India Human Development Survey: October 2023

The IHDS Forum is a monthly update of publications, op-eds and data news based on the India Human Development Survey (IHDS), jointly conducted by NCAER and the University of Maryland. While two earlier rounds of the survey were completed in 2004-05 and 2011-12, respectively, the third round has also been launched and is currently underway

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India needs both e-vehicles and biofuels

E-vehicle adoption needs changes in building bye-laws and huge charging infra. Complementing with biofuels is pragmatic.

Given that vehicles are the biggest culprits for polluting Delhi, the government has launched a stringent drive against polluting vehicles this year, through measures such as banning petrol and diesel vehicles older than 15 years and 10 years, respectively; promoting e-vehicles; and the deployment of nearly 400 teams on Delhi’s roads to check the vehicles’ pollution certificates and prevent the plying of over-age cars.

The most far-reaching move is, however, the push for the widespread adoption of electric vehicles. The Ministry of Road Transport and Highways has announced a policy of EV30@2030, where by 2030 30 per cent of the newly registered private cars, 40 per cent of buses, 70 per cent of commercial vehicles, and 80 per cent of two- and three-wheelers will be electric vehicles.

The challenges
But the chief of The Energy Resource Institute (TERI), Ajay Mathur contends that the target to switch to e-vehicles within the next 10 years is hard to achieve as the vehicle market is consumer-driven, and ensuring acceptability and desirability among consumers is vital.

The other challenges include affordability concerns stemming from high battery costs; limited facilities for building a robust battery manufacturing ecosystem; lack of a consistent policy framework for e-vehicles; and high charging times and inadequate availability of charging stations for such vehicles, especially in space-constrained urban areas like Delhi.

Experts point out that providing dedicated charging stations for every e-vehicle in cities would necessitate re-engineering of building laws and widespread construction of multi-level parking lots across the entire urban landscape.

The introduction of e-vehicles thus needs to be implemented in a graded fashion in tandem with other feasible options.

The replacement of fossil fuels with biofuels, for instance, can not only counter environmental pollution but is also a more affordable alternative to the rapid adoption of e-vehicles. Since biofuels are generated from renewable stocks, their production and use could be sustained indefinitely, unlike fossil fuels that come with expiry dates.

Biofuel option
Moreover, since ethanol-based biofuels can be produced domestically on a large scale, their introduction into the vehicle manufacturing ecosystem would also bring down overall costs, reduce the need for oil imports, and enable the country to better deal with the adverse impacts of global supply disruptions in oil and gas.

Biofuels derived from waste and farm residue can also re-energise the rural economy and augment farmers’ incomes. In this context, recent policy efforts to promote biofuel production are already showing results. According to Government sources, the target of 10 per cent ethanol blending for 2022 was achieved comfortably, leading to notable savings in forex outflows.

Hence, combating the scourge of air pollution and vehicular emissions warrants the twin strategies of pragmatic introduction of e-vehicles on roads coupled with changes in building bye-laws and making charging infrastructure compulsory for large real estate (residential/commercial) project, and promoting greater use of biofuels to eventually phase out conventional polluting fuels. Both measures require policy interventions for creating appropriate infrastructures and investments in research and development to help achieve India’s net zero and decarbonisation goals.

Pohit is Professor and Mehta is Head of Publications and Senior Editor at NCAER. Views expressed are personal.

Monthly Review of the Economy: October 2023

In the Review, we summarise the economic and policy developments in India; monitor global developments of relevance to India; and showcase the pulse of the economy through an analysis of high-frequency indicators and the heat map.

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Chattogram Port: A win-win for India and Bangladesh

The opening up of the Chattogram Port for transit and transhipment of goods and allowing regular movement is a powerful testimony of the India-Bangladesh partnership.

The decision taken by the taxation authority of Bangladesh to issue a Permanent Standing Order for the operationalisation of the Chittagong port for the transit of Indian goods was a momentous one. This will without doubt be instrumental in bridging the gap of connectivity between the northeastern region of India and the rest of the country. It may be noted India was the first country to establish diplomatic relations with Bangladesh in 1971 and both countries stand out for their decent partnership in terms of generational links of culture and socioeconomic realities. Sustained trade is one of the key relations among the two countries and it may be noted that during the COVID-19 pandemic, the supply chain between the two countries continued without much interruption.

Improving this connectivity further is important for significantly boosting the bilateral trade and investment potential, especially for Bangladesh and the eastern part of India. In this regard, ensuring seamless connectivity between the two countries is the most important factor in facilitating India-Bangladesh trade intensity. The opening up of the Chattogram Port for transit and transhipment of goods and allowing regular movement is a powerful testimony of the India-Bangladesh economic partnership.

The move will help cut down the inland distance of the northeastern states by half if a multimodal route synchronisation is effectively implemented. However, this requires substantial investment, not only on the Indian side but also in the relevant part of Bangladesh.

The inauguration of the Maitree Setu (Friendship Bridge) on March 9, 2021, connecting Sabroom of India with Ramgarh of Bangladesh over the river Feni is an important development. Sabroom, which is just 80 km away from the Chattogram Port, makes Tripura the ‘Gateway of Northeast’, with the potential to uplift the regional economy. This is a milestone in the direction of enhancing connectivity and is an exemplar of the closer integration of the BIMSTEC region and the larger Southeast Asia.

Located on the banks of the Karnaphuli River, Chattogram is Bangladesh’s main seaport and handles over 90% of the country’s exim trade. Mongla port, on the other hand, is Bangladesh’s second-largest seaport and lies close to the Bay of Bengal near Khulna city. It may be noted in this context that India is developing two Indian Economic Zones at Mirsarai and Mongla. Over 350 Indian companies are working in Bangladesh now. The latest development will drastically reduce the cost and time of transferring goods from one state to the other. For instance, the land route between Kolkata and India’s northeastern states is more than 1,200 kilometres while Chattogram and Mongla ports are located at almost half the distance.

Therefore, the overburdened Petrapole-Benapole route may be replaced with the new route, leading to a substantial reduction in the delays faced by cargoes when they take the inland route. In this regard, there are multiple routes that can come up as potential corridors to connect major economic clusters in the northeastern region to Chattogram through road, rail, and waterways. It may be noted in this context that rail-based systems are long-lasting and the life cycle costs are comparatively better than other transport systems for better connectivity. But landscape and terrain remain important considerations in this regard.

Also, within the northeastern region, the logistic cost is on the higher side. In order to reduce the same, the Asian Development Bank suggested the opening of the Sabroom–Ramgarh–Chattogram route to further reduce the distance between the northeastern region and Chattogram, thereby reducing the cost of transportation. There is also the possibility of the movement of non-bulk cargoes by sea using roll-on, roll-off mode through Chattogram to the northeastern region. However, massive investment is required to build up a dedicated freight corridor from Chattogram through the Akhaura-Agartala-Guwahati route.

Historically, the Private-Public Partnership (PPP) model played a critical role in infrastructure delivery around the world; the same method of investment could be applied with the right of construction to be delegated to a private entrepreneur on an agreed design and financial plan, allowing operation of the project for a specified time period. There could be a BOO (Built-Own-Operate) model too.

Furthermore, multi-modal connectivity from Chattogram via Ashugunj, covering the entire Silchar strait to Agartala, could be a game-changer for facilitating trade for the rest of India and its northeastern region as well as between India and Bangladesh. On all counts, the reduction of procedural delays and turnover time should be the topmost prerequisite to attract a large quantum of investment for strengthening and enhancing the connectivity of relevant routes between India and Bangladesh.

The author is Senior fellow at NCAER. Views are personal.

India needs a gender strategy

India must adopt a holistic gender strategy consisting of fiscal, administrative, and regulatory measures, combined with public messaging and mindset changes.

Globally, the average workforce participation is 50 per cent for women and 80 per cent for men. In India, the corresponding ratio is similar for men, but strikingly lower for women, at under 30 percent.

Claudia Goldin recently won the Economics Nobel Prize for explaining various facets of entrenched gender gaps in employment. Her research shows that more women enter the workforce when several conditions are met: There are appropriate jobs (for example, in the service sector); women are more educated; they can independently decide when to have children; societal stigma, discriminatory legislation, and other institutional barriers are removed; they have role models to emulate; and when the burden of raising the family lessens, e.g. once their children grow older. Importantly, economic growth in itself has not bridged gender gaps.

Dr Goldin’s research uses data from the US, but her findings are fully applicable to India and other contexts. In India, despite a shift towards an increasingly service-sector oriented economy and a marked reduction in gender gaps in education, the gender employment deficit remains as wide as ever. This implies that we need to target the institutional and societal causes creating the gender gap in employment, while simultaneously making it easier, safer, remunerative, and professionally rewarding for women to join the workforce and for their families and communities to support these decisions.

Given the enormity of the challenge and its persistence, a holistic gender strategy consisting of fiscal measures, administrative measures, regulatory measures, public messaging, and mindset changes is needed. The strategy could build around the measures proposed below.

First, Indian women are unable to join the formal workforce because their days are occupied from dawn to dusk with unpaid care work. Developing a care economy to cater to the young, the ailing, and the elderly can be transformational. This not only has the potential to generate a large number of direct employment across genders, but will also free up women to join the formal workforce.

Second, evidence from the East Asian economies shows that women need mobility to be independent, productive, and employment-ready. Women must be encouraged and incentivised to own and operate their own vehicles (be it a bicycle, a bike, a scooter, or a car). Tax breaks, easier access to credit, lower interest rates, as well as reduced fees for driving licences and insurance cover may be offered to encourage women to acquire their own vehicles.

Third, safety is one of the primary reasons for the low engagement of women in paid work in India. Our cities and workplaces must be made safer. This would necessitate the presence of a critical mass of women in public spaces, and deployment of more women as security staff, in the police force, and as transport operators (in buses, autos, taxis, metros, or trains).

At present, only 10 per cent of the Indian police force consists of women. Efforts could be made to increase this number initially to 30 per cent, with the eventual aim of achieving parity with men. A politically and socially acceptable way of achieving this could be to expand the current size of the police force by incorporating new positions only for women.

In addition, working women need affordable and safe housing in urban and semi-urban areas. Gender-based discrimination against single women in renting homes must end. A combination of public awareness marketing campaigns and better enforcement of existing regulation can facilitate the process of developing safe and conducive accommodations for working women.

Fourth, we need to economically incentivize women’s participation in the workforce. Tax breaks for all working women — whether single, head of households, or in dual-income families — should help. This would also help garner family support.

Fifth, we must find ways to facilitate the entry or re-entry of older women, say in their 40s and 50s, into the workforce. Dr Goldin’s work makes it clear that women rejoin the workforce after the bulk of their childcare responsibilities are over. Such women can directly contribute to all kinds of service-oriented activities, such as health, wellness, education, designing, research, and hospitality; as well as be called upon to train the next generation of skilled workers.

Sixth, we must inculcate gender-neutral behavior among boys and girls from a young age, including through sports, electives, and after-school extracurricular activities. Boys may be encouraged, or even required, to learn parenting, cooking, and housekeeping activities, while girls may similarly be trained in technical education, financial literacy, driving, and self-defence.

Seventh, we need to bridge the leadership gaps in all spheres of public life. Parity in leadership roles can counter embedded norms in ways that no other policy measure can. An uncomfortably large number of glass ceilings remain intact even after 75 years of Independence. Sample this: Not a single one of the 25 Reserve Bank of India (RBI) governors so far has been a woman. Among the 64 deputy governors of the RBI, only three have been women. None of India’s 18 Chief Economic Advisors to date has been a woman. There has never been a woman Vice Chairperson of NITI Aayog (or of that of its precursor, the Planning Commission); a woman member of NITI Aayog; a woman Chief Justice of India; a woman head of the Finance Commission; or a full-time woman Chief Election Commissioner. This list could go on.

Lack of women’s leadership is not a pipeline issue. It is a mindset issue. Pipelines can be built with committed intent.

Finally, we should re-design and re-designate the Ministry of Women and Child Development as the Ministry of Mother and Child Development; and set up a separate Ministry of Gender Parity with the predominant aim of ushering in “Women-led Development”.

The above measures, once combined with support from top political leadership and appropriate public messaging, would weaken the prevalent societal and economic norms that inhibit women’s participation in the workforce.

Gender parity is both an economic and a human rights issue. For India, it would be the key to becoming an advanced economy by 2047.

The writer is director general at NCAER.

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