India Policy Forum 2015-16

This 12th India Policy Forum 2015–16  Volume was released by Dr Arvind Subramanian, Chief Economic Advisor to the Government of India and Dr Shekhar Shah, Director-General NCAER at the annual Indian Policy Forum (IPF) Lecture held at the India International Centre on 12 July, 2016.  The Volume comprises papers and highlights of the discussions at the India Policy Forum (IPF) held in New Delhi on July 14-15, 2015. The IPF invites both original empirical research and policy-focused expert reviews that define the best policy advice based on robust, empirical research and is sponsored and organized by NCAER. The 2015 IPF featured a Roundtable on “The Challenge of Financing Infrastructure in India”, chaired by Mr Suresh Prabhu, Union Minister for Railways in the Government of India. The 2015 IPF Annual IPF Lecture, “Economic Policies and Outcomes in India: A Retrospective” was delivered by Professor Arvind Panagariya, Vice Chairman of NITI Aayog.

2015|16, Volume 12, Papers

 


 


 


 


 


The IPF 2015|16  Volume is available at the ‘Download’ link below.

The complete set of IPF Volumes, can be viewed and downloaded here

Agricultural Outlook and Situation Analysis Reports: Fifth Medium-term Agricultural Outlook Report

The report provides a comparison of the latest medium-term projections for wheat, rice, coarse grains, oilseeds, vegetable oils and sugar made by five international institutions (OECD/FAO, USDA, FAPRI, and IGC) on the supply and demand conditions globally and for India. A standalone model for Indian agricultural markets, using the OECD/FAO developed COSIMO model and an econometric model developed by NCAER have been used for medium-term projections. Realising the importance of the livestock sector in providing nutrition, better returns to farmers and as a means for diversification of Indian agriculture, a chapter on status and prospects of livestock sector is also covered in this report.

How women marry in India

A significant share of women in the country get married without even the most basic forms of communication with their to-be-spouses before their wedding day

Indian women may be shedding their clichéd demure image but when it comes to matters of choosing life partners they still opt for the traditional conventional ways. According to the India Human Development Survey (IHDS) 2011-12 a significant share of women in the country continue to get married without even the most basic forms of communication with their to-be-spouses before their wedding day.

Consider this: only half of the women in the age group of 15-32 years who were married as of 2011-12 had interacted with their spouses in person or through phone or email or had even seen a picture reveals the survey.

The numbers were even worse in the case of women of the older generation. In some categories only about one in six women have had some form of interaction with their to-be-spouses before wedding.

Expectedly a higher share of urban women has interacted with their to-be husbands. In rural India less than half of the married women had any form of communication with their partners.

According to Ravinder Kaur professor of sociology at IIT Delhi this may be because the idea of dating before marriage is still not accepted especially in smaller towns and rural areas and arranged marriage continues to be more prevalent.

“Often it may be that people are hesitant to admit that the couple had a love marriage and so they instead answer that they had no communication prior to the marriage. It becomes a question of the family’s honour… but now things are changing especially when the marriage is between two communities of the same class and stature” Kaur said.

As seen from the chart a higher share of the younger generation is now breaking this trend.

Higher age of marriage

That there is more communication before marriage now could be also owing to women now getting married at an older age. As per United Nations statistics the mean age of marriage in India as of 2011 was approximately 21 years. This is higher than the mean age of 19.3 years in 1991.

IHDS data shows that while an increasing proportion of women are now delaying marriage the mean age of marriage for women in India continues to remain low.

As of 2011-12 almost 41% of the married women in the age group of 15-32 years i.e the generation born after 1980 were married between 16 and 18 years of age. Over 24% of women in this age group were married between 19 and 21 years of age and only 11.5% were married between 22 and 25 years.

A research paper by UNICEF in 2011 titled ‘Delaying Marriage for Girls in India: A Formative Research to Design Interventions for Changing Norms’ conducted in Rajasthan revealed that fathers play a critical role in altering child marriage practices. The survey revealed that poverty was the biggest reason among fathers for pushing for early marriage of girls. Other reasons included social pressure/ chastity sibling marriage and school dropout or lack of inclination towards education.

Changing attitudes

The good news is that there is a visible change in the attitude towards daughters in the society. For instance 44.75% of women in urban areas who have been married at least once were open to receiving financial support from their daughter in old age up from 32.8% in 2004-05.

More women were also willing to live with their daughters in their old age a contradiction to the age-old tradition in India that parents should only live with their sons and not with their married daughters. The percentage of women willing to live with their daughters at later stages in life showed a 10 percentage point increase between 2004-05 and 2011-12.

Rural India proved to be slightly more conservative in this regard although a similar change in attitude was visible in rural areas too.

Reassuringly the younger generation of married women were more open to relying on their daughters in their old age. As per Kaur one reason for this could be that more women are now educated and are earning. “But of course it won’t be uniform across regions. Maharashtra and other southern states would have more such women while in states such as Bihar UP and Haryana such a trend may not be as visible.

This story shows how women are slowly gaining more freedom in issues like choosing their partners or breaking erstwhile taboos of supporting their parents after marriage. Tomorrow we use data to show how they still have fewer rights than men in terms of choosing to marry or remarry in India.

Tackling poverty in India: Jobs, not transfers, the big poverty-buster

The significant shift from farm work to non-farm sources of income accelerated the decline in poverty in India. Non-farm jobs pay more than agricultural labour and incomes from both were propelled by a steep rise in wages for rural unskilled labour. While lower dependency rates and transfers — from remittances and social programmes — have contributed to a reduction in poverty they are not the primary drivers of the poverty decline between 2005 and 2012.

A previous article in this series examined how India’s structural and spatial transformation — the shift from agriculture to services and industry and from rural to urban areas — is changing the relationship between economic growth and poverty reduction. We now examine how household incomes grew and helped reduce poverty. We ask how different sources of income contributed to poverty reduction. We also examine how these contributions compare with the effect of changes in the composition of households including demographic changes.
Our analysis shows that the changes commonly associated with structural transformation were the primary drivers of poverty reduction at the household level during 2005-2012. Increase in labour earnings was a major factor in reducing poverty. While both agricultural and non-agricultural earnings increased the rise was most rapid for non-agricultural wages and salaried work. This was in turn linked to workers shifting out of agriculture toward wage/salaried non-agricultural work that yields higher earnings. The largest shifts occurred among the poorest which was accompanied by rising wages in casual employment. In broad sectoral terms rising income from the non-agricultural sector was the most important driver of the observed changes contributing to nearly 46 per cent of national poverty reduction. In terms of employment categories changes in wage/salaried work contributed to nearly half of the reduction in poverty.
As expected there are urban-rural differences. Rising incomes from non-agricultural employment and self-employment were more important for poverty reduction in urban areas. In rural areas on the other hand shifts in employment away from agriculture contributed much more to poverty reduction. The pace of transformation was thus more rapid in rural areas which had a much higher share of employment in agriculture than urban areas to start with.
Changes in the composition of households contributed to poverty decline as well (see figures). This occurred as the share of working members in households rose. These changes were partly due to a fall in the share of household members who were too young or too old to be of working age; in other words due to a change in dependency ratios. This demographic dividend makes more workers available at the macro level and complements the structural transformation of the Indian economy.
Rising incomes from other sources — public and private transfers rent or interest income — contributed to poverty reduction as well. This was more so in rural areas. The largest share of non-labour income came from remittances which increased significantly. The steep rise in domestic remittances which form a part of total remittances suggests that urban and rural areas are becoming increasingly integrated highlighting another marker for structural transformation.
Thus faster poverty reduction since 2005 appears to be closely linked to the pattern of structural transformation occurring in India. The falling dependency ratio and crucially the steep rise in wages for unskilled work reinforced the effects of structural transformation. The growth in unskilled wages however occurred due to a somewhat fortuitous confluence of factors which we will examine in a future article in this series.
Looking ahead important challenges remain. These include accelerating the speed at which the chronically poor — many of whom belong to the Scheduled Tribes — escape poverty. Another challenge is to ramp up the pace of upward mobility so that households increasingly become part of an economically secure middle class. This calls for faster creation of higher-productivity jobs. Upcoming articles in this series will examine these challenges in detail.

Business confidence falls 6.7% in fourth quarter last fiscal: NCAER

The business confidence fell 6.7 per cent in the fourth quarter last fiscal signalling subdued sentiments says an NCAER survey.

“The 96th round of the Business Expectations Survey (BES) shows that the Business Confidence Index (BCI) registered a decrease of 6.7 per cent in April 2016 over January 2016 on a quarter-on-quarter (q-o-q) basis thus hinting that business sentiments have remained subdued since the last quarter.

The current round of survey is pertaining to the January-March quarter of FY 2015-16.

“Further BCI has continued to fall on a year-on-year basis (12.0 per cent)” the survey by economic think-tank National Council of Applied Economic Research (NCAER) said.

Three of the four components of the BCI shows a deterioration in sentiments between January and April 2016 while one component has increased marginally it added.

As per the survey in April 2016 only 43.8 per cent of the firms expected that the financial position would be better in the next six months versus 59.8 per cent of the firms in January 2016.

As many as 44.8 per cent of the firms perceive that the financial position of firms would remain the same in the next six months.

The survey said the eastern region showed a significant improvement (11.2 per cent) in the BCI whereas the western (-15.8 per cent) and southern (-17.9 per cent) regions have showed a sharp dip in it and the northern region (-0.5 per cent) hardly showed any change in it on a q-o-q basis.

“The maximum decline in BCI of 11.4 per cent has been recorded by firms with an annual turnover of 1–10 crore” it pointed out.
The survey said there has been an improvement in political sentiments in April over January 2016 with the Political Confidence Index (PCI) showing a q-o-q rise of 2.1 per cent.

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).

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