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3819 items in total found

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

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

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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Journal Articles | 2018

Reforming agricultural markets in India: A tale of two model Acts

Sukhpal Singh

Economic & Political Weekly

The union Ministry of Agriculture and Farmers’ Welfare had prescribed a model Agricultural Produce Marketing Committee Act in 2003. The state-level adoption of the act has been tardy and varied in terms of both the magnitude and content of agricultural market reforms. Yet, the ministry under the current central government has come up with another model act, the Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017, supposedly an improvement over the 2003 act. Among other things, the provision that has grabbed much attention is the removal of contract farming from the APMC domain to a separate model act of Agricultural Produce and Livestock Contract Farming and Services (Promotion and Facilitation). Analysing these draft acts, the paper finds that both the model acts suffer from serious conceptual lacunae that have implications for their application and governance, and, consequently, for inclusive and sustainable agricultural development.

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Journal Articles | 2018

Food waste due to retail power in suppy chains: Evidence from Sweden

Ranjan Ghosh and Mattias Eriksson

Global Food Security

Trading practices such as the take-back agreement (TBA) can become a tool for retailers to exert coercive power over suppliers when market concentration is high. We explore the implications of TBAs for the Swedish bread industry using unique company data from a premium bread supplier and find that powerful buyers over-order and, thereby, waste. This supplier faced 30% returns on total volume produced in the period 2011–2015 and had to bear the entire cost of bread rejections, collection and disposal. It received payment only for bread sold to end-customers, not the quantity supplied. To our knowledge, this is first time there is substantial evidence of the negative consequences such trading practices lead to with respect to waste. The EU has been considering banning the practices of ‘forcing the supplier to pay for wasted product’ and ‘a buyer returning unsold food products to the supplier’. However, such behaviour is very difficult to prove, given that suppliers-buyers are either tied up with bilateral confidential contracts or operate under relational norms. Yet, TBAs are common in certain food supply chains, presenting a global challenge for prevention of food waste and requiring deeper policy engagement.

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Journal Articles | 2018

Employees' Provident Fund Organization: Empowering members by digital transformation

Ravichandran Narasimhan, Joy P. Vazhayil, and Sundaravalli Narayanaswami

Journal of Public Affairs

Employees' Provident Fund Organization (EPFO) was established by the Government of India with the purpose of ensuring financial and social security for industrial workers and their dependents. With more than 150 million accounts of its members, EPFO is the world's largest social security organization. Operational processes of EPFO were riddled with over emphasis on rules and regulations but were weak on transparency, accountability, effectiveness, and efficiency. Consequently, the primary purpose of social security of industrial employees was compromised. Business process reengineering combined with adoption of Information and Communication Technology (ICT) and social media brought a sea change to the functioning of EPFO. This paper documents the transformation of EPFO from a bureaucratic, opaque organization to a customer-centric, stakeholder-friendly, transparent, and accountable organization.

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Journal Articles | 2018

Exploring linkages between industrial innovation and public policy: Challenges and opportunities

Rakesh Basant

Vikalpa: The Journal for Decision Makers

It is widely understood now that innovation is critical for development and growth of an economy. World over, governments have worked with a variety of policies to encourage innovative activity. Significant research has gone into the analysis of the complex linkages between public policy and innovation. While this research has generated a lot of interesting insights, it has also identified several gaps in our understanding of these linkages. This article is an attempt to pool together some of the ideas that academic research has highlighted on the linkages between innovation and public policy and identify the current challenges as well as opportunities for meaningfully exploring these linkages further. While it draws a lot on existing studies, the article does not provide a comprehensive or rigorous review of the literature on this subject. It is, at best, a tentative attempt to provide a broad perspective on where we stand vis-à-vis our understanding on the relationship between innovation and public policy. And admittedly, it is one of the many perspectives that a researcher can potentially have on this complex relationship.

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Journal Articles | 2018

Telemedicine for low resource settings: Exploring the generative mechanisms

Rajesh Chandwani and Rahul De

Technological Forecasting and Social Change

Information Communication and Technology for Health (ICT4H) initiatives, such as telemedicine, can potentially bridge the gap between the health care services available in rural and urban areas. However most of such initiatives have not been able to sustain or obtain optimal results. Comprehending knowledge about what drives success in telemedicine initiatives would be highly valuable for practitioners, policymakers and academicians. In this study, through a qualitative analysis of doctor-patient interactions over a telemedicine initiative in India, we attempt to identify the mechanisms that can enable successful telemedicine interventions. Based on the perspective of critical realism, we explore the phenomenon through the lens of ‘generative mechanisms’. Specifically, we identify three different mechanisms that underlie successful telemedicine, namely, (1) Mechanism of rich connectivity, which refers to the expanding scope of information flow between the nodes to include multiple aspects- clinical, managerial and technological; and both online and offline communication; (2) Mechanism of tutoring, which involves learning and skill development of the peripheral doctor; and (3) Mechanism of moulding, which concerns the moulding of naïve patients to expert patients, both in technology use and self management of disease. In addition, the paper demonstrates the efficacy of critical realism as a philosophical perspective for providing substantive insights in the field of ICT4H initiatives.

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Journal Articles | 2018

Group identity in a network formation game with cost sharing

Pritha Dev

Journal of Public Economic Theory

This paper introduces the choice of group identity, which is comprised of characteristics and commitments to these characteristics, in a network formation model where links costs are shared. Players want to link to the largest group given that linking costs for players of the same (different) characteristic are decreasing (increasing) in their commitments. The equilibrium concepts used are Nash equilibrium as well as one that looks for stability allowing for bilateral negotiations. Conditions are shown under which the endogenous choice of characteristics and commitments allow for multiple groups with segregated or connected networks. When group identity is partly endogenous, such that characteristics are fixed and players only choose commitment, it is shown that the equilibrium population commitment profile dictates whether the resulting network is segregated or connected. When group identity is fully endogenous, it is shown that multiple groups and segregated networks are possible equilibrium outcomes but such outcomes are not stable unless the group size additionally affects the costs of link formation.

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IIMA