Urban employment guarantee scheme signifies India’s failure to address inequality

Half-baked countercyclical policies such as the promise of an urban employment guarantee are an apology for the larger failure to address the unequal distribution of fruits of economic growth.

The opposition is reportedly mulling on including the promise of an urban employment guarantee scheme in its Common Minimum Programme ahead of the 2019 elections. In principle, the idea sounds tempting.

The rural employment guarantee scheme, which was launched by the first United Progressive Alliance (UPA) government, has proved to be a useful countercyclical policy tool in the rural economy. The recently leaked findings of the first Periodic Labour Force Survey (PLFS) conducted by the National Sample Survey Office (NSSO) have shown the unemployment rate to be at significantly higher levels than it has been in a long time. GDP data shows that the present government has fared relatively badly in terms of growth in employment intensive non-farm sectors such as construction. Can an urban employment guarantee scheme can solve these problems?

The rural guarantee scheme works on self-selection. All of the work under the scheme is of the unskilled manual nature such as digging ponds and making link roads in villages. This means that no special skills are required for the job seekers. Can (and, more importantly, should) such a framework be implemented in the urban economy?

The basic premise of a healthy rural to urban economic transformation is to transfer workers from low-skill and low-productivity professions to high-skill jobs. It would be extremely difficult, if not impossible, for an urban employment guarantee scheme to ensure this. Given the fact that common land — which is where most of the rural guarantee works happen — is more scarce in cities than in villages, even a perverse (and undesirable) unskilled job guarantee would be difficult to implement in cities.

Are the opposition parties and their advisors not aware of these facts? Most probably, they are. Why are they making such promises, then? The explanation probably lies in the perverse evolution of India’s political economy narrative in the post-reform period. Most political parties agree that reforms have been good for economic growth. But they are also aware of the rising inequality and an acute shortage of quality jobs in this phase. The tragedy is that there are very few political actors who have the imagination and political will to widen the transformative impact of economic reforms for the mass of the population.

Half-baked countercyclical policies such as the promise of an urban employment guarantee are an apology for the larger failure to address the unequal distribution of fruits of economic growth. But such moves will not be able to douse the aspirational anger which characterises the urban unemployed. They will also divert scarce resources which could have been better utilised.

Source: Hindustan Times, 5/03/2019

Strengthen NREGS to support the rural economy

We began our own work on the NREGS from a posture of skepticism, documenting corruption and seeking to mitigate it. But our results from a highly-credible randomised evaluation suggest that NREGS may be a surprisingly effective tool both for improving the welfare of the landless rural poor and also increasing overall rural productivity.

The increased policy attention on reducing economic distress among farmers is welcome. Yet, it is as or more important to consider the welfare of the millions of landless rural households who depend mainly on wages, and not cultivation. They do not benefit directly from subsidies, loan waivers, minimum support price increases, or even income transfers to farmers. Further, the one component of India’s safety net designed primarily to benefit them — the National Rural Employment Guarantee Scheme (NREGS) — is under pressure.

The NREGS is the world’s largest public employment programme, with over 600 million eligible workers, and it has generated a commensurate amount of controversy. Proponents argue that it provides a lifeline to the rural poor in the lean season, raising rural wages and enabling the creation of productive assets. Detractors argue that it is wasteful, plagued by corruption and creates unproductive holes in the ground. Much good research has been done on these issues, but all are subject to important technical limitations, and policy views on NREGS seem to be informed more by ideology and opinion than credible evidence.

To make progress, we use data from an unusually large-scale experimental evaluation where the government of (then unified) Andhra Pradesh randomised the rollout of biometric smartcards for making NREGS payments across nearly 20 million people. In prior work studying the impact of smartcards on NREGS implementation quality, we found substantial improvements on several dimensions: Leakage fell by 41%, programme participation increased by 17%, the time lag between working and getting paid fell by 29%, the time to collect payment fell by 20%, and the variability in the payment lag fell by 39%. In other words, the use of smartcards substantially improved the effective presence of NREGS on the ground and brought the implementation quality closer to what NREGS architects had intended.

In addition to informing the ongoing debate on the role of biometric authentication in social programmes, the experiment also gives us a unique opportunity to answer a core question about NREGS itself: What happens to the rural poor when NREGS implementation is improved? The results are striking. In treated areas, the incomes of NREGS jobcard holders increased by 13% while overall poverty fell by 17%. These results from our survey data match those using the completely independent Socio-Economic and Caste Census (SECC), which also shows a significant reduction in poverty.

Some of these gains simply reflect the fact that corruption fell, and NREGS earnings increased. But this turns out to be a relatively small part of the story. In fact, nearly 90% of the income gains we measure come not from the NREGS itself but from increases in market earnings. In particular, we find a significant increase in market wages, perhaps because a better-implemented NREGS forced private employers to raise wages to attract workers. Moreover, private employment did not fall as a result; once we account for spillovers into neighbouring sub-districts, we find that it actually increased.

How could both wages and employment go up at the same time? First, lower leakage could have improved public asset creation, thereby increasing productivity, wages, and employment. Second, if employers had monopsony power and were able to coordinate to keep wages low, then economic theory predicts that an increase in minimum wages can also increase employment. Finally, reduction in credit constraints (which we find evidence of) could have boosted private investments and productivity. Over time, the increase in rural wages may also speed up mechanisation of agriculture, which would further increase productivity as seen in historical evidence from the US.

Overall, a better implemented NREGS reduced poverty without crowding out private sector economic activity. Regardless of the underlying economic mechanism, this is a crucial fact for policy making. It has certainly shifted our own thinking. We began our own work on the NREGS from a posture of scepticism, documenting corruption and seeking to mitigate it. But our results from a highly credible, randomised evaluation suggest that NREGS may be a surprisingly effective tool both for improving the welfare of the landless rural poor and also increasing overall rural productivity.

Policies that improve both equity and efficiency are quite rare, and a well implemented NREGS may fit this category. Given what we currently know, the government should strengthen NREGS rather than cutting it, or letting it slowly atrophy though weak implementation. It is good that the recent budget has increased the allocation for NREGS. The government should now follow through to deliver on the full potential of this allocation, ensuring that funds reach projects and beneficiaries in a timely manner. Prioritising timely wage payments as well as asset quality will improve both short term beneficiary welfare and long term rural productivity.

The authors are economics faculty members at UC San Diego (Karthik Muralidharan and Paul Niehaus), and the University of Virginia (Sandip Sukhtankar)

Source: Hindustan Times, 6/03/2019

Nothing Lasts Forever

 Living in the limelight is exciting, but it is fraught with the liability of losing all that a celebrity has got accustomed to, and perhaps learnt to expect as his right. Call it the law of opposites or the law of physics, the fact is that what goes up has to come down. And, so, while a man is at the peak of his period of glory, he should remember that this period will not last forever; a time will come when he will be confronted with his vulnerability and his inability to sustain this acme of fame and good fortune. Rudyard Kipling understood and expressed the need for detachment in the poem: “If ”. The poem is steeped in philosophy, and the lines that have become memorable for sportspersons are the ones that are etched at the entrance to Wimbledon, “To meet triumph and disaster and treat the two impostors the same.” The Vipassana meditation programme explains the need for detachment when students are asked to chant the message of impermanence, “Anicca, anicca, anicca”, at the end of every round of meditation. The Gita embodies this message throughout, with Krishna explaining to Arjuna that change is the law of life. “What have you lost, that you are weeping? What have you brought, that you have lost? What have you made, that has been destroyed? You brought nothing. What you have, you got from here. What was given was given here. You have come empty-handed and shall go empty-handed. What is yours today was somebody else’s in the past and will be somebody else’s in the future. You think it is yours and are deeply engrossed in it.

Source: Economic Times, 7/03/2019

The loss of intellectual autonomy

To define one’s identity or community in terms of an exclusive religion is a vexed European notion

No person in today’s world likes to be told what to do or what to think. The young are particularly keen to have the freedom to decide which beliefs to form. Intellectual autonomy is widely considered to be an important value. This was probably not true in the past when large numbers of people were illiterate, knowledge was produced and stored by a few, and there was wider social legitimacy for submission to those with power and authority.

However, even then, poets and philosophers routinely felt that intellectual autonomy is smothered by temptations of power. Asked by his pupils on how to relate to rulers, the medieval philosopher-saint Al Ghazali said, “It would be disastrous to go to a ruler to offer unsolicited advice. It is acceptable to offer your opinion if the ruler sought you. But it is best if he goes his way and you go yours.”

Strategy of intellectual control

Since the end of the 18th century, as technologies of knowledge production became increasingly available to larger sections of society, intellectual autonomy has been threatened not only by state power, but in other invidious ways. Colonialism is a case in point. The British strategy of intellectual control was implemented by crafting a system of education rather than brute coercion. Although the best of our thinkers outmanoeuvred this system — after all our most original thinker of this period, Gandhi, was a product of this very education — it created acute anxiety among self-reflexive thinkers. For example, Sri Aurobindo lamented the “increasing impoverishment of the Indian intellect” in the face of new knowledge imposed by European contact. “Nothing is our own, nothing native to our intelligence, all is derived,” he complained. “As little have we understood the new knowledge; we have only understood what the Europeans want us to think about themselves and their modern civilisation. Our English culture — if culture it can be called — has increased tenfold the evil of our dependence instead of remedying it.”

A more catastrophic malady resulting from this “well meaning bondage” was the loss of intellectual autonomy. The watchword of Indians, he argued, has become “authority”, blind acceptance of ideas coming either from outside, from Europe, as was the case of the then English-educated Indians, or from inside, from fossilised traditions, as was the case of traditional pundits. It was as if the only choice before Indian intellectual elites was a hyper-westernised modernism or ultra-traditionalism. Some elites would have every detail of their life determined exclusively by Western ideas. Others would have them fixed only by shastra , custom and scripture. Each wanted to reform the other, which was nothing but a call to substitute the authority of “Guru Sayana with the authority of Max Mueller” or the “dogmatism of European scientists and scholars” with the “dogmatism of Brahmin Pandits”. The absence of real choice was a symptom of an undermined capacity to think on one’s own, the power of humans to accept or reject nothing without proper questioning.

Much the same conclusion was reached, a decade later, by the Indian philosopher, K.C. Bhattacharya. In ‘Swaraj in Ideas’, Bhattacharya feared that Indians might suffer from a subtler form of domination “when one’s traditional cast of ideas and sentiments is superseded without comparison or competition by a new cast representing an alien culture which possesses one like a ghost.” To be sure, when two cultures come into sustained contact with one another, there is bound to be give and take. One culture might even give to the other more than it takes from it. However, all creative assimilation involves a real conflict of ideas, and elements of an alien culture can be accepted only after “full and open-eyed struggle has been allowed to develop” between the two encountering cultures.

Two alien ideas in India today

I am afraid we have allowed two deeply problematic alien ideas to penetrate our collective consciousness without thorough questioning or proper comparison with ideas emanating from our intellectual traditions. One is the idea of religion, and the second, a particular conception of the nation. Religion, as a demarcated system of practices, beliefs and doctrines, is largely an early modern European invention and begins its existence in and through the theological disputes of the 16th and 17th centuries. Under the impact of colonialism, this category came to India and obliged Indians to think of themselves as members of one exclusive religious community, not just different from but opposed to others. It is of course true that gods and goddesses, ethical norms and prescriptions, rituals and practices did exist in some form in the past. But these were not thought to be part of one single entity called Hinduism, so that those who owed allegiance to any one of these sets of practices did not think of themselves as belonging to a single system of belief and doctrine in competition with and opposition to all others. Indeed, mobility across communities and multiple allegiances were common. As a result, most people refused to be slotted into rigid, compartmentalised entities. They were religious but did not belong to a religion. This has virtually ceased to be the case.

Second, religious belief or practice, or adherence to a doctrine, was never viewed as a condition of membership in a wider national community. One’s religious or linguistic identity made little difference to one’s belonging to the nation. Alas, now, for many inhabitants of our territory, a nation cannot but be defined in single religious or linguistic terms. An exclusivist conception of the ethnic nation — entirely against the spirit of local Indian religions or conceptions of nationhood — devised first in Spain in 1492, developed further during the European wars of religion, and perfected in the 18th or 19th century has seized the Indian mind. Thanks to narrow-minded education institutions and now the electronic media, the idea was first disseminated and then unquestioningly accepted by Indians as if it were a long-held indigenous Indian idea. In accepting this alien idea of religion and nation without proper comparison or competition with Indian ideas of faith and community, we have sacrificed intellectual autonomy and gone down the road to hell from which Europe has itself yet to recover.

To define one’s identity or community in terms of a single, exclusive religion — Hindu, Muslim or any other — is a perverse European notion, a mark of our cultural subjugation, a symptom of the loss of our intellectual autonomy. To have done so is to have uncritically abandoned our own collective genius for something ill-suited to our conditions. Can this be reversed? Is it too late to heed Sri Aurobindo’s warning or follow Gandhi’s example? Can we recover our collective intellectual autonomy?

Rajeev Bhargava is Professor, Centre for the Study of Developing Societies, Delhi

Source: The Hindu, 5/03/2019

Transplanting must not justify removing trees

The draft policy states that transplantation will be undertaken only when more than 10 trees need removal for a construction project.

Struggling to save trees, a major victim of the city’s unending construction spree, the Delhi government last week proposed a tree transplantation policy.

The draft policy, to be finalised after taking comments from citizens, states that transplantation will be undertaken only when more than 10 trees need removal for a construction project. In such cases, at least 80% of local trees will be transplanted and resource-hungry exotic invasive species will be cut. The mandatory compensatory planting of 10 trees for every single one cut or transplanted will continue.

Mass transplantation could be costly at ₹15,000-30,000 per tree, depending on its size, and its success rate is yet unknown. More importantly, finding similar environmental conditions to transplant uprooted trees could be tricky. Delhi’s 1,484 square kilometres has as many as five micro-habitats with different soil types. For example, not all trees that grow near the Yamuna floodplains will survive if transplanted in the ridge.

Land is a premium resource in a crowded country and more so in Delhi. Even for compensatory plantation, authorities struggle to find land and often end up planting in already forested areas and close to the floodplain.

The draft policy promises to make room for transplantation along the arterial roads on “priority”.

But roadside trees are anyway the first to be axed for the widening of roads, construction of flyovers and laying new Metro lines.

Along NH-24, for instance, as many as 2,400 trees were cut to widen the stretch between Sarai Kale Khan and UP Gate and another 1,000 were transplanted near the Yamuna floodplain. While there is still no assessment of how many of these trees have survived, the end-to-end concretisation of the highway has altered the local ecology for good.

The proposed tree policy states that if the government is unable to find land for transplantation, it will be the responsibility of the project developer to find a patch. Before setting this cost-intensive scheme in stone, the policymakers could perhaps re-evaluate the compulsions for tree removal in the first place.

While planning urban development around existing trees may require a paradigm shift in mindset, our building agencies seem to remove trees just because it is convenient. “They have the flimsiest of reasons such as to allow heavy machinery to move freely,” says Prabhakar Rao of Kalpvriksha, an environmental action group. Or proposing to build underground parking lots at the cost of thousands of trees while redeveloping seven South Delhi neighbourhoods.

Successful transplantation is not easy. Experts say old trees that have large canopies and deep root system have a poor chance of surviving. “Most of the trees that are marked out for axing are old, some even 50 years or older,” says CR Babu, professor emeritus at the Centre for Environment Management of Degraded Ecosystems at Delhi University.

Transplanting trees involves heavy lopping of branches so they can be transported to the next site. While the young trees – those below 10 years – usually survive the transplantation shock, older trees stand a slim chance after heavy lopping, he says.

Transplantation also requires trimming of roots. But not all indigenous trees are good at regenerating their root systems, says Babu. While the younger trees of some species — Pongamia and Ficus — can tolerate transplantation, other common native species such as dhok/palash, siris, native wild kikar and arjun cannot.

If a tree loses its canopy, it loses the transpiration function — the process by which it carries moisture from the roots to the leaves — and dries out. A weak, underfed tree cannot perform its ecological function. “If the ability to do this is compromised in transplantation, the purpose of the tree is lost,” Babu adds

The draft policy does mention on-site tree preservation, stating that no tree should be unnecessarily removed and those that can be saved from felling should be identified in the planning stage. But it is up to the construction agencies to appreciate that using what Rao calls “precision engineering” to avoid felling of trees is likely to be more cost effective than expensive transplantations.

Like compensatory plantation, transplantation is also an economic activity and, like all economic activities, has its own incentive. Like plantation, it can also sugar coat decisions to remove trees. Whether compensated ten-for-one or transplanted elsewhere, loss of its last surviving trees is irreversible for every Delhi neighbourhood. However, well-meaning, the draft policy’s real test will lie in its inbuilt ability to safeguard against such eventualities.

Source: Hindustan Times, 4/03/2019

Looking for a Purpose

One of the greatest illusions — or delusions — people have is of a life where they are comfortably sitting, relaxing and having no stress at all; just enjoying themselves. Everybody, at some point in time, dreams of life like that; one with no stress. The delusion is that somehow it could be a happy life, but nothing could be further from the truth. A life where there are no challenges is unfulfilling. It’s a very boring life, not worth living, assuming it’s even bearable. Pain is an essential part of our spiritual progress. Whether our challenges are selfimposed or forced upon us, they make us work, think and appreciate the more desirable aspects of life. For a seed to sprout, it has to push through the earth — it must go against gravity. The harder it pushes through the earth, the more it can go against gravity. The taller it will grow, the more it will flourish. This is why many rich people are so very bored with their lives — especially those who inherit their wealth. There is little challenge or the joy of exhilaration upon accomplishing something after tremendous hard work. By no means am I saying that the lives of rich people are easy. I have known enough such people and was even blessed with decent wealth myself at one point to know that life is anything but rosy. It may be full, but not necessarily fulfilling. And when that is the case, we often search for a purpose

Source: Economic Times, 5/03/2019

Delhi world’s most polluted capital: Report

Delhi is the most polluted capital in the world, while Gurgaon is the most polluted city, revealed a Greenpeace report. According to the latest data compiled in the IQAir AirVisual 2018 World Air Quality Report and interactive world’s most polluted cities ranking, prepared in collaboration with Greenpeace Southeast Asia, to reveal the state of particulate matter (PM2.5) pollution in 2018, Delhi had an average yearly PM2.5 concentration at 113.5 micrograms per cubic metre, followed by Dhaka at 97.1micrograms per cubic metre. Kabul was at the third spot with 61.8 micrograms per cubic metre. However, in terms of cities, Delhi takes the no 11spot, as Gurgaon took no 1spot with an annual average PM2.5 reading of 135.8 micrograms per cubic metre. Ghaziabad is no 2 with 135.2 micrograms per cubic metre and Faisalabad in Pakistan is third with 130.4 micrograms per cubic metre. Faridabad, Bhiwadi, Noida take the next three spots with average PM2.5 readings of 129.1, 125.4 and 123.6 micrograms per cubic metre respectively. According to the National Ambient Air Quality Standards, the annual permissible limit for PM2.5 is 40ug/m3. The annual permissible limits prescribed by the World Health Organization are even lower at 10ug/m3. “This report is based on 2018 air quality data from public monitoring sources, with a focus on data which has been published in real-time or near real-time. These sources include government monitoring networks, as well as validated data from air quality monitors operated by private individuals and organisations,” the report stated.

Source: Times of India, 5/03/2019