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1. Winding Up of State Enterprises in India: A Case Study of Five Enterprises Under the Department of Heavy Industry

Author:
Rajan Katoch and Sunil Bahri
Publication Date:
09-2023
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Why is it so easy to create a public sector enterprise but so difficult to wind one up, even when precious resources of the state with huge opportunity costs are regularly appropriated for entities that no longer serve any public purpose? Usually, it is due to a lack of political will arising out of a perhaps overblown fear of consequences of taking what are perceived to be “harsh” steps. It is also often due to an abundance of caution in the bureaucracy that has to implement these steps. There are reasons for this reluctance. Bureaucracy has learned from previous attempts at winding up state enterprises that such exercises tend to ruffle vested interests, attract political and judicial ire, and sometimes invite the unwelcome attention of investigative agencies. Closing down state enterprises has always been notoriously difficult. It requires the rare circumstance of all the stakeholders being in alignment with the objective at the same time for progress to be made. A great opportunity for overcoming these difficulties arose in 2014, when there was a rare and favorable confluence of circumstances and people in government, notably at the political level and in the Department of Heavy Industry (DHI), Government of India. A new government had assumed power with a reforming zeal, as new governments often have. In the department, we (Sunil Bahri as the financial adviser and Rajan Katoch as the secretary of the department) happened to be thrown together as a new leadership team. Both students of economics, we understood the administrative and economic rationale for closure of sick enterprises and appreciated the opportunity for us to make a signal contribution to better governance and public welfare. We intended to make all-out efforts to ensure that the opportunity was grasped and a sustainable outcome achieved within the brief tenure of two years that we had with the department. This is the story of those efforts.
Topic:
Governance, Economy, Economic Growth, Public Sector, and State-Owned Enterprises
Political Geography:
South Asia and India

2. Tax provisioning by extractive industry multinational subsidiaries

Author:
Khanindra Ch. Das
Publication Date:
11-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Extractive industries are spread across mining of metal and minerals, oil and gas, among others. Multinationals in these sectors are confronted with different challenges ranging from corruption, political risk, economic uncertainty, sunk costs, and the long-gestation periods to execute projects. As a result, tax payment behaviour of subsidiaries in the extractive sector could be dependent not only on these factors, but also on the life cycle of the subsidiary, profitability, and holding structure. Furthermore, emerging economy multinationals in the extractive industries could be state-owned and may invest in foreign subsidiaries for strategic reasons. We examine tax provision in host countries by India’s multinational subsidiaries in the extractive industry. Panel data analysis is carried out for the period 2010–20. It is found that tax provision remains lower in the initial years of subsidiary life and increases with the sustenance of subsidiary in the host country for a longer period. In addition, subsidiaries of public sector enterprises are found to have higher tax provisions than their private counterparts. When it comes to the determinants, economic policy uncertainty, corruption, and political stability are found to significantly affect tax provision.
Topic:
Corruption, Political stability, Multinational Corporations, Tax Systems, Economic Policy, Public Sector, Extractive Industries, and Uncertainty
Political Geography:
South Asia and India

3. How Much is a Government Job in India Worth?

Author:
Kunal Mangal
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Centre for Sustainable Employment, Azim Premji University
Abstract:
Government jobs in India are valuable, not just because they pay relatively higher wages, but also because they provide many valuable amenities, such as lifetime tenure, access to bribes, and prestige. Does the value of these amenities compete with the nominal wage itself? I use the observed search behavior of candidates preparing for highly structured competitive exams for government jobs to infer a lower bound on the total value of a government job, including amenities. Based on a sample of 120 male candidates preparing for state-level civil service exams in Pune, Maharashtra, I estimate a total value of at least 425,000 INR per month. This estimate implies that the amenity value of a government job is at least 81% of total compensation. The high amenity value is not driven by misinformed beliefs about the nominal wage, nor by a high value placed on the process of studying itself. I conclude with a discussion of the implications of these findings for policy and the questions it raises for future research.
Topic:
Economics, Government, Employment, Public Sector, Job Creation, and Workforce
Political Geography:
India

4. State-led Responses to the Indian Energy Challenge: Infrastructure Expenditure, Central Public Sector Enterprises and Electrification

Author:
José Eduardo Cassiolato, Maria Gabriela von Bochkor Podcameni, Elisa Possas Gomes, and Manuel Gonzalo
Publication Date:
03-2019
Content Type:
Research Paper
Institution:
BRICS Policy Center
Abstract:
In the 21st century, economic growth, increasing urbanization, demographic expansion, and advances in electrification as important drivers of energy demand have put significant pressure on the Indian energy landscape. Indeed, energy infrastructure problems are a major hindrance to India’s economic growth. The central objective of this paper is to present and analyze some of the main State-led policy efforts that have been put in place to address India’s energy challenge. In particular, we examine three main types of state-led energy policy in India: a) infrastructure expenditure, b) Central Public Sector Enterprises (CPSEs) investments and Research and Development (R&D) strategies, and c) electrification. Firstly, we present and examine current data on the role of the state in the development of India’s energy sector. Secondly, we provide a nuanced examination of the role of public-private relations in India’s energy sector, especially in contrast to the widespread advancement of the neoliberal agenda in the country recent years. We conclude that the Indian State has fostered an increasing participation of the private sector in infrastructure, especially in renewable energies in which PPPs type of procurement have been more relevant. CPSEs’ expenditure in R&D has been of main importance in oil as well as in power. However, most of them tend to adapt foreign technologies instead of balancing foreign technologies with domestic technological efforts. Therefore, a main contemporary challenge for the Indian CPSEs performing in the energy sector is to deepen their connections and interaction with the other Indian NSI actors. Through the electrification process, the State has created markets for the private sector. Finally, we recommend further energy-related questions to be addressed in future research projects.
Topic:
Climate Change, Energy Policy, Environment, United Nations, Public Sector, Renewable Energy, Private Sector, and Sustainability
Political Geography:
India

5. Physician Shortages in the Indian Public Sector

Author:
Anjali Chikersal
Publication Date:
06-2015
Content Type:
Special Report
Institution:
Centre for Policy Research, India
Abstract:
India is one of the few countries that has been estimated to have a “critical” shortage of health workers and therefore unlikely to be able to provide essential health interventions to its people (WHO 2006). The dire impacts of these shortages are evident from the fact that it has fallen short of meeting its MDG goals on several fronts. As the current discourse on Universal Health Care debates the means of expanding coverage to all citizens, the one aspect universally agreed upon is the persistent challenge that a shortage of health workforce in the public sector poses, and the pressing need to address this gap. This policy brief outlines the core issues at the root of the problem and examines the reasons for the severe shortages in the key element of this workforce, the physicians, in the Indian public sector. It then provides an overview of WHO’s Global Policy Recommendations to address this challenge and looks at the strategies that various Indian states have so far adopted. Finally, it offers a set of practical and goal oriented recommendations aimed at directly and urgently addressing the challenge in the Indian context.
Topic:
Health, Governance, Health Care Policy, Public Policy, and Public Sector
Political Geography:
South Asia and India