Archives: Publication

Delhi recently hosted the International Solar Alliance (ISA) Summit from 10th to 12th March 2018. With 55 countries having signed the ISA framework agreement and 26 of them already ratifying it it looks like the ISA is certainly gaining momentum. Of course India seems to be the right platform for such an event. After all barring China no other country is pushing as aggressively for solar energy as India is. The solar energy sector has accounted for the largest capacity addition to the Indian electricity grid in the last year and is expected to be the same this year.

A growth spurred by imports

While the shift towards solar energy is a wise move as India is endowed with unlimited sunshine for most of the year the path that India is following is not so glorious. It seems that India is making the same mistake as it did with the mobile revolution. India’s mobile revolution was entirely fuelled by imports whether one looked at the mobile architecture associated software or the handsets. China too embarked on a full-scale mobile revolution even when they could produce the entire architecture in-house. The same is true in case of China’s shift towards solar energy. By contrast India seems to be too eager to embark on a full-fledged solar energy revolution by riding on the growth of LED imports.

As a result imports of solar cells primarily from China Malaysia Singapore and Taiwan increased from 1275 MW in 2014-15 to 9331 MW in the last fiscal. On the other hand domestic production stood at 246 MW in FY15 and is likely to increase to 1164 MW in the current financial year. Consequently the market share of domestic players has steadily diminished from 13 percent in FY15 to an estimated 7 percent in FY17. Due to this fall domestic players have asked for safeguard duty on solar cells whether or not assembled into modules or panels immediately for four years. However in the present World Trade Organisation (WTO) regime there is a limit on the use of safeguard duty or anti-dumping duty.

Issues with manufacturing

To some extent India’s solar industry is weak in terms of its backward linkage (that is which provides goods and services for its production activities). The basic primary input for solar cells is pure silicon a product India is yet to optimise its production in. By contrast among the high technology export items silicon invariably figures as a bulk item of ‘high technology chemical export’ in developed countries like the USA Germany and Japan. China has entered this export market recently in line with its push towards solar energy. Without support from the government it is unlikely that the domestic industry can make a breakthrough in this high technology niche segment.

Solar Photovoltaics (PV) technology requires higher scientific and manufacturing sophistication. Crystalline polysilicon cells arranged into modules or panels are the most established technology by far but recently advances in conversion-efficiency and decline in production costs have been obtained in producing thin-film (TF) solar cells. Cellular solar cells have higher conversion efficiency but TF solar cells are cheaper to manufacture. A third experimental technology uses organic photovoltaic cells. While China has nearly mastered these technologies India lags behind in this aspect.

Rethinking procurement policies

Many of the so-called technologically developed countries including China have used public procurement policies judiciously without violating the WTO rule for promoting technological advancement in the domestic industry. By contrast current procurement practices promote competition between vendors and not between technologies or technical standards. Designed to minimise short-term financial losses it does not statutorily bind procurement with the technological processes and industrial development. Hence it is not likely to promote technological advancement. Rectifying this lapse in subsequent amendments will depend on political will and bureaucratic vision.

Thus if India does not intend to repeat the mistakes of its mobile revolution Indian policy-makers need some serious introspection for promoting the growth of the domestic solar industry.

By Sanjib Pohit

(The writer is Senior Fellow at the National Council of Applied Economic Research. Views expressed here are personal)

Time magazine dedicated its person of the year (2017) cover to women who broke the silence surrounding the pervasiveness of sexual harassment and violence especially in the workplace. It took a string of allegations by women with public images they could leverage and were willing to put at stake to give heightened visibility to the widespread nature of violence against women by men in prominent positions.

The #MeToo movement

If the emergence of the #MeToo movement inspired by these public allegations has revealed anything it is the power of numbers. The subsequent solidarity around experiences of sexual violence globally has taken root in India too. However given the genesis of the movement we must ask ourselves: Is it not disconcerting that building this collective solidarity required publicly celebrated figures to come forward with their stories? Surely experiences of ordinary women deserve the same recognition?

We live in a world awash in statistics. We know what proportion of India’s population owns mobile phones and what proportion is overweight. We even know how many people defecate in the open. Yet when it comes to our knowledge about how many women experience sexual harassment and violence we are at a loss. If we don’t know the contours of violence how can we address it?

It is easy however to say we need data on sexual harassment but data collection in this area is extremely challenging. It is difficult to define sexual harassment; it is even more difficult to collect information about painful and stigmatising experiences. Results from India’s National Family Health Survey (NFHS) – IV provide testament to this challenge. NFHS asked questions about women’s experiences of sexual violence. About 5.5% of the women surveyed say they have experienced sexual violence; over 80% of these instances of violence are perpetrated by husbands.

These results direct our attention to the home as the primary site for violence away from public spaces and workplaces. This no doubt is misleading and largely reflects problems in survey design and execution. To paraphrase Ludwig Wittgenstein an entire mythology is stored within our statistics or lack thereof.

Importance of phraseology

Let us look at what and how NFHS asks about sexual violence. The phraseology of NFHS-IV is: “Has anyone ever forced you in any way to have sexual intercourse or perform any other sexual acts when you did not want to?” It then goes on to ask the identity of the perpetrator. Unsurprisingly this bald question most likely asked in semi-public settings in the absence of lead-up and sensitivity elicits largely negative responses. It moreover asks about non-consensual sexual acts; it does not account for sexual coercion tactics of the kind instigated by Harvey Weinstein. Such acts are forbidden under the Sexual Harassment of Women at Workplace (Prevention Prohibition And Redressal) Act 2013 which defines harassment as unwelcome physical advances remarks and demands for sexual favours. The kinds of experiences examined by NFHS form only a part of this definition.

There is also an important difference between reporting coercive overtures and ‘successful’ coercion since the latter brands and often stigmatises survivors of sexual misconduct. Some suggest for instance that it might have been easier for Angelina Jolie to come forward about Weinstein’s attempted coercion because she did not have to confess to actual violation. But distinctions of this kind are sensitive to definitions question wording and settings in which interviews take place.

We see for instance that men and women differ in their perceptions about the prevalence of sexual harassment. When the India Human Development Survey (IHDS) organised by the University of Maryland and the National Council of Applied Economic Research asked men and women in over 40000 households about how often young women in their neighbourhoods were harassed 20% of women and 14% of men said this occurred ‘at least sometimes’ in 2005. In 2012 when the same households were interviewed again 31% of women and 21% of men reported that harassment was prevalent in the same neighbourhoods. This suggests that women are far more likely to feel harassment is pervasive in their neighbourhoods than men; moreover for both men and women perceptions of sexual harassment increased by almost 10 percentage points between 2005 and 2012 in the same neighbourhoods.

Lok surveys designed by the Lok Foundation and administered by the Centre for Monitoring Indian Economy Pvt. Ltd. (CMIE) go one step further and ask women about their actual experiences of sexual harassment to nearly 78000 women. When asked how often have you experienced unwanted groping/touching by men nearly 10% said often and an additional 7.5% said very often.

Since we fully expect personal experiences of this nature to be underreported over 17% women claiming they experience unwanted groping often or very often is striking. Of the 15.67% of women who reported experiencing groping/touching only ‘rarely’ a fair number might have been under-reporting. Even more disturbing is the acceptance of sexual harassment. When both men and women were asked whether “women should tolerate eve-teasing as a normal part of life” only about 50% disagreed with this statement; others either agreed to some extent or had no opinion. Notably of those who disagreed 17.5% disagreed only ‘somewhat.’

Measuring attitudes

These experiences have an insidious effect on women’s lives and ability to participate in educational work and/or social activities. IDFC Institutes’ survey of over 20000 households in four cities asked households when they start worrying about the safety of men and women within their families who may be outside the home and unaccompanied. In Delhi the city where perhaps fear is most prevalent almost no household worries that a male member is outside at 7 p.m. but about 20% of the households start worrying about a female member. By 9 p.m. the proportion of households worrying increases to 40% for men and a whopping 90% for women.

What do we find missing in these statistics? There is no mention of sexual harassment and violence against women in the workplace. To the best of our knowledge there is minimal data on workplace harassment in India. Here silence speaks louder than statistics. The challenges associated with collecting data on sexual harassment are multiple. Not only must we find the right words to ask about these difficult experiences; we must find privacy and safety and guard against further stigmatising survivors of sexual harassment and violence. Data must be collected and interpreted with sensitivity in order to do justice to the struggles women encounter in the face of gendered and sexual violence. However collecting and disseminating data about sexual violence is the first step towards breaking the culture of silence and finding ways of combating violence against women.

Sonalde Desai is Professor of Sociology at University of Maryland and Senior Fellow NCAER. Ragini Saira Malhotra is Program Director Lok Foundation and PhD Candidate Sociology UMass-Amherst

One of the grimmest projections for the future of the earth as we know is the irreversible degradation of agricultural land caused by depletion of water bodies and climate change rendering it progressively unfit for cultivation within a span of less than a century. Where does that leave the Indian farmer who has been consistently providing food for 1.3 billion people relying largely on inherited wisdom and knowledge with little access to technology or infrastructure over the last several decades?

Crisis in the agriculture sector: Agriculture has traditionally been the backbone of the country in terms of livelihood but the sector has recorded alarmingly slow growth in the last few years. According to recent estimates of the Central Statistics Office the growth of Gross Value Added in agriculture declined from 4.1 per cent in 2016-17 to barely 2.1 per cent in 2017-18. Even the National Commission of Farmers (2006) chaired by MS Swaminathan had pointed out that something “very serious and terribly wrong is happening in the countryside” largely resulting from instability in farm incomes and risks relating to production markets and prices faced by farmers.

Another reason for the crisis in agriculture is a steady decline in the size of landholdings caused by mounting pressure on land assets. Government data shows that small and marginal holdings of less than two hectares currently account for 72 per cent of the landholdings in the country. However arguably the biggest challenge facing the farmer today is that of price fluctuations caused by demand and supply uncertainties and hoarding of agricultural produce by traders. These risks are followed by rising input and capital costs and perishable nature of the produce preventing farmers from stocking till they get a profitable margin or even from insuring their produce against losses

Alarming drop in agricultural growth: The Modi Government’s promise of ‘Sabka saath sabka vikas’ is unlikely to be fulfilled without taking the farmer on board especially since almost 47 per cent of the workforce in India is engaged in agriculture. The World Development Report (2008) also pointed that growth in the agriculture sector is two-three times more effective in reducing poverty than concomitant growth in non-agricultural sectors. However an analysis of the performance of India’s agriculture sector and farmers’ incomes over the last four years offers little source for optimism especially with the agri-Gross Domestic Product falling to 2.1 per cent this year down drastically from 4.9 per cent in the previous year. Can the Modi Government buck this trend to bring the farm sector back on the growth trajectory in just one remaining year of its term?

Poor agricultural performance during the Modi era is also reflected in the shrinking agri-trade surplus which as per the Government’s own figures has plummeted from $25.5 billion in 2013-14 to just $8.2 billion by 2016-17. The draft Mid-Year Review of the Economy brought out by the National Council of Applied Economic Research in November 2017 argues that structural changes in consumption patterns in both rural and urban areas as also rising incomes are exerting price pressures in the agriculture sector. This necessitates productivity growth and efficacious management of post-harvest operations to ensure affordable supplies of agricultural produce.

Reversing the downward slide: Realising the severity of the situation the Government has decided to take contingent measures such as constituting the Doubling Farmers’ Income (DFI) Committee for augmenting both food production and farm incomes while simultaneously spurring growth in the sector. The DFI Committee recommends the creation of self-sustainable models not only in food cultivation but also in corollary agricultural sectors like horticulture and livestock-rearing to improve market linkages for boosting farmers’ incomes. The Economic Survey lists other initiatives in this area including disbursement of credit from institutional sources to complement Government initiatives like the Soil Health Card the ‘Per Drop More Crop’ scheme in the Pradhan Mantri Krishi Sinchai Yojana and the construction of an electronic platform for the National Agriculture Market trading portal which networks the existing Agricultural Produce Market Committee mandis to create a unified national market for agricultural commodities.

Ameliorating the agrarian crisis: Budget 2018: The 2018 Budget dubbed as ‘farm-centric’ by many also highlights the Government’s intentions to mitigate the farmers’ suffering. However it is not clear how the resources would be generated for implementing the ambitious announcement of a minimum support price (MSP) of 1.5 times the input cost of farmers for all the unannounced kharif crops. Other proposals in the Budget aim at upgrading the existing rural haats into gramin agricultural markets diversification through setting up of a fisheries and aquaculture infrastructure development fund and an animal husbandry infrastructure development fund with a corpus of Rs 10000 crore; and 100 per cent tax deduction for farmer producer companies that can in turn assist small and marginal farmers in achieving economies of scale.

However experts warn that even these far-reaching measures may not be sufficient to take the farm sector out of the red or to attain the target of doubling farmers’ incomes by 2022 especially since the paltry 3.1 per cent growth rate of farmer incomes between 2003 and 2013 needs to be scaled up to over 10 per cent to reach this target. The obvious solution lies in augmenting the non-agricultural incomes of farmers emanating from jobs in the rural non-farm and urban sectors.

The most enterprising suggestion is however embedded in the Economic Survey in its emphasis on promoting women farmers by integrating them as active agents in rural transformation by earmarking 30 per cent of the Budget allocation for women beneficiaries in all ongoing Government schemes and by connecting them to micro credit agencies through self-help groups. This is sought to be achieved by offering women farmers enhanced access to resources such as land water credit technology and training to counter the challenge of migration of their menfolk to urban areas. These women are envisaged to perform multiple roles of cultivators entrepreneurs and labourers by deploying their gender expertise in an otherwise male-dominated sector.

Conclusion: The Government thus seems to be working on a philosophy of “when the going gets tough the tough get going” to reduce the travails of farmers — a philosophy that has been most evocatively immortalised in the famous war novel of 19th century America Gone with the Wind when its female protagonist and plantation owner Scarlett O’Hara finds only one dirty carrot in her erstwhile sprawling farm that has been ravaged by the war; and when she grimly resolves “As God is my witness I’ll live through this…I’ll never be hungry again.” Surely it’s time to nurture our impoverished farmers and ensure that even as they keep feeding us they should themselves never go hungry.

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

Policy orientation in modern-age trade negotiations has progressively turned to non-price measures looking beyond tariff liberalisation 

A better information system for domestic exporter will assist upgrade of domestic industry to meet global norms. (Reuters)

Policy orientation in modern-age trade negotiations has progressively turned to non-price measures looking beyond tariff liberalisation. In the past India’s FTAs did not necessarily and always benefit domestic exports and exporters. Instead imports increased more than exports in most cases. So there exist instruments other than custom tariffs that are operative in constraining access to markets abroad. Such policy measures are referred to as non-tariff measures and predominantly include quality control measures; para-tariff measures such as anti-dumping and safeguards measures; technical barriers to trade (TBTs) for manufactured goods; and sanitary and phytosanitary (SPS) measures for food products plants and animals.

According to data collected by the United Nations Industrial Development Organisation (UNIDO) TBTs quality control and SPS are the most prevalent non-tariff measures exercised globally. On an average countries impose TBTs quality control and SPS on 32% 24% and 16% of trade respectively. Compliance to non-tariff measures such as TBT and SPS requires meeting stated process benchmarks and certifications which add to costs thus wearing out the competitive advantage due to low labour costs or enhanced market access acquired through tariff cuts during negotiations.

An earlier survey of Indian exporters has revealed the non-tariff measures experienced in the US UAE UK Germany France Japan Kenya and New Zealand citing predominant procedural obstacles in the from of arbitrary or inconsistent behaviour and non-transparent practices. The frequent revisions of TBTs and SPS standards demonstrate a ‘goalpost change syndrome’ in developed countries where the attempt is to introduce tougher and prohibitive norms making compliance more difficult for the exporting partner which is generally a developing country. India’s affected export sectors include industries with competitive advantage—textiles leather electrical equipment electronics and chemicals. India’s own non-tariff measures mostly cover food engineering equipment medical equipment metal and gems and jewellery. India has participated in non-tariff measure regimen through specifying the labelling requirements registration procedures certifications and test quarantined requirements and measures for food products.

India’s most recent engagement in negotiations has been that on the RCEP agreement. The regional dimensions of the proposed RCEP will be the among the sturdiest with a combined share of 30% in world GDP and 40% in world trade. Evaluation of benefits from trade is seminal to assessing the potential from an international arrangement of such high order. For India regional trade with 15 RCEP member nations is significant accounting for 18.9% of India’s world exports. Even more important is the import relationship with the share of imports from RCEP as high as 35.5%. Therefore the issues of import are likely to be tougher as India’s import dependence on RCEP is notably higher than for exports. India has a high intra-RCEP trade deficit too

The prevalent use of TBT and SPS measures in Japan (an RCEP member) and by developed regions such as the EU has highlighted India’s inability to address the challenge for its exporters. Flexing muscles for tariff cuts alone will not be of much use unless supported with simultaneous negotiations on mutual recognition of TBTs and SPS between trading partners. Since future trade wars are likely to be battled on non-price measures understanding the TBT and SPS regime of partners becomes essential. This will have dual benefits. On export front information on measures adopted in partner countries will enable India to expand opportunities of mutual trade through signing of Mutual Recognition Agreements.

A better information system for domestic exporter will assist upgrade of domestic industry to meet global norms. On import front improved domestic standards will be useful to raise and tighten standards in India’s notifications on TBTs and SPS. Stricter norms for imports will not only benefit through better health and safety of human life plants and animals but will also provide a level-playing field to India in negotiations on TBTs and SPS.

Thus addressing the information gap with regard to TBTs and SPS measures between India and its trade partners is instrumental in realising the trade potential. This is a common priority both for exports and imports which can be useful in turning the non-tariff measure challenge into an opportunity for trade.

No doubt the rolling of GST is a right move towards making India into a one-market with one tax and with interstate barriers to trade being removed.  While GST is facing the teething problem with multiple rates a high cost of implementation it is expected that these problems would be sorted out paving a way for efficient movement of merchandise across the country in a span of one or two years. This would give a big boost to the manufacturing sector as the same is more dependent on raw materials and components for their production and they can source their inputs at lower costs from across the country. However there are some valid reasons why this utopia may not be realised soon.

Faulty connectivity puts brakes on GST benefits

Firstly because of the absence of seamless connectivity in India Indian manufacturing industries has put unduly emphasis on vertically integrated production process or have ensured their components accessories are located near the mother plant so that logistics barrier does not hamper production. No doubt the production cost would have come down if they have not adopted this production structure. However once this has already been set up it is unlikely that the entrepreneur would alter the status at an incremental cost in a short-time horizon. This transition may take place over a medium (four-five years) time horizon.

Secondly it is generally argued that interstate movement of merchandise would be simplified with the introduction of GST. While there is a merit in that argument it comes with a pinch of salt. GST does not encompass all merchandise. There is a long list of items which are not under the purview the GST.  Thus GST would not automatically imply that the border check post would be abolished. Thus the red light would still be there.

Thirdly most of the interstate movement of merchandise on road operate through non-container mode. Container merchandise traffic is yet to catch up on the Indian scene. They are less likely to be struck in the inter-state border or elsewhere within a state as they generally follow ditto the rule of the road.  The paper works for inter-state movement of goods are usually complete for them. Non-containerised merchandise traffic by trucks face the maximum hindrances in the inter-state movement of goods. GST or no-GST their status would not change significantly in foreseeable future.

Red-tapism: A bane for commercial vehicles

By and large highway trucks are overloaded in India. A sizable number of trucks does not possess pollution/goodness of fit certificate. As a result they are at the mercy of highway patrols.  The police personnel patrolling the highways invariably put up barricades on the roads in the name of checking to secure bribes. These rent-checking activities will not cease in a day in spite of rollover of GST because these para-tariffs are not at all accounted in GST schemes. Incidentally rarely an overloaded truck or same without pollution/goodness of fit certificate is seized in spite of repeat violations.  The practice is to let the truck move once the speed money is paid.  The overloading of the truck is a serious menace in India. It not only reduces the lifespan of a truck it adds to pollution as an overloaded truck has to be driven at a lower gear for a longer distance. Given the current tax structure of a commercial vehicle in India it is not really possible for a transporter to replace the fleet unless a large incentive is given to this sector. Thus the improvement in on-road logistics in respect of non-containerised cargo seems to be a pipe dream.

Poor infrastructure: A detriment for benefits

The conditions of the India national highways have generally improved. However truck transportation within India is still subject to long sections of congested roads in poor condition. The state border crossing is typically congested due to increased urbanization. The scope of widening the road is limited due to encroachment by inhabitants on the public land.

Traditionally the cost of logistics in India as compared to the overall product cost is around 13-14% which is comparatively higher as compared to the global averages of around 10% (in the developed economies). We are walking on the right path. But we have miles to go before overland road-logistics are sorted out and the sector needs significant investment. Are the stakeholders including policy-makers are willing to bite the bullet?

By Sanjib Pohit

(The writer is Senior Fellow at the National Council of Applied Economic Research. Views expressed here are personal)