India’s Economy and Society

Last five years have been witness to a spate of farmer protests in India. These protests which have been witnessed in almost all major states have been on different issues but are unified by a common thread of declining farm incomes and increasing distress in the agrarian economy. This paper examines the genesis of the crisis using available data from different sources. The preliminary analysis suggests that the crisis is a result of long neglect of structural factors by successive governments since the early 1990s. The crisis has been aggravated in recent years by policies which have contributed to shifting terms of trade against agriculture, rising input prices and declining output prices. Exogenous shocks such as demonetisation have also contributed to intensification of the crisis. The response of the government in the form of loan waivers and cash transfers is unlikely to resolve the primary contradiction in the agrarian economy. The recent attempt to withdraw state support to agriculture through various reforms is further likely to worsen the situation of farmers’ incomes.

The supply chain of agricultural commodities in India is fraught with challenges. Not only the size of holdings are fragmented and small, they are dominated by marginal and small farmers, there is lack of scale of economies, supply chain is laden by low standards of processing and value addition and there is shortage of marketing infrastructure. In the Indian scenario, the markets for wheat and rice are different as compared to other agricultural commodities as the government controls the rice and wheat for balancing the value and nation’s food security. Participants in wheat and rice supply chain are input suppliers of seeds, fertilizers, manures, pesticides and insecticides, farmers, commission agents (Arhtiya), FCI (Food corporation of India), other government procurement corporations such as Markfed, Central Warehousing Corporation, large millers of wheat and rice, wholesalers and retailers of processed grains and consumers. Input suppliers consist of major chemical producing companies, government distributors, wholesaler, retailers, and even very small retail shops that sell small quantities of seed, fertilizer, manure and pesticide to peasants at the village level. The major producers of wheat and rice supply chain are in the states of Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, and Rajasthan. There is a clear cut relationship between supply chain management and rural development, because mismanaged supply side creates an imbalance in demand and supply equilibrium which hampers their prevailing insufficient incomes and ultimate means of livelihood. Some of these issues and government policy towards handling these challenges is discussed in this paper.

This paper presents an analysis of changes in regional concentration of manufacturing industries and the factors driving the change in recent years. Two key questions have been addressed. First, why the regional distribution of Indian industry continues to be dominated by Maharashtra, Gujarat and Tamil Nadu? Second, what are the sources of this uneven spread of industries? Past industrial policies (history) and contemporary factors are found to reinforce the regional concentration of industries. It makes a contribution to the literature by providing evidence on the net entry of new factories by state, the spatial distribution of large factories and the observed tendency of co-location of relatively larger plants in industrially advanced states in the post-reform period. It finds that top three industrialized states of Maharashtra, Gujarat and Tamil Nadu have attracted larger share of the new factories. Nearly 44% of the cohort of large factories with more than 100 workers which began operation in the years 1995–2014 was found to be in the top three states. The key driver of regional concentration is argued to be the agglomeration economies sought by firms to offset other cost disadvantages.

The electronics industry—the hardware core of the digital economy—is strategic for any country because of the rapid expansion in the adoption of digital technologies across sectors. Several policy reforms have been carried out by successive governments to attract FDI and to promote global value chain (GVC) engagement by Indian electronics firms, with a view to upgrade their technological capabilities and to increase electronics exports from India. Against this backdrop, the present paper seeks to analyse the nature of FDI-driven engagement of Indian electronics firms in industry value chains. Based on a critique of the existing approaches for examining GVC participation based on intra-industry trade (IIT) or trade in value added (TiVA), the paper presents an alternative methodological approach and examines the nature of value chain participation of foreign-owned firms through an analysis using firm-level data. Analysis of the value chain engagement of a large FDI-recipient Indian electronics firm is carried out using this methodology. This analytical framework relates macro policy aspects of trade and FDI liberalisation and industry-specific policies with firm-level business strategies, to understand the impact of policies on the nature of an industry’s FDI-led GVC engagement and its implications for the industry’s development trajectory.

The chapter analyses the performance of the country’s investments in and output of innovation in terms of both conventional innovation indicators such as investments in R&D, trends in patents, trends in and structure of high technology exports, emergence and growth of technology-based start-ups. The period covered in the chapter is the post 2000 period which is characterized by the enunciation of a large number of policies that impact on the S&T performance of the country. These policies range from a new IPR policy to financing of R&D to a number of specific technology policies dealing with a variety major emerging technologies. Further, it maps out the inputs to S&T policy in terms of human resources development in science and engineering, financing of essentially R&D in industry and the policy support for the emergence of technology-based start-ups, etc. Finally, the chapter surveys the progress of the country with respect to adoption of new technologies such as Industry 4.0 basket of technologies, automation and its potential effects on manufacturing employment, the growth of domestic manufacturing in certain high technology industries such as cell phones, electric vehicles and the diffusion of a cashless economy in India.

Approaches that recognize the specific kind of market failure/s, in the policy and design of infrastructure, greatly reduce the financing costs and improve the ability of to attract finance in 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 and the challenges have proven beyond the current ability of the state. Debilities in the financial markets stem from the weaknesses of the public sector banks. Risk shifting on to them by private players have been common. Policy must move to internalizing interest rate change risk in all PPPs. It must also tighten the conditions under which renegotiation is possible so that the state is not pushed to bearing the downsides of privately provided infrastructure. The heightened private brownfield investments (when greenfield decline rapidly), today, are more a reflection of the government’s inability to come out with solutions while monetizing its creative effort-especially the NHDP—in the past.

In this chapter we provide a critique of the traditional mechanisms to transfer land from agriculture to other developmental activities. We show that both the market mechanism and the Eminent Domain have several serious shortcomings, especially in the Indian context. Eminent Domain (Land Acquisition) Law empowers governments to take away private properties for public purpose. In many cases, the affected owners approach the court to seek enhanced compensation. Indeed, disputes and litigation over compensation is an international phenomenon. In this paper, we compare the compensation provided by the Government (executive) and the Courts (judiciary). Our analysis indicates that the compensation for expropriated properties is regressive—Compensation for high-value [low-value] properties is greater than [less than] their market value. We argue that the land pooling mechanism is a better alternative for ensuring availability of land for development. We argue that the land pooling is more efficient as well as equitable than the traditional means of land transfers. We demonstrate how suitably designed land pooling mechanisms can protect property rights, induce voluntary participation in land transfer to and encourage productive investment.

The engineering sector is not only the largest segment of the Indian manufacturing industry but also the largest net foreign exchange earner. However, the sector has seen increasing import dependence, and domestic players have lost market share both in domestic and global markets. In this context, this paper looks at the changing pattern of exports of India’s engineering goods sector and attempts to identify products with most export potential. We find that though intermediate and capital goods mostly drive Indian engineering exports, India also has an increasing trade deficit in these goods. The analysis of export competitiveness reveals a strong negative relationship between India’s competitiveness and global market size, i.e., India is not competitive in those products with large market size and vice versa. Though the two-way trade in intermediate goods is an indicator of integration to global value chains, the strong global market presence in resource-intensive low-value added goods and the extremely limited final goods exports suggests that India is struggling to develop competitiveness in high-value adding segments of engineering goods. The government needs to shift its focus from the protection of intermediate goods towards improving domestic technological competence to increase domestic value addition and export competitiveness.

As part of the 2030 Agenda for Sustainable Development, all countries, including India, have committed to trying to achieve univeral health coverage (UHC) by 2030. There are three dimensions to UHC: population coverage, services coverage, and financial risk protection. The goal is to make available to 100% of the population a broad-enough range of essential health services that cover 100% of their healthcare needs and ensure that 100% of the population can receive these services without incurring health expenditure that is more than 10% of the monthly household expenditure. While UHC is a desirable goal, it poses significant challenges for low- and middle-income countries on many fronts. Over the past two decades, India has implemented a wide range of reforms in the health sector ostensibly towards making healthcare services accessible to all. This paper discusses major health financing reforms and private sector engagement in health in India from the perspective of their contribution to UHC. Based on the existing evidence, the paper argues that recent health reforms in India have made limited contributions to access with financial risk protection for socially and economically marginalised groups. Inequalities in coverage by health services have been accentuated and the less privileged bear a disproportionate burden of catastrophic health expenditures. Drawing on the experiences of LMICs in Asia, such as Thailand and Vietnam that have achieved near-universal health coverage, the paper concludes with listing much-needed reforms that are urgently needed for India to move anywhere close to UHC.

This paper analyses the rapid expansion of professional higher education (PHE) in India in its several dimensions. Using secondary database, it discusses (a) trend and patterns of growth in professional higher education, (b) inequalities in access, (c) barriers to participation, and (d) household financing of professional higher education. We find striking regional inequality in the growth of PHE in India in the last decade—close to 40% of professional higher education institutions are located in southern region while it is less than 10% in central, eastern and north-eastern regions. Findings also suggest that students belonging to poor households are not only underrepresented in PHE but also spend considerably less on it than their rich counterparts. The discussion on the status and prospects of professional higher education in India in this chapter will be useful to the academia, regulatory bodies and policy makers.

This paper contests the widely cited argument that the slow expansion of manufacturing employment in India has been on account of the rigidities in the country’s labour market. The growth of employment in India’s organized manufacturing sector, which remained stagnant at 8–9 million between the early 1980s and the early 2000s, accelerated to reach 15 million by 2017–18. Nevertheless, employment in the manufacturing sector as a whole (organized and unorganized sectors combined) decelerated, especially during the recent years (from 61.3 million in 2011–12 to 60. 2 million in 2017–18). These figures point out that there has indeed been a sharp downward fall in the growth of employment in India’s unorganized manufacturing from the mid-2000s onwards. There is little support for the argument that labour regulations had been the hurdle to the growth of manufacturing employment. In fact, even within the organized manufacturing sector, contract workers or workers who are outside the purview of the labour laws accounted for close to 70% of the net increase in employment since the 2000s. The reasons for the lacklustre performance of the manufacturing sector in India lie outside the sphere of labour. To begin with, the slowdown in the growth of investment, especially since 2007–08, created severe bottlenecks for industrial expansion, especially for the small units. The other major constraints include inadequate access to bank credit for the small firms and the increasing dependence of India’s manufacturing growth on imported components. Greater domestic investment and well-directed industrial policies are important to achieve faster generation of decent jobs in Indian manufacturing.

This paper will contextualise the contemporary concern over sex selection once rendered as “missing women”. Though Amartya Sen’s famous article in the New York Review of Books “More than one hundred million women are missing” in 1990 is thought to have been seminal in bringing the phenomenon to the notice of social scientists, India has contended with a long history on the subject. Beginning in the colonial period when British officials encountered practices of female infanticide and saw gender skews in the first Censuses, Indian demographers in the late 1960s and 1970s were bedevilled by the conundrum of long term worsening trends in overall sex ratios which continued to decline after independence. A new moment in this history comes with the women’s movement’s discovery of the annexation of amniocentesis testing for sex determination of the foetus and its subsequent normalisation through pre-natal ultrasound as part of ordinary maternal care during a pregnancy. I argue that this new moment is distinctive in the Indian context in more than one way: it is urban-led and most visible among non-poor “small families” aspiring to have the right kind of family of one boy and one girl. While dominant approaches to sex selection, see it as the core of Indian culture (son preference); or alternatively as part of the continuum of violence against women, I suggest that the lens of political economy might have its own insights to offer, and that gender is becoming more complex than simple accounts of son preference and daughter aversion would suggest.

Ethnographically interrogating Haryana Kalyanams—popular name for marriages between men from Haryana and women from Kerala—this chapter illustrates the complexity of marital mobility in cross-region marriages (henceforth CRM) in India. CRM are an outcome of local male marriage squeeze created due to sex-ratio imbalance and changing gender relations in north India. Media attention to these marriages is largely negative and replete with stories of trafficking and exploitation of brides from Bihar, Bengal, Odisha, Assam and Bangladesh married into Haryana. However, in Kerala–Haryana marriages, the popular narrative changes. The better position of Kerala in comparison to Haryana, as expressed in its gender development indicators, is used to present Kerala brides as completely in control of their marital destiny and as agents of change and transformation in rigidly patriarchal Haryanavi society. This paper complicates this oversimplified narrative to illustrate how Kerala brides in Haryana grapple with harsh patriarchal norms and gender prescriptions which often conflict with their personal desire for freedom and agency. In doing so, it cautions  against any straightforward assumptions of upward mobility and agency for Kerala brides in CRM and emphasizes the need to analyze their poistion within the webs of power within which they operate.

Taking the Discipline of Economics as base, this paper demonstrates how and why macro-economic policies centrally anchored in the Discipline of conventional Economics cannot accommodate gender concerns; thereafter, it provides a brief overview of the shifts in “gender and development” literature emphasising in particular the contribution of feminist economists. Feminists’ continued efforts to move towards transformation of society to achieve gender equity finds articulation in the manner in which the Sustainable Development Goals of Agenda 2030 have been formulated. We discuss briefly this movement from MDGs to SDGs highlighting the specific contribution of feminist economists. Next, using the Telangana Social Development Report, 2018, the paper not only demonstrates what a “gender” reading of secondary data can reveal but also the fact that the findings of the report are in sync with the concerns raised by feminists over the various Sustainable Development Goals and Targets of Agenda 2030. The paper ends by supporting the framework that feminists have laid out for a transformative agenda using three of the concepts that underpin the human rights framework, namely accountability, inclusion and non-discrimination.

This paper examines a report that was published in 1947—on women’s role in the planned economy. This was put together by  a national subcommittee appointed for this purpose, and its mandate was novel and expansive. It was to examine women’s lives and the roles women played in three different yet related settings: the family, the economy, and social institutions. I draw on this report to indicate the issues at stake for those who were fascinated by the idea of planning, as such and used it as a context to bring together the household and the world of labour, marriage, money, property, and progeny. I am particularly interested in the dissenting note appended to the report—it gives us an indication of how planning appeared to hold both practical and utopian possibilities for women committed to transforming their lives and that of other women. It seems to me that this admixture of the practical and the possible has been central to how feminists in the Indian context have attempted to redraw the contours of economic thought—and in the event, link it to what are usually considered “extra-economic” realities.