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2753 items in total found

Working Papers | 2019

Does IT work? Information Technology (IT) in Welfare in India*

Reetika Khera and Vineeth Patibandla

The use of information technology (IT) in public administration is viewed as a significant tool for enhancing transparency and accountability. In popular rhetoric, these continue to be heralded as necessary and sufficient conditions for increasing transparency and accountability. This paper studies the use of various forms of IT such as computerization, public management information systems (MIS), digital ID and biometrics in two welfare programmes in India. This paper aims to (a) use government MIS portals to shed light on the performance of welfare programmes, (b) understand whether recent IT applications have been beneficial or detrimental to programme performance and (c) comment on what extent IT has fulfilled its potential to enhance transparency. We find support for two earlier findings: one, there is no automaticity between use of IT and enhanced transparency or accountability and two, the use of IT may reinforce, even exacerbate, existing power imbalances rather than mitigating them. Further, we find some evidence of 'too much' technology being detrimental to improving administration and accountability.

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Working Papers | 2019

Financing Infrastructure in India – Issues and the Way Forward

Sebastian Morris

Optimal approaches that recognize the specific kind of market failure/s, in the policy and design of infrastructure, greatly reduce the financing costs and improves the ability of to attract finance in the private provisioning of infrastructure. When state systems are weak organizationally it is first best to strengthen the state capacity so that it can minimally perform the roles of design, regulation, development of frameworks, and of monitoring, for the private provisioning of infrastructure. This is particularly so in the case where there are dual market failures arising out of both the natural monopoly and the appropriability failure aspect. Thus sewerage and water, city roads, multimodal facilities, solid waste, public health care, the challenges have proven beyond the current ability of the state, despite its large commitment to the use of private capital. The challenges in design and policy are large and with many false starts it is only now barely beginning to be considered in India. Thus infrastructure design rather than debilities in financial markets remain the key problem.
The need to develop capital markets and institutions to lend long is vital, but much of the challenge is really in having good projects that are financed keeping in mind the capacity limitations within banks and financial institutions. The potential to use of foreign capital to finance infrastructure is often overstated. Reform of financial institutions (FIs) and banks is vital today, as also the necessary incorporation of interest rate (change) risks into the project cost to overcome adverse selection. The forces leading to the current mess-up of the Indian banks and FIs in lending to infrastructure are brought in perspective. The key issues in developing state capacity, and the changes required for getting the design of infrastructure right, as also to bring functionality to the role of financial institutions in the private development of infrastructure are highlighted.

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Working Papers | 2019

Does GST in India Hurt Producing Regions?
A New Estimate of the Tax Base Under GST of Select States

Sebastian Morris, Ajay Pandey, Sobhesh Kumar Agarwalla, and Astha Agarwalla

GST as introduced in India being a destination based tax, does not encourage regions to vigorously promote manufacturing and tradable services industries. Being in the midst of its economic transformation, and given the subnational character of most states (regions), it is important that the states engage in locational tournaments to attract investments, not through tax concessions, but through the provision of infrastructure services, governance, and other intangible services. A new consumption based approach that adjusts the detailed consumer expenditure figures of the National Sample Surveys at the state level is developed. This is shown to be robust and is used to estimate the RNR (Revenue Neutral Rate of Taxes) at the State level. This reveals that there are stark differences between the rates for the producing states and the consumption oriented states amounting to as much as 10% of GDP. These differences cannot be bridged by the proposed compensation scheme. As the impact of GST goes on to the next stage of determining the locational choices of new investments, the lack of fiscal incentives for states to attract and nurture investments, unless corrected would have deleterious effects on the investment process.
As much as 50% of the Centre's collection of GST may have to be distributed based on economic activity centered around manufacturing and tradable services production, if the country is not to lose the steam of high and growing investments to take it through its economic transformation. The contrast with China is remarkable, China's GST is only partial covering only manufacturing and associated labour services, allowing states to tax and retain many services irrespective of the location of the consumer of the service. More importantly as much as 25% of the central collections on account of GST( in manufacturing) go to the provinces based on their public goods production.

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Working Papers | 2019

Whose Empowerment? National Digital Infrastructure and India's Healthcare sector

Rajesh Chandwani, Saneesh Edacherian, and Mukesh Sud

Patient-centric digital infrastructure can potentially enhance the efficiency of the healthcare systems. Even in developed nations evidence suggests low adoption rates for such infrastructure. The Indian government, piggybacking off biometric identity, is setting up digital infrastructure to enable the provision of universal healthcare. Invoking an information ecology perspective, we investigate the physician's perception to this initiative. We find that, equipped with a unique patient identifier and stakeholders' registry, this initiative is perceived to be a game changer and could significantly impact the power dynamics in the healthcare sector. Physicians, who are the key stakeholders in this initiative, are skeptical about the change in the locus of the power, with power residing in 'data' rather than 'professional expertise'. The changes are expected to manifest through monitoring, controlling and managing the data rather than the provision of knowledge-based services. We present recommendations for the design and implementation of this large-scale patient-centric digital infrastructure.

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Working Papers | 2019

Overestimation in the Growth Rates of National Income in Recent Years? – An Analyses Based on Extending GDP04-05 through Other Indicators of Output

Sebastian Morris and Tejshwi Kumari

Quarterly indices of output like those of Industrial Production, other measures of production like net sales, exports, of companies for which data is available, besides proxies like credit to the sector, and indices of price levels have been used to forward project the growth rates of GDP04-05, for the principal sectors of the National Income Accounts (NAS). These were then compared with the growth rates given by the new Gross Value Added (GVA11-12) at constant price measure. It is very highly probable that some sectors of the National Accounts Statistics (NAS) notably Manufacturing, and Trade, Transport, Storage, Hotels and Communication Sectors were overestimated, especially in periods when the output (economic activity) was slowing down. This questions the use of the new GVA series for macroeconomic (policy) actions, wherein more than extensiveness of coverage, the movements over time of the measure have to be reliable and accurate. This is especially so because manufacturing and its related sector-trade etc., are the core sectors which are responsive to changes in policy and to shocks (that could be countered), wherein there is deep overestimation. Some evening out of the overestimation is noticed over the upswing in the business cycle since 2017:2. However the demonetization which rudely reduced demand did not allow the "phase shifting" and "flattening" aspects, which the new GVA series possibly imposes to be examined in detail, although the same is suggested.

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Working Papers | 2018

Lighting up Lives through Cooking Gas and transforming society

S. K. Barua and Sobhesh Kumar Agarwalla

The study, reported in the form of a case, narrates the story of a major attempt at social transformation through a simple mechanism of providing cooking gas (LPG) to the marginalized in society. Targeting about 100 million households in India who still use dung-cakes, firewood, and coal as the primary fuel for cooking, the Pradhan Mantri Ujjwala Yojana (PMUY) was conceived with the objective of replacing these traditional fuels with LPG which is a clean fuel. The initial target of providing 50 million Below Poverty Line (BPL) families with LPG at the time of the launch of the scheme on May 1, 2016 was increased to 80 million by 2019-20, and as of January, 2018 over 30 million families had already been covered by the scheme.

The key findings are as follows. The scale and speed of implementation were achieved through excellent coordination between the government system, the government-owned Oil Marketing Companies (OMCs) and the banking system. The government system represented by officials from the central government, the state governments, and the village heads (Sarpanchs) helped in identifying BPL beneficiaries and in mobilizing people to canvass the idea of switching over to LPG from traditional fuels for cooking. The OMCs (the three companies involved in the implementation were IOCL, BPCL and HPCL) designed and created the robust logistics system needed for bottling and distribution of cooking gas. They also designed and created the IT platform required for easy transaction and record keeping for the entire logistics system. The banks provided the infrastructure needed for flow of funds, including flow and accounting of subsidies from the government.

PMUY is clearly one of the largest social intervention schemes executed anywhere in the world in challenging environment. Its successful implementation provides insights into management of such interventions. The lessons that can be drawn from the implementation would be of use for similar large-scale social interventions.

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Working Papers | 2018

Too much care? Private health care sector and surgical interventions during childbirth in India

Mitul Surana and Ambrish Dongre

This paper evaluates the role of the private sector in performing one of the common surgical interventions, i.e. caesarean sections during childbirth in India. We use the latest round of National Family Health Survey to estimate the differential probability of C-section in private medical facilities relative to government facilities. We employ two estimation techniques, Household Fixed Effects and Coarsened Exact Matching, to reduce the extent of selection bias in the choice of delivery location. We also take advantage of a new question introduced in the survey which allows identification of planned C-sections which are more likely to be the result of either demand for C-section or unobservable (in the data) medical risks. We find that the probability of an unplanned C-section is 13.5-14 percentage points higher in the private sector. Given that some of the planned C-sections could be a result of supplier-induced demand, this is a very conservative estimate. Our results suggest that there were potentially 0.9 million preventable C-sections in the private sector in 2016. These results therefore call for a critical assessment of the role of private sector in healthcare in the context of inadequate public provision, expanding private provision and weak governance structures.

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Working Papers | 2018

Risk-sensitive Basel Regulations and Firms' Access to Credit: Direct and Indirect Effects

Balagopal Gopalakrishnan, Joshy Jacob, and Sanket Mohapatra

This paper examines the impact of risk-sensitive Basel regulations on access to debt and cost of debt for firms with varying characteristics around the world, and investigates how firms cope through reliance on alternative financing sources and adjustments to their capital investments. We find that the implementation of Basel II regulations had a significant impact on the credit availability for firms. The results indicate that debt financing has become more difficult for the lower-rated firms in the post-Basel II period. Firms mitigate the shortage in bank credit induced by the regulation through a combination of higher trade credit, lower payouts, and reduced capital investments. In particular, lower-rated firms substitute reduced bank credit with increased reliance on accounts payables. Such firms also lower their payouts to shareholders, in an effort to maintain their liquidity. We also find that the lower-rated firms experience a significant decline in their capital investment in the post-Basel II period, implying an active response to the deterioration in access to credit. Our key results are robust to alternative estimations that control for changes in credit demand and credit supply shocks, and inclusion of bank-specific variables obtained from loan-level information. The findings of the paper substantially contribute to the understanding of the real effects of risk-sensitive bank capital regulations.

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Working Papers | 2018

Impact of Price Path on Disposition Bias

Avijit Bansal and Joshy Jacob

Recent experimental studies have illustrated the influence of price-path, particularly the `non-straight price-path on several aspects of investor behavior. The paper computes a proxy for price-path based on Cumulative Prospect Theory and with investor- level high-frequency trade data from the commodities futures market, demonstrates that the nature of the price-path significantly impacts the degree of disposition bias, after controlling for the level of returns and volatility of the commodity. We find that the experience of a favorable (unfavorable) price-path, decreases (increases) disposition bias among the traders with Prospect Theory preferences. The decline (increase) in disposition bias is an outcome of the decline (increase) in the propensity for gain realization, accompanied by a concurrent increase (decline) in the propensity for loss realization among the traders. We conjecture that both investor preferences and beliefs about future price movement, inferred from the price-path experienced, influence their trading decisions.

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Working Papers | 2018

Study of Retail Electricity Consumers' Response and Perception Regarding Electricity Consumption

Krishnendranath Mitra and Goutam Dutta

The price of retail electricity is restricted by regulations and have not increased at a same pace with the ever-growing demand of electricity. However, there exists a considerable amount of consumer surplus that can be harnessed by the electricity industry to improve the quality of service. In this paper we make an attempt to understand some characteristics of household electricity consumer demand. We performed an empirical, descriptive research and used inductive reasoning. Quantitative and qualitative primary data was collected through a questionnaire administered in Microsoft Excel format from 173 respondents. We propose a suitable present and future market segmentation of the retail electricity market based on several demographic and perceptual parameters respectively. We also analyze the demand price relationships and the price elasticities of demand for four appliances. We find that the willingness-to-pay is nearly five times the present average price of electricity. We also present perceptual distances for the future market related to adoption of dynamic prices and renewable energy by consumers.

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