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1. Fostering Growth in Digital Trade

Author:
Don Stephenson
Publication Date:
06-2020
Content Type:
Working Paper
Institution:
Gateway House: Indian Council on Global Relations
Abstract:
The shifting trends in trade, especially given the growth in communications capacity and reduced cost of computing have altered traditional economic development. India and Canada have a shared commercial interest in E-trade. Both countries need to align their resources to frame trade rules of the new digital economy, to mutual benefit.
Topic:
Communications, Economic growth, Trade, and Economic Development
Political Geography:
South Asia, Canada, India, and North America

2. Economic Aspect of Conflict Transformation in Balochistan (2001-2008)

Author:
Saima Butt and Rehana Saeed Hashmi
Publication Date:
01-2019
Content Type:
Journal Article
Journal:
South Asian Studies
Institution:
Department of Political Science, University of the Punjab
Abstract:
Economic development tends to bring stability in conflict ridden areas and mostly acts as a prescription for political stability and sustainability. In this context, Balochistan is one such study which implicates that deprivation and economic backwardness have been key players in intensifying conflict within and between the federal and provincial governments. Relative economic deprivation in Balochistan has become one of the root causes of conflict in the area. This study would focuses on developmental projects introduced by President General Pervez Musharraf in 2005 to pacify the intensity of insurgency in Balochistan.
Topic:
Conflict Resolution, Development, Natural Resources, Economic growth, and Conflict
Political Geography:
Pakistan, South Asia, Punjab, and Balochistan

3. India’s Great Slowdown: What Happened? What’s the Way Out?

Author:
Arvind Subramanian and Josh Felman
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
We examine the pattern of growth in the 2010s. Standard explanations cannot account for the long slowdown, followed by a sharp collapse. Our explanation stresses both structural and cyclical factors, with finance as the distinctive, common element. In the immediate aftermath of the Global Financial Crisis (GFC), two key drivers of growth decelerated. Export growth slowed sharply as world trade stagnated, while investment fell victim to a homegrown Balance Sheet crisis, which came in two waves. The first wave—the Twin Balance Sheet crisis, encompassing banks and infrastructure companies—arrived when the infrastructure projects started during India’s investment boom of the mid-2000s began to go sour. The economy nonetheless continued to grow, despite temporary, adverse demonetization and GST shocks, propelled first by income gains from the large fall in international oil prices, then by government spending and a non-bank financial company (NBFC)-led credit boom. This credit boom financed unsustainable real estate inventory accumulation, inflating a bubble that finally burst in 2019. Consequently, consumption too has now sputtered, causing growth to collapse. As a result, India is now facing a Four Balance Sheet challenge—the original two sectors, plus NBFCs and real estate companies—and is trapped in an adverse interest-growth dynamic, in which risk aversion is leading to high interest rates, depressing growth, and generating more risk aversion. Standard remedies are unavailable: monetary policy is stymied by a broken transmission mechanism; large fiscal stimulus will only push up already-high interest rates, worsening the growth dynamic. The traditional structural reform agenda—land and labour market measures—are important for the medium run but will not address the current problems. Addressing the Four Balance Sheet problem decisively will be critical to durably reviving growth. Raising agricultural productivity is also high priority. And even before that, a Data Big Bang is needed to restore trust and enable better policy design.
Topic:
International Trade and Finance, Economy, Global Political Economy, Economic growth, and Global Financial Crisis
Political Geography:
South Asia and India

4. Validating India's GDP Growth Estimates

Author:
Arvind Subramanian
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
My recent research paper “India's GDP Mis-estimation: Likelihood, Magnitudes, Mechanisms, and Implications,” (hereafter “GDP paper”) and the associated op-ed in the Indian Express on June 11, 2019 have generated considerable debate. This is encouraging because serious argument and counter-argument are the basis for good policy-making. Since the issue itself is of great importance, the counter-arguments to my analysis warrant a considered response. That is the aim of this note, which is a complement to the original paper, addressing both the larger issues and some of the specific points that have been raised. The note is structured as follows. Section II describes my engagement with India’s GDP estimation when I was Chief Economic Adviser. Section III elaborates on the framework/approach underlying the GDP paper. Section IV makes explicit the key puzzle surrounding India’s growth estimates, and addresses the possible explanations for it. Section V explores the puzzle in greater detail. Section VI provides additional cross-country evidence on growth and price deflators, which support the findings of the original paper, namely that growth during 2011-16 was likely overestimated by a significant margin. Section VII addresses two broad objections to the main findings. Section VIII discusses some of the methodological critiques of the paper. Section IX offers some thoughts on the way forward.
Topic:
Economics, Political Economy, International Development, and Economic growth
Political Geography:
South Asia and India

5. India's GDP Mis-estimation: Likelihood, Magnitudes, Mechanisms, and Implications

Author:
Arvind Subramanian
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
India changed its data sources and methodology for estimating real gross domestic product (GDP) for the period since 2011-12. This paper shows that this change has led to a significant overestimation of growth. Official estimates place annual average GDP growth between 2011-12 and 2016-17 at about 7 percent. We estimate that actual growth may have been about 4.5 percent with a 95 percent confidence interval of 3.5 - 5.5 percent. The evidence, based on disaggregated data from India and cross-sectional/panel regressions, is robust. Lending further credence to the evidence, part of the overestimation can be related to a key methodological change, which affected the measurement of the formal manufacturing sector. These findings alter our understanding of India’s growth performance after the Global Financial Crisis, from spectacular to solid. Two important policy implications follow: the entire national income accounts estimation should be revisited, harnessing new opportunities created by the Goods and Services Tax to significantly improve it; and restoring growth should be the urgent priority for the new government.
Topic:
GDP, Global Political Economy, Economic growth, and Global Financial Crisis
Political Geography:
South Asia and India

6. Incentivising Pro-Labour Reforms

Author:
Alice Evans
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
This paper shows that countries may reduce labour repression if they perceive this as conducive to export growth. This paper traces what happened before, in the presence of, and then following the withdrawal of international economic incentives for pro-labour reforms in Vietnam and Bangladesh. The Government of Vietnam announced it would allow independent trade unions, in order to join the Trans-Pacific Partnership (TPP) and increase market access. Similarly, the Government of Bangladesh rescinded restrictions on unions, following global condemnation of Rana Plaza and fear of buyers leaving en masse. Both governments reduced labour repression to promote export growth. With high-level authorisation, Vietnamese and Bangladeshi activists and reformists became less fearful, and mobilised for substantive change. However, these economic incentives were short-lived: after Trump’s election, the USA withdrew from TPP; buyers continued to source from Bangladesh, and squeezed prices (without requiring labour reforms). Both governments then amped up labour repression - notwithstanding private regulation, economic upgrading, industry growth, and mass strikes.
Topic:
Economics, Labor Issues, Reform, Economic growth, and Trans-Pacific Partnership
Political Geography:
Bangladesh, South Asia, and Vietnam

7. Engines without Drivers: Cities in India’s Growth Story

Author:
Partha Mukhopadhyay
Publication Date:
03-2018
Content Type:
Working Paper
Institution:
Centre for Policy Research, India
Abstract:
It is now almost axiomatic that cities are the engines of growth. Historically, federal support programmes have focused on rural areas, but over the past fifteen years, the need to devise such programmes for urban local bodies has come to be recognised, with JNNURM in its various forms, being the most visible early manifestation. This trend has continued, even strengthened, in this government and among the menu of urban support programmes on offer from the Government of India, the vision of the city as the engine of growth is most clearly evident in the Smart City Mission, with its focus on area based development – like an engine within the city. Yet, even in the mainstream economics literature, while there is evidence for cities as places of higher productivity, there is less evidence for cities as drivers of growth – with learning being the primary driver and urban primacy being an important obstacle. The primary questions are whether cities are places of learning, whether there are identifiable mechanisms of such learning and the kind of city institutions – economic, social and political – that facilitate such learning. This paper will interrogate the empirical characteristics of such urban institutions in India in the context of the theoretical literature and learning mechanisms that emerge from international evidence. In particular, it will argue that the nature of the labour market, which is largely contractual, the transfer of rural fragmentation in social relations to cities and the absence of city-level political agency, all reduce the potential of the city as a location of learning economies. For cities to even have the possibility of being engines of growth, we need to ensure that drivers of these engines are in place and we have a mechanism to think about paths to follow.
Topic:
Development, Government, Urbanization, and Economic growth
Political Geography:
South Asia, India, and Asia

8. Integrating Urban Development and Climate Objectives: Insights from Coimbatore

Author:
Ankit Bhardwaj and Radhika Khosla
Publication Date:
07-2018
Content Type:
Special Report
Institution:
Centre for Policy Research, India
Abstract:
Indian cities routinely make decisions on land use, housing, water, transport, economic growth and waste management that have implications for climate change mitigation and adaptation. Aligning these sectoral actions with climate goals involves understanding how infrastructural systems interact and how these choices address both development and climate objectives. City governments, as managers of these various infrastructure systems, can co-ordinate such decision-making. However, so far, this is largely ad hoc. We show how cities can use a ‘multiple objective’ approach to systematically examine, and make explicit, the linkages between local objectives, climate change mitigation and adaptation across their planning portfolio.
Topic:
Climate Change, Development, Water, Economic growth, Urban, and Sanitation
Political Geography:
South Asia, India, and Asia

9. Midcourse Manoeuvres:Community strategies and remedies for natural resource conflicts in Myanmar

Author:
Meenakshi Kapoor, Nwe Ni Soe, and Vidya Viswanathan
Publication Date:
06-2018
Content Type:
Special Report
Institution:
Centre for Policy Research, India
Abstract:
Land transformation has been at the centre of economic growth of post-colonial, Asian nation-states. While their political reforms and economic policies have focused on land governance, the outcomes have resulted in promoting privatisation and speculative business interest in ecologically sensitive landscapes that are also under diverse forms of common use by resource-dependent communities. A three-year study undertaken to understand community-level responses to land use transformation in India, Indonesia and Myanmar shows that the current scale and approach of land–intensive development in these large democracies is facilitated by fast-paced, top down policy changes. These policies are ‘stacked’ (when multiple layers of current and revoked laws are simultaneously in use) rather than integrated and their implementation is the responsibility of various authorities and agencies that overlap. Growing private investments in land that has remained within varying degrees of state control have changed the way land is managed. Land has become increasingly securitised and ‘out of bounds’ for small farmers and other land-users with or without recognised forms of ownership and use rights. Land conflicts are caused due to coercive acquisition processes or land grabs, unlawful operations of projects and long pending remedies to social and environmental impacts. In many instances, these conflicts begin even before the final decisions on projects are taken and persist for years. Highly capitalised land use change brings powerful investors and corporations, governments and local communities in unequal and precarious arrangements of negotiation and confrontation. Citizens and communities affected by land use change, use varied strategies such as administrative complaints, protests, litigation, media campaigns and political advocacy, and engage in improving project design and implementation, increase compensations, restore community access to resources and get a review on the operations of harmful projects. These are done under conditions of political intransigence and criminalisation of those who speak up. While all three countries have recognised land conflicts and their impact on development plans and proposals, they are yet to give affected people a formal and effective role in land and natural resource governance. This is the study report on Myanmar.
Topic:
Privatization, Natural Resources, Governance, Economic growth, Land Law, and Land Rights
Political Geography:
South Asia, India, Asia, and Myanmar

10. Midcourse Manoeuvres: Community strategies and remedies for natural resource conflicts in India

Author:
Kanchi Kohli, Meenakshi Kapoor, Manju Menon, and Vidya Viswanathan
Publication Date:
06-2018
Content Type:
Special Report
Institution:
Centre for Policy Research, India
Abstract:
Land transformation has been at the centre of economic growth of post-colonial, Asian nation-states. While their political reforms and economic policies have focused on land governance, the outcomes have resulted in promoting privatisation and speculative business interest in ecologically sensitive landscapes that are also under diverse forms of common use by resource-dependent communities. A three-year study undertaken to understand community-level responses to land use transformation in India, Indonesia and Myanmar shows that the current scale and approach of land–intensive development in these large democracies is facilitated by fast-paced, top down policy changes. These policies are ‘stacked’ (when multiple layers of current and revoked laws are simultaneously in use) rather than integrated and their implementation is the responsibility of various authorities and agencies that overlap. Growing private investments in land that has remained within varying degrees of state control have changed the way land is managed. Land has become increasingly securitised and ‘out of bounds’ for small farmers and other land-users with or without recognised forms of ownership and use rights. Land conflicts are caused due to coercive acquisition processes or land grabs, unlawful operations of projects and long pending remedies to social and environmental impacts. In many instances, these conflicts begin even before the final decisions on projects are taken and persist for years. Highly capitalised land use change brings powerful investors and corporations, governments and local communities in unequal and precarious arrangements of negotiation and confrontation. Citizens and communities affected by land use change, use varied strategies such as administrative complaints, protests, litigation, media campaigns and political advocacy, and engage in improving project design and implementation, increase compensations, restore community access to resources and get a review on the operations of harmful projects. These are done under conditions of political intransigence and criminalisation of those who speak up. While all three countries have recognised land conflicts and their impact on development plans and proposals, they are yet to give affected people a formal and effective role in land and natural resource governance. This is the study report on India.
Topic:
Development, Privatization, Natural Resources, Business, Economic growth, Land Law, Conflict, and Land Rights
Political Geography:
South Asia, India, and Asia