much of her research is on India and South Asia, she has also done comparative studies in Asia, Latin America and Sub-Saharan Africa. Desai has published widely in a number of sociology and demography journals, including the American Sociological Review, Demography, Population and Development Review and Feminist Studies. She has a PhD in Sociology from Stanford University, an MA in Sociology from Case Western., and a BA in Sociology from the University of Bombay.

For queries, please contact Ms Sudesh Bala at sbala@ncaer.org or on 91-11-2345-2722.

Immigration, Nationalism and the Economics of Global Movement

NCAER hosted a book talk by Neeraj Kaushal, Professor of Social Policy at Columbia University, on her latest book, Blaming Immigrants: Nationalism and the Economics of Global Movement (January 2019; Columbia University Press). Mr Sanjoy Hazarika, Director of the Commonwealth Human Rights Initiative, and Mr Pramit Pal Chaudhuri, Senior Editor, Hindustan Times, offered their comments after the book talk. The seminar was attended by members of NCAER Research Team and invited guests.

Citing examples from around the globe, Dr Kaushal discussed the growing discontent towards immigration globally. Immigration is shaking up electoral politics around the world and more and more countries around the globe are enforcing restrictions.  In her presentation, Dr Kaushal concentrated on whether immigrants are the cause or a scapegoat of the discontent.  Based on her  book on immigration, covering both US and other immigration, she pointed out the core causes of rising global disaffection with immigrants and her views on the common complaints against immigration. She found that it is neither the volume nor pace of immigration that is fueling disaffection, but it is the willingness of nations to accept, absorb, and manage new immigration. In her presentation, she demystified common misconceptions about immigration, showing that the level of global mobility is historically typical and that most immigration occurs through legal frameworks.  She also highlighted that the U.S. system, far from being broken, works quite well most of the time, its unique features are replicated by many countries, and the recent and proposed anti-immigrant measures in the US are likely to cause human suffering without deterring potential migrants. She said that a lot can be learnt from the immigration related experiences of other countries and that immigration should be looked into as an opportunity and not a threat.

Neeraj Kaushal is Professor of Social Policy and Chair of the doctoral program at the Columbia School of Social Work. She is also a Research Associate at the National Bureau of Economic Research. An economist by training, she has been writing on global immigration issues for three decades.  In addition to Blaming Immigrants, she has authored or co-authored over 60 peer-reviewed articles and book chapters on immigrants and other vulnerable populations. She writes a monthly column in the Economic Times. She holds a BA and an MA in economics from Delhi University and a PhD in economics from the City University of New York.

The NCAER 2019-20 Mid-Year Review of the Indian Economy

NCAER presented the 2019-20 Mid-Year Review of the Indian Economy on November 16, 2019 in cooperation with the India International Centre (IIC). NCAER macro team led by NCAER Distinguished Fellow Sudipto Mundle presented its latest analysis of the economic situation and its growth forecasts to an audience of policy makers, policy commentators, and the business media.

The NCAER Mid-Year Review (MYR) carries on the tradition started by Malcolm Adisheshiah at the IIC in 1976. Dr Adiseshiah, one of India’s most distinguished economists and educationists, a Life Trustee of IIC, recipient of the Padma Bhushan, and founder of the Madras Institute of Development Studies, was a key architect of UNESCO’s work on education and technical assistance. The MYR 2019 came at a time of heightened concern about a serious slowdown of the Indian economy, with both cyclical and structural factors coming together at a time when fiscal and monetary policy appear to have limited headroom to tackle the slowdown.

Bornali Bhandari, NCAER presented the Performance of the Real Economy and Trade and Sudipto Mundle discussed the Macroeceonomic policies. A Panel Discussion on Balancing Macrostability and Deeper Structural Reforms for a Growth Recovery was moderated by Pronab Sen, IGC.

The highlights of the report are as follows:

NCAER nowcast the GVA growth for Q2:2019–20 at 4.9 per cent (± 0.81 per cent).  It has also forecast the annual GDP growth for the whole year 2019–20 at 4.9 per cent (± 1.04 per cent). The Q2:2019–20 nowcast and the annual 2019–20 growth forecast has been arrived at by a joint NCAER-NIPFP modeling team. This presentation of the Mid-Year Review (MYR) of the Indian economy, is part of a long-standing partnership with the India International Centre.

Farm sector looks up 

Weakening economic growth has been cushioned somewhat by its the positive trend in agricultural production. Indian agriculture is still heavily dependent on the monsoon and, despite its late arrival, rainfall this year has been normal, as predicted in the forecasts of the India Meteorological Department (IMD). NCAER estimates the output of kharif foodgrains to be in the region of 149.1 million tonnes, which indicates an increase over last year’s record output of 141.7 million tonnes. The expected increase in output is attributable to the strong performance of all the three crop groups, viz., rice, coarse cereals, and pulses.  The estimates are based on area-weighted rainfall though they may be subject to adjustments because of abnormal rains in many parts of the country which may affect crops and crop quality.  The current year’s water storage in dams as on October 24, 2019 was 127 per cent of the long-term average, also pointing to an encouraging outlook for the rabi season.

Industry dips 

The industrial sector outlook is grim. The figures show that in Q1 2019–20, growth of all the industrial sectors declined barring ‘electricity, gas, water supply and utility services’. In Q2: 2019–20, the Index of Industrial Production (IIP) showed a year-on-year (y-o-y) decline in growth of (–) 0.4 per cent as compared to growth of 5.3 per cent in Q2: 2018–19. The three major components of IIP, that is, mining, manufacturing, and electricity, showed growth rates of (–) 1.2 per cent, (–) 0.4 per cent, and 0.4 per cent, respectively in Q2: 2019–20 compared to the corresponding rates of 0.9 per cent, 5.6 per cent, and 7.5 per cent in Q1: 2018–19.

Goods & services collectively hit 

Capital goods showed negative growth for nine months in 2019, with this slowdown deepening further in August and September 2019. The capital goods IIP grew at (–) 21.4 per cent and 20.7 per cent, respectively. The consumer durables IIP has registered negative growth since June 2019. In September 2019, the growth in IIP of consumer non-durables also slipped into negative territory. Thus, the overall outlook for the industrial sector remains gloomy due to weak demand and investment activities. The Nikkei Purchasers Managers Index fell to 50.6 in October 2019.

In the services sector, the indicators available for Q2: 2019–20 point to a decline in the growth of most services. The decline in railways cargo traffic, international air cargo traffic, and cargo handled at major ports, taken together, is indicative of a general decline in the level of economic activity during Q2: 2019–20. In line with this observed pattern during Q2: 2019–20, the Nikkei Purchase Managers Index (PMI) was also below 50 during both September and October 2019.

Retail inflation as measured by changes in Consumer Price Index (CPI) has gone up in September and October 2019, largely driven by a rise in the price of vegetables.  However, inflation of other retail prices and wholesale prices as well as core inflation (non-food and non-fuel) have been softening.

Marginal growth in exports 

On the external front, India’s total exports, including merchandise and services, is estimated to be worth US$ 267.2 billion for the first half of the Financial Year (FY) 2019–20. In other words, the period April–September 2019 witnessed a growth of only 1.9 per cent on a year-on-year (y-o-y) basis. The total imports during this period at US$ 312.16 billion, declined 3.1 per cent on a y-o-y basis. The trade deficit for the period April–September 2019 stands at US$ 83.7 billion, as compared to the corresponding figure of US$ 98.1 billion during the same period in FY 2018–19. The exchange rate has depreciated throughout the first six months of the year , except in September 2019 (on a y-o-y basis).

Lending to micro, small and medium enterprises shrinks  

In the monetary policy front, in a series of consecutive cuts, the Reserve Bank of India (RBI) has reduced the policy Repo rate by 135 bps to 5.15 per cent as of October 2019, given low inflation and concerns over slackening of growth. However, the transmission of rates has been weak, raising concerns about the effectiveness of monetary policy in reviving real output growth. Bank Credit to the Commercial Sector (BCC) grew by 8.5 per cent, lower than the growth achieved during the corresponding period of the previous year, with the credit extended to micro and small industries actually declining.  The credit squeeze for the MSME sector has been aggravated following the default by ILFS, which hit the Non-Bank Financial Companies (NBFCs).

Revenue shortfall 

On the fiscal front, the large shortfall in tax revenue observed in 2018–19 is likely to recur in 2019–20. In H1 of 2019–20, direct taxes have grown by only 5.2 per cent as compared to a target of 17.1 per cent set in the annual budget. Indirect tax collection has actually declined by (–) 2.1 per cent as compared to the growth target of 19.4 per cent set in the budget. The impact of tax revenue shortfall on total revenue is moderated by the very high growth of nearly 92 per cent in non–tax revenue, mainly on account of the massive transfer of RBI surpluses. Nevertheless, the total revenue growth in H1 of 2019–20 (the Centre’s share), at 18 per cent, is well below the target of 25.6 per cent. The large revenue shortfall is unlikely to be passed on as a larger deficit. Most of it is likely to be absorbed through expenditure compression. This is already evident in the trend observed in H1 of The credit squeeze for the MSME sector has been aggravated following the default by ILFS, which hit the Non-Bank Financial Companies (NBFCs).2019–20. We are, therefore, likely to see a further slowdown in aggregate demand and GDP growth during 2019–20 compared to 2018–19.

Video recording of the event can be viewed here

 

MYR 2017-18

How to leverage open government, research, and data to strengthen public policymaking in India

Around 100 participants from a diverse group of researchers, policymakers, civil society, representatives of international organizations and corporate sector attended this seminar co-hosted by NCAER and 3ie. The event was held in the new Conference Centre offering world-class facilities at NCAER. Participants working on development economics, impact evaluation, for the government and the technology sector discussed on a variety of topics on how to leverage open government, data and research to strengthen public policymaking in India.

Advocates of open government believe that civil society and researchers should have access to all government data and analysis. The argument goes that having this information will allow researchers to produce and validate evidence for policymaking, and will allow the public to be better informed. Policymakers will, in turn, be more apt to listen to a better-informed public. Under what conditions does such a virtuous circle operate best, and what are key entry points to jump start such a circle? Central to this case of seamless information flows is the role now of social media, big data, AI, and machine learning. This brings into play concerns about privacy, ethics, inclusion and sovereignty, crucial issues for development practitioners and evaluators to explore. How can the accountability of the underlying evidence and of policymaking itself be best served in a fast-moving digital world? The proceedings of the seminar brought offered suggestions on many such challenges.

Shekhar Shah, NCAER and Emmanuel Jimenez, 3ie delivered remarks at the opening of the seminar.  The first session explored the conditions under which there is a virtuous circle of open government and data that leads to good evidence and to good policymaking that further reinforces the openness of data and government. The panelists were Avani Kapur, Accountability Initiative, Parth Shah, Centre for Civil Society, Rahul Matthan, Trlegal and was the session was chaired by Dr Shah. In the second session, discussions focused on how the digital world is transforming the generation and transmission of evidence and how its speed should be leveraged to enhance sound policymaking without some of its collateral costs. It was chaired by Marie Gaarder, 3ie and the panelists were Aparna Krishnan, J-Pal SA, C N Raghupati, Infosys and Renuka Sane, NIPFP.

In his Keynote address, Amitabh Kant, Niti Ayog stressed on the need to setup a national open data and analytics platform that can stitch together datasets of government departments. “Data has to be made available for researchers, academicians and young start-ups to work on. Without data there can be no governance, no transformation, and no on-ground changes”, he said.

Co-hosted by NCAER, this seminar was a part of 3ie’s 2019 Delhi Evidence Week, Beyond good intentions: from action to impact.  3ie supports the generation and effective use of high-quality evidence to inform decision-making and improve the lives of people living in poverty in low- and middle-income countries. It provides guidance and support to produce, synthesise and assure the quality of evidence of what works, for whom, how, why and at what cost.

NCAER has served the nation well with its rich offering of applied policy research, unique economic and social data sets, evaluations, and policy inputs for over 60 years.  NCAER’s work covers the entire spectrum of public policy, from macroeconomics to poverty. NCAER researchers generate and analyse empirical evidence to support and inform public policy choices in these areas.  NCAER is one of a handful of think-tanks globally that combine rigorous analysis and policy outreach with deep, scientific field data collection capabilities.

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