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Even as the Government is hastily drafting the quota Bill for the EWS section like most predecessors it has orphaned the Women’s Reservation Bill

The recent Bill reserving 10 per cent quota for the economically weaker sections (EWS) among the upper castes has been intensively debated over its utility propriety and Constitutionality but discussions have roundly ignored the group that has once again been given the short shrift in prioritising the policy of reservation. The obvious reference here is to the Women’s Reservation Bill or the Constitution (108th Amendment) Bill of 2008 which seeks to reserve 33 per cent of the seats in Parliament and all State legislative Assemblies for women. Although the Bill was passed by the Rajya Sabha in 2010 it is still not a law as the Lok Sabha is yet to ratify it.

The Bharatiya Janata Party (BJP) had in its 2014 election manifesto promised to ensure its passage as part of its commitment towards women’s empowerment and welfare. In fact in a chapter titled ‘Women — The Nation Builders’ the BJP’s manifesto had highlighted the crucial role of women in the development of society and growth of the nation. It had claimed that one of its first tasks on assuming power would be to ensure one-third seats would be reserved for the women in both Parliament and Assemblies. This commitment forgotten through almost the entire tenure of the Modi Government has ostensibly lost out to political exigency and the need to appease a significant section of the electorate ahead of a ‘do-or-die’ election.

While the jury is still out on the actual benefits of any reservation policy for intended beneficiaries there is widespread consensus that an affirmative action to empower women politically does yield desirable results. And there is data to back this belief. With less than 12 per cent representation in Parliament as compared to a corresponding global average of 22.4 per cent Indian women trail their counterparts in many parts of the world.

While Nordic nations lead the way with an average of 41.5 per cent as many as 42 countries in the world have 30 per cent or more women MPs. Among these Sweden leads the way with 50 per cent reservation for women. It is not a mere coincidence that these nations are symbols of not only economic prosperity but also progressive social policies. Many others such as Rwanda (30 per cent) Nepal (28 per cent) Pakistan (20 per cent) and Bangladesh (13 per cent) have quotas for women in Parliament. Even sub-Saharan Africa has an average female representation of 22.6 per cent in Parliament.

Research published by the United Nations University World Institute for Development Economics Research (UNU-WIDER) in May 2018 found that Assembly constituencies in India helmed by women representatives show significantly higher economic growth than those under men. Based on data for 4265 State Assembly constituencies across four election cycles spanning the period 1992-2012 the authors of the study found that women legislators in India enhance economic performance in their constituencies by about 1.8 percentage points per year more than their male counterparts. The study also noted women’s efficiency in creating vital infrastructure especially because they are less likely than men to succumb to corruption temptation for self-aggrandisement and criminal tendencies.

These figures are substantiated by another 2017 research study by Guilhem Cassan University of Namur Belgium and Lore Vandewalle The Graduate Institute of International and Development Studies Geneva. Using two data sets collected by the National Council of Applied Economic Research (NCAER) the 2005-06 edition of the Rural Economic and Demographic Survey (REDS) and the 2011-12 edition of the India Human Development Survey (IHDS) Cassan and Vandewalle document gender norms in variations across castes and how mandated political reservations for women lead to path-breaking changes in their lives.

The REDS data from rural India which lists respondents’ preferences for public goods such as water sanitation roads and electricity shows that gender quotas enable women to rise to the position of president in gram panchayats — 95.4 per cent of the presidents in gram panchayats reserved for women were female. The IHDS data on the other hand provides quantitative evidence of restricted mobility and stricter gender norms among high-caste women underscoring the need for policy to bring more women into the political mainstream.

In an Employment Policy Paper of 2017 on MGNREGA and its impact on women the ILO too highlighted the gender dynamics of affirmative policies. Using both waves of IHDS data (2004-05 and 2011-12) it shows that work provisions under MGNREGA have helped shift social and economic outcomes in favour of rural women engaged in wage labour thereby contributing to transformative equality.

Coming back to the quota Bill for the economically backward upper castes unlike gender-based findings there is no substantive evidence that preferential treatment based on financial status has the desired effects. While assessing the redistributive effects of affirmative action on poverty in 2010 which they claim is the first such study Aimee Chin and Nishith Prakash of the National Bureau of Economic Research aver that policies aimed at improving socio-economic outcomes for poor sections are not only highly controversial but also inconclusive in indicating any real benefits. “It remains an open question whether affirmative action policies successfully reduce poverty” they concluded.

Significantly a major roadblock in putting the new quota into effect on the ground could be the legal tangle. In the 1992 Indra Sawhney judgement by the Supreme Court a majority (six) of the nine judges on the Bench averred that economic criteria cannot be exclusively used for deciding on reservation. The court consequently barred such reservations based on poverty alone arguing that social and educational backwardness should also be addressed to counter the historic injustice faced by several generations of the country’s population — here again women literally fit the Bill.

Irrespective of its eventual denouement and fate on the legal front it is clear that the hastily drafted quota Bill which arguably has little data to support has the weight of the Modi Government behind it; whereas the long-pending women’s reservation Bill which is rooted in extensive research remains the orphan that nobody wants to adopt. Does this indicate another opportunity lost both for redemption of past neglect and for improving the metrics of performance in a nation riddled with low-performance outcomes?  

(The writer is Anupma Mehta Editor at the National Council of Applied Economic Research. Views expressed here are personal)

There needs to be robust infrastructure for official statistics so that governments do not suppress inconvenient truths.

Over the past two weeks headlines have focussed on declining employment between 2011-12 and 2016-17; loss of jobs under the National Democratic Alliance government particularly post-demonetisation; and the government’s refusal to release a report using the Periodic Labour Force Survey (PLFS) documenting this decline leading to resignations of two members of the National Statistical Commission. In a pre-election politically charged environment it makes for eye-catching headlines.

Five trends

Let us step back from this episode and recall similar controversies over official data in the past. Past experiences tell us five things.

First suppression of results seems to be a problem common to all political parties. Census 2011 data on religious distribution of the population was not released until 2015. It is widely believed that these data were ready before the 2014 election but the United Progressive Alliance government was worried about inciting passions around differential population growth between Hindus and Muslims and chose not to release the tables. Similarly the UNICEF conducted the Rapid Survey on Children (RSOC) 2013-14 on behalf of the Ministry of Women and Child Development but the report was held up by the new government allegedly due to the fear that it showed Gujarat in poor light. Sometimes these concerns lead to lack of investment in data collection itself as is the case with the National Sample Survey or the NSS’s Employment-Unemployment surveys (not conducted since 2011-12) forcing public policy to rely on non-comparable statistics from other sources such as the data from the Employees’ Provident Fund Organisation (EPFO). These episodes are likely to recur and hence we need a more comprehensive strategy for dealing with them.

Second the fear of having statistical reports misquoted is legitimate. We live in a world where appetite for news is incessant and the news cycle is very short. Statistics that don’t always lend themselves to rapid unpacking into sound bites and headlines are easily misinterpreted. When Census 2001 results on religion were released in September 2004 a newspaper led with a story that although the Hindu growth rate between 1981-1991 and 1991-2001 had declined from 25.1% to 20.3% that for Muslims had gone up from 34.5% to 36%. Media reports paid little attention to the actual report that highlighted that the 1991 Census was not conducted in Jammu and Kashmir and that after adjusting for it growth rates for both Hindus and Muslims had declined. When the mistake was discovered it was blamed on the then Registrar General and Census Commissioner J.K. Banthia a highly competent demographer. He was sent into bureaucratic exile while the news media moved on to a new story.

Third it is impossible to bottle up the genie once data are collected and reports prepared. In a world dominated by WikiLeaks suppressing reports seem to create an even bigger problem since it allows individuals with exclusive access to act as the interpreters for others. In the instance of the RSOC mentioned above suppression of the report coupled with leaked data encouraged speculation by The Economist (July 2015) that the data were being suppressed because Gujarat must have fared poorly on reducing malnutrition. It stated that Bihar had made much greater progress since the proportion of children who go hungry had been cut from 56% to 37% between 2005-6 and 2012-13 while the decline was much smaller in Gujarat from 44.6% to 33.5%.

Fourth sometimes leaked results create speculation that is far worse than full disclosure would warrant. The Economist cherry-p-icked its comparisons. Nutritional status is measured by weight-for-age (underweight) and height-for-age (stunting). The final report showed that about 41.6% of children in Gujarat were stunted (had low height for their age) This is higher than the nationwide average of 38.7%. However improvement in stunting in Gujarat between 2005-6 and 2013-14 was of similar and slightly higher magnitude as that for the nation as a whole: 10.1 versus 9.7 percentage points. Moreover stunting decline in Gujarat was greater than that in Bihar 10.1 percentage points as opposed to 6 percentage points. Usually statistics on underweight and stunting should provide a similar picture; when they do not greater care is required in interpretation. This was not possible because only The Economist seemed to have access to the report and led the headlines.

The employment picture

Fifth statistics often deal with complicated reality and require thoughtful analysis instead of the bare bones reporting contained in typical government reports. The headline in Business Standard on February 3 based on the leaked PLFS report claims that more than half the population is out of labour force; however the statistics they present show that the trend is dominated by women and the rural population. If the full report were available I think it would be rural women who would drive the employment story. This is very much a continuation of the trend between 2004-5 and 2011-12 documented by the NSS under a different government.

Between 2004-5 and 2011-12 work participation rates for rural women of working ages (25-64) fell from 57% to 43%. However much of this decline was in women working on family farms and in family businesses from 42% to 27%; decline in wage work was much smaller from 24% to 21%. If lower engagement of women with family-based activities such as farming rearing livestock or engaging in petty businesses drives the decline in employment we may need to look at declining farm sizes and increasing mechanisation as the drivers of this decline. One can blame the government for not creating more salaried jobs for women pushed out of farming and related activities but it would be hard to blame it for eliminating jobs.

If the full report and unit level data for the PLFS were available it is possible that we will find a continuation of the trend that started in 2004-5. This is not to say that demonetisation may not have had a negative impact particularly in urban India where Business Standard reports that employment fell from 49.3% to 47.6% but this is a much smaller decline. It is also important to note that the urban comparison between the NSS and the PLFS requires caution particularly for unemployment figures. Whereas the NSS contains independent cross-sectional samples for each sub-round the PLFS includes a panel component in urban areas where the same households are re-interviewed every quarter. Since it would be easier to find unemployed individuals than employed individuals for interview attrition adjustment is necessary before drawing any conclusions. Without access to the full report it is difficult to tell whether attrition adjustment was undertaken.

So how do we get out of this vicious cycle where fear of misinterpretation leads to suppression of data which in turn fuels speculation and suspicion and ultimately results in our inability to design and evaluate good policies? The only solution is to recognise that we need more openness about data coupled with deeper analysis allowing us to draw informed and balanced conclusions. The onus for this squarely lies with the government. Simply placing basic reports in the public domain is not sufficient particularly in a news cycle where many journalists are in a hurry to file their stories and cherry-pick results to create headlines.

Spread the net wider

Understaffed and underfunded statistical services cannot possibly have sufficient domain expertise to undertake substantively informed analyses in all the areas for which statistical data are required. A better way of building a robust data infrastructure may be to ensure that each major data collection activity is augmented by an analytical component led by domain experts recruited from diverse sources including academia.

Sonalde Desai is Professor of Sociology at University of Maryland and Professor and Centre Director NCAER-National Data Innovation Centre. The views expressed are personal

In a market economy like India a strong judiciary is required for quick settlement of disputes

Since the 1991 economic reforms India has improved tremendously in almost all economic indicators and is now one of the fastest growing nations in the world. Various economic policies of the current government have enabled the economy to move faster than ever before. These include tax reforms leading to the introduction of the Goods and Services Tax reforms making India more competitive in the ‘Ease of Doing Business’ index and implementation of the Insolvency and Bankruptcy Code. But it has never been more important to also strengthen the quality of the material which makes up the engine of the economy i.e. India’s institutions. As a democracy India has an advantage: the roots of all its institutions are strong. However they have simply failed to grow with the growing population and with increasing demands. The judicial system in particular is far from reaching the pace required for efficient functioning.

An inefficient judiciary

The importance of the judiciary cannot be underplayed in a market economy. Three things are crucial for the market economy to function efficiently: transparency in information efficient dispute settlements and contract enforcement in a time-bound manner powered by an effective judiciary. In a market economy the government has little role to play in transactions among players. However it plays an effective role by setting up efficient dispute settlement mechanisms so that the costs of transactions are minimal. In such an economy the judiciary plays the pivotal role by enforcing contracts in the case of disputes through minimal costs.

Over the years and with the advent of the Internet India has taken a leap towards transparency of information. However little progress has been made in the case of dispute settlement mechanisms due to an inefficient judiciary. The situation is so desperate that the Economic Survey of 2017-18 had to set aside an entire chapter on the need for ‘Timely Justice’. It noted that the current working capacity of the High Courts and the Supreme Court is only 63.6%. Plus there are huge numbers of pending cases: 1.8 lakh in six of the major tribunals and close to 3.5 million in the High Courts. For economic cases the average duration of pendency is about 4.3 years for the five major High Courts. The Centre and the States approximately spend 0.08-0.09% of the GDP on administration of justice which is very low. In 2017 India spent about ₹0.24 per person on the judiciary; the U.S. spent ₹12. Even though understandably it is a little punitive to compare India’s budget with that of the most powerful economy in the world the point is to set out a benchmark for India.

The problem is with economic theory

Unlike our policymakers those in other countries seem to have realised the importance of the judiciary in the efficient functioning of a market economy. The problem here lies with economic theory. The proponents of reform belong to the school of neoclassical economics and are taught that transactions are costless. However the writings of Richard Coase and Douglass North have taught us that in reality the rules and regulations that affect economic activity determine whether transactions are costless or not. This theory of new institutional economics questions the two crucial assumptions of neoclassical economics — costless transactions and perfect information — and stresses the role of institutions in facilitating market exchange by reducing transaction costs providing a predictable framework for exchange and overcoming imperfect information. In India there are few practitioners of new institutional economics and that could explain why this aspect has not been addressed in the past decade.

The low focus on the judiciary obviously implies that non-compliance of contracts is not at all costly in India. The official dispute settlement mechanism does not deliver justice in a time-bound manner. Consequently players are willing to bypass the system by paying rents to government officials a system that became customary in the License Raj. Officials are willing to accept quick money since there is little chance of getting caught making venality a norm. Of course studies in political economy have shown that strengthening institutions and political power enjoyed by the incumbent are in conflict of interest. Thus the Opposition also has a major role to play in the solidification of institutions including and especially the judiciary. Strong institutions are the key to move India up the economic ladder. Otherwise India will remain a land of crony capitalists.

Sameer Malik and Sanjib Pohit are with the National Council of Applied Economic Research. Views are personal

It may be difficult to imagine that the humble “anganwadi” the grassroots institution at the base of the Integrated Child Development Services scheme (ICDS) could have any role in addressing India’s formidable challenge of unemployment. However two recent studies Employment In India (Oxford University Press 2019) by Ajit Ghosh and the Annual Status Of Employment Report 2019 (ASER 2019) released earlier this week together establish a clear causal link between early learning among children in India’s vast network of 1.2 million anganwadis and employment outcomes in the labour market over the long term. 

The past four-and-a-half years of the Modi govt have been more of continuity than a break from the past says Wolf

New Delhi: The government that comes to power after the general elections due in April-May may not be able to carry out radical reforms like the present one even if Prime Minister Narendra Modi returns to power Martin Wolf chief economics commentator of UK’s Financial Times newspaper said in an interview on Tuesday.

“In my experience governments are less radical in the second term than in the first term. My assumption is another term for this government would not be one of radical reform and certainly my expectation is if the opposition were to win same would be true perhaps even more so” said Wolf who was in New Delhi to deliver the 7th C.D. Deshmukh Memorial Lecture organized by the National Council of Applied Economic Research.

Wolf said the last four and half years of the Modi government has been more of continuity than a break from the past. “Many people wrongly expected the government to be more radical than it has been. Some people believed there would be a lot of privatization and more trade liberalization. The attitude of the government has been quite inward-looking. So it is very recognizably the old India.”

However Wolf said he is not particularly disappointed as he never expected the Modi government to carry out radical reforms though it had a huge majority in the lower House. “This is a pretty ‘small-c conservative’ country (one that believes in the philosophy of conservatism but does not necessarily identify with an official conservative party) with huge vested interests. India is a large complex democracy and by and large democracies do radical reforms only when in crisis.”

On the economic challenges before India Wolf said in the short run the world environment may remain more difficult. “The government must completely finish restructuring and recapitalizing the financial sector. If you get stronger banks with lower interest rates I would expect to see investment and growth to pick up” he said.

Wolf said India might have missed the bus on following an export-driven growth model such as that of China. However he said India has the advantage of being a large and low-wage economy. “You would need radically different policies in labour and infrastructure to take advantage of industries from which China is moving out. Though the China (model) is not replicable yet India can do a lot because it is 25 years behind” he said.

On the tussle between the Reserve Bank of India and the central government over the former’s capital reserves Wolf said he surprisingly finds himself in agreement with the government. “I don’t believe the independence of the central bank depends on the equity capital it holds. The rather important issue for the central bank is operational independence. Ultimately the equity belongs to the government. The central bank does not really need capital because nobody is going to wind it up. It prints money it does not get bankrupt” he said.

Wolf also argued that he had never been persuaded by the argument that India gains much being a developing country and insisting on special and differential treatment at the World Trade Organization as it only allows India to continue with bad policies.