Building Synergies: Matching Business Reforms to Improved ‘Ease of Doing Business’

The study explores ground-level realities linked with initiatives on tax administration, construction permits, transparency, compliance with environmental and labour laws and regulations, and inspection reforms. For this NCAER undertook two special purpose surveys covering state-level officials and firms. The firm survey covers 600 enterprises, 50 each in the 12 selected states, Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Punjab, Rajasthan, Telangana, and Tripura. The state-officials survey covers associated government departments in the 12 surveyed states. The major purpose of this study is to provide policy makers and investors real-time feedback on the level of awareness and effectiveness of the business reforms that are being implemented across the states, and highlighting the areas where further work needs to be carried out in order to ensure that the reform process serves the needs of the intended end-user, the firms.

Reclaiming public spaces

Eve-teasing leads to restrictions on women’s mobility

Walking through a rural market in Myanmar recently I was shocked to see it dominated by women vendors and buyers. In rural Indian markets particularly in the north women vendors are few and shoppers are frequently accompanied by men. The India Human Development Survey (IHDS) of over 42000 households across the country organised by the University of Maryland and the National Council of Applied Economic Research (NCAER) shows that in 33% of the households all the food shopping was done by men and 22% of the women did not go to a local kirana shop alone. This is quite an omission given that the primary cooks in 98% of these households were women.

Women’s reluctance to venture alone into public spaces such as kirana shops spills over into more serious areas. Over 30% of the women surveyed said they would not go to a local doctor or health centre alone. Anecdotally many doctors said that mothers wait too long to bring a sick child to a health centre; they wait until their husbands come home.

Reporting sexual harassment

This exclusion of women from public spaces is an integral part of Indian life; yet we have no way of knowing how pervasive sexual harassment is as it is missing from our daily conversations. We will probably never be able to find data that tell us how many women have faced some form of harassment. However the IHDS statistics reveal a pattern. In 2004-05 when male respondents were asked how often women/ girls are harassed in their neighbourhoods 14% said that this happened at least sometimes while 20% of the women in the same households reported the prevalence of harassment in the same neighbourhoods. In 2011-12 when the same households were interviewed again the proportion of male respondents reporting harassment increased to 21% and women to 31%.

Many elements of these statistics are noteworthy. First the question was about harassment in neighbourhoods where young women usually live close to their harassers (who are acquaintances or neighbours and not unknown perpetrators). Thus the figure of 20-30% women reporting harassment is quite high. Second women seem to consistently report more harassment than men in the same households/neighbourhoods. This suggests that either women don’t tell men in their families about incidents of harassment or men are unwilling to acknowledge and talk about it. Third reported harassment increased sharply between 2004-05 and 2011-12 by nearly 10 percentage points. It is not clear whether there is an increase in harassment or a greater willingness to talk about it.

Data however offer us little clue on where the harassment is concentrated. Although female residents of metro cities in 2011-12 reported more harassment in their neighbourhoods (39% versus less than 30% in villages and small towns) harassment is reported in almost all areas and affects both the rich and the poor. There are few studies of actual experiences of harassment and among studies that exist under-reporting remains a serious challenge. However the consequences of sexual harassment on the way families and young women view their options places they can travel to and spaces they can occupy have more to do with perceptions of safety than the experience of violence. Women who live in neighbourhoods where they don’t perceive the possibility of sexual harassment are 1.33 times more likely to be comfortable going to a health centre alone than those who live in neighbourhoods where harassment is pervasive.

Day-to-day aggressions that women and girls face in their own neighbourhoods is not violence perpetrated by strangers; it is the aggression young men visit upon women who share their community. Craig Jeffrey formerly with Oxford University who has extensively studied young men in Meerut College notes that many young men especially those unemployed seem to feel that they are entitled to aggressively express their masculinities through what they euphemistically call ‘eve-teasing’. Eve-teasing is not harmless as it leads to restrictions on women’s mobility and shuts them out of public spaces.

Laws against eve-teasing and sexual harassment are necessary but not sufficient to address this challenge. The 2017-18 Budget committed to setting up Mahila Shakti Kendras in rural India. Can we re-emphasise the ‘shakti’ part of this mandate and strengthen these institutions? Young women must be prepared to reclaim their lives from harassment and young men must be taught to take pride in a masculinity that stands in solidarity with women.

Sonalde Desai is Professor of Sociology at University of Maryland and Senior Fellow at the NCAER. Views are personal

Business sentiment falls 16% in Jan: NCAER

The business sentiment in the country fell by 16 per cent in January over the previous quarter says a survey by economic think-tank NCAER.

Prior to this the N-BCI had risen consecutively for two quarters in July (2.2 per cent) and October 2016 (7.2 per cent) on a q-o-q basis the National Council of Applied Economic Research (NCAER) said.

NCAER’s 99th round of the Business Expectations Survey (BES) shows that the NCAER Business Confidence Index (N-BCI) fell by 16 per cent in January 2017 on a quarter-on-quarter (q-o-q) basis.

It further said that the N-BCI fell by 14 per cent on a year-on-year (y-oy) basis.

The NCAER said the fall in the N-BCI has been driven by a deterioration in sentiments in all the four components that have equal weights in the composition of the BCI.

Noting that the components dealing with future sentiments have been more severely affected than the others the NCAER survey said “Sentiments dealing with the present economic conditions have also been sharply affected”.

“The percentage of respondents saying that ‘the present investment climate is positive’ slipped from 50 per cent in October 2016 to 39 per cent in January 2017” it pointed out.

Although the business sentiments of firms across sectors showed a decline in all types of firms in January 2017 versus October 2016 the magnitude of the decline varied across sectors.

“The consumer goods sectors showed the steepest decline in BCI as compared to the other sectors. The BCIs of the consumer non-durables and durables sectors fell by 27.8 per cent and 19.5 per cent on a q-o-q basis respectively” it pointed out.

While the BCI declined in all the four regions on a q-o-q basis the statement said the North exhibited the maximum deterioration in sentiment with the BCI falling by 38 per cent followed by the East registering a decline of 11.9 per cent in sentiment.

“The magnitude of the decline was lower in the West and the South. The southern region continues to show the highest BCI among all the regions” it said.

Also overall sentiments regarding production domestic sales exports imports of raw materials and pre-tax profits significantly worsened in January 2017 compared to October 2016.

In particular the consumer goods sector including both the durables and non-durables sectors showed a dampening of spirit on all fronts it said.

Besides the NCAER Political Confidence Index (N-PCI) showed a q-o-q fall of 18.9 per cent between January 2017 and October 2016.

Among the eight components of the PCI six showed a worsening in terms of the percentage of positive responses between October 2016 and January 2017 the survey said.

As regards the remaining two components it pointed out that “managing the exchange rate” remained virtually unchanged and “managing inflation” exhibited an improvement on a q-o-q basis.

“The PCIs fell across sectors firm size and ownership but showed a mixed performance on the basis of region” it said.

The National Council of Applied Economic Research (NCAER) has been conducting the Business Expectations Survey (BES) every quarter since 1991.

It tracks the business sentiments of over 500 Indian companies to compute the composite Business Confidence Index (BCI).

After Kharif, India set to reap record rabi crops: NCAER

A good monsoon in 2016 helped in achieving record Kharif crops output and India is set to replicate the performance in Rabi or winter sown crops too said a study by economic think­tank NCAER.

As per the NCAER’s report on the short­term agricultural outlook for the 2017 Rabi season Gross Value Added (GVA) in agriculture and allied sector registered a significant 3.3 per cent year­on­year growth in the second quarter of 2016­17 as compared to 1.8 per cent growth in he previous quarter.

Overall a robust growth of 4.1 per cent is estimated for the agriculture sector in 2016­17 as against the previous year’s drought­impacted growth rate of 1.2 per cent.

In comparison the latest official estimates suggest 4.4 per cent growth for 2016­17 and 0.8 per cent for 2015­16.

“The agriculture sector is projected to grow by 4.1 per cent in 2016­17 which is more than double the drought­ impacted growth rate of 1.2 per cent in 2015­-16.

“After a record or near­record production of most Kharif crops in 2016­17 India is heading for a record or near­record production of Rab crops” said NCAER’s Senior Research Counsellor Rajesh Chadha.

The findings of the NCAER report are based on a comprehensive assessment of various factors including farm input prices an availability monsoon rainfall national and international market demand conditions and government policies impacting this year’s Rabi and Kharif crop production.

The forecast for wheat production in the Rabi season is 96­98.7 million tonnes compared with the government’s estimate of 96.6 million tonnes assuming normal weather conditions through harvest.

The NCAER forecast for Rabi rice production is over 13 million tonnes compared with the government’s estimate of 12.8 million tonnes.

No economy for women

According to a recent report by the International Labour Organisation (ILO) India and Pakistan have the lowest rates of women’s labour force participation in Asia in sharp contrast to Nepal Vietnam Laos and Cambodia that have the highest with richer nations like Singapore Malaysia and Indonesia falling in between. Moreover even this low rate of labour force participation seems to be declining. The National Sample Survey found that while in 1999-2000 25.9% of all women worked by 2011-12 this proportion had dropped to 21.9%. This is in stark contrast to worldwide trends. Of the 185 nations that are part of the ILO database since the 1990s 114 countries have recorded an increase in the proportion of women in the workforce and only 41 recorded declines with India leading the pack. So what does this tell us about India’s growth story?

The importance of access

A heartening explanation could be that with rising incomes women have the opportunity to escape harsh labour in farms and on construction sites and focus on their families. But a more pessimistic and possibly realistic explanation might be that with declining farm sizes rising mechanisation and consequently dwindling labour demands in agriculture women are being forced out of the workforce. If true this has serious implications for future policy.

Research has shown that when women have access to more work opportunities they gladly take them. The India Human Development Survey (IHDS) jointly organised by researchers from the National Council of Applied Economic Research (NCAER) and the University of Maryland finds that the provision of work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has brought more rural women into wage labour. Among MGNREGA workers in 2011-12 a whopping 45% were not in wage labour before the scheme was initiated.

Moreover the provision of MGNREGA work has far greater impact on women’s paid work than that of men. Increased availability of wage work also enhances women’s control over household decision-making.

Since NREGA work by itself cannot be expected to provide consistent stable employment for women it is imperative to explore other avenues. From a policy perspective two main challenges have to be addressed for augmenting women’s workforce participation rates. First in view of shrinking farm work we need to create opportunities for women to move from agricultural to non-agricultural manual work. Second we must foster a work environment that allows more women especially urban and educated women to take up salaried jobs.

In her research Lei Lei a sociologist at the University of Maryland finds that in villages where roads were constructed between the first (2004-05) and second (2011-12) waves of IHDS both men and women were more likely to undertake non-agricultural work but this effect was greater for women. Such work has a cascading effect as construction of concrete roads also improves transportation services such as buses which in turn could facilitate movement of the rural workforce especially women into non-agricultural work in neighbouring villages and towns.

At the other end of the employment spectrum however there is a need to make it possible for educated women to continue to work even while raising families. In a context where women continue to bear the major share of household work and childcare the prevalence of a rigid work environment in India and the dearth of family-friendly work institutions create impediments to women’s access to white-collar jobs in the formal sector. Second long distances between the home and the workplace increase both commuting time and work burdens leaving workers with even less time for family duties.

Another aspect of the skewed work-family equation for women in India is the demand for investing in children’s education over professional achievement. Research by Alaka Basu a sociologist at Cornell University and Sonalde Desai (co-author of this article) highlights the contrast between the reasons for fertility decline in the West where it was fuelled by the desire for self-fulfilment among both men and women and in India where small families have emanated from the desire to promote future achievements of children by focusing on their education rather than on better employment prospects for the parents. This has led to urban and educated Indian women dropping out of the labour pool in contradistinction to their counterparts in Japan and Korea for example who have instead opted out of marriage resulting in a dip in fertility rates in the latter countries to barely 1.3 child(ren) per couple. Neither of these however seems an optimal outcome for society. The only way this conundrum can be addressed is by encouraging workplaces to become more responsive to family needs and to promote sharing of household responsibilities between both genders — something that Scandinavian countries have emphasised.

Sharing the burden

Few organisations are willing to consider challenges involved in generating a work-life balance. Even before the influx of global firms in India work structures in Indian companies and even the government were highly inflexible. Over the past two decades these demands have grown. With rising global competition Indian firms have chosen to follow the American model with demands for extended work hours as well as attendance on Saturdays and Sundays. This creates a time bind for both men and women where something must give.

An interesting repercussion of this work dynamic is reflected in a recent study titled ‘Millennial Careers: 2020 Vision’ by ManpowerGroup conducted across 25 countries and encompassing 19000 working millennials and 1500 hiring managers. The study found that young workers in India worked 52 hours per week as against say 42 hours by their counterparts in Canada. Work-family balance requires increased participation by men in household chores and caring for children. However workplace inflexibility makes for difficult choices involving trade-offs betweeln investing in careers of husbands vis-à-vis those of wives often resulting in women taking a back seat and at times even dropping out of the workforce.

The Economic Survey 2016-17 expressed concern that the demographic dividend is already receding reducing the opportunity for the Indian economy to catch up with its East Asian counterparts. However the numeric consequences of reducing obstacles to women’s full economic participation far exceed the demographic advantages of having a larger pool of young workers. It is thus high time to talk of the gender

Sonalde Desai is professor of sociology at University of Maryland and senior fellow at the National Council for Applied Economic Research (NCAER); Anupma Mehta is editor at NCAER. Views expressed in this article are personal.

    Get updates from NCAER