The IHDS Forum is a monthly update of socio-economic developments in India by the IHDS research community, based on the India Human Development Survey, jointly conducted by NCAER and the University of Maryland. While two earlier rounds of the survey were completed in 2004-05 and 2011-12, respectively. Fieldwork for the third round was undertaken in 2022-24 and the data is currently being cleaned and processed.
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Odisha must conduct deep-down power system analysis
Among the Indian states, energy intensity of Odisha economy has always been on the higher side due to her higher resource (mineral) base. The proximity of minerals has led to development of extraction based industries in the state.
The abundance of coal resources has fuelled development of coal power in the states both for domestic consumption as well as for exports to other states. Expectedly, the location of energy intensive industries and coal power imply that per capita emission in Odisha would be higher than the national average.
Though the state has taken significant steps to facilitate a transition towards renewable energy and fight climate change, it appears to be moving slowly in formulating a clear decarbonization roadmap. Among the India states, only a handful of states have clearly underlined the target they have set for achieving net-zero emission.
Among the Indian states, Odisha is the first state to get its second phase of climate action plan approved from the National Steering Committee on Climate Change (NSCCC) under the Ministry of Environment, Forests and Climate Change (MoEFCC), Government of India.
The Government of Odisha has roped in Council on Energy, Environment and Water (CEEW) to prepare a roadmap for achieving net-zero carbon emission in line with the country’s decarbonisation plan.
Odisha’s Renewable policy envisions to establish a robust framework that can enable Odisha to undertake an inclusive journey towards energy transition through higher adoption of renewable energy (RE) in their power system.
However, Odisha’s power sector like that of India operates on an interconnected grid system. Coordinated efforts and grid integration between states are crucial for optimizing renewable energy generation and ensuring reliable and stable power supply.
At first, in order to ensure the uninterrupted supply of electricity it is necessary to promptly address issues linked to power system losses and malfunctions of the existing grids. Further, to facilitate the integration of renewable energy resources it is necessary to solve the issues with high energy consumption and demand. In terms of socio-economic factor, states with a higher population or energy-intensive industries may require tailored strategies to manage the energy transition while ensuring social equity and economic growth.
To adopt a low carbon pathway in energy sector, a state has to consider a variety of factors, such as energy accessibility, local energy sources, infrastructure, legal frameworks, and socioeconomic conditions. The problem is more challenging for a mining rich state like Odisha States with a higher concentration of energy-intensive industries. Hence, it is essential that to have deep down planning with power system analysis for optimal operation and inclusion of RE technologies in grid.
Over the years, Nordic countries with high penetration of renewable energy in the grid have opted for spatial mapping of available RE resources along with transmission and distribution network and mapping of demand to adopt a low carbon transition pathway with increased share of renewable energy.
However, this approach namely spatial mapping is yet to take root in the Indian context even though renewable power is expected to play a bigger share in the coming years.
It is important that Odisha undertakes in-depth power system analysis while going forward in a big way for renewable power development in the state.
The analysis of distribution networks and local level power systems would help the power sector in the following way: cost effective pathways to reduce GHG with optimal operation, management and planning of electricity networks, aassessment of transmission infra structure, storage capacity requirement for higher utilization of RE and analysing the technical impacts of the grid due to the high volume of RE integration, assessment of local demand for designing microgrid system, and further linking decentralized power generation, accessibility of the real time data through locational coordinates, coupling of electricity to other energy sectors, such as gas, heating and transport, and investment & system planning for a stable secures networks through assessment of job potential, enhanced per capita power consumption and income generation.
There is no alternative but to go for spatial mapping of power system in the state if Odisha intend to increase her share of renewable power in the electricity sector. Sustainable Development Goal (SDG) 7 calls for ensuring access to affordable, reliable, sustainable and modern energy for all. All these measures will help Odisha to achieve SDG 7.
Prof. Sanjib is with NCAER, New Delhi and Pradeep is Bhubaneswar-based Economist, Views are personal.
Persistent regional disparities in household illiteracy is hampering India’s quest for inclusive development.
Household illiteracy in India: The fight against illiteracy has long been a priority for policymakers in India. Education, often hailed as the cornerstone of progress and empowerment, remains central to India’s vision of inclusive growth and development. However, despite significant strides, the battle against illiteracy continues to pose formidable challenges.
India’s quest for inclusive development is overshadowed by persistent pockets of illiteracy. Despite concerted efforts by the government, non-governmental organisations, and various stakeholders, the problem of illiteracy persists, depriving millions of households of the transformative power of education. As India aims to eliminate this issue and achieve 100% literacy by 2030, it is imperative to assess the situation accurately.
Household illiteracy in India
Illiteracy perpetuates cycles of poverty, inequality, and social marginalisation, depriving individuals of the opportunity to break free from this vicious cycle. While individual illiteracy in the country has been extensively analysed, we chose to examine a grimmer phenomenon—household illiteracy. A household is considered illiterate if none of its members can read or write in any Indian language. Alarmingly, India is home to a staggering 17.2 million such households, with rural India accounting for approximately 81.8% of the total illiterate households.
In contrast, only 18% of urban households face this challenge, highlighting the persistent gap in educational access between urban ‘India’ and rural ‘Bharat.’ Additionally, a higher percentage of households among Scheduled Tribes (10%) are illiterate compared to other groups. Scheduled Castes (8%) also face significant illiteracy rates, while illiteracy is relatively lower among Other Backward Classes (6%) and the General category (4%). These figures underscore that, despite affirmative action to dismantle caste barriers, many households remain trapped in poverty and deprivation.
Household illiteracy is not a problem unique to India; it is a global challenge that affects millions of families across developing and underdeveloped nations. According to UNESCO, more than 773 million adults worldwide still lack basic literacy skills, with a significant number concentrated in sub-Saharan Africa, South Asia, and parts of the Middle East. These regions face similar structural barriers to education, such as poverty, gender inequality, conflict, and inadequate infrastructure. Addressing household illiteracy on a global scale is crucial for realizing the United Nations’ Sustainable Development Goal of quality education for all by 2030, as literacy is the foundation upon which broader social and economic progress is built.
Low-performing states and regions
India, a union of states with diverse socio-economic landscapes, faces an illiteracy problem that transcends the conventional north-south divide. Uttar Pradesh leads with 2.3 million illiterate households, closely followed by Andhra Pradesh at 2.1 million. Other states with over 1 million illiterate households include Tamil Nadu, Bihar, West Bengal, and Maharashtra. Meanwhile, smaller states like Nagaland, Sikkim, Goa, Manipur, and Arunachal Pradesh appear to have achieved universal household literacy.
However, focusing solely on absolute numbers can be misleading. In terms of the proportion of illiterate households relative to the total population, Andhra Pradesh leads with 15%, followed by Telangana with 11%. Tamil Nadu, Delhi, and Bihar each have approximately 8% of such households. Each region in India has its own unique challenges and opportunities, and addressing illiteracy will require identifying and focusing on low-performing regions.
Of the 88 NSS regions, 10 have more than 10% illiterate households, a concerning statistic. Coastal Andhra and inland Eastern Telangana have the highest proportion, with 17% of households being illiterate. Coastal northern Andhra has 15%, while southern Rajasthan and southern Odisha each have 13%. To achieve universal literacy, India must resolve socio-economic disparities between regions and provide the necessary infrastructure to support literacy.
Illiteracy undermines democracy and nation-building. Ensuring widespread access to education and eliminating illiteracy are essential steps toward creating a more inclusive society in India. Tackling this challenge requires a comprehensive approach to address structural barriers and systemic inequalities. Investments in education infrastructure, teacher training, and curriculum development are crucial.
The New India Literacy Programme, which aims to reach 50 million illiterate individuals aged 15 and above by 2027 through the use of technology and volunteerism to access remote areas, is a positive step. Additionally, the National Education Policy (NEP) 2020, with its five pillars—foundational literacy and numeracy, critical life skills, vocational skills development, basic education, and continuing education—has the potential to break down literacy barriers and empower millions of households to lead more fulfilling lives.
Dhruv Pratap Singh is a research analyst, and Jyoti Thakur associate fellow at NCAER, New Delhi. Views are personal.
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The Companies Act (2013) implemented in 2015 marked a turning point for the presence of women directors in corporate India. This Act required all listed firms to have at least one woman on their board. In a recent paper, Mahima Vasishth, Navya Srivastava, and I looked at the trends of female leadership in corporate India. We examined whether the presence of women in boards led to better firm performance and firm culture, and whether there were any positive spillovers to top management positions. We also scrutinized whether director characteristics of men and women such as age, education, and independence changed after the mandate.
In just a year after the Act was implemented, the percentage of listed firms without women on boards dropped from 53 percent to under 10 percent, highlighting the policy’s immediate impact. Moreover, the share of women on boards also doubled from 5 percent in a year.
Despite this progress, India still lags global benchmarks. By 2021, the average share of women on boards in India was just over 17 percent, lower than the global average of nearly 20 percent. It was significantly behind countries like France, where women held over 43 percent of board seats. More concerning is the representation of women in management roles. In 2019, only 17 percent of senior and middle management positions in India were held by women, a stark contrast to the global average of nearly 33 percent.
There is a lively ongoing debate on the impact of gender composition on corporate boards on firm performance, with diverging evidence based on different national and cross-country settings. A 2018 global study found a strong positive association between share of women in boards and firms’ financial performance.
Gender gaps in corporate leadership—stylized facts
We not only found a sharp increase in the share of women on boards across most firms within a year after the board mandate was implemented, but surprisingly, the average firm had hired well beyond the mandate over time. By 2023, the share of women in boards had reached nearly 16 percent. This possibly indicated the positive experience gained by firms by hiring more women directors, an issue we explore in our paper.
Unfortunately, the positive developments on boards did not extend to top management positions. The share of women in C-suite positions remained stagnant, ranging between 15 percent and 18 percent over the five years following the board mandate. Worse still, more than half of the firms listed on the NSE still had no women in their top management teams in 2023.
Female director profile following the mandate: who was being appointed?
A criticism of gender quotas is the potential for “tokenism”, where women are appointed as non-independent directors (for example, through familial connections) merely to fulfill a quota rather than for their qualifications or expertise. However, our data indicate that this concern is largely unfounded in the Indian context. The share of independent women on boards increased after the mandate, surpassing the share of independent men.
We also found that the women’s average education levels had caught up with men’s by 2012 and surpassed them in the following years. The education gap widened further in the year after the Board mandate. The implementation of the quota did not lead firms to compromise on the quality of women being hired, at least regarding education levels.
Even before the mandate was enforced, women appointed to boards were generally younger than their male counterparts, with an average age gap of around seven years. Following the mandate, this gap widened, as the women added to boards were significantly younger than both their male counterparts and the women already serving on boards. This suggests that the mandate may have led to a new generation of female leaders joining the corporate sector.
We also find that women directors were stretched thin post-mandate, holding significantly more directorships relative to men. This may indicate a shortage of qualified women or that firms were not casting their nets wider in their recruitment efforts to find women.
Regarding the degree of participation in board meetings, women directors attended fewer board meetings than men before the mandate. This attendance gap narrowed post-mandate, with meeting attendance improving for both men and women by nearly 7 percentage points and 15 percentage points, respectively, over the next five years. These developments suggest that a more gender balanced board facilitates better board monitoring and oversight of firms.
Women directors and firm outcomes—did financial performance and organizational culture improve or deteriorate?
In our sample of over 1,400 firms listed on the National Stock Exchange, covering the period 2006-20, we found a significant positive relationship between the presence of women on boards and financial performance, where the latter was measured by profits, returns on capital, debt-equity ratio. However, this relationship held for medium- and large-cap firms, but not for small firms. The improvement in financial performance for the larger firms persisted over time, whereas the positive impact on smaller firms dissipated quickly.
Regarding organizational culture, we collected data from over 2,000 firms by web-scraping employee reviews and sentiment scores, starting in 2017. Our analysis indicates that firms with sustained female board representation had better outcomes, but only if there was at least one woman in top management. Employee reviews indicated higher levels of job satisfaction, improved career growth opportunities, and better perceptions of job security, when women were present in both boards and top management.
Why do more gender-balanced boards lead to better firm performance?
There are a few plausible mechanisms identified in the literature that explain the positive relationship. First, gender-balanced boards may help substitute for weak corporate governance, with women directors potentially enhancing oversight and monitoring. Second, discriminatory hiring practices may result in women of higher quality being appointed to boards, contributing to better firm performance. Our analysis supports both mechanisms. Third, women bring diverse perspectives and networks that may improve boards’ decision-making, leading to better financial performance, risk management, and employee welfare.
Policy implications
As India’s experience shows, implementing gender-based quotas on board membership improves a firm’s financial performance. This makes a business case for creating more gender-balanced boards. Expanding the representation of women in top management in the presence of gender-balanced board, has the additional benefit of enhancing employee satisfaction. This makes the case for introducing gender-based quotas or targets for top management positions.
In the specific case of India, to maximize corporate performance, additional efforts must be made to cast a wider net to find qualified women. This should not be too difficult because women are attaining higher education levels in a wide spectrum of fields that are on par with men.
Ratna Sahay is an Honorary Professor at NCAER. Views are personal.