Managing Pandemic and Correcting Development Fundamentals

This paper highlights that the COVID-19 pandemic has exposed the inadequacy of public health systems worldwide, casting a shadow that we could not have imagined even a year ago. Moreover, a parallel problem may well exceed the direct death toll from the virus. This is the growing economic crises globally and the prospect that these may hit emerging economies especially hard. This essay takes stock of the policies adopted by governments in emerging economies, and what effect these governance strategies may have had, and then speculates about what the future is likely to look like and what we may do here on.

The COVID-19 pandemic that started spreading in India in 2020 produced an extraordinary situation not observed at any time in the last century. Already a reeling economy at that point in time, it faced a major jolt and plunged further. Lack of knowledge about a hitherto unknown virus created a feeling of immense fear impacting demand as well as supply. Subsequently, with the discovery of vaccines, though, the situation has improved, but fear of new strains continues to create disturbances. While a large body of literature has emerged on the subject for the Indian context, most studies are empirical in nature, and theoretical modelling of the situation is hitherto missing. This paper fills this research gap by developing a simple macroeconomic model of Keynesian type but bringing in the concept of transaction costs which occurred due to the fear of the disease and the lockdown. The resulting scenario appears to resemble what we call a ‘supply constrained’ Keynesian equilibrium. The paper then looks at the medium-term effects by considering the subsequent invention of vaccines and other geopolitical developments.

This paper explores the short run, medium run and long run impact of pandemic on the contact-intensive entertainment industry in terms of a simple general equilibrium model that can accommodate for unemployment and underemployment. Finite change as a response to large shocks may lead to vanishing occupations in this industry, even when pandemic is over and leads to underemployment. Pandemic tends to eliminate fixed wage contracts in this sector for its survival, but over the longer run affects fundamental occupational choice in a society.

The paper looks at the various alternatives of financing economic recovery in India in an environment where output and employment have taken unprecedented hits due to the COVID-19 pandemic. While recovery involves huge expenditure on the part of the government, whether it is incurred on direct transfers or on more indirect means to boost up the economy, the moot question is about its financing. We examine three alternatives: one, monetization of public assets, two, increasing money supply (by lowering interest rates and expanding bank credit), and three, a surge in public borrowing. We conclude that under the present conditions, the only feasible alternative before the government is to adopt an expansionary fiscal policy by increasing public debt.

This chapter seeks to understand and anticipate the future of the Indian higher education in the Post-Covid era in the wake of the implementation of the New Economic Policy (NEP) 2020. The chapter begins with the conceptualization of the debatable issue of whether higher education as a public good or common good. This is followed by a brief discussion of the challenges facing the Indian higher education system and how are they being addressed in the proposed NEP. This is followed by a discussion on the possible implications for the two major functions of the universities such as teaching and doing research with the academic profession being at the center of discussion. We broaden the context of the discussion by bringing in a major force which is gaining momentum, i.e., internationalization. We end this chapter with a discussion on the major issues and objectives, access and equity, conceptualization of quality, autonomy and accountability and the nature of public good character of higher education. We conclude with observations for the evolving market for higher education and the nature of public character of higher education focusing on inclusive expansion and attainment of quality education.

The paper studies trends, patterns and regional variations of COVID-19 pandemic in India at sub-national level. The study considers 27 states in India that covers 99.7% of India’s population. Using spatial econometrics techniques, the study concludes that the space and neighboring effect does matter toward rapid spreading of the virus; therefore, COVID-19 protocol should be implemented among the economically well-off states. Strict lockdown for longer period of time is unhealthy for an economy like ours where more than 90% labor force are engaged in informal sector; therefore, vaccine with free of cost may be suggested to further contamination of the virus.

Food security has important positive implications for cognition, the basis for human capital formation. This paper points to the highly probable food insecurity mediated poverty trap—on the basis of a collation of researches by nutrition and paediatric scientists, and neuroscientists—by which poverty causes malnutrition and thus poor human capital formation, resulting again in poverty in the next generation. It marshals empirical support for the existence of this trap—National Sample Survey data for India as a whole showing that households with low economic status are indeed associated with a significantly higher statistical probability of malnutrition and anthropometric deficiency than other households. However, at the same time, it qualifies this conclusion on the basis of a primary survey of two villages carried out in 24 South Paraganas district of West Bengal which indicates that the results for India as a whole are not necessarily true for each narrowly defined region: in this specific case, nutritional deficiency or qualitatively poor dietary intake is poorly associated with income status and often observed for high income households. Second, households in these two villages are observed to remain in the wealthier part of the economic distribution in spite of poor dietary intake. An important parallel finding also emerges from National Sample Survey data: alleviation of income poverty over time is not necessarily a cure for food insecurity with income enhancement often associated with copycat status good consumption. A case thus emerges for nutritional counselling whereby households could be advised how changes in their diet can enhance their productivity and wellbeing. Finally, the study of two villages’ points to the likelihood of poor nutrition being determined more by cultural characteristics born out of religious, caste and geographical affiliations than income. It thus concludes that region specific studies for determining the significant drivers of food insecurity are called for.

This paper aims to estimate a new state-level export data series for organized manufacturing sector at the aggregate and disaggregate levels over the time period 2008–09 to 2014–15, using ASI unit-level records. The requirement of a new data series arises on two counts: first, the existing port-level data generated by the DGCI&S are not validated and fraught with problems, and second, there is a renewed requirement for disaggregated state-level export data, especially in the post-pandemic period when states are trying to formulate policy strategies to come out of the pandemic-led recession. The present research uses the multiplier, provided by ASI to arrive at the new state-level export data series. The new aggregate and disaggregate state-level export data series are free from the identification of state of origin problem as observed in case of the DGCI&S database on state-level exports. However, these data include only organized manufacturing exports at the state level. The aggregate state-level exports show wide variations with Maharashtra, Tamil Nadu and Gujarat emerging as the top exporting states. The export basket also varies across the states. Spearman rank correlation and Kendall’s tau rank correlation show a positive association between production structure and export structure across most states, though the pattern varies.

This project attempts to find out how different aspects of traditional cultural practices vis a vis modern outlook of three major tribal communities of South West Bengal Shabar, Bhumij, and Santhal—impacts the self-reported indicators of happiness. Happiness indicator in this paper comprises of personal happiness, worth of life, safety for future, personal relationships with spouse and other family members, loneliness, and anger. The survey was carried out between November 2019 and February 2020 among Shabar, Bhumij, and Santhal people of West Midnapore (Jhargram) and Purulia and Districts of West Bengal. We adopted convenience sampling. Our overall sample size is 237. We constructed happiness index, cultural index, and living condition index of the respondents. To estimate happiness equation, we used Ordered Probit model (when we considered categorical form of happiness variable) and Probit model (when we considered binary form of happiness variable). In almost all the regressions, facing discrimination from upper caste people is found to have negative significant effect. Possessing modern outlook in contrast to traditional cultural view enters with significant negative coefficient in all regressions. Hence, being attached to own culture is important for the happiness of tribal people. Food sufficiency and drinking alcohol are found to have positive significant effect on happiness of tribal community. Based on our results, policies for enhancing the happiness of tribal communities of West Bengal are prescribed.

We find that the tax grouping of commodities under GST reform is largely poverty-reducing. The direction of the tax change is not always right. The design of the GST structure in India can be improved further. The intragroup analysis suggests that tax on pro-poor commodities like tea leaf, LPG, kerosene (non-PDS), toilet articles, spices, sugar, edible oil, etc., should be reduced further. Again, alcohol, electricity, jewellery made of gold, silver, precious stones, coffee, coffee powder, and cigarettes should be taxed at a higher rate.

While the award period of the Fifteenth Finance Commission (FC-XV) has begun, the issues associated with fiscal autonomy of States and their spending priorities consequent upon the significant compositional shift in intergovernmental fiscal transfers as recommended by the Fourteenth Finance Commission (FC-XIV) continue to remain a centre of debate and discussion in the literature on India’s fiscal federalism. The present paper adds to the existing literature on this topic in that it attempts to examine the impact of this compositional shift in intergovernmental fiscal transfers on the quality of public expenditures of States for two most basic services, namely, elementary education and rural healthcare which remain amongst the top most priorities of the Central Government in terms of allocations under Centrally Sponsored Schemes. The analysis of this paper reveals that the majority of States have generally performed better in terms of their public expenditure effectiveness and efficiency indices as compared to adequacy index, though most of the States depicted an increase in their public expenditure adequacy indices from pre-rationalisation period to post-rationalisation period. The trend analysis as well as the regression estimation results seem to suggest a positive impact of compositional shift in intergovernmental fiscal transfers in favour of untied grants on States’ public expenditure adequacy. This, however, has to be complemented by good governance at the State level in order to realise the full impact of Central transfers to States.

This chapter measures technical efficiency scores (TE) of government and government-aided schools for secondary education in Kolkata using primary survey data, collected through multistage stratified random sampling procedure, employing data envelopment analysis and obtains the determinants of such TE. It is evident that about 52% of the sample schools are not perfectly efficient, implying that these schools can produce more output with existing resources, and the magnitude of TE varies among the schools. It is observed that a huge percentage of students undertake private tuition which may affect TE. Thus, to find out the determinants of TE, the paper considers the effect of (i) percentage number of students taking private tuition, (ii) the role of the headmaster/mistress (HM), (iii) the characteristics of the HM, (iv) the characteristics of the teachers, (v) school infrastructure and administration related variables, (vi) school characteristics and student composition-related variables, (vii) policy-related variables, (viii) socio-economic background of the students, (ix) quality of school attributes based on student’s perceptions. The results support that the TE is positively related to the percentage number of students taking private tuition and the part of the variation of TE which is not explained by the percentage number of students taking private tuition is low; it ranges from 1.5 to 23.8%, with mean value 8.28%. Further, TE is negatively and significantly related to service experience of headmaster/mistress (HM) and full time teachers, meaning that schools with relatively junior HM and junior teachers will have higher TE. TE is positively related to (a) the role of the HM in school management, i.e., while taking any policy decision whether HM interacts with students and teachers, and also the interaction between this variable with the variable specifying the frequency of interaction of HM with State Education Department; the existence of interaction term implies, given the value of one variable, TE will in turn depend on the value of the other, showing the importance of the both, (b) school infrastructure variables, i.e., whether Librarian of the school is on duty, (c) policy variable like (i) the proportion of students getting Kanyashree (an initiative taken by the government of West Bengal to improve the life and status of girls by helping economically backward families with cash transfer so that they do not arrange for the marriage of the girls before eighteen years), where nonlinear inverted U-shaped relationship between the proportion of students getting Kanyashree and TE is obtained, with positive marginal effect for the present sample, implying that an increase in Kanyashree will boost up TE and (ii) on the availability of government fund to the schools, (d) the school characteristics, student composition, and students characteristics-related variables like the class size as represented by the number of sections in the class, the proportion of reserved category students, and the proportion of students having text book at their home.

We have focused on a range of issues that have surfaced in discussions on the growing economic inequality in India in both income and non-income dimensions. First, we present a brief account of the changing nature of income inequality during and after the COVID pandemic drawing on various sources. During COVID-19, the rising inequality has been associated with an absolute decline in the economic conditions of a large number of people, unlike in the period since the 1980s when most people experienced some gain but the poorer classes gained rather less. The central argument in the paper is that economic inequality had been high in India for quite some time, and COVID pandemic has exacerbated it in the most recent period. Using two rounds of IHDS and applying the technique of decomposition, we find that overall inequality increased but the contribution of inequality between social groups to the overall inequality declined. We then presented an alternative procedure which would allow us to find out how each of the groups fared vis-à-vis others. Finally, we looked at changes in child stunting between NFHS-3 and NFHS-4 across different states, as an instance of inequality in non-income dimensions. Applying three different methods, we find that in five states, the declines in the bottom quintile of households were more than the average decline, whereas in four states, declines were less than average, across all the three methods. The overall purpose of this paper is to demonstrate that if we want make a substantive statement on changes in economic inequality in India, we need to use multiple sources of data and carefully consider multiple methods in order to check robustness of the statement.