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Despite a rich statistical heritage paucity of data hinders policymaking in India. Most national surveys such as the ones carried out by the National Sample Survey Office (NSSO) tend to focus on a single theme. Further these surveys typically provide snapshots of society only at a particular point of time.

By comparison the India Human Development Survey (IHDS) carried out jointly by the National Council of Applied Economic Research (NCAER) and the University of Maryland collects information on a plethora of socio­economic indicators such as income employment education health well­being and other parameters. Further IHDS is a panel data­set. This allows study of the same households over time. The first round in 2004­05 covered 41554 households. In 2011­12 the second round re­interviewed 83 per cent of the original households with an additional sample of 2134 households. With data from the latest round in the public domain researchers are beginning to explore various aspects of socio­economic changes India has seen over the past decade. Ishan Bakshi looks at the key findings under four broad categories ­ intergenerational mobility health gender and the National Rural Employment Guarantee Scheme.

INTERGENERATIONAL MOBILITY IN INDIA

Does the apple fall far from the tree?

Conventional wisdom has it that rigid caste structures prevent children from switching to occupations different from their parents’. But a new paper titled Rags to Riches: Intergenerational Occupational Mobility in India suggests the reality is more nuanced.

At the all­India level about 40 per cent of sons born to fathers employed as labourers are engaged in occupations ranked higher in social status than their fathers. About a third of those born to parents in low­skilled occupations are now engaged in occupations ranked higher than those of their fathers.

While these estimates suggest considerable occupational mobility the scenario isn’t so rosy for those involved in many other occupations. Less than one in five sons born to farmers is now engaged in better­paying occupation. Further children born in scheduled castes and scheduled tribes are less likely to move up the occupation hierarchy and more likely to witness a sharp fall than those born in upper­caste households.

At the aggregate level the authors ­ Kunal Sen Anirudh Krishna and Vegard Iversen ­ find a fairly high degree of occupational mobility in India with mobility rates higher in urban than rural areas. The logic is straightforward: In urban areas individuals are more likely to have greater opportunities for switching jobs.

The authors also find mobility rates higher among forward castes than the backward castes. This could be because forward caste households are more likely to be better educated than lower­caste households.

It is possible that the low levels of mobility the authors find among certain social groups is a consequence of two factors. First children in these households have lower levels of education;second sluggish job creation over the past decade means that despite an improvement in education individuals find it difficult to switch to better occupations.

Other studies based on NSS data also find considerable mobility in India. Viktoria Hnatkovska and her co­authors find the probability of switching occupations between two generations increased from 32 per cent in 1983 to 41 per cent in 2004­05. For scheduled castes and Scheduled Tribes the authors estimate the probability has gone up from 30 per cent to 39 per cent over the same period; for the others it has increased from 33 per cent to 42 per cent. Though the two surveys aren’t entirely comparable the results do suggest that at the aggregate level occupational mobility has increased in India over the past decade.

Income mobility in India While the notion that India is a highly immobile society resonates strongly in public discourse new research suggests intergenerational income mobility in India is similar to levels observed in some developed economies. Abdul Mohammed estimates that in rural India parents pass on roughly half their economic advantage to their children. What this means is that if A earns Rs 100000 more than B then on average A’s children will earn Rs 50000 more than B’s. As mobility in urban areas is likely to be higher aggregate mobility at the all­India level is likely to be similar to existing levels in the US and the UK though significantly lower than Scandinavian countries such as Denmark Norway and Finland.

HEALTH

Portliness amidst poverty

While public discourse on health in India largely revolves around issues of under­nutrition and malnutrition research by Pushkar Maitra and Nidhia Menony shows the proportion of people overweight or obese in India is substantial and growing.

India has the third highest number of obese and overweight people in the world after the US and China. The authors find at an all­India level 23 per cent of adult women and 19 per cent of adult men are overweight or obese. It should not come as a surprise that the urban numbers are larger. In urban areas 35 per cent of adult women and 29 per cent of adult men are either overweight or obese as compared to 16 per cent and 14 per cent respectively in rural areas.

In urban areas women in Punjab Jammu & Kashmir Haryana and Himachal Pradesh show the highest rates of overweight with 50 per cent of women in urban Punjab either overweight or obese. In rural areas the highest proportion of this population was observed in Kerala Punjab Jammu and Kashmir and Himachal Pradesh.

The authors who used body mass index (BMI) to measure obesity find BMI significantly higher for married men in both rural and urban areas. BMI is higher among more educated individuals especially women belonging to more affluent households.

The authors also find an increase in the number of hours spent watching TV and the presence of household help are significantly related with increased BMI. This suggests a sedentary lifestyle correlates well with overweight and obesity. Interestingly the study also finds access to piped water and a flush toilet indicative of higher income associated with higher BMI. Improving sanitation Simply building latrines will not be enough to put an end to the practice of open defecation in India.

A study by Chloe Leclere finds individual characteristics such as gender empowerment health beliefs wealth and social identity significantly impact latrine use. This implies policies should also focus on “nudging” people to make better choices. What is equally important is the presence of village/district level infrastructure. For example an improvement in the main source of water availability in a village increases the chances of households owning proper sanitation.

GENDER

Bargaining for girls’ education

It is well known that when it comes to education households in India prefer to spend more on boys than on girls. This is probably a consequence of the patriarchal society we live in. But what if adult women in the household begin to contribute more to household income? Do they get a greater say in household decisions? And does this lead to an increase in spending on educating girls?

According to a new paper The Power To Choose: Gender Balance Of Power & Intra­Household Educational Spending In India by Christophe J Nordman and Smriti Sharma spending on girls education is tied to how much women members matter in households’ decision­making. The authors find greater women bargaining power has a significant impact on girls’ educational expenditure in urban areas. But the relationship does not hold in rural areas.

In urban households women typically have lower bargaining power in household decisions. This is largely because womens’ share of household income is significantly lower in urban areas than rural areas. Women labour force participation rates in urban areas are lower than rural areas. But as labour force participation increases and women begin to contribute more to household incomes the intrahousehold dynamics change with women getting more say in household decisions.The study finds in urban Hindu households women have greater bargaining power than households of other religions.

The authors find across all caste groups more women bargaining power leads to greater educational spending on girls. This relationship is especially strong among upper castes scheduled castes and scheduled tribes as compared to other backward classes (OBCs). For upper­caste households a one per cent increase in women education share within a household leads to a four per cent increase in bargaining power.

In rural areas lower caste households scheduled tribes and OBCs exhibit greater women bargaining power than uppercaste ones. While this could seem surprising the authors contend this is because “low­caste women experience greater autonomy and control over household resources and attitudes towards women are more likely to be liberal as compared to upper­caste women who face greater restrictions on mobility and decision­making.”

Patriarchal versus liberal families

Discrimination in the job market alone does not account for differences in pay across genders. A new study by Sukanya Sarkhel and Anirban Mukherjee finds women from liberal families tend to work and earn more than those from patriarchal families. Women born in patriarchal families are more likely to face strong cultural constraints in joining the labour force and are thus likely to work less. This difference is not found among men workers.

NREGS

The unintended welfare implications

While National Rural Employment Guarantee Scheme (NREGS) a social security scheme was designed primarily to provide employment during times of stress the scheme has ended up improving household welfare in unintended ways.

For one NREGS may have reduced the dependence of rural households on high interest loans from moneylenders. Data captured in IHDS show while 48 per cent of households participating in NREGS obtained loans from moneylenders in 2004­05 this was down to only 27 per cent in 2011­12.
esearchers Sonalde Desai Prem Vashishtha and Omkar Joshi find the difference between loans taken from moneylenders by NREGS participants against those who did not participate in the scheme was as great as four percentage points. The authors also find while credit from formal sources of finance rose for all households for those who participated in NREGS it rose from 24 per cent in 2004­05 to 34 per cent in 2011­12. It is likely once all NREGS workers open a bank account and learn to operate the formal financial system the share of formal credit could witness a steady rise.

The other unintended benefit has been that children from NREGS households are more likely to be better educated not only in terms of attaining higher levels of education but also showing an improvement in their learning outcomes. The authors find in 2004­05 NREGS households spent four hours less a week on educational activities “than those in low intensity villages and one hour less than their nonparticipating neighbours.” But by 2011­12 these households had bridged the gap.

While the intuitive explanation would be that NREGS income is likely to be spent on education based on the data collected the authors discount this and offer an alternative explanation. They say it is possible NREGS helped reduce child labour. Impact of NREGS on wage growth On the debate as to whether NREGS has influenced wage growth Desai and co­authors present evidence to support the claim that it has contributed both directly and indirectly to wage growth.

States with higher levels of implementation such as Chhattisgarh and Rajasthan have experienced had higher wage growth than low implementation states such as Bihar Gujarat and Maharashtra. The authors find wage growth for men in states with medium level of participation about 3.5 per cent higher than in states with low NREGS participation. In states with higher participation wage growth is about seven per cent higher. The authors also argue NREGS has a far greater indirect impact on wages by “improving the bargaining position of workers”.

“Our public policies have historically focused on individuals who are poor by virtue of the accident of their birth – dalits adivasis and individuals based in poor states and backward districts. But with declining poverty the accident of birth has become less important than the accident of life. People fall into poverty due to illness drought declining opportunities in agriculture and urban blight.”said Dr Sonalde Desai Indian Human Development Survey Project Leader and Senior Fellow at National Council of Applied Economic Research (NCAER) and Professor at the University of Maryland.

Dr Desai was speaking at a function when NCAER formally launched the public-use India Human Development Survey-II (IHDS-II) data said to be India’s first national multi-topic longitudinal household panel survey at the start of the Third IHDS Users’ Conference at Neemrana in Rajasthan on Wednesday.

IHDS survey of over 40000 Indian rural and urban households tracks the same household over long periods of time. It is valuable because researchers and analysts can make inferences with far greater confidence and trace the long-term impact of economic and social policies.

Dr Desai pointed out an inherent problem with use of data collected at a single point in time for informing public policy.

She noted ” If we were to provide safety nets in 2011-12 based on a BPL card issued in 2004-5 65 percent BPL card holders would have already moved out of poverty (reflecting an error of inclusion) but of those poor in 2011-12 40 per cent would not have BPL card since they fell into poverty after the BPL survey (reflecting errors of exclusion). The vulnerability of this last group has unfortunately received little
Policies that label individuals as poor on the basis of Below Poverty Line (BPL) surveys often mis-target. In a rapidly changing economy BPL censuses undertaken only once in ten years tend to miss the mark. IHDS data shows that only 13 per cent of the population was poor in both 2004-05 and 2011-12 and this is the population most likely to be served by the present policies; 53 percent of the people were poor in neither of the two periods and 25 per cent moved out of poverty between 2004-05 and 2011-12. The worrying finding however is that 9 per cent of the population fell into poverty. This suggests that “As Latin American countries have found moving to middle income levels also means fostering a middle-income mindset for drafting social policies with a greater focus on vulnerability instead of concentrating solely on chronic poverty” said Dr Desai.

Professor Reeve Vanneman University of Maryland pointed out that “Given India’s massive policy innovations longitudinal research can examine th ‘before’ and ‘after’ outcomes for participants and non-participants alike. National longitudinal data provides the big picture for evidence-based policy design. The decentralisation of programmes such as Integrated Child Development Services and massive experiments such as MGNREGA and Rashtriya Swasthya Bima Yojana or RSBY have promising implications for development policies around the world. IHDS will help us all to understand their impacts.”

Dr Shekhar Shah Director-General NCAER opened the IHDS Users Conference and emphasized the rich analytical possibilities that this data offer and the impact it has already had. “The IHDS surveys are available free to researchers worldwide. IHDS data are filling a clearly felt need as evidenced by the fact that more than 7000 researchers globally are using these data; over 205 scientific papers have been published using just IHDS-I. With the release of IHDS-II we anticipate an even greater interest” Dr Shah added.

“IHDS-II is currently ranked second in the list of top downloads in the past six months from ICPSR and IHDS-I is fourth. This is an amazing endorsement of the IHDS since the ranking includes all US databases on ICPSR. The next non-US database on this list is at a distant 10th place. So you can imagine the level of interest that the IHDS data are generating. Just the five themes at this Users Conference which actually only scratch the surface show the rich possibilities in assessing the success or failure of Indian public policy in promoting development” he said.

The IHDS contains data on a wide range of topics such as income expenditure employment morbidity health expenditure marriage fertility and education. It is also the only source of data on marriage patterns in India and has proven to be extremely useful in studies of family formation and intra-household dynamics. The project has wide support from a number of funders including five grants from the US National Institutes of Health and from the World Bank the Ford Foundation and DFID UK.

Gujarat Delhi and Tamil Nadu are the best places to make fresh investments in India while Jharkhand Uttar Pradesh and Bihar lag on this front a latest survey by think-tank National Council of Applied Economic Research (NCAER) has revealed.

The NCAER State Investment Potential Index (N-SIPI) is based on five pillars such as labour infrastructure economic climate political stability and governance and perceptions of a conducive business climate. The survey was undertaken in 20 states and one Union Territory Delhi.

If perception of the business climate is excluded Gujarat slips to the second place and Delhi occupies the top slot. States like Kerala West Bengal and Punjab move up the rankings while others like Andhra Pradesh Chhattisgarh and Madhya Pradesh move down.

Interestingly Jharkhand which is at the bottom of the table in the NCAER rankings was placed at the third spot on the ease of doing business rankings conducted last year at the behest of the Department of Industrial Policy and Promotion (DIPP).

However both are not strictly comparable as the 2015 rankings of states by the DIPP and the World Bank were based on how the states fared in implementing a 98-point action plan adopted in December 2014 and didn’t exactly reflect the business-conducive nature of states while the NCAER rankings are based on the five pillars that are crucial for potential investments.

Shekhar Shah director general NCAER said “It provides an entry point in thinking about new investment for domestic and overseas firms and encouraging a more competitive ethos among Indian states.”

Kerala Tamil Nadu and Karnataka top the list under the pillar for labour while Delhi is ranked the best in the infrastructure pillar followed by Punjab and Gujarat. In economic climate Delhi occupies the top slot followed by Andhra Pradesh and Maharashtra. In governance and political stability Gujarat tops the charts. FE

New Delhi: Businesses ranked Gujarat Delhi and Tamil Nadu as the top three states for making new investments and corruption emerged as the biggest concern for investors according to a survey by New Delhi­based think tank National Council of Applied Economic Research (NCAER).

A ranking based on the success rate of states in implementing 98 regulatory reforms by the department of industrial policy and promotion (DIPP) in September last year ranked Gujarat Andhra Pradesh and Jharkhand as the top three performers.

Interestingly the NCAER survey puts Jharkhand at the bottom of the list below Uttar Pradesh and Bihar.

The first report of the NCAER State Investment Potential Index (NSIPI) is based on five pillars—labour infrastructure economic climate political stability and governance and perception of a good business climate. The survey was carried out across 20 states and the Union territory of Delhi.

Shekhar Shah director general NCAER said N­SIPI seeks to bridge the many information gaps surrounding questions of what how much and where to invest.

“It provides an entry point in thinking about new investment for domestic and overseas firms and encouraging a more competitive ethos among India’s states” he added.

At a disaggregated level Kerala Tamil Nadu and Karnataka top the list under the “labour” pillar. In the “infrastructure” pillar Delhi is ranked as the best place followed by Punjab and Gujarat. In terms of “economic climate” Delhi comes out on top again and is closely followed by Andhra Pradesh and Maharashtra.

In the “governance and political stability” pillar Gujarat tops the ranking followed by Tamil Nadu and Madhya Pradesh. In the fifth pillar regarding “perception of a good business climate” Gujarat again tops the list followed by Rajasthan and Chhattisgarh.

The ranking on “perception of a good business climate” also asks about the key constraints to doing business. Corruption (79.2%) ranks at the top among 22 parameters followed by getting approval before starting business and getting environment clearance. Industries ranked Uttarakhand (32.5%) as the least corrupt state and Tamil Nadu as the most corrupt with 100% of the survey participants voting against it. The bottom three parameters where industries have least concerns are availability of unskilled labour availability of water and labour relations.

DIPP secretary Ramesh Abhishek speaking at the report’s launch said the results are quite different from its own report on implementation of business reforms by states. “In the beginning it was of some concern to us before we got down to the details of what this study is all about because we thought it may send some diverse messages to various potential investors. But the two studies and the contents are so different that they supplement each other nicely” he said.

Abhishek said the findings of the report clearly underline the reforms DIPP has been proposing to the state governments. “Corruption delay in approvals before starting a business and getting environmental clearance have been cited as the top three constraints in the report. These are exactly the areas that DIPP wishes to address as part of our ease of doing business initiative” he added.

The Narendra Modi government’s focus on improving the business climate both at the centre and state level is an important component of his Make in India initiative to turn India into a manufacturing superpower.

His aim is to improve the overall business environment in the country to move up in the World Bank’s Doing Business rankings by creating a competitive atmosphere among states.

The move is also expected to encourage states to carry out reforms in areas such as land acquisition and labour laws where the Modi government has found it difficult to make legislative headway.

This year India’s Doing Business ranking improved by four notches to 130 under a revised methodology. The NITI Aayog is also preparing to conduct a nationwide “enterprise survey of business regulatory environment” of around 3000 units including 500 start­ups later this year to assess the perception of enterprises on the ease of doing business initiatives taken by the state governments.

As call drop menace continues Telecom Secretary J S Deepak today put the blame on large-scale shutting down of towers for “health reasons” and said states are not able to implement their commitments.

He also said that the complaints of call drops were like people refusing to allow water tanks on their roof-tops and at the same time demanding 24×7 water supply.

“It’s true that in pharma telecom and electronics the central government does most of the regulation but I do not agree that the role of the states is limited” Deepak said at the launch of NCAER’s State Investment Potential index report.

Citing the example of telecom sector he said that all regulations are done by the Centre but the “critical parameter for success is enforcing commitments made by states”.

He was replying to a question on limited role of the states in policy making.

Deepak said that when it comes to laying optical fibre by seeking ‘Right of Way’ permission or install a telecom tower “states are not able to implement commitments made”.

He said that large number of telecom towers are often shut down citing health issues leading to call drops.

“Some kind of clamour on the basis of health reason or other will lead to shut down of towers in large numbers and then there is complaint of call drops. It’s like saying I would not let water tank established on my roof top but I want 24×7 water supply” Deepak said.

Telecom operators have also cited difficulty in getting permissions to dig roads for laying optical fibre (right of way) and local authorities’ arbitrary orders to shut down mobile towers which is leading to call drops.

Most of the operators failed to meet call drop parameters in a drive test conducted by regulator Trai in December-January.

Deepak also said that the states need to offer incentives in order to attract investments.

The telecom secretary said “competitiveness for exports is possible only if we make up for this disability and is done through incentives.

“We in India have disabilities as far as India is concerned. In telecom and electronics sector say it is 10 to 12 per cent. Take the case of Foxconn they are planning to set up more plants. They have wish-list which is 2 meters long and they are going to states from Andhra to Maharashtra to UP to Gujarat trying to see what incentives states give.”

Andhra Pradesh has been able to attract top investments in the field of electronics manufacturing because of incentives it provides to companies he said.