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Report on “MGNREGA: A Catalyst for Rural Transformation”

MGNREGA: A Catalyst for Rural Transformation, a report published by NCAER and University of Maryland was released at a function held at the Vigyan Bhawan, New Delhi today.  The event organised in collaboration with the Ministry of Rural Development (MoRD), Government of India, and UNDP India was presided by Dr Bibek Debroy, Member, NITI Aayog, Shri Amarjeet Sinha, Additional Secretary, Ministry of Rural Developemt, Govt. of India and,  Shri J K Mohapatra, Secretary, Ministry of Rural Development, Govt. of India.  Aparajita Sarangi, Joint Secretary, MoRD delivered the welcome address, followed by remarks from Dr Shekhar Shah, Director-General, NCAER. Dr Sonalde Desai, Senior Fellow, NCAER gave a presentation on the report to a house full of audience, followed by an insightful Q&A session.

‘The Mahatma Gandhi National Rural Employment Guarantee Act has been remarkably successful in improving the welfare of workers who participate in the programme. But its reach has been limited due to the lack of work in some of the poorest areas. Using unique data from the India Human Development Survey, a large, national survey comprising over 28,000 rural households, conducted twice by researchers from the NCAER and the University of Maryland before (2004-05) and after (2011-12) the implementation of MGNREGA, this report concludes that MGNREGA reduces poverty and empowers women but work rationing limits its impact’.

At least 25% of the decline in poverty since 2004-5 for participating households can be attributed to participation in MGNREGA. These households are also less likely to have to rely on moneylenders for loans and more likely to have children with higher levels of education. The principal author of the study, Professor Sonalde Desai, Senior Fellow at NCAER and Professor of Sociology at University of Maryland, notes, “The most striking impact of MGNREGA participation is on women. Increasingly women dominate MGNREGA work. And for more than 40% of them, MGNREGA is their first opportunity to earn independent cash income. Not surprisingly, this increases their power within the household and improves their conditions, including access to health care.”

However, the positive effect of MGNREGA is limited by very low access to work in some of the poorest states such as Bihar and Odisha. Only 24.4% of rural households participate in MGNREGA nationwide, and nearly 70% of the interested households cannot participate due to lack of work. Most important, about 70% of households below the poverty line, do not participate. Implementation challenges lie at both the state and the local level.

In states with strong programmes, such as Chhattisgarh, nearly 60% of the poor participate in MGNREGA infrastructure projects. Contrastingly, in states with weak programmes such as Bihar, barely 11% of poor households participate. It is particularly important to ensure better implementation at the local level—both to improve MGNREGA access and to improve the quality of infrastructure.

Dr Shekhar Shah, Director-General NCAER, noted, “As India continues its march towards economic prosperity, independent, rigorous assessments of this type will be increasingly required to ensure that public policy and programmes stay on the right track.”

The full report is available here.

The India Policy Forum Lecture 2015

Economic Policies and Outcomes in India: A Retrospective

The 2015 India Policy Forum Lecture by Professor Arvind Panagariya presented a  retrospective of how India’s economic policy framework has evolved over several decades and the outcomes this has produced.
In a recent communication describing his plans for the Lecture, Panagariya has noted “…For the sake of argument, if India’s per capita income in 1950-51 is taken to be $1, it would have risen to $2 by 1990-91 and to $6 by 2013-14.  In other words, per capita income doubled in the first 40 years of India’s development, but then tripled in a much shorter period of the next 23 years. Alongside this quickening of growth, poverty fell by only a modest amount prior to 1990-91, but fell much more sharply during 2004-05 to 2011-12. What accounts for these massive differences in economic outcomes before and after 1990-91? Why did India lose out in the early decades of its independence and what has led to its rise in more recent decades?”
This very interesting seminal review of India’s economic development by the head of NITI Aayog, India’s erstwhile Planning Commission recast in January 2015 by the government of Prime Minister Modi attracted a large audience. In response to a lively and engaged question and answer session that followed the lecture, Prof. Panagariya gave his views on a wide ranging topics on the prospects of India’s economy and stressed on the importance of a Policy Framework to be in place.
The IPF Lecture is part of an annual economic policy discussion event organized by NCAER in cooperation with the Brookings Institution. It comprises of an annual international conference, the IPF Lecture and the IPF Volume which is published by SAGE.
Arvind Panagariya is Vice-chairman, NITI Aayog, and has been the Jagdish Bhagwati Professor of Indian Political Economy and Director of the Columbia Program on Indian Economic Policies at Columbia University. Until his appointment to NITI, he was a Non-resident Senior Fellow at NCAER and delivered NCAER’s Second C D Deshmukh Lecture in February 2014. Panagariya has also been the Chief Economist of the Asian Development Bank and Professor of Economics and Co-director of the Center for International Economics at the University of Maryland, College Park. He has worked with the World Bank, IMF, WTO, and UNCTAD in various capacities.
Panagariya has written and edited more than a dozen books. His book, India: The Emerging Giant (2008) was listed as a top pick of 2008 by The Economist magazine. The Economist has described his latest book (with J. Bhagwati), Why Growth Matters (2013), as “a manifesto for policymakers and analysts.” Until his appointment to NITI, Panagariya was co-editor of NCAER’s annual India Policy Forum, the highest ranked Indian economics journal based on RePEc citation counts.
Panagariya has a PhD in Economics from Princeton University. In March 2012, the President of India honoured him for his contributions in the fields of economics and public policy with the Padma Bhushan.

The India Policy Forum 2015

The India Policy Forum, in its 12th continuous year in 2015, is organized by NCAER in New Delhi in July every year in a long-running partnership with the Brookings Institution in Washington DC. Its objective is to promote rigorous empirical research on Indian economic policy with commissioned papers, an annual two-day conference leading to a volume, the India Policy Forum Volume published by SAGE, and the annual IPF Lecture. The IPF explores and provides insights on India’s rapidly evolving and often tumultuous economic transition and the underlying policy reforms that are driving it.

The 2015 IPF held on July 14-15 commenced with Keynote Remarks by Rajiv Mehrishi, Finance Secretary, Ministry of Finance, Government of India and a member of NCAER’s Governing Body. The IPF featured an exciting mix of five papers and a Policy Roundtable on “The Challenge of Financing Infrastructure in India”, moderated by Suresh Prabhu, Union Minister for Railways, Government of India. A highlight of the 2015 IPF was the IPF Lecture delivered by Arvind Panagariya, Vice-chairman, NITI Aayog (and until his appointment in January 2015, a Nonresident Senior Fellow at NCAER), on “Economic Policies and Outcomes in India: A Retrospective”. Please see the detailed 2015 IPF Program, which also has videos of the sessions and the associated papers and slide presentations.

The topics that IPF papers have dealt with over the years cover a broad sweep of macro, international, and sector challenges that the Indian economy has faced and the many successes and failures of policymaking over the past several decade. IPF research papers are invited on the strength of their policy-relevance and represent some of the best empirical research on India being done globally. The annual IPF Volume is currently the most highly ranked economics journal out of India based on RePEc citation counts. As interest and research on Indian economic policymaking grows, a far cry from the situation in 2004 when NCAER launched the IPF, our future plans include a call for papers.

Two international research panels of India- and overseas-based researchers with an abiding policy interest in India supports this initiative through advice, active participation at the annual IPF Conference, and the search for innovative papers that promise fresh insights. An international Advisory Panel of distinguished economists provides overall guidance. Shekhar Shah, Arvind Panagariya and Subir Gokarn are the editors of the 2014-15 volume, released at the IPF 2015 by Arvind Panagariya.

The IPF has been generously supported by a select group of Indian corporate partners that over the years have included the Tatas, HDFC, Reliance Industries, SBI, HSBC, IDFC, and Citibank. This support reflects their deep institutional commitment to rigorous high-quality policy research in India that helps promote informed policy debates and sound, evidence-based policymaking.

IPF Advisory Panel: Shankar N. Acharya, Isher J. Ahluwalia, Montek S. Ahluwalia, Pranab Bardhan, Jagdish Bhagwati, Barry Bosworth, Willem H. Buiter, Stanley Fischer, Vijay Kelkar, Mohsin Khan, Anne O. Krueger, Ashok Lahiri, Rakesh Mohan, Arvind Panagariya, Raghuram Rajan, Shekhar Shah, T.N. Srinivasan, Nicholas Stern, and Lawrence H. Summers.

IPF Research Panel: Abhijit Banerjee, Kaushik Basu, Surjit S. Bhalla, Mihir Desai, Shantayanan Devarajan, Esther Duflo, Subir Gokarn, Jeffery S. Hammer, Vijay Joshi, Devesh Kapur, Kenneth M. Kletzer, Robert Z. Lawrence, Rajnish Mehra, Dilip Mookherjee, Karthik Muralidharan, Urjit Patel, Ila Patnaik, Indira Rajaraman, M. Govinda Rao, Ajay Shah, Nirvikar Singh, Rohini Somanathan, Tarun Ramadorai, and Arvind Virmani.

Digital India Campaign-Scope and Challenges

Digitization of India will not only increase the efficiency of the government and public sector but also bring about huge democratization of the economy´’ believes Prof. Nirvikar Singh, University of California, Santa Cruz. In his ‘’brainstorming’’ session with the research fellows and the director general of NCAER Dr Shekhar Shah, Prof. Singh reviewed a presentation on the Government’s Digital India programme, prepared by the Department of Electronics and Information Technology.

With technology taking over almost all of manual labour, and the evident lack of skilled labour in India, it is imperative to have the country’s labour force skilled in Information Technology. With this in mind, India’s Digital India Campaign aims to make technology central to enable change.  The vision of this programme encompasses three areas: universal access to digital infrastructure, government services, and citizen empowerment. This vision is further developed to include electronics manufacturing and job creation as well.

Prof. Singh began with a basic overview of what Digital India entails, and led a discussion of the conceptual structure of the programme, its potential challenges, and possibilities for prioritization and successful implementation. He explained why India’s foremost challenge is to provide broad base digital access and to build on it to improve government and market efficiency.

The discussion ended with a very insightful as well as thought provoking Q&A session, largely centred on ways to raise digital literacy, increase digital inclusion, and improve digital connectivity. Major issues discussed were the extent of state subsidy for connectivity as a public good, the role of startups and private sector in the deployment of a digital infrastructure in rural and urban India, the increasing female labour force participation and global competitiveness of the semi-skilled and skilled Indian workforce.

Prof. Singh’s paper titled ‘Information Technology and its Role in India’s Economic Development’ will be published by Springer in a forthcoming conference volume. You can also find it here, attached with this post.

Nirvikar Singh is Professor of Economics and Sarbjit Singh Aurora Chair of Sikh and Punjabi Studies at the University of California, Santa Cruz, where he also directs the Center for Analytical Finance. He has been a member of the Advisory Group to the Finance Minister of India on G-20 matters, and has served as Consultant to the Chief Economic Adviser, Ministry of Finance, Government of India. Professor Singh’s current research topics include entrepreneurship, information technology and development, electronic commerce, business strategy, political economy, federalism, economic growth and the Indian economy. He has authored over 100 research papers and co-authored or edited several books. He has also served as an advisor for several start-ups and knowledge services firms in Silicon Valley and in India.  He received his PhD from the University of California, Berkeley.

Investor-friendly India: The Way Forward

Interest in India is substantially on the rise in Japan, with India’s ‘Make in India’ campaign and reciprocal visits by Prime Minister Modi and Abe. The number of Japanese companies entering India has gone up by 15 percent in the past year. Building on this momentum, India and Japan have set ambitious goals.  Under the India-Japan Special Strategic and Global Partnership, the two prime ministers have talked about realizing 3.5 trillion yen of public and private investment and ODA, and a doubling of the number of Japanese companies in India in just five years. Many have heralded this as a special moment in India’s relationship with Japan. This dialogue by video conference between NCAER and Japan’s Policy Research Institute, a part of its Ministry of Finance, focused on India’s investment climate and ways of improving. It followed the first NCAER-PRI Delhi Dialogue in February 2015 in New Delhi and is part of the work envisaged under a three-year Memorandum of Intent signed by NCAER and PRI in January 2015. The MOI seeks to foster joint work and greater collaboration in enhancing economic relations between Japan and India.

This dialogue dealt with key issues built around four presentations relating to the investment climate in India.  From Tokyo, Professor Takahiro Sato, Research Institute for Economics & Business Administration, Kobe University, presented the results of a survey on “Business Environment for ‘Make in India’ by Japanese Firms”. He highlighted the availability of skilled human resources as the main impediment for Japanese companies in India.   Mr Takahiro Tsuda, Senior Deputy Director of the Research Division, International Bureau, Ministry of Finance, spoke on the  “India’s Investment and Financial Regulations: Policy Dilemmas and A Possible Way Forward”. Mr Tsuda drew attention to a set of policy dilemmas faced by Indian policy makers regarding FDI and FPI Investment, Priority Sector Lending and Insurance in India.

From New Delhi, Professor Ram Singh, Delhi School of Economics, delivered a presentation on “Land Acquisition Issues in India”. Prof Singh noted that land acquisition is not as big an issue as it is made out to be and the real problem is the way in which the law is implemented. Mr Parveen Kumar, Partner and Director, ASA & Associates, talked about “Compliance and the Tax Environment in India: A Cake Walk or a Daunting Task for Japanese Corporates?” He provided a broad overview of tax regime in India and noted that Indian labour laws should be made more transparent.

The presentations were followed by a rich Q&A session moderated by Mr Daikichi Momma, President of PRI, with useful questions from New Delhi led by Dr Shekhar Shah, Director-General of NCAER, and followed by perceptive comments and questions from Tokyo. The Dialogue was attended in New Delhi by NCAER researchers and other invited participants, including officials from the Ministry of External Affairs and the Department of Industrial Policy and Promotion in the Ministry of Commerce and Industry.

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