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Working Papers | 2010

How have Government Policies Driven Rural Credit in India:
A Brief Empirical Analysis, 1969-2009

Debdatta Pal and Amey Sapre

This paper makes a modest attempt to identify structural breaks in outstanding credit of rural branches of Scheduled Commercial Banks in India during the period of 1969 to 2009. With the use of endogenous method, we find three possible structural shifts in growth, i.e. 1981, 1989 and 1999 and thus four different regimes of growth and performance. These structural changes are analyzed with respect to branch licensing policy and priority sector lending by the Schedule Commercial Banks. Empirical evidence and growth performance shows that such policies have been instrumental in changing the off-take of rural credit in a significant way. The study also finds corroborative evidence of break dates and growth performance in evaluating the outcomes of the prevailing banking policies.

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Working Papers | 2010

Does Land Reform Matter? An Empirical Analysis of Indian States

Debdatta Pal and Varsha Khandker

This article looks into the role of land reform in comparison to concentric effort to augment agricultural GDP. Redistributive land reform policy aims to improve land endowments of poor, though varies among states in respect to political will and implementation. Panel data of fifteen main states from 1980 to 2003 is used to understand whether land reforms have any appreciable impact on reducing rural poverty. An examination of effect of land reform along with agricultural GDP on rural poverty suggests that decrease in land concentration has greater impact on reducing rural poverty. A policy with combination of equitable economic progress and redistributive efforts is advocated.

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Working Papers | 2010

A Conceptual Framework for Studying Institutions in
Watershed Development

Vasant P. Gandhi

Improving productivity and incomes in rainfed areas is a major challenge in India, and a key to achieving this is improving the use of land and water which are the principal constraints in these areas. A major initiative through which this is pursued in India is Watershed Development (WSD) programs which have been taken up under different schemes funded by the Government of India and the state governments. Since poverty is particularly acute in the rainfed areas, large expenditures to the tune of about US$ 500 million per year are being made on WSD programs. A hierarchy of complex institutional arrangements of the government and other bodies undertakes the planning and implementation of WSD to the district and village levels. Institutional weaknesses are a significant challenge and often lead to poor implementation and results. The paper develops a conceptual framework for the study of institutional setups in the implementation of watershed development programmes. It uses the theoretical fundamentals of new institutional economics, and concepts of organizational design and governance from management sciences. It related these to observations from six in-depth case studies of watershed development projects in state of Andhra Pradesh, India which has the largest number of such projects. The framework that emerges may be useful for examining the institutional setups and performance of watershed development activities in various areas, as well as the better design of the institutional setups for watershed and other development programmes in India and elsewhere.

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Working Papers | 2010

Structuring PPPs in Aviation Sector: Case of Delhi and Mumbai Airport Privatization

Ajay Pandey, G. Raghuram, and Sebastian Morris

The concession agreement for the modernization and operation of Indira Gandhi International airport in Delhi and Chhatrapati Shivaji International airport at Mumbai respectively is referred to as Operation Management and Development Agreement (OMDA). The OMDA was a part of a set of transaction documents along with the request for proposal provided to potential bidders. The OMDA laid out the contractual terms for structuring the PPP. This paper discusses the evolution of the draft OMDA from when it was first released in April 2005 to the bidders till it was released as a final OMDA in August 2005 before an extended bidding date. During this period, some of the critical issues addressed were: limits to commercial development of airport land, nature of tariff regulatory regime, contingent liabilities including performance bonds and termination payments, and potential contractual and strategic conflicts. It brings out the intra-governmental issues and processes, and the significant learning that formed part of these PPP concessions, which could well be among the largest in the world.

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Working Papers | 2010

Intellectual Property Protection, Regulation and Innovation in Developing Economies - The Case of Indian Pharmaceutical Industry

Rakesh Basant

Historically, nations have modified their IP policies to support their development agenda. With the advent of TRIPS, the ability of countries to choose between different IP policy options has reduced considerably but some flexibility remains. Countries have tried to utilize this flexibility for their advantage but in certain respects the choices are difficult. In recent years, certain elements of the new IP regime in India have been vigorously debated in the context of the TRIPS mandated IP policy changes. Given the complex interface between economic development and IP regimes, a variety of arguments have been deployed to argue in favour or against these elements. The paper argues that an evaluation of the IP regime and regulation in developing countries needs to be done in the context of how they facilitate capability building especially through participation of domestic firms in global R&D and production networks. Opportunities for domestic firms to participate in global networks depend on a variety of inter-related factors like emerging technology regimes, changes in global industrial structures, strategies followed by MNCs and capabilities and strategies of domestic firms with respect to innovation. Consequently, the fine-tuning of the IP regime would require an understanding of these developments as well, often in the context of a specific sector. The paper uses this broad heuristic framework to analyze emerging IP policy needs for the Indian pharmaceutical sector and the role of other types of regulation. In the process it also provides some insights on how developing countries with decent technological capabilities can exploit regulatory flexibilities available in the post-TRIPS scenario.

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Working Papers | 2010

Issues in Real Estate and Urban Management – A Note

Sebastian Morris

This note raise many policy issues related to real estate and the urban sector. Urban issues and the very high cost of real estate in India have deep rooted problems that have their origin in the policy, law and working of government. The potential of high growth to deliver benefits to people but especially the poor have to a large extent been negated by the large perversities that underlie the real estate sector in India. These have been compounded by structural problems in governance. Without correction it is unlikely that India would be able to face to the challenges in rapid urbanisation that lies ahead.

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Working Papers | 2010

Pedagogical Innovations for Triggering Social and Economic Entrepreneurship among Youth

Anil K. Gupta

Recent economic meltdown triggered worldwide search for viable options for generating employment through entrepreneurial opportunities for the youth. Not many countries succeeded although India has fared much better. I discuss the challenges faced by India soon after meltdown and the strategies that could work. While many ideas have still potential to influence the pedagogy and the content of educational programmes in the short term, some have value for longer term entrepreneurial revolution. I pay particular attention to converting grassroots innovative communities into viable entrepreneurial networks. The need for empathetic innovation eco system cannot be over-stressed. I also underline the fact that ethical standards seem to be higher among micro and small and medium enterprises. There is a need for transition from mass consumption to high degree of customisation.

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Working Papers | 2010

Leveraging Innovations for Inclusive Governance

Anil K. Gupta

The concern for making services of public systems accessible, accountable and affordable for the disadvantaged people has been there since independence of the country. However, after recognising the limitations of trickle down theory despite witnessing economic growth for a decade, government has realised the need for more inclusive approach. The disparities have increased just as they had in the post green revolution era. The declaration of this decade as the 'decade of innovation' by the Prime Minister and the President of India has underlined the concern for inclusiveness. On Civil Service Day, April 24, 2010, I had the opportunity to witness the awards to the outstanding civil servants and also share my thoughts in a panel having concerned Minster and former Cabinet Secretary and Advisor to Prime Minister. I have argued that the urgent concern is not so much about triggering new innovations as about learning from existing innovations. I also refer to the efforts of 13th Finance Commission in this regard. Two major changes were enacted on the advice of Finance Commission based on the background papers prepared by NIF. The Commission has recommended in the paras 12.92 and 12.96 setting up of "Centre for Innovations in Public Systems to identify, document and promote innovations in public services across states". A grant of Rs.20 crore has been recommended for the purpose. In addition, "a second grant of Rs.1 crore per district is for the creation of District Innovation Fund [DIF] aimed at increasing the efficiency of capital assets already created." I hope that the paper will trigger discussion about the need for a more systematic cataloguing of innovation in public system so that the benefits thereof can reach the masses rapidly.

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Working Papers | 2010

Cradle of Creativity: Strategies for in-situ Conservation of Agro Biodiversity

Anil K. Gupta and Chandak Vikas

Given the inter-relationship of different agro ecological sub-systems in any country, success of the strategy of diffusion of varieties invariably adversely affects the conservation of agro biodiversity. At the same time, given the climate change and other fluctuations in the environment, in-situ conservation of agro biodiversity is most essential for future survival of the society. This study is a part of a long term investigation being pursued by the first author about the micro level changes at plot level in the farmers' fields and their implications for micro policy at national and international level. Same villages were studied in 1988-89 and 2000-02 to look at the degree of erosion of agro biodiversity. In addition, a survey on preferred incentives for in-situ conservation was also conducted among the local communities. The implications of the study for monetary and non-monetary incentives for conservation have been drawn. Different models of incentives for possible action research have been described. There are not too many studies that provide micro level evidence over a decade on the subject. The findings were presented to the national policy makers though actual response in practice so far has been limited.

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Working Papers | 2010

Empathetic Innovations: Connections across Boundaries

Anil K. Gupta

Several motivations may guide quest of a creative person for solving real life problems either faced by oneself or by others. Honey Bee Network has been documenting and valorizing grassroots innovations and traditional knowledge practices for over two decades. In this paper, I review some of the lessons emerging from the innovations triggered by a feeling of internalization of somebody else's pain [samvedana] exactly as one's own. The concept of empathetic innovations resonates with the Gandhian philosophy in a very intimate sense. Way back in 1924, Gandhiji had announced a prize of Rs. one lakh to improve the design of charkha [spinning wheel]. When burden becomes responsibility and when concern triggers creativity, we encounter Gandhian spirit in action. He was a great action researcher. In the first part, I summarise the journey of Honey Bee Network, the evolution of SRISTI (Society for Research and Initiatives for Sustainable Technologies and Institutions) on the advice of Policy and Perspectives Committee of IIMA, and establishment of Grassroots Innovation Augmentation Network (GIAN) as a follow up of International Conference on Creativity and Innovations at Grassroots held at IIMA in 1997. Later, NIF (National Innovation Foundation) was set up with the help of Department of Science and Technology in 2000 to build a National Register of Grassroots Innovations and Traditional Knowledge besides bridging formal and informal science. Recently, the NIF has become a grant-in-aid institution of DST. Nine key issues discussed in the paper to amplify the concept of empathetic innovations are: Why does not adding value to people's knowledge and creativity excite majority of young and old institutional scientists?; Does wealth necessarily improve the propensity for risk taking and innovation or the lack of it, i.e., can poverty also be a trigger for innovation? Is frugality fungible?; Whether the nature of motivation influences the incentives or disincentives for diffusion?; Should national science, technology and innovation system be fertilized by the grassroots innovations in a fundamental manner?; Do Gandhian methods still matter? Why did Gandhian institutions fossilize in the last six decades?; Will Incorporating innovations in the curriculum not trigger creativity early in life?; Will creating mobile and stationary museum of innovations help in transforming the minds? and Will Gandhian advice to youth for social engagement be still valid?

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IIMA