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KOLKATA: National Council of Applied Economic Research (NCAER) a leading economic think tank has said the enthusiasm of ‘Make in India’ programme seems to be bypassing the steel industry. The current condition of the Indian steel industry is dismal with low profits low capacity utilization and dim prospects for new private investment either foreign or domestic it said. These views are part of a new study by NCAER titled ‘The Indian Steel Industry: Key Reforms for a Brighter Future’ which was sponsored by Tata Steel and launched by V K Saraswat Member NITI Aayog on Tuesday.

The steel sector won’t be able to meet this year’s production target of 300 million tonnes (mt) proposed in the draft steel policy 2012 a study by the National Council of Applied Economic Research (NCAER) has said.

It added the sector which contributes two per cent to India’s gross domestic product won’t be able to meet the 12th five-year Plan goals too considering the current stress in the segment. The 12th Plan estimated 149 mt of crude steel production by 2016-17.

The study said “Over the past three years (2010-11 to 2013-14) the profits of steel producers have declined more than 46 per cent in nominal terms. Medium and small companies in the sector have been experiencing huge losses in recent years.”

Many steel firms it said were experiencing debt servicing woes and resorting to debt restructuring with increasing incidence of non-performing assets. “Many companies in the secondary sector are experiencing an increasing excess capacity and are on the verge of a collapse unless special financial assistance is provided” it added.

It cited several high-profile exits from capital expenditure plans involving companies such as Posco ArcelorMittal and JSW Steel indicating among other things their downbeat assessment of the prospects of investments in India.

Identifying 11 roadblocks the study said the solutions needed were “transformational” and beyond the mandate of the steel ministry. “The NITI Aayog is the right venue for consensus building on steel policy with support from the steel ministry and other ministries and think tanks” it said. The roadblocks cited include lack of demand decline in competitiveness and a surge in imports financial fragility excessive taxation and stalemate in land acquisition delays in project implementation and a suboptimal method of mineral allocation.

On the way forward it said the physical infrastructure should be pushed through public investment. Also the government should provide a push to the construction sector and for increasing steel-intensity in construction. “Unless prompt measures are taken for debt relief and improving the profitability of the sector there might be several cases of bankruptcies and the closure of several companies particularly smaller ones” the study said.

 NCAER study on The Indian Steel Industry: Key Reforms for a Brighter Future was released on 6 October 2015. Know more

This article published in The Straits Times  is written by Dr Shekhar Shah Director-General and Dr Rajesh Chadha Senior Research Counsellor NCAER.

India the world’s third-largest economy measured in purchasing power parity terms became a middle-income country in 2007. It has one of the world’s youngest populations with some 260 million people below the age of 25 and its economy is once again growing fast at 7 per cent one of the world’s fastest-growing economies as of last month. But will it grow rich before it grows old?

Rajasthan farmer Shivlal Jat’s four acres help him meet his household expenses. During off-peak periods he has time on his hands. So for the past six to seven years he has demanded work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme and earned an extra ₹9000 every year. This not only helped Jat procure quality seeds and fertiliser but also spend more for the household.

It is these kinds of stories from the ground that form a part of the new National Council of Applied Economic Research (NCAER) report on the rural job-guarantee scheme. Titled ‘A Catalyst for Rural Transformation’ the study is based on data from the India Human Development Survey rounds 1 (2004-05) and 2011-12.

Coming in the wake of declining participation in the programme the study offers some interesting findings. For instance it shows that the scheme contributed on average ₹4000 to household income in 2011-12; and this income was less than 9 per cent of the total income in the surveyed houses. But this small sum could be critical to the poor farmer during the lean season.

In the five years before 2011-12 48 per cent of the rural population borrowed from moneylenders; in 2011-12 only 27 per cent did. The extra earning from MGNREGA also helped enrol children in schools and empowered women workers with access to cash. But of course the scheme could have done more. The study found low participation in several states including Bihar where the scheme was poorly implemented.

Nevertheless the scheme helped reduce poverty by about 32 per cent. Additional employment of 107 crore days for the chronic poor and 54 crore days for those who had slipped into poverty is sufficient to pull them up to non-poor status.

Other important trends highlighted include rising engagement with work outside the family farm and drop in agricultural labour. The non-agricultural work offered under MGNREGA is only a small part of this. Improved transportation is helping villagers find work in nearby towns. A sharp growth in construction in the larger villages offers substantial job opportunities to labourers. Women are finding work as community health workers and anganwadi workers. In places like Uttar Pradesh people find factory work at wages far above what the job-guarantee scheme offers.

However among the poor and the socially vulnerable (agricultural wage labourers) adivasis dalits and other backward classes have dominated MGNREGA participation. The scheme was instrumental in reducing poverty among these groups.

The writer is an organic farmer based in Dahanu Maharashtra

More and more young Indians are choosing their own spouses

HALF a dozen young technology workers are gathered around a table in south Mumbai. In between checking their smartphones they describe an Indian social revolution of which they are in the vanguard. Marriage one woman explains is becoming freer and easier—“less stiff-necked” as she puts it. All have far more choice when it comes to picking a marriage partner than their parents knew: two of the women have even married men from another religion. The old-fashioned marriages that they see on television and in films seem deeply peculiar. “It’s a different world” one says.

Marriage is a central institution in all societies. In India it often seems more important than anything else. Witness the extravagant days-long weddings the lavish gifts of saris and jewellery and the columns of spouse-wanted ads in newspapers—or just watch any Bollywood romantic comedy. Yet marriage in India is also changing in ways that are liberating and exciting but also often confusing.

Nearly all Indian women marry by their late 20s and births out of wedlock are vanishingly rare. Marriages are almost always arranged. Dowry payments are widespread. About 90-95% of the time Hindus marry within their broad caste group. But if the basic rules of the game are fixed the style of play is different these days.

Gourav Rakshit the chief executive of a popular website for seeking marriage partners Shaadi.com spies a subtle but momentous change. It used to be that parents and older siblings drove the matchmaking process he says lining up potential partners whom the spouse-to-be might veto. These days the offspring tend to be in charge of finding their own partners but parents may veto them. “What has not changed is that marriage is a family decision” he explains. “What has changed is who is driving the process.”

Fully 73% of the profiles on Shaadi.com have been put there by people who are seeking partners for themselves not by their parents or brothers. These days most new users (about 12000 to 15000 people sign up each day) access the website via smartphones. Those phones which are bringing the internet to millions of new users are themselves changing the matchmaking process. Tech-savvy Indians can now find out all about potential partners by tracking their digital traces through social media or just by texting and telephoning. Parents need never know.

If small numbers of highly educated urbanites were becoming more individualistic it would be little more than an interesting wrinkle in Indian life. However the change is much more widespread than that. To begin with this group is no longer small. Fully a quarter of young Indians were in tertiary education in 2013 according to the World Bank up from 11% a decade earlier. Education and control over marriage go together (see chart).

And it is not just the wealthy who see marriage differently. The teenagers who live in Dharavi a long-established slum between two railway lines in Mumbai feel themselves to be just as culturally distinct from rural Indians as the technology workers do. Young men from Dharavi sometimes marry village women who come to live with them. Asked about this one teenage slum girl launches into a wicked impersonation of a rural bride all namastes and scraping deference to her husband. (A Muslim boy is more equivocal: Mumbai girls know how to handle technology he says but rural girls know how to handle mothers-in-law.)

Although caste is still powerful in Dharavi it is gradually giving way to the money god. Teenage boys insist that good jobs—government jobs especially—are now more important both for snagging good partners and for asserting control over marriage decisions. One of the boys an orphan has a girlfriend and wants to marry her. Her parents object to his caste but he reckons he can wear down their objections by finishing his education and getting a better job.

Dipankar Gupta a sociologist at Shiv Nadar University says that caste is crumbling as India urbanises. Nearly a third of Indians now live in cities or towns while villages are tied increasingly to urban economies. The village bosses who enforce caste rules have less power than they did. Some north Indian village elders have chosen to relax the rules anyway because so many single men are in search of wives—a consequence of sex-selective abortions. Caste is now less an institution than a mess of prejudices about the superiority of one’s own group.

Popular culture is driving change too. In parts of Dharavi the greatest hazard for a pedestrian is not the open sewer beneath your feet but the tangle of wires around your head. Many of these wires carry cable-television signals. They transmit soap operas and movies which often depict the struggle between love and tradition. Though these seem stuffy to the upper middle classes they can be a revelation to the poor. Nayreen Daruwalla of SNEHA a Mumbai charity has heard women complain that their husbands do not sing to them as men do in Bollywood films.

One big thing stands in the way of further change says Sonal Desai another academic. Indian parents still assume they will live with their sons. That explains why they exert so much control over marriage: they are in effect choosing a cook and a future carer. Yet this too is beginning to weaken. Ms Desai conducted a huge survey of Indians in 2011-12 which found that 77% of women over 60 lived with their married children—still a big proportion but lower than the 83% who did so in 2004-05. Small houses and high-rise flats are shooting up in Indian suburbs suggesting the share is going to fall further.

Indian marriage still looks very different from the Western kind (which is changing too). Yet prosperity and technology are eroding tradition. People Group which owns Shaadi.com even invested in a dating app earlier this year. Such apps which were unimaginable in India until recently have not taken off yet. “The guys are all keen” says Mr Rakshit “but the girls aren’t there yet.”