Archives: Event

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 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.

This workshop held in New Delhi is part of NCAER Study on Matching Business Reforms in India’s States to the ‘Ease of Doing Business’, funded by prosperity fund, British High Commission, BHC.

The opening address welcoming delegates and providing an overview of the project was delivered by Dr Shekhar Shah, Director General NCAER. An introduction to the BHC perspective on EoDB was delivered by Mr Aurodeep Nandi, Deputy Head of Economics, Ease of Doing Business Lead. An introduction to the study was presented by Dr Anushree Sinha, Senior Fellow at NCAER.

The first session in this National Workshop was a Country Expert Panel, chaired by Mr Suman Berry and speakers included Dr Sher Verick, Deputy Director, ILO and Professor Shreekant Gupta, Delhi School of Economics. The third session was on Industry perspective and was chaired by Professor Santosh Mehrotra, JNU and was moderated by Aurodeep Nandi. Dr Sanjeevan Bajaj, Adviser, FICCI Quality Fourm, Ms Vanitha Datla, Deputy Chairwoman, Indian Women Network & Vice-Chairperson, Elico Ltd, Hyderabad, Mr Richard McCallum, Managing Director, UK India Business Council, Mr Amol Kulkarni, Sr. Policy Analyst, CUTS International, Jaipur and Mr Manish Mishra, Chief Regulatory Affairs, Tata Steel were the speakers for this session.

The aim of NCAER’s ‘Building Synergies’ initiative is to evaluate business regulations in India, matching DIPP’s business reform plan with actual conditions on the ground. The special focus of the study is on reforms in tax policy and administration, construction permits, and regulatory and inspection reforms. For this, NCAER conducted an extensive survey of 600 firms and state government officials across 12 selected states to gauge the effectiveness of business reforms. The findings are expected to provide policy makers and investors real time feedback on the implementation of business reforms across the focused states.

The last session in this workshop was chaired by Prof Shreekant Gupta in which NCAER presented its findings from the survey of all the 12 states. The study methodology was presented by Dr A C Kulshreshtha and Dr Rajesh Jaiswal. Dr Anushree Sinha presented the state level findings and Dr Pallavi Choudhuri presented the industry level findings. In his talk, Professor Shreekant Gupta lauded the rigour and depth of the NCAER study. He also suggested that such a study should to be repeated every year to understand the evolving situation on ground on EoDB. Dr Rajesh Chadha’s concluding remarks included a mention of the proactive engagement of India and UK in the field of research.

This workshop was the last in the series of three workshops aimed at building engagement with the government, industrialists, industry experts, UK business experts, academia, multilaterals and other stakeholders. The first regional workshop held on 14 December, 2016 at the NCAER focused on the states of Haryana, Punjab, Delhi, Rajasthan, Gujarat, and Tripura. The second regional workshop held on January 17, 2017 at Institute of Public Enterprise (IPE), Hyderabad focused on Madhya Pradesh, Maharashtra, Andhra Pradesh, Telangana, Kerala, and Karnataka. The last and National Workshop provided results from all the 12 states and included participants from all the focused states.

NCAER’s latest forecasts show a GDP growth rate of 6.9 per cent for 2016–17 and 7.3 per cent for 2017–18. These forecasts are based on NCAER’s annual GDP model on annual model for GDP market prices at constant (2011–12) prices forecasts.

The Gross Value Added (GVA) at Basic Prices at constant (2011–12) prices is predicted to grow at 6.3 per cent in 2016–17 and 7.0 per cent in 2017–18. Real Agriculture GVA is forecasted to grow at 3.7 per cent, real Industry GVA at 5.5 per cent and real Services GVA at 7.3 per cent in 2016–17.  Wholesale Price Index (WPI) inflation is projected at 3.6 per cent for 2016–17. Inflation is projected to accelerate in 2017–18 due to rising crude oil inflation.

The removal of the legal tender status of high value currency notes (Rs 500 and Rs 1,000) with effect from the midnight of November 8, 2016 took the domestic economy by surprise, raising fresh anxieties about economic recovery, leading to a downward forecast. Global economic uncertainty has added to these concerns.

Notwithstanding the fact that the monsoon arrived about nine days later than its normal date of arrival, the year 2016–17 has been a good one for the agricultural sector. NCAER estimates suggest that the total foodgrain production is going to touch a record of 272 million tonnes, 8 per cent higher than the corresponding figure of 251.6 million tonnes harvested last year. The production for crops like rice (108.8 million tonnes, about 4.2 per cent above last year’s output), wheat (96.6 million tonnes, about 4.7 per cent more than last year’s output) and pulses (22.1 million tonnes, 35 per cent higher than last year’s output of 16.4 million tonnes) is expected to reach record levels in 2016–17.  This increase in harvest is expected to help in keeping food inflation low.

The growth of the industrial sector remained lackluster. The overall Index of Industrial Production (IIP), a measure of industrial performance in the country, shows a growth of 0.3 per cent during April–December 2016–17, when compared to the 3.2 per cent growth recorded during the same period of 2015–16. The Index of Industrial Production (IIP) contracted by 0.4 per cent in December 2016, as compared to the growth of 5.7 per cent it recorded in November 2016. Seventeen out of 22 groups experienced negative growth with a decline of –0.5 per cent in manufacturing in April–December as compared with the 3.2 per cent growth rate achieved during the same period of the previous fiscal, reflecting a massive downward swing in production.

The year-on-year (y-o-y) growth of Gross Value Added for the services sector (excluding construction) showed stagnant growth between 2015–16 (8.9 per cent) and 2016–17 (8.8 per cent). Tourist arrivals registered higher growth (55.2 per cent) during the third quarter, as compared to the rise of 14.6 per cent witnessed in the second quarter of the current fiscal. Aviation passenger traffic growth continues to exhibit double digit growth.  Both port and aviation cargo traffic picked up speed in the third quarter.

The performance of the external sector in the third quarter of 2016–17 has shown signs of improvement. Merchandise exports grew for the fifth consecutive month in January 2017, up by 4.3 per cent. This improvement can be attributed to economic normalisation of the world economy, led by revival of growth in the US, UK, Germany and Japan. On the other hand, merchandise imports grew significantly at 10.7 per cent, as compared to the growth of 0.5 per cent registered in the previous month. Nonetheless, the merchandise trade deficit narrowed to $9.8 billion from $10.4 billion recorded the previous month.

On the inflation front, consumer price inflation trended down with CPI inflation being at a two-year low of 3.2 per cent in January 2017. However, the wholesale price inflation recorded a sharp increase to 5.2 per cent in January 2017, up from 3.4 per cent in December 2016. It was driven by fuel prices that rose by 18.1 per cent in January 2017, up from 8.7 per cent a month ago. The core CPI inflation (headline inflation minus food and fuel) also rose to 5.1 per cent. Wholesale Price Index (WPI) inflation, on the other hand, increased to 5.2 per cent over December 2016 to January 2017 after declining slightly in the third quarter of 2016.

Meanwhile, the RBI in its sixth bi-monthly Monetary Policy announcement on  February 8, 2017, kept the repo rate (at which the RBI pumps in liquidity into the system) unchanged at 6.3 per cent and, more importantly, changed its monetary stance from ‘accommodative’ to ‘neutral’. After staying subdued in the months of November and December, 2016, the BSE Sensex showed double digit y-o-y growth in January 2017.

The fiscal scenario shows an improvement in 2016–17:Q3 compared to the previous quarters in the same fiscal year and the corresponding quarters of the previous fiscal year. While the fiscal deficit recorded positive y-o-y growth of 13.8 per cent and 32.4 per cent in Q1 and Q2 respectively, it showed a y-o-y decline of 51.4 per cent in 2016–17:Q3.