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The India Policy Forum 2017

NCAER held the 14th India Policy Forum at the India International Centre in New Delhi on July 11-12, 2017. The IPF is NCAER’s annual economic policy research conference that brings together academics, policymakers, industry representatives, media, and researchers for discussions on key issues of Indian economic policy. The IPF includes presentations of original commissioned papers, leading to a published volume, and the annual IPF Lecture. A distinguished international Advisory Panel and an international Research Panel guide the IPF. The annual IPF Volume is the highest ranked economic journal out of India based on citation counts.

The keynote address at IPF 2017 was delivered by Arvind Subramanian, Chief Economic Advisor, Government of India. Complimenting NCAER on its efforts over the years to promote applied policy research across India’s many economic development challenges, Dr Subramanian highlighted the need for “relevance, rigour, and timeliness” in policy research. He said that in his work as the CEA, he had found how policymakers simply do not have the luxury of waiting for the perfect answer, but nonetheless wanted experience and accumulated wisdom on what works and does not work in economic policy. “It is great to be here among this wonderful audience and an interesting array of papers and topics for the IPF’s presentations,” commented Subramanian, while releasing the 13th IPF 2016-17 volume.

Shekhar Shah, Director General of NCAER and co-editor of the IPF Volume, said that he “welcomed both the advice that the CEA had for researchers and his suggestion to provide an expert resource that government economists could turn to for ready reference and quick queries on policy and technical issues of data and methodology.” He added, “NCAER would be more than happy to explore a ‘help-line’ resource of the kind that Subramanian had recommended.”

Karthik Muralidharan, Associate Professor at the University of California, San Diego, and co-editor of the IPF volume, said that “Academics do need different time frames to ensure that their answers are correct, but that is exactly the gap that we try to bridge with the India Policy Forum. Increasingly, the IPF features papers that draw upon a mountain of high quality research and produce definitive assessments of the best policy advice. These policy assessments can be invaluable go-to resources for policymakers in a hurry.”

Subramanian’s address was followed by presentations of five papers on the solvable challenge of air pollution in India; a deep dive into state budgets in India; India’s linkages into global value chains; the implementation of ICT in agriculture; and the drivers of growth of India’s cities and towns in the 2000s.

In addition to Subramanian, several sessions of the IPF were chaired by key policymakers, including S. P. Singh Parihar, Chairman of the Central Pollution Control Board, Anup Wadhawan, Additional Secretary, Ministry of Commerce and Industry, and Ramesh Chand, Member of NITI Aayog. B. J. Panda, Member of the Lok Sabha, participated in a final panel discussion on market failure versus government failure in India.

The 14th IPF included a Policy Roundtable on financial inclusion and household finance in India, with the Panel debating the difficulties on the supply and demand side of household finance that need to be overcome in order to promote much greater financial inclusion of the relatively large percentage of the population that remained outside the formal financial system.

The IPF 2017 ended in the evening of 12th July with the Annual IPL Lecture delivered by Professor Lant Pritchett of the Harvard Kennedy School at the Imperial Hotel. Pritchett’s IPF Lecture on “Avoiding the morning-after blues: Building state capability while times are good,” combined different strands of his work on why countries should use periods of high growth to the fullest to build the capabilities of the state. His work along with Lawrence Summers had shown that such periods do not persist indefinitely. Countries therefore need to focus their energies and resources on realistic pathways to build state capacity during the “good times”.

The 2017 Rabi Season and Doubling Farmers’ Income

A good monsoon in 2016, which brought great relief to farmers suffering from the impact of poor rains over the last two years, has helped achieve record or near-record production of most Kharif crops in 2016-17. NCAER’s latest report on the short-term agricultural outlook for the 2017 Rabi season released today, points out that India is now heading towards replicating this achievement in the case of Rabi crops too. As per the NCAER 2017 Rabi Report, the Gross Value Added in agriculture and the allied sector registered a significant 3.3 per cent year-on-year growth in the Q2 of 2016-17 as compared to 1.8 per cent growth in Q1. Overall, a robust growth of 4.1 per cent was recorded in the agriculture sector in 2016-17 as against the previous year’s drought-impacted growth rate of 1.2 per cent. In comparison, the latest official estimates suggest 4.4 per cent growth for 2016-17 and 0.8 per cent for 2015-16.

These and other findings of ongoing research at the NCAER were discussed today at a national workshop on the Indian Agricultural Outlook: The 2017 Rabi Season and Doubling Farmers’ Income.  The NCAER research has been supported by the National Food Security Mission, Ministry of Agriculture & Farmers Welfare, and Government of India.

Smt. Sudha P. Rao, Principal Adviser in the Department of Agriculture, Cooperation and Farmers Welfare in the Ministry of Agriculture & Farmers Welfare, while releasing the NCAER Rabi Report today, noted that “There are many positive indications in the agricultural sector and agricultural production in the country today. The importance of agriculture in the Indian economy is underscored by the fact that 54.6% of India’s population is engaged in agriculture and contributes 17% to GDP. However, the sector faces many dilemmas, especially with regard to farmers’ welfare. Many initiatives have been announced in the Union Budget 2017-18 for farmers’ welfare and the objective of doubling farmers’ income by 2022. There is a focus on enhancing agricultural productivity, investment in warehousing and cold chains, crop insurance, and promotion of ancillary activities. We have achieved record production of rice, wheat and pulses this year helped by various programmes implemented by the government. Other issues that need to be addressed are optimization of irrigation practices, fertilizer yields and support systems for farmers like the launch of the Soil Health Card and the Pradhan Mantri Krishi Sinchai Yojana.”

The workshop offered the Indian policy and economic research community and experts in the agriculture sector an opportunity to discuss current and prospective agricultural policies and their implications for the economy. The extensive day-long discussions by the delegates at the conference also provided insights and delineated the way forward for improving India’s short-term agricultural prospects. In addition, the major findings emanating from the government’s initiatives for doubling farmers’ income by 2022 were also discussed at the conference.

The findings of the NCAER report are based on a comprehensive assessment of various factors including farm input prices and availability, monsoon rainfall, national and international market demand conditions and government policies impacting this year’s Rabi and Kharif crop production. The forecast for wheat production in the Rabi season is 96.0-98.7 million tonnes compared with the Government’s estimate of 96.6 million tonnes assuming normal weather conditions through harvest. The NCAER forecast for Rabi rice production is over 13 million tonnes compared with the Government’s estimate of 12.8 million tonnes.

While introducing NCAER’s short and medium-term agricultural scenarios, the principal author and team leader of the study, and NCAER’s Senior Research Counsellor, Dr Rajesh Chadha remarked, “The agriculture sector is projected to grow by 4.1% in 2016-17, which is more than double the drought-impacted growth rate of 1.2 % in 2015-16. After a record or near-record production of most Kharif crops in 2016-17, India is heading for a record or near-record production of Rabi crops. The government is working diligently for the betterment of farmers and farming through various innovative programmes with the aim of doubling farmers’ income by 2022.”

National Workshop on Indian Agricultural Outlook Rabi Outlook and Farmer’s Income Issues

A National Workshop on the Rabi Outlook 2017 and Farmers’ Income on March 7, 2017 will be held at the India International Centre, New Delhi. The Workshop is being jointly organized by the NCAER and its research partner, the National Food Security Mission of the Government of India.

The Workshop is based on NCAER’s ongoing research being done in partnership with, and with support from, the National Food Security Mission, Ministry of Agriculture & Farmers Welfare, Government of India. This work is being done under a project on Agricultural Outlook and Situation Analysis that NCAER has been leading since 2011. The project comprises seasonal, half-yearly and annual reports. NCAER’s short-term reports for the Rabi and Kharif seasons, such as the one that will be presented on March 7, are based on detailed assessments of expected domestic output, prices, market functioning, and global developments.

For queris please contatct Ms Sudesh Bala at sbala@ncaer.org; 011-2345-2722

Does Devolution to Local Government Improve Health Outcomes in Rural India?

NCAER organised a conversation with Professor Hari K. Nagarajan, RBI Chair Professor at IRMA, about the findings of his joint work with Hans P. Binswanger-Mkhize and Anirudh Tagat on whether democratisation and devolution of responsibilities to local governments in India improves access to health care, health status, and individual incomes.

Using nationally representative household panel data for rural India from NCAER’s Rural Economic and Demographic Surveys (more popularly known as REDS), the authors explore the welfare effects of the choice of health service provider. They find that the deepening of democracy through participation in local decision-making and improved grievance redressal related to public goods influences the choice of health care provider. Given a level of illness, they find that such choice, in turn, leads to increases in contribution to household incomes that vary by gender. Their work importantly implies that it is not only the supply of services and mechanisms of access that are important, but what also matters is the extent to which members of households are able to participate in the management and governance of these services. This work continues earlier work based on the REDS data, the only national panel data for rural India, by Nagarajan, Binswanger and Meenakshisundaram in their book, Decentralization and Empowerment for Rural Development, published by NCAER and Cambridge University Press in 2015.

In his presentation at NCAER, Professor Nagarajan gave an overview of the study,  the data and explained the methodology used. While talking about the result, he spoke on the combined impact of local governance and on why governance matters. He stressed on the need for care expenditures, and greater access to publicly-managed health services. “Policy should therefore focus both on strengthening direct accountability of health care providers to citizens and indirect accountability via democracy. The structure, design, and management of the health care system in rural India is crucial for economic welfare of households’’, he added. The findings of the study show that increasing accountability in health via democratic citizen participation in the Panchayat government is a powerful means to improve the rural public health care system in India and results in reduced probability of falling ill and reduced private health

Hari K. Nagarajan is Professor and RBI Chair in Rural Economics at IRMA in Anand. Prior to this he was a Senior Fellow at NCAER, where he headed the team that collected and analysed the last round of the REDS data. He has also been a consultant to IFAD, the World Bank, and SEBI. His research interests include rural development, land markets, land reforms, inheritance, and price formation in agricultural markets. He has published in professional economic journals including the European Economic Review, Journal of Human Resources, Journal of Development Studies, World Development, Agricultural Economics, and Economic and Political Weekly. He has taught at the Indian Institute of Management, Bangalore and at the University of Oklahoma, Norman. Nagarajan holds a PhD in economics from the University of Oklahoma, Norman.

A Conversation on “Automation and Asian Labour Markets”

A Conversation with Ms Pamela Mar, Fellow at the Fung Global Institute at HK University, Hong Kong 

In her engaging conversation, Pamela Mar highlighted the significance of technological advancement in meeting the changing needs of consumers and the demands generated by the rise of e-commerce. She argued that the growth of automation technologies, robotics, and artificial intelligence has the potential to disrupt the reliance on low-cost manufacturing for achieving economic development in the developing Asian countries. Pamela also outlined other factors that are likely to impact development in Asia, and pointed out that business, policymakers, and civil society can help spur more sustainable growth in the continent.

Pamela Mar is a Fellow at FGI in Hong Kong, now known as the Asian Global Institute.  She has been researching and writing about the impact of automation on jobs in the Asian context. The subject of her talk at NCAER is of tremendous interest to observers in India, especially in the context of the ‘Make in India’ campaign launched by the Indian Government, and concerns about whether policy initiatives in this area are chasing a world of labour-intensive manufacturing that is fast disappearing. This has implications up and down the line for education and skilling initiatives in the country, for life-long learning approaches, and for how India rides its demographic tiger to prosperity or penury, having missed the great post-War manufacturing and trading opportunities that other East Asian countries and China have taken advantage of over the last three decades.

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