MARCH 10, 2018 Vol LIII No 10

` 80

A SAMEEKSHA TRUST PUBLICATION www.epw.in

EDITORIALS The BJP in the North East

 On a Trajectory of Trade War The party’s “development” rhetoric is based on
 When Power Is the Glue
nationalism and Hindutva that worked in Assam and
 Imperialist Assumptions
Tripura; will it work in the rest of the region? page 12
MARGIN SPEAK
 Return of the Mandir
COMMENTARY Changing Centre–State Relations
 BJP’s Victory in Tripura Two articles examine the challenges before the Fifteenth
 Three Years of PDP–BJP Finance Commission in view of its terms of reference
 The New Finance Commission’s Brief being notably different from those of previous commissions
 Caste in Britain and changes in Indian fiscal federalism. pages 19 and 39
 Counting Jobs in India

BOOK REVIEWS
 Gender, Medicine, and Society in Colonial India: Agents of Accountability
Women’s Health Care in Nineteenth and Early The implementation of the Right to Information Act, 2005
Twentieth Century Bengal in Bihar has opened up a new space for accountability of
 The Political Economy of India’s Growth Episodes
the administration to the citizens. page 47
PERSPECTIVES
 Challenges of the 15th Finance Commission
SPECIAL ARTICLES A Familiar Script in Kashmir
 Institutional Progression of the RTI Act An assessment of three years of the Peoples Democratic
 Levelised Cost of Electricity for Nuclear Power Party and the Bharatiya Janata Party coalition
 Caste, Religion, and Health Outcomes government in Jammu and Kashmir page 14
NOTES
 Assessing the 14th Finance Commission
ECONOMIC NOTES
Caste in Britain
 Misguided Priorities: Union Budget 2018–19 A look at how legislating against caste discrimination in
the United Kingdom has become not only contentious
CURRENT STATISTICS
but highly politicised, especially in the wake of the public
POSTSCRIPT consultation on caste and the equality law page 22
APPOINTMENTS/PROGRAMMES/ANNOUNCEMENTS ADVERTISEMENTS

The New India Foundation

Applications Invited for Fellowships
In the seventy years since Independence, there has been a large body of work produced by Indian historians and
social scientists. Taken singly, many of these studies are very impressive; viewed cumulatively, they add up to
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of that single date: 15th August, 1947. Historians rarely look beyond the attainment of Independence, whereas other
social scientists hardly look back at all.
Given India’s size, its importance, and its interest, and given that this is our country, the lack of good research on its
modern history is unfortunate. It is this lack that the New India Foundation seeks to address, by sponsoring work of
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Fourteen books have thus far emanated from the New India Foundation Fellowships. These are Harish
Damodaran’s India’s New Capitalists (Palgrave Macmillan, 2008), a study of the rise of new business communities;
Vasanthi Srinivasan’s Gandhi’s Conscience-Keeper (Permanent Black, 2009), a study of the political philosophy of
C. Rajagopalachari; Dinesh C. Sharma’s The Long Revolution (HarperCollins India, 2009), a history of India’s
computer and IT industry; Deepak K. Singh’s Stateless in South Asia (Sage Publications, 2009), a study of refugee
politics in north-east India; Ghazala Shahabuddin’s, Conservation at the Crossroads (Permanent Black, 2009), an
analysis of the science and politics of biodiversity conservation; Anis Kidwai’s, In Freedom’s Shade (Penguin India,
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biographical sketch of the author by the translator; Chitra Sinha’s Debating Patriarchy (Oxford University Press,
2012), a history of the controversy over the reform of Hindu personal laws in the 1940s and 1950s; Shashank
Kela’s A Rogue and Peasant Slave (Navayana, 2012), a history of adivasi culture and resistance in Central India;
Rahul Pandita’s Our Moon has Blood Clots (Random House, India, 2013) a memoir of the exodus of the Kashmiri
Pandits; S. V. Srinivas’s Politics as Performance (Permanent Black, 2013), a social history of the Telugu cinema;
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Hindi publishing house and its contributions to political discourse; Amrita Shah’s Ahmedabad: A City in the World
(Bloomsbury, 2015), a socio-political study of a once great industrial city in decline; Kartik Shanker, From Soup
to Superstar: The Story of Sea Turtle Conservation along the Indian Coast (HarperCollins, 2015), a work by a
professional scientist on marine conservation in India and the world; and Richa Kumar’s Rethinking Revolutions
(Oxford University Press, 2016), an ethnographic analysis of technology and agrarian change. Venu Madhav
Govindu and Deepak Malghan’s The Web of FreedomCDKQITCRJ[QHHTGGFQOſIJVGTCPF)CPFJKCP'EQPQOKUV
J.C Kumarappa (Oxford University Press, 2016).
The New India Foundation now invites applications for the ninth round of the New India Fellowships. Open only to
Indian nationals, these Fellowships will be awarded for a period of one year, and will carry a stipend of Rs. 1,00,000
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publication, and outline a road map towards that destination. The Foundation is ecumenical as regards genre,
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Applicants for the New India Fellowships are invited to submit their C.V., book proposal, and a writing sample
of at least 5,000 words (published or unpublished) to the Managing Trustee, The New India Foundation,
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www.newindiafoundation.org/fellowships.
Further details about the Foundation may be found at www.newindiafoundation.org
 march 10, 2018 | vol LIII No 10

Return of the Mandir EDITORIALS

10 A close examination of the Bharatiya Janata Party’s “Ram Rajya” promise tells
us that the idea itself violates constitutional values. — Anand Teltumbde
What the Tripura Victory Signifies for the BJP
12 An assessment of the Bharatiya Janata Party’s victory in Tripura, the
only North East state after Assam, which also follows the trajectory of
“mainstream” India. — Radhika Ramaseshan
Three Years of PDP–BJP
14 The coalition government of the Peoples Democratic Party and the Bharatiya
Janata Party in Jammu and Kashmir is facing a crisis of legitimacy, and
democracy itself is being damaged. — Mudasir Amin
Terms of Reference of the Fifteenth Finance Commission
19 The Fifteenth Finance Commission has a challenging task of addressing
fiscal federalism in a changed landscape. A reading of the terms of reference,
however, points to a bias towards the union government. — G R Reddy
Caste in Britain
22 Legislating against caste discrimination in the United Kingdom is not only
contentious, but has also become highly politicised. The UK government is
consulting the public about its equality law. — Annapurna Waughray
Counting Jobs in India
28 A detailed review of various sources of labour statistics in India highlights the lack
of long-time series data on total employment. — Jitender Singh, Arup Mitra
Challenges before the Fifteenth Finance Commission
39 An examination of the terms of reference of the Fifteenth Finance
Commission, which are distinct from earlier commissions, in the light of
changed centre–state relations — V Bhaskar
Emerging Politics of Accountability
47 The Right to Information Act, 2005 in Bihar has opened up a new space for
accountability of the state to society; its use is often linked to local politics. A
new variant of local politics has emerged in the form of accountability politics,
which is also now increasingly linked to social power. — Himanshu Jha
Nuclear Power Technology in India
55 A long-term energy security perspective may justify nuclear power to
be a part of the energy basket of the country. This may, however, be
overshadowed by the rapid development of renewable energy sources.
— Anoop Singh, Saurabh Sharma & M S Kalra
Caste, Religion, and Health Outcomes, 2004–14
65 If one is at the bottom of the social ladder in India, the risk of suffering
premature death, poor health, and lack of access to treatment and care is
substantially higher. — Vani Kant Borooah
Impact of the Fourteenth Finance Commission
74 An assessment of the changes in centre–state fiscal relations brought about
by the Fourteenth Finance Commission award — Mita Choudhury, Ranjan
Kumar Mohanty & Jay Dev Dubey
Misguided Priorities: Union Budget 2018–19
79 An examination of the trends in government finances suggests that the
expenditure patterns and regressive taxation policies are putting an
additional burden on out-of-pocket expenditure of individuals.
— J Dennis Rajakumar
Postscript
85 Vidyadhar Date looks at how gyms have monopolised the idea of being
healthy; Vishnu Achutha Menon discusses how Kathakali has changed quite
radically since the early 1990s; and Last Lines by Ponnappa.
On a Trajectory of Trade War ...............................7
When Power Is the Glue ...................................... 8
Imperialist Assumptions ..................................... 8
FROM 50 YEARS AGO............................................. 9
MARGIN SPEAK
Return of the Mandir
—Anand Teltumbde ............................................ 10
COMMENTARY
What the Tripura Victory Signifies for the BJP
—Radhika Ramaseshan ..................................... 12
Co-option, Collaboration, Conflict:
Three Years of PDP–BJP
—Mudasir Amin ................................................. 14
Upholding Fiscal Federalism: Terms of Reference
of the Fifteenth Finance Commission
—G R Reddy ....................................................... 19
Caste in Britain: Public Consultation on
Caste and Equality Law
—Annapurna Waughray ....................................22
Counting Jobs in India:
A Detailed Review of Labour Database
—Jitender Singh, Arup Mitra .............................28
BOOK REVIEWS
Gender, Medicine, and Society in Colonial India:
Women’s Health Care in Nineteenth and Early
Twentieth Century Bengal—Western Medical
Education and Women’s Healthcare in Colonial
Bengal—Manas Dutta........................................32
The Political Economy of India’s Growth Episodes—
Navigating Spaces of Economic Growth
—Chetan Ghate ..................................................36
PERSPECTIVES
Challenges before the Fifteenth Finance
Commission—V Bhaskar ...................................39
SPECIAL ARTICLES
Emerging Politics of Accountability: Institutional
Progression of the Right to Information Act
—Himanshu Jha ................................................47
Levelised Cost of Electricity for Nuclear Power
Using Light Water Reactor Technology in India
—Anoop Singh, Saurabh Sharma, M S Kalra ....... 55
Caste, Religion, and Health Outcomes in India,
2004–14—Vani Kant Borooah ............................65
NOTES
Fourteenth Finance Commission: Impact of
Its Recommendations—Mita Choudhury,
Ranjan Kumar Mohanty, Jay Dev Dubey ............. 74
ECONOMIC NOTES
Misguided Priorities: Union Budget 2018–19
—J Dennis Rajakumar .......................................79
CURRENT STATISTICS ..........................................83
POSTSCRIPT
Treadmill Times—Vidyadhar Date (85),
Kathakali in Flux—Vishnu Achutha Menon (87),
Last Lines (88)
appointments/programmes
announcements ................................................ 89
Letters .................................................................4
 LETTERS
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Ever since the first issue in 1966,
EPW has been India’s premier journal for Economists on Bank Scams unsecured loans and ever-greening of
comment on current affairs
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loans, both practices that PNB is now ac-
It succeeded Economic Weekly (1949–1965),
which was launched and shepherded
by Sachin Chaudhuri,
who was also the founder-editor of EPW.
T he scale of the recent bank scams and
the potential losses faced by banks
holding non-performing loans given to
cused of. In fact, because of the opacity
of banking practices, public banks are
actually easier to regulate than private
As editor for 35 years (1969–2004)
Krishna Raj some large companies and individuals, has banks. As a first step to address the prob-
gave EPW the reputation it now enjoys. shocked all of us. However, we are con- lem of NPAs, the finance minister should
Editor cerned to note that this has become an immediately require all banks to publish
Lina Mathias excuse to demand the privatisation of their lists of wilful defaulters.
Editor–DESIGNATE publicly held banks. While it is true that Public sector banks in India have played
GOPAL GURU
the current scam involves Punjab National a critical role in financial inclusion, a
SENIOR Assistant editorS
lubna duggal Bank (PNB), the second largest public project that is still far from complete. After
ABHISHEK SHAW sector bank, the basic cause is very clearly nationalisation, there was an increase in
copy editorS the inadequate and faulty regulation and rural bank branches and accounts, and
jyoti shetty
Tejas Harad monitoring of the banking sector. This an increase in credit to sectors that were
Assistant editorS affects all banks, regardless of ownership. ignored earlier, such as agriculture and
SANGEETA GHOSH But in a curious turn, fraud that was led small-scale enterprises. Even now, private

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ANISHA GEORGE
Ishan Mukherjee by and which benefited private players banks continue to avoid these activities
ASSISTANT Editor (DIGITAL) pursuing super-profits at any cost, is being and focus only on higher value borrowers

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SHIREEN AZAM made the reason for handing control of and lenders, thereby excluding the poor.
editorIAL Assistant the nation’s savings to the private sector. At this juncture, it is critical to focus
JEMIMAH GOMES
Poorly regulated private banks are even on effective regulation and supervision

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production
u raghunathan more prone to scams and failure, as the of all banks, and to make the regulatory
suneethi nair financial sector is rife with information process stricter, as well as more trans-

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Circulation MANAGER asymmetries and market imperfections. parent and accountable. Using this crisis
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Private profit orientation generates incen- to privatise public sector banks will only
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expensive for the public exchequer, be-
cause bank runs have to be prevented.
It is worth noting that even a scam as
large as the present one has not led to a
widespread run on PNB and other banks.
This is because of the state guarantee
that still generates trust in the public
banking system.
In India, before the nationalisation of
banks in 1969, there was an average of
35 private bank failures every year. This
came down drastically after most of the
sector came under public control. After
the liberalising reforms of the 1990s, the
collapse of the private Global Trust Bank,
Times Bank and Centurion Bank (among
others) resulted in mergers, with the losses
being borne by public sector banks. At
present, several private banks also face
large non-performing assets (NPAs), often
with the same companies that are default-
ing on public banks. Some private banks
have also been found guilty of providing
I n the article “Assessing ASER 2017:
Reading between the Lines” (EPW,
24 February 2018), Disha Nawani suc-
cinctly points out the limitations of large-
scale assessments, the foundations of
which are based on a limited and flawed
understanding of education and learning.
Conclusions drawn from ASER such as the
“better outcomes of private schools,” do
not take into account the social and politi-
cal context of learning and education.
While I am in solidarity with the author
with respect to her criticism of ASER and
its dangerous claims for the deregulation
of private schools and scrapping of no-
detention policy, I think that attention
should not shift away from the poor quality
of education that millions of our children
are trapped in. Unlike ASER, the Literacy
Research in Indian Languages (LiRIL)
project—jointly funded by Tata Trusts and
Azim Premji University, in collaboration
vol liII no 10 EPW Economic & Political Weekly

with Quality Education Support Trust
(QUEST), Maharashtra and Kalike, Karna-
taka—goes beyond the “performance-
levels of students” and tries to understand
the complexity and nuances of literacy
acquisition. The project collected data on
children, teachers, curricular materials,
teaching–learning processes, and on chil-
dren’s environment beyond schools. Even
such a study, with a larger canvas of under-
standing of literacy learning, confirmed
that children in both the project sites—
Wada in Maharashtra and Yadgir in
Karnataka—perform very poorly in a
variety of reading and writing tasks. While
understanding the politics of large-scale
assessments like ASER and their unjusti-
fiable appropriation of education systems
and processes, we should not ignore this
other elephant in the room.
I do not agree to the assertion that
“detention is required for ensuring learn-
ing.” At the same time, the Right of Chil-
dren to Free and Compulsory Education
Act, 2009 (RTE) provisions for continual
and regular support for student learning
is clearly not implemented on the ground.
In the current context, neither detention
nor non-detention is capable of making
any deeper educational change, especially
for children in difficult circumstances.
After detention, children are “given” the
same educational experience they have
received the previous year, without any
change in pedagogy, classroom culture or
teacher–child relationship. It is more likely
that after detention, the child either dis-
continues schooling, or gets an automatic
promotion in the second year, or experi-
ences one more stressful school year.
The system should be able to locate
children in the diversity of their individual
dispositions as well as in the sociocultural,
economic, historical and political-rooted-
ness of their lives. Unless the system re-
sponds to this complex being of children
(or for that matter any human being), it
will continue to treat children as “raw
materials,” uniform in nature, which can
be transformed into “products” of uniform
quality. This is of course the kind of episte-
mological change that educationists have
been arguing for, for decades. The point is
that the roots behind inadequate quality of
schooling, unjust and meaningless school-
ing experiences (especially for children in
Economic & Political Weekly EPW march 10, 2018
difficult circumstances), and what school-
ing means to such children’s lives, is more
complex than one can imagine. Unless we
think through our education system in such
a deep and complex manner, and envision
a meaningful educational change through
difficult and challenging actions and parti-
cipation, detention or non-detention will
continue to reproduce the existing quality
and equity of our education system.
As the author rightly points out, the
public education system needs to be
strengthened and the state needs to be
held accountable to the poor children, for
whom quality education is still a distant
dream. Education cannot be left to the
charity of individuals and mercy of the
market, and the state cannot have double
standards when it comes to the education
of poor children. Blind endorsement of
large-scale assessments like ASER, without
reflecting on their sociopolitical implica-
tions for educational policy and practice,
T
will only add fuel to the pyre, beneath
which our education system lies.
Z
Vijitha Rajan
Comment on website
G
A Rohingya Woman’s Story
T he Rohingya Muslims, forcibly ousted
A
from Myanmar, are living precarious
lives, mainly in the refugee camps in
Bangladesh and India. The military
M
assault on the Rohingya in Myanmar from
25 August 2017 onwards, compelled a large
number of them to flee the country in a
desperate bid to save their lives. Rahman
Nasiruddin has documented the stories
of some stateless Rohingya in the refu-
gee camps of Bangladesh. A few such
stories have been incorporated in the
Bengali report titled “The Rohingya: How
Will They Survive?” prepared by Surajit
Bandyopadhyay, and published by an acti-
vist forum, Manthan Samayiki on 5 Feb-
ruary 2018 in Kolkata. The micro-story of
EPW Engage
The following articles have been published in the past week in the EPW Engage section (www.epw.in/engage).
(1) Budget 2018 and Interactive Media: How to Design Nuanced Games on Complex Topics
— Bharath M Palavalli, Sruthi Krishnan
(2) The Communal Politics of Eviction Drives in Assam—Pinku Muktiar, Prafulla Nath, Mahesh Deka
(3) PNB Fraud: How Do Banks Manage Operational Risk?—K Srinivasa Rao
vol liII no 10
LETTERS
Toiyoba, incorporated in the report, gives
us a snapshot of the traumatic lives of the
Rohingya in Myanmar.
Toiyoba lived in Mongdu, Myanmar,
with her husband and four children. Her
husband had a grocery shop in the market
and reared poultry at home. The family did
not have any land, other than the house in
which they lived. Neither Toiyoba nor her
husband were formally educated, and their
children received their education in the
madrasa. Toiyoba communicated that the
formal education that the Burmese (the
dominant community in Myanmar) receive
in schools is not meant for the Rohingya.
According to her testimony, the Rohingya
children, who joined the formal system of
schooling in Myanmar were deliberately
not allowed to pass the examinations,
R
and detained in the same class for years.
Only those who paid bribes could man-
E
age to pass. To put it in Toiyoba’s words:
We do not have so much money. So we did not
even think of sending our children to such
schools. It is better not to have education,
rather than studying with the Mogs (pejora-
tive way of referring to the dominant com-
munity). Madrasa education would at least
give our children the chance to know Allah.
Toiyoba further stated that even the
children of the Mogs would throw stones,
if they found the Rohingya in the streets.
She witnessed brutal state violence on
the Rohingya Muslims before her family
fled from Myanmar:
Neighbourhood after neighbourhood was
being burnt, and the young men and women
were forcibly taken away. The young men
were either shot dead or cut into pieces, and
the young women, after being brutally treat-
ed, were found to be doused in petrol and
burnt. Those of us who could escape are
alive, the rest are dead.
Toiyoba’s story put us in a great
predicament: How does one address such
savagery of the state and pathos of the
people in the language of human rights?
Arup Kumar Sen
Kolkata
5
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6 march 10, 2018 vol liII no 10 EPW Economic & Political Weekly
 march 10, 2018
On a Trajectory of Trade War
Is something akin to Smoot–Hawley (and the retaliations it provoked) on the cards?
U
nited States (US) President Donald Trump’s announce-
ment on 1 March to impose a 25% import tariff on steel
and a 10% import tariff on aluminium, both on grounds
of “national security,” has been widely expected to provoke a
trade war. As we go to press, this is yet to break out, but without
sounding alarmist, one needs to add that a trade war between the
world’s major economies would lead to a significant contraction
of world trade. In turn, this could result in deep recession in the
world economy, which would, no doubt, exacerbate the already
tense geopolitical strains. Indeed, riding high on his nationalis-
tic “America First” tirade, Trump seems to be bent on generating
such a dénouement. Ranting against unnamed countries that
had “destroyed” the aluminium and steel industries of the US, he
G
went on to justify the big import tariff impositions: “When it
comes to a time when our country can’t make aluminium and
steel, then you almost don’t have much of a country.”
A
The announcement of the import tariffs came at a meeting
with a group of top executives of the US aluminium and steel
industries, suggesting that domestic steel and aluminium prices
M
and profits were the prime considerations in arriving at the
decision. What impact the import tariff impositions would have
on the costs of production of the automotive, aerospace, con-
struction, machinery, and many other steel and/or aluminium-
based industries, and, in turn, on their international competitive-
ness, did not seem to matter. On 6 March, Gary Cohn, Trump’s
chief economic adviser and head of the National Economic
Council, who had spearheaded the earlier massive corporation
and income tax cuts, resigned. A former top Goldman Sachs
executive, Cohn reportedly sided with Trump’s “national security”
team, H R McMaster, Rex Tillerson, and Jim Mattis, US National
Security Advisor, Secretary of State, and Defense Secretary
respectively, who opposed the import tariffs on the plea that
such an imposition would alienate Washington’s main “security”
allies—Germany, France, Japan, Canada, and South Korea.
An early response to the tariff imposition came from the
European Union (EU) and from the US’s trade partners in the North
American Free Trade Agreement (NAFTA), Canada and Mexico. EU
trade commissioner Cecilia Malmström hinted that the EU would
legally challenge the imposition in the World Trade Organization’s
(WTO) Dispute Settlement Body and also impose WTO-compati-
ble retaliatory import tariffs on a list of US products as a counter-
measure. She seemed reluctant to call this a trade war, but Trump
was quick to suggest that the US will then hit back on European
Economic & Political Weekly EPW march 10, 2018 vol lIii no 10
cars. On the list of US products chosen by the EU for the imposi-
tion of retaliatory tariffs are Harley Davidson motorcycles,
which must surely have provoked Trump’s threat to hit back
with the imposition of prohibitive tariffs on European cars. The
E R
“America First” economic nationalists in the White House, Peter
Navarro, director of the White House National Trade Council, and
Wilbur Ross, the Commerce Secretary, stole a march over Cohn,
who then, as already mentioned, put in his papers. Vigorous dissent
T
has, however, come from Republicans, expressed forcefully by
House Speaker, Paul D Ryan.
Z
When Canada and Mexico asked for exemptions from the import
tariffs, the US reportedly told their representatives that these
will be granted only if they agree to US demands in the ongoing
NAFTA renegotiation. The US, in effect, wants Canada and Mexico
to renegotiate NAFTA holding a gun to their heads, as one of their
representatives put it. Interestingly, Navarro, who also heads
the Office of Trade and Manufacturing Policy, said that even as
exemptions will not apply to individual countries, companies
can seek exemptions, opening the door for intense lobbying.
Interestingly, in the midst of disagreement all around, there
seems to be some sort of an establishment consensus that Trump
should instead direct his trade war against China, and that he
should lead a coalition of US allies against China’s “predatory
trade behaviour.” The question being posed is, why does he need to
attack countries that would otherwise be ready to join him as
part of such a coalition? The more precise target seems to be
China’s “piracy of software,” its “theft of trade secrets,” and its
commerce in “counterfeited goods.” China is the “main culprit,”
so “twist its arm” under Section 301 of the US Omnibus Trade and
Competitiveness Act of 1988 to “punish” it for its “illegitimate”
transfer of technology and its “stealth” of intellectual property
that have “harmed” US commercial interests. There are also
calls to impose prohibitive tariffs on shoes, textiles and clothing,
and consumer electronics goods imported from China.
China, however, has refused to be provoked. Trump’s initial
“protectionist” moves must nevertheless be viewed as the
beginning of a concerted US attempt to undermine the multilateral
trading system governed by WTO rules. The world might be
witnessing the beginning of something akin to the Smoot–Hawley
Tariff Act of June 1930, which raised import tariffs on some
20,000 goods provoking retaliatory tariffs by major US trading
partners, leading to a severe trade war, the contraction of world
trade, and exacerbation of the Great Depression.
7
EDITORIALS
When Power Is the Glue
The recent assembly elections in north-eastern India tell three distinct stories.
I
f there is one lesson the “mainland” must draw from the recent
assembly elections in Meghalaya, Nagaland and Tripura in
north-east India, it is to avoid generalisations. Based on the
sweeping victory of the Bharatiya Janata Party (BJP) in Tripura,
where it decisively trounced the Communist Party of India (Marxist)
that had been in power for 25 years, the mainstream media in
India wrote glowingly about the “saffron sweep” of the North East.
They forgot, as they often do in relation to this region, that “the
North East” is a geographical entity that comprises seven distinct
(now eight, counting Sikkim) states with different political, cultural
and historical features. To lump them together is to deny them
their individual identities. In fact, this attitude in the “mainland”
remains a major reason for resentment in these states where people
feel they are lumped together and relegated to the periphery.
Apart from anti-incumbency as a factor, it is evident that the
BJP succeeded in Tripura because of the large Hindu population
that responded to its agenda. In the hill states, which are Christian
majority, the story was entirely different. But even in Tripura,
where the BJP won enough seats to form a government on its
G
own, it entered riding on the coat-tails of a regional party
demanding a separate state for the tribals of Tripura, the Indig-
A
enous People’s Front of Tripura (IPFT). Although the IPFT is a
junior partner in the new Tripura government, it has the poten-
tial to be a thorn in the ruling party’s flesh as there is no way the
BJP at the centre will accede to the demand of a separate state.
M
In Meghalaya and Nagaland, it is the nature of regional poli-
tics that tells the real story. Meghalaya was formed as a result of
the struggle of the All Party Hill Leaders Conference (APHLC)
that succeeded in carving out a separate state for the Khasis,
Jaintias and Garos out of Assam in 1972. The APHLC broke apart
within a few years, largely due to the machinations of the
Congress party that was in power at the centre in 1976, a year
that coincided with the Indira Gandhi-imposed state of emergency.
Since then, its former members either joined the Congress or
formed smaller regional groupings. Their one attempt to come
together and form a non-Congress government in 2008 lasted
only a year, ending in President’s Rule and thereafter Congress
rule until these elections. Although the Congress emerged as
the largest single party this time, its record of misgovernance
notwithstanding, it did not have the abilities of the wily
Imperialist Assumptions
The debate in Britain over religious prosecution in India is hypocritical.
O
n 1 March 2018, the British Parliament lamented about
how “freedom of religion or belief” was in danger in
Narendra Modi’s India. Member of Parliament (MP)
Martin Docherty-Hughes, a leader of the Scottish National Party,
has urged the British government to raise the issue with Modi
8 march 10, 2018
“facilitator,” the BJP, to cobble together an alliance. It is possible
that the current alliance in power, although unwieldy, could
survive this time around as the BJP is a part of it and thus would
have no interest in pulling it apart.
Nagaland remains something of an outlier. The BJP used the
principle of regional parties wanting to align with the national
party in power at the centre to keep the two main regional parties
dangling before the elections. It had a pre-election alliance with
the Nationalist Democratic Progressive Party (NDPP) led by
R
Neiphiu Rio that was formed when the ruling Naga People’s Front
(NPF) led by T R Zeliang broke apart. It was this split in the NPF,
E
based not on substantive issues but on the rivalry between Rio and
Zeliang, that gave the BJP its political advantage. In the end, though,
the BJP stuck with the NDPP and made up the numbers with
T
smaller parties. Given the recent political history of Nagaland,
where there was no one in the opposition in the assembly, it would
Z
not be surprising if, in the not too distant future, the NPF once
again breaks apart with some of its members choosing to join the
ruling alliance. In Nagaland, the lure of being in office remains
the ideological glue that holds disparate elements together.
So, what conclusions should the “mainland” draw from the
elections in the three north-eastern states? First, that the outcome
in Tripura does not represent the political reality of the other two
states. The BJP has won in Tripura but in the two hill states it is still
dependent almost entirely on regional formations. The prospect
of it being able to form a government on its own in any of these
states in the foreseeable future is unlikely. Second, these elections
demonstrate that the party with a difference, as the BJP likes to pro-
ject itself, is clearly no different from the party it chooses con-
stantly to attack, the Congress. The philosophy that anything goes
so long as you come to power is common to both. Third, the BJP
was able to sell the “development” mantra in these states because it
has no track record of misgovernance there unlike the Congress.
This could unravel in the months leading up to the general elec-
tion as little can be delivered of what has been promised. And fi-
nally, while there is no doubt that the BJP is a formidable opponent
in a straight fight, as in Tripura or in Assam in 2016, in the rest of the
North East, it only wins because it has perfected the art of being a
“facilitator,” a kinder term for “manipulator,” to cobble an alliance
of unlikely partners with the lure of power as the main magnet.
when he visits the United Kingdom in mid-April 2018 for the
Commonwealth Heads of Government Meeting.
On the face of it, the fact that Britain has finally woken up
to persecution of religious minorities in India is good news.
Diplomatic pressure on a government bent on vitiating the state
vol lIii no 10 EPW Economic & Political Weekly
 EDITORIALS

machinery and society with its Hindu-majoritarian agenda,
must be welcomed. However, the transcript of the House of
Commons (HOC) speeches makes for a curious reading. It
reveals how Britain’s alarm at the decline of religious freedom
across the (non-Western) world is articulated through a series
of imperialist assumptions.
The success of imperialist propaganda, of the modern European
variety, cannot simply be measured by the degree of legitimacy
that overt justifications of empire are able to gain in public dis-
course. It is revealed by the extent to which certain basic premises
of imperialist ideology are rendered self-evident and obvious.
One such assumption is that the achievement of Europe in any
given field becomes the unquestioned yardstick against which
the achievements and failures of all societies are measured. The
and that if they are “inconvenienced,” it is only to protect the
world from terrorism?
Despite everything, even if the question of religious persecu-
tion is broached at all by the British government during its inter-
actions with Modi, it will still be good news. But the possibility
of this happening does not seem particularly bright. Responding
to the discussions, Minister for Asia and the Pacific Mark Field
promised that in his government’s meetings with Modi, he will
“do his best … to ensure that Parliament’s voice is properly
heard.” However, he reminded his colleagues that “diplomacy
sometimes needs to be done behind closed doors, rather than
with megaphones.” If the reception given to Modi in 2015 by his
government is anything to go by, Field’s excuse for closed-door
diplomacy appears more like telling parliamentarians in the

R
Westminster Hall debate, which voiced concerns about the decline most parliamentary language not to expect too much. Post-Brexit
in freedom of religion, was almost casually “Eurocentric.” Labour Britain is far more desperate to forge closer ties with India. Already

E
MP Fabian Hamilton was appalled that despite India being the there are reports of bilateral meetings being scheduled between
world’s largest democracy “there is still religious persecution Modi and British Prime Minister Theresa May where trade and

T
and on a scale unimaginable in parts of Europe.” India’s record business agreements are to be discussed. There is also talk of
in ensuring religious freedom, therefore, is dismal precisely setting up a regional trade hub in India. It is unlikely that Britain
because it compares so unfavourably with the state of affairs in will want to annoy the visiting Prime Minister with irritants
parts of (read “Western”) Europe.
The consequence of this imperialist discourse of religious
freedom is clear enough. The HOC debates give the impression
that Christians and Sikhs are the only oppressed religious
groups in India. Not a word is said about the fate of Muslims,

G Z
such as issues of religious persecution.
There is no denying that oppression of Christian and Sikh
religious minorities in India is a genuine issue. Christian victims
of the 2008 Kandhamal violence still wait for justice, as do
the victims of the 1984 anti-Sikh pogrom. But critiquing reli-

A
who have been the primary targets of Hindutva violence in India. gious persecution within an explicitly imperialist frame, as has
What accounts for this glaring omission? The only plausible been the case in the recent debate in the British Parliament,
answer is that the record of Britain (and indeed, of the rest exposes its limits. It remains complicit in the silence around

M
of the “Western” world) in ensuring rights and freedoms of
Muslim minorities may not qualify as an obvious parameter to
compare Muslim experiences in India. This is admitted as
much in a brief display of self-reflexivity by Hamilton who
confessed that the UK has seen an unprecedented rise in hate
crimes against Muslims in recent years. However, this moment
of autocritique was drowned out in assertions such as those by
the Conservative MP Edward Leigh that the most persecuted of
all religious groups in the world are Christians and minority
Muslims groups, the latter always suffering at the hands of
other dominant Muslim groups (such as Ahmadis in Pakistan).
Does this mean Muslims in non-Muslim majority states, such as
India and Britain, are not persecuted because of their religion
some of the most horrific experiences of violence faced by
Muslims in contemporary India. Such narratives also resist all
nuanced understandings, such as complexities in experiences
of religious violence. Christians in India are oppressed not
simply because they read the Bible, but because they are also
Dalits and Adivasis and, like other minorities in other parts
of the world, often live on land and resources that global
capitalism craves. Neo-imperialist ambitions of metropolitan
capitalism in the global periphery are often the pre-eminent
forces of oppression of marginalised groups across the world,
including religious minorities. It is impossible, therefore, to
discuss religious persecution within frames imbued with impe-
rialist assumptions.

From 50 Years Ago
Vol III, No 10 march 9, 1968
A Departure from Apartheid
South Africa has been readmitted to the
Olympic Games after it made what can only
be described as sweeping concessions on its
racial policies — at least for the Olympic
Games. Since 1963, when at its Baden Baden
session the International Olympic Games
Committee took the unprecedented decision
to keep South Africa out, South Africans have
missed the 1964 Tokyo Games, the 1964
Winter Olympics in Innsbruck, and the most
recent winter contest in Grenoble. Even now,
it has been accepted for the Mexico City
Games only, as the whole question of racial
discrimination is to be reconsidered in 1970.
Meanwhile the International Committee
possibly wants to put South Africa on proba-
tion. For the present, by South African stand-
ards, the concessions made by Johannesburg
are substantial enough: South Africa is to send
to Mexico City a single team, multi-racial in
character, instead of two teams, one of Whites
and one of non-Whites. The non-white and
white members of the team are to travel
together, and not separately. They are to wear
the same uniform, be accommodated in the
same hotels, and march as an integrated team
under the same flag at the opening ceremony
— all of which is a departure from earlier
practice.
These may not sound radical decisions on pa-
per, but it is possible to foresee a time when the
dark-skinned people of South Africa will come to
represent their country more and more at inter-
national meets, even as it has happened in the
United States.

Economic & Political Weekly EPW march 10, 2018 vol lIii no 10 9
MARGIN SPEAK
Return of the Mandir
Anand Teltumbde
P
rime Minister Narendra Modi came
to power in 2014 on the back of a
blitzkrieg campaign against a “cor-
rupt” Congress party. With the support of
its global capital patrons, he also mesme-
rised people with his political rhetoric of
achhe din (good days) and a clean India,
both literally and metaphorically. How-
ever, in the past three years, public life
has got corrupted and it may be difficult to
recover from its effects, for many years to
come. Socially, the emboldening of the
saffron brigade in terms of enacting its
fascist antics, unleashing terror on min-
orities, and spreading communal poison;
politically, systematic erosion of demo-
cratic norms, undermining of parliamen-
tary decorum, and saffronisation of insti-
tutions; economically, devastation of the
informal sector due to irrational deci-
sions like demonetisation, hasty imple-
mentation of the goods and services tax,
and reversal of India’s economic growth
rates have been the hallmark of his rule.
Now that people are slowly waking up to
reality, reflected in the decline of his
party’s performance in recent elections,
there is a clear indication of the revival
of the Bharatiya Janata Party’s (BJP)
strategy of communal polarisation in the
name of Ram Mandir.
Dirt of Communalism
It is well known that Ram Mandir, Article
370 on Kashmir, and Pakistan, have been
the three main issues that have propelled
the BJP from a fringe party to a formida-
ble political force in India. Among these,
it was the Ram Mandir issue that provided
the moment of ascent for the BJP, when
the Rajiv Gandhi government enthusias-
tically ordered the opening of the locks
of the Babri Mosque within an hour of
the Faizabad judge’s ruling on 1 February
1986. Gandhi’s strategy was aimed at
undercutting the BJP’s Ram Temple cam-
paign, underway since 1984. But it back-
fired badly as the Sangh Parivar quickly
10
seized the initiative. It paid off handsome
dividends for the BJP (then the Jan Sangh)
in terms of pushing up its tally from just
two seats in 1984 to 86 seats in 1989.
Enthused by this success, Lal Krishna
Advani, the then president of the BJP
undertook a rath yatra from Somnath in
Gujarat to Ayodhya in Uttar Pradesh (UP)
on 25 September 1990. If Pradipsinh
Jadeja, then minister of state for home, is
to be believed, the architect of this yatra
was none other than Modi (Ajay 2017).
Advani’s arrest on 23 October 1990 at
Samastipur, Bihar by Lalu Prasad Yadav’s
government, the consequent frenzy of the
T
kar sevaks (religious volunteers) assem-
bled at Ayodhya, and the firing upon
Z
them by the Mulayam Singh govern-
ment in UP on 30 October and 2 Novem-
ber 1990, eventually led to the demoli-
G
tion of the Babri Mosque on 6 December
1992. It sparked off communal riots
A
across the country, particularly in cities
like Mumbai, Surat, Ahmedabad, Kanpur,
Delhi, and Bhopal, resulting in over
2,000 deaths, primarily of Muslims, and
M
loss of property amounting to crores of
rupees. A significant contribution to this
communal build-up in favour of the BJP
was that of Modi’s, culminating in the
2002 Gujarat pogrom, a sequel to the
Ram Mandir issue, resulting in the
deaths of another 2,000 Muslims.
The BJP gained hugely from these
communal carnages. Yatras became its
special purpose vehicle to whip up com-
munal frenzy among the people. The
second rath yatra of the BJP was the Ekta
Yatra (unity rally) from Kanyakumari to
Kashmir led by the then party chief
Murli Manohar Joshi, which ended with
a handful of BJP leaders, including Modi,
who was the convener of the yatra, timidly
unfurling the tricolour at Srinagar’s Lal
Chowk on Republic Day in 1992 amidst
tight security. Another Rashtriya Ekta
Yatra (national integration rally) from
Kolkata to Kashmir was planned in 2011.
MARCH 10, 2018
However, the BJP Yuva Morcha’s attempt
to hoist the national flag in Srinagar was
thwarted by the then Omar Abdullah-led
state government in Jammu and Kashmir
as it could potentially derail the ongoing
peace process.
As it gained in strength, the BJP main-
tained a strategic silence over these issues
and instead projected development as its
election issue. It was required to have a
wider appeal and also to convince its
patrons in global capital. Now that it finds
itself on shakier grounds with voters, it
appears to be resorting to its old game of
communal polarisation to consolidate its
constituency.
R
Ram Mandir, Once More
The BJP’s global patrons, however, may
E
not favour the idea and hence it appears
to have distanced itself from the 41-day
long Ram Rajya Rath Yatra, spanning a
6,000-kilometre long journey from Ayo-
dhya in UP to Rameshwaram in Tamil
Nadu (Pradhan 2018). The yatra was to
be flagged off earlier by UP Chief Minister
Yogi Adityanath, but another party
Member of Parliment did so at Ayodhya
on 13 February 2018. The yatra is said to
be organised by a little known Maha-
rashtra-based organisation, “Sree Rama-
dasa Mission Universal Society,” sup-
ported by two Rashtriya Swayamsevak
Sangh affiliates, the Vishva Hindu Pari-
shad and the Muslim Rashtriya Manch
(Pradhan 2018). It is meant to “create
awareness” about “Ram Rajya” and the
Ram Temple.
The BJP’s political agenda is visible to
anyone: as many as 224 Lok Sabha con-
stituencies are being covered by the yatra
in six states—UP, Madhya Pradesh,
Maharashtra, Karnataka, Kerala and
Tamil Nadu, not the least—with immi-
nent assembly elections in Karnataka in
April 2018. Although, the BJP govern-
ment kept a safe distance from the yatra,
the union home ministry has written to
the police chiefs of states through which
the yatra will pass, asking them to facili-
tate its progress (Jha 2018). It is interest-
ing that the government that routinely
denies permission to activists holding
even small public meetings, without any
vol lIiI no 10 EPW Economic & Political Weekly

rhyme or reason, has not only allowed
this yatra, despite its potential danger to
law and order, but also has mandated its
machinery to facilitate it.
The demands of this yatra are also reve-
aling: the re-establishment of Ram Rajya,
inclusion of the Ramayana in syllabi of
schools and colleges, shifting weekly
holidays from Sundays to Thursdays,
and a declaration of a Vishva Hindu
Diwas (world Hindu day). There is ano-
ther angle to this project, which is that
Hindutva forces want to have an out-of-
court settlement of the Ram Janmab-
hoomi–Babri Masjid dispute that is com-
ing up for its final hearing before the
Supreme Court on 14 March 2018. The
yatra can pressure Muslim groups to
acquiesce to the same as the verdict of
the Court cannot be relied upon. Ram
Rajya, as a concept, was first articulated
by M K Gandhi to lure the masses into
his freedom movement on the promise
that once independence arrived, Ram
Rajya will be established. Gandhi, in his
characteristic style, went on to change its
interpretation, even dissociating it from
the Hindu religion. Responding to a
question at a prayer meeting on 26 Feb-
ruary 1947, he clarified
let no one commit the mistake of thinking
that Ramrajya means a rule of Hindus. My
M
Ram is another name for Khuda or God. I
want Khuda Raj which is the same thing as
the Kingdom of God on Earth.
As Chief Minister of Gujarat, Modi
explained that Ram Rajya meant a “wel-
fare state.” However, he went on to dis-
possess common people in the state in
order to satiate the unquenchable greed
of crony capitalists and their corpora-
tions. Ram Rajya, in practice, appears to
have served as rhetoric for all political
parties to appeal to gullible Hindus. The
late Rajiv Gandhi had inaugurated the
Congress party’s 1989 election cam-
paign from Ayodhya with a promise to
usher in Ram Rajya as his son does
today. Ram Rajya is uncritically evoked
as an ideal rule, as described in Rama-
yana. In the sixth book of Valmiki Rama-
yana, Lankakanda,1
All [that is, Brahmins (the priest-class),
Kshatriyas (the warrior-class), Vaiśyas (the
class of merchants and agriculturists), and
Sudras (the servant class)] were performing
Economic & Political Weekly EPW MARCH 10, 2018
their own duties, satisfied with their own
work, and bereft of greed. (canto 116, verse 89)
This is the typical varna order that
Gandhi believed in and our rulers
would like to have. But what about the
Dalits, Adivasis, Shudras and non-
Hindus, who together constitute a vast
majority and would surely say “no” to
such a Ram Rajya?
Why No Outcry?
When it comes to resisting the BJP’s
Hindutva, there is no real political
opposition; all parties are united in a
broad anti-people alliance. In the
present instance, except for the two par-
liamentary communist parties (Com-
R
munist Party of India and Communist
Party of India [Marxist]), there was not
E
even a whisper of opposition from the
other opposition parties to the yatra.
T
The Trinamool Congress in West Bengal
which had been accused of “appeasing
minorities,” because they are relatively
Z
more populous in the state, also recently
organised a massive Brahmin conven-
G
tion, namely the “Brahmin and Purohit
Sammelan.” It was organised by a
senior party leader and Trinamool’s
A
Birbhum district president, Anubrata
Mondal. All the priests who attended
the convention were gifted a copy of the
Bhagavad Gita, a shawl, and pictures of
Ramakrishna Paramahamsa and his
wife Sarada Devi. All political parties
have similar skeletons in their closets.
The Congress, on the other hand, proves
to be a comic competitor with its soft
Hindutva, in its desperation to demon-
strate that it is not anti-Hindu. The
manner in which the Congress presi-
dent Rahul Gandhi is being projected as
a janevudhari (holy thread wearing)
Brahmin should be condemned, but it
sells in “secular” India.
During the recent Gujarat elections,
Rahul Gandhi visited 27 temples to
stress that he too is a Hindu. The Con-
gress has interpreted its victory in the
18 constituencies where these temples
are situated (wresting 10 from the BJP)
as being due to this temple run. It is nei-
ther ashamed to see that even in such a
surcharged anti-BJP atmosphere, as in
Gujarat, it could not wrest power from
the BJP, nor does it realise that it can
vol lIiI no 10
MARGIN SPEAK
never compete against the BJP on the
Hindutva platform. Those who egged
on Rahul Gandhi’s soft Hindutva, will
soon demand a hardline stance from
him. It is a dangerous development
which would only hasten the establish-
ment of the Hindu rashtra in India.
While it is true that electoral success is
driven by religious and caste considera-
tions rather than social or public service
records, it is not the natural order. The
ruling classes had deliberately intrigued
to conserve castes and communities in
the Constitution and cheated people on
the promise of secularism as on many
other things. Dharmanirapekshata is
not just secularism; it is a ploy to pre-
serve dominance of the majority reli-
gion. Had India been truly secular, we
would not have had to face the spectres
of the Hindu rashtra.
Anand Teltumbde (tanandraj@gmail.com) is a
writer and civil rights activist with the
Committee for the Protection of Democratic
Rights, Mumbai.
Note
1 Book 6, Lankakanda (Book of War), Valmiki
Ramayana (critical edition), Varoda: Oriental
Institute, Maharaja Sayajirao University
(compiled in the 1960s–70s).
References
Ajay, Lakshmi (2017): “Modi Architect of Advani’s
Rath Yatra: Gujarat Minister,” Indian Express,
22 April, http://indianexpress.com/article/india/
modi-architect-of-advanis-rath-yatra-gujarat-
minister-pradeepsinh-jadeja/.
Jha, Dhirendra K (2018): “RSS Prepares to Launch
Rath Yatra from Ayodhya to Rameswaram on 13
February,” Scroll.in, 7 February, https://scroll.in/
article/867793/rss-prepares-to-launch-rath-yatra-
from-ayodhya-to-rameswaram-on-february-13.
Pradhan, Sharat (2018): “‘Ram Rajya’ Rath Yatra Is
a Misuse of ‘Ram’ in Politics,” National Herald,
14 February, https://www.nationalheraldindia.
com/opinion/ram-rajya-rath-yatra-is-bjps-mis-
use-of-ram-in-politics.
available at
Life Book House
Shop No 7, Masjid Betul
Mukarram Subji Mandi Road
Bhopal 462 001
Madhya Pradesh
Ph: 2740705
11
COMMENTARY
What the Tripura Victory
Signifies for the BJP
Radhika Ramaseshan
The Bharatiya Janata Party is
jubilant after its performance in
the assembly elections in Tripura.
However, while it was relatively
simpler for the party to find
success in Assam and Tripura
because their politics essentially
follows the trajectory of
“mainstream” India, cracking the
other states in the North East may
be complex and a long haul. In
the meantime, the BJP will make
peace with the regional forces
and forsake or dilute the
Hindutva-specific agenda
according to expediency. It helps
to have a government at the
centre that can dangle and deliver
M
carrots from time to time.
Radhika Ramaseshan (ramaseshan.radhika@
gmail.com) is consulting editor, Business Standard.
12
W
ith only 59 assembly and two
Lok Sabha seats, Tripura is just
about visible on the political
map to the Bharatiya Janata Party (BJP).
Independently or in conjunction with
other parties, the party rules over elec-
torally high-yielding states such as Uttar
Pradesh, Maharashtra, Rajasthan, Madhya
Pradesh, Bihar and Andhra Pradesh. On
3 March, hours after the trends in Tripura’s
assembly elections established a conclu-
sive victory for the BJP, the party broke
T
out into a celebration that was matched
in scale and enthusiasm with the jubila-
Z
tion that marked its sweep in the 2017
Uttar Pradesh assembly polls. The new
multi-storied BJP office with 70 rooms—
G
its grandeur approximating a top-class
corporate headquarter and purportedly
A
surpassing the offices of political parties
the world over—could not have heralded
its arrival more grandiosely.
Prime Minister Narendra Modi’s victory
speech to the BJP workers appropriately
used an architectural analogy to explain
his party’s full-fledged victory in a second
north-eastern state after Assam. He said
that vastu shastra (or the Hindu system
of architecture) considered the corner fac-
ing the north-east as the “most impor-
tant” part of a structure because of
which the north-east formed the pivot of
an edifice. “My country’s north-east has
come forward to lead our onward journey
(‘yatra’) of development,” he declared,
implying that he and his government
were indeed on the “right” track.
In the recent elections and by-elections,
the BJP suffered a partial setback in
Gujarat while it was decisively routed in
three by-polls in Rajasthan and lost two in
Madhya Pradesh rather narrowly. Perti-
nently, it had held all the three (one assem-
bly and two Lok Sabha) seats in Rajasthan,
but not those in Madhya Pradesh that fall
within Congress Member of Parliament
MARCH 10, 2018
(MP) Jyotiraditya Madhav rao Scindia’s
Guna constituency and are held by his
party. Pressured by the Delhi “high com-
mand” that remains sceptical of Chief
Minister Shivraj Singh Chouhan’s loyalty
quotient towards Modi, Chouhan (who
had lost two earlier by-elections in Ater
and Chitrakoot) staked his prestige, time
and resources in the Mungaoli and
Kolaras assembly seats. He mobilised his
council of ministers to launch a blitz-
krieg (in the form of public meetings
and road shows) in the Chambal constit-
uencies to take the message of his own
government’s “development” and that of
the centre. Therefore, is one supposed to
R
infer that, while the north-eastern states
of Nagaland and Tripura ostensibly em-
E
braced Modi’s template of governance
and development, the heartland turned
its back on it? In Meghalaya, the third
state that went to the polls recently, the
BJP picked up only two seats.
Modi certainly suggested that, sound-
ing beside himself with joy as the tidings
from Agartala arrived. He said,
Amidst the disinformation, I am grateful to
the voters of the north-east. Far away, people
understood what the BJP and the BJP gov-
ernment is about. It’s difficult for them to
discard the age-old perceptions and em-
brace new certitudes. But when our humble,
ordinary workers reached out to them and
revealed the truth, they won over people’s
hearts and we won the elections.
To reduce a mandate to a debate bet-
ween “falsehood” and “truth” and contend
that “truth” triumphed, as Modi framed
it, is simplistic and misleading. The
Tripura verdict carries deeper signifiers.
A clue to one of them was visible in the
festivities that broke out among the BJP’s
rank-and-file in Kerala and West Bengal
shortly after the trends became known.
Kerala is under a Left Front government
and West Bengal under the All India
Trinamool Congress (AITC) government
that is every bit as antagonistic towards the
BJP as the left coalition. But the slogans
the BJP raised were against the “barbaric
Communists.” These were counterpoised
with the presence of the BJP as the people’s
“saviour.” In West Bengal, the BJP persis-
tently portrayed Chief Minister Mamata
Banerjee as “corrupt” and a “patron” of
vol lIiI no 10 EPW Economic & Political Weekly

the Muslims. In Kerala, its storyline is
themed on the “killings” of the Rashtriya
Swayamsevak Sangh (RSS) volunteers
and its own workers. Although, the RSS’s
retaliatory eliminations, amounting to a
head for a head, have also been meti-
culously documented. Senior journalist
Subir Bhaumik noted,
Both Tripura and West Bengal are Bengali-
majority states with long years of Left rule and
any major progress made by the BJP in Tripura
will be a source of concern for both Mamata
Banerjee’s AITC and the Left in Bengal.
(Bhaumik 2018)
It is worth noting that as the BJP was
rejoicing after its Tripura showing, Mamata
Banerjee lashed out against the Congress
and its president Rahul Gandhi for not
taking the elections seriously (Scroll.in
2018). Indeed, the Congress’s dismal per-
formance in Tripura and Nagaland has
cast doubts on Rahul Gandhi’s ability to
lead a larger coalition against the BJP clos-
er to the 2019 Lok Sabha elections. Unless
the Congress keeps Karnataka and de-
feats the BJP in the Madhya Pradesh,
Rajasthan and Chhattisgarh polls later
this year, the sheen that Gandhi had
acquired after the Congress’s unexpected
showing in Gujarat and the success in the
Rajasthan by-polls may wear thin, under-
mine opposition unity, and confound the
issue of who could lead an anti-BJP front.
Anti-left Hostility
For decades, the left’s ideology has been
anathema to the RSS and the BJP. Their
spokespersons loosely tar dissenters of
all political persuasions as “Maoists” or
M and straighten out matters. One of the
“Marxists.” Ironically, the Congress is not
regarded with the same degree of anta-
gonism. A BJP strategist who worked in
Tripura described Congress leaders and
sympathisers as “nationalists” and wel-
comed the exodus from their ranks to his
party (Ramaseshan 2018a). Modi’s victory
speech specifically singled out Tripura’s
“Maoist ideologues” as being culpable
for the murder of “several” BJP workers
and played on the “martyrdom” trope by
keeping a two-minute silence for those
who had perished while Shah dedicated
the victory to the “martyrs.”
The second message emanates from the
BJP’s “Act East” outlook that germinated
and evolved into a policy shortly after
Economic & Political Weekly EPW MARCH 10, 2018
the BJP won the 2014 elections. The BJP
was almost always successful only in the
north and the west and Karnataka in the
south. There are two parts to the “Act East”
agenda. The BJP clubbed the eight north-
eastern states (including Sikkim) into one
political grouping and the states/union
territory along the east coast into another
grouping. The latter comprised of Tamil
Nadu, Puducherry, Andhra Pradesh,
Odisha and West Bengal. Between them,
the north-eastern states contribute 24 Lok
Sabha MPs, and the coastal quintet, 128
of the 543 Lok Sabha seats (Ramaseshan
2018b). While the Tamil Nadu and West
Bengal grouping offers a fairly big chunk
of seats, the North East is valued by the
BJP not for the number of seats it con-
beams to the country as a whole.
hard to demolish the theory that the
E
It is no wonder then that Modi tried
R
tains, but the political signals the region
T
“tyranny of distance” between Delhi and
Dispur and the other state capitals was a
Z
figment of the imagination in his regime.
He listed the various steps his govern-
ment took to bridge the “distance.” He
G
claimed that when his government came
to power, there were frequent reports of
A
the harassment and victimisation of the
residents hailing from the North East and
living in Delhi. Home Minister Rajnath
Singh was directed to speak to the victims
decisions arising from such occurrences
was creating a quota in the police for
those from the North East. It is another
matter that even today, those from the
North East are looked upon askance in
Delhi and spoken of in derisive terms.
But the North East, with its mixed
ethnicity and faiths, serves as a con-
venient front to the BJP and Modi to bolster
their national acceptability and “prove”
that they are not insular. This idea was
rejected by Meghalaya where the BJP’s
militant advocacy of vegetarianism, its
“save the cow” campaign, and a back-
handed way of slighting Christians by
declaring 25 December as “good govern-
ance day” and insisting on the participa-
tion of all government employees worked
against its effort to shore up its “pan
Indian” credentials (Jha 2018).
On the other hand, Tripura was demo-
graphically more hospitable to the BJP
vol lIiI no 10
COMMENTARY
because it is a Hindu majority state with
a 9% Muslim population and a sprin-
kling of Christians among the tribals
(Ramaseshan 2018a).
Using the inroads it has made in the
North East to project itself as a party
that has transcended the boundaries
of the Hindi heartland and the western
India may or may not work for the BJP.
There is no denying that while the
Congress seems to have thrown up its
hands out of apathy or futility, the BJP is
assiduously working on a game plan to
enhance its acceptability in this region.
Other Parties
The North-East Democratic Alliance
(NEDA), formed on 24 May 2016, shortly
after the BJP won Assam, proposed to
unite the non-Congress parties and set up
a neutral platform for the constituents to
engage themselves with the BJP and the
centre without joining the National
Democratic Alliance (NDA). The NEDA held
a strategy session with the chief ministers
of Assam, Manipur, Sikkim, Arunachal
Pradesh and Nagaland soon thereafter
under the chairmanship of Shah and the
backroom endeavour of Himanta Biswa
Sarma, a former Assam Congressman
who shifted to the BJP after the Congress
had allegedly given him short shrift.
However, the NEDA’s first meeting came
under a cloud because Kalikho Pul, the
Arunachal Pradesh chief minister—who
had defected from the Congress with his
entire flock of legislators—returned to
the Congress before the session was over.
Ironically, Shah had announced that the
NEDA’s main intent was to “liberate” the
North East from the Congress.
Elusive Goal
“Liberation” is an attractive word, but the
BJP’s interpretation has been confined to
the tactics of chicanery and defections
that are an integral part of politicking
in some of the north-eastern states. In
March 2017, when Manipur voted, the BJP
was beaten to the post by the Congress,
which emerged as the single largest party
with 28 legislators in a 60-member as-
sembly, while the BJP got 21 seats. It
cobbled a disparate majority with the help
of the Naga People’s Front, the National
People’s Party, the Lok Janshakti Party,
13
COMMENTARY
independents and Congress defectors
(Singh 2017). This saga is being replayed
in Meghalaya where the BJP has become
a stakeholder in a coalition government
despite having two legislators. On the
other hand, the Congress is the single
largest party but was outmanoeuvred
by the BJP.
What is more, the “development” narra-
tive is underpinned on the twin themes
of “nationalism” and Hindutva, which
are mired in the RSS’s ideology. While
success was relatively simpler in Assam
Co-option, Collaboration, Conflict
Three Years of PDP–BJP
Mudasir Amin
The Peoples Democratic Party
and the Bharatiya Janata Party
coalition government in Jammu
and Kashmir has been marred by
doublespeak and U-turns
vis-à-vis its poll/alliance mandate,
gross human rights violations,
and extended (cyber) curfews in
the Valley. With Kashmiri youth
turning to insurgency in a big
way, rising mass protests, and
repeated cancellation of local
elections, the government and
M tained through a magisterial “enquiry,”
indeed democracy itself face a
legitimacy crisis.
Mudasir Amin (mudasiramin90@gmail.com) is
a public policy scholar at the Hindu Centre for
Politics and Public Policy, Chennai.
14
and Tripura because their politics essen-
tially follows the trajectory of “main-
stream” India, cracking the other states
may be complex and a long haul. In the
meantime, the BJP will make peace with
the regional forces in the more problem-
atic states and expediently forsake or di-
lute the Hindutva-specific agenda. It
helps to have a government at the centre
that can dangle and deliver carrots from
time to time. But the BJP’s goal of
a “Congress-mukt [free]” North East
remains elusive.
T
O
n 28 January 2018, the Garhwal
Z
Rifles of the Indian Army killed
three civilians in Ganawpora
village of Shopian district, when they
G
were mourning the killings of two insur-
gents and another civilian earlier that
A
week (Fareed 2018). The army version
claims that they came under heavy stone
pelting by protesting youth and fired in
self-defence. The facts are being ascer-
farcical in a place like Kashmir owing to
the fate of all such enquiries against the
Indian Army thus far (Farasat 2014). In
this case, a first information report (FIR)
was lodged against the army unit, nam-
ing the major as well (Pandit 2018). The
Indian media, uncritically standing by
the Indian military, took no time in cas-
tigating the state government for the FIR
which could affect the “morale of the
soldiers” (Vohra 2018).
The furore over the police report, how-
ever, is questionable given the poor track
record of the state, which frequently raises
the “probe” bogey but fails to indict the
forces’ personnel. In rare cases where it
did, the perpetrators have never been
prosecuted. This was recently established
by the Union Minister for Defence, Nirmala
Sitharaman, while replying to a question
in Parliament, where she stated that the
union government had between 2011 and
MARCH 10, 2018
References
Bhaumik, Subir (2018): “A High-stakes Poll for ‘Red
Fort’ Tripura,” Hindu, Centre for Politics and
Public Policy, 15 February.
Jha, Prashant (2018): “Insecure of BJP Efforts,
Churches in Meghalaya Are Getting into Elec-
toral Politics,” Hindustan Times, 11 January.
Ramaseshan, Radhika (2018a): “Tripura, Meghalaya,
Nagaland Polls: BJP Leads the Charge against
the Left,” Business Standard, 12 February.
— (2018b): “Assembly Elections: Odisha, BJP’s
Sunrise State in the East-Coast Blueprint,”
Business Standard, 19 February.
Scroll.in (2018): “‘They Didn’t Listen to Me’: Mama-
ta Banerjee Picks on Congress after They Lose
Tripura to BJP,” 4 March.
Singh, Shiv Sahay (2017): “BJP Combine Invited to
Form Government in Manipur,” Hindu, 14 March.
2016 received 50 cases under the Armed
Forces (Special Powers) Acts (AFSPA) from
the Government of Jammu and Kashmir
E R
(J&K) for sanction to prosecute army per-
sonnel which have been denied for “lack
of sufficient evidence” (Jaleel 2018).
Despite being fully aware of the immu-
nity enjoyed by the forces under the AFSPA,
the J&K Chief Minister Mehbooba Mufti
“promised” that the investigation in the
Shopian case would be taken to a “logical
conclusion” (Tribune News Service 2018).
People in Kashmir, however, know the
powerlessness of the chief minister in a
militarised state; that is why the father of
one of the deceased youth called the inves-
tigation as further harassment of the griev-
ing family (Fareed 2018).
Indeed, exactly a week from the firing,
on 3 February 2018, Mufti pitched for
the continuation of the AFSPA in the state
assembly (PTI 2018). This was in complete
violation of her party’s poll promise of
reviewing the Jammu and Kashmir Dis-
turbed Areas Act, 1992, followed by party
leaders ambitiously pledging a complete
withdrawal of the AFSPA in the state, if
voted to power. Mufti’s Peoples Demo-
cratic Party (PDP) has come a long way
from its earlier green, “soft separatism”
stance, with promises of a healing touch
and demand for self-rule, to forging an
alliance with the “saffron” brigade that
they used to despise, in public at least.
A Shaky Start
On 1 March 2015, Mufti Mohammad
Sayeed was sworn in as the chief minister
of the coalition government, comprising
the PDP and the Bharatiya Janata Party
(BJP), which materialised after nearly
vol lIiI no 10 EPW Economic & Political Weekly

two months of talks. The coalition was
dubbed “unethical and unholy” (PTI
2015b; Tribune News Service 2016), per-
haps because of the two being politically
opposed to each other on a variety of
issues, including the AFSPA and Article 370.
In the common minimum programme of
the alliance, the PDP softened its posi-
tion on the AFSPA maintaining that
the government will examine the need for
denotifying disturbed areas which will as a
consequence enable the union government
to take a final view on the continuation of
the Armed Forces Special Powers Act (AFSPA)
in these areas. (India Today 2015)
On the other hand, the BJP made a
U-turn on the abrogation of Article 370 and
agreed to maintain a status quo stating that
the present position will be maintained on
all constitutional provisions, including spe-
cial status. (India Today 2015)
However, nothing in the “document”
has actually been executed on the ground.
On the very first day of the government’s
formation, Sayeed stoked a controversy
by thanking Pakistan, the All Parties
Hurriyat Conference, and insurgents in
the Valley for allowing the smooth con-
duct of elections in the state (PTI 2015a).
It was met with calculated condemna-
tion from the BJP. However, Sayeed was
not an ordinary politician, he meant
business. While receiving flak from eve-
ry corner for forming government with
the BJP, he had to resort to traditional
posturing, at least for his own party
workers who were not happy with the
decision; thus, the Pakistan–Hurriyat
card. In 2002, when the PDP first came to
power in alliance with the Congress,
M through a court order which created a
Sayeed, in a public speech, had said
Kashmiri militants don’t need any guns be-
cause their representatives are now in the
assembly. (Geelani 2015)
In the next three years of his chief
ministerial stint, Sayeed represented
everyone but “militants.”
The PDP–BJP government came to
power at a time when Kashmir was still
recovering from the disastrous floods of
2014 that had incurred massive property
and agricultural losses with more than
200 people losing their lives. The Indian
government while doling out a meagre aid
package made the state government pay
`500 crore for the “rescue operations”
executed by different national agencies
Economic & Political Weekly EPW MARCH 10, 2018
in Kashmir (Times of India 2015). A 2015
report by the Jammu Kashmir Coalition
of Civil Society (JKCCS) explained how the
Valley’s disaster vulnerability has intensi-
fied due to a military governance struc-
ture and its permanent installations, and
criticised the militarised rescue opera-
tions, captured and glorified through the
cameras of mainstream media. Based on
case studies and extensive field research,
the report debunks the “heroic humani-
tarianism” of the military and asserts
that it was Kashmiris, through their cou-
rageous community volunteerism, who
helped each other during the floods
(JKCCS 2015a). The PDP got much flak for
its silence on a “humiliating package”
but the party leadership did not take this
R
up with its alliance partner in the centre,
fearing a premature end to the coalition.
E
Throughout the election campaign,
the PDP had vowed to keep the BJP away
T
from Kashmir, reminding people of the
“Gujarat pogrom” and the role played by
Z
the BJP and particularly the incumbent
Prime Minister, Narendra Modi, therein
(Sharma 2016). The PDP evoked fear among
G
the people leading up to polling day in
the Valley. The BJP did the same against
A
the PDP in Jammu (Sharma 2016). This
seemed to have worked for both.
One week into power, the government
released Hurriyat leader Masarat Alam
ruckus in the Indian Parliament (Sharma
2015), with the opposition accusing the
government of compromising national
security by releasing a man who had spent
almost half his life in different Indian
jails. The BJP feigned ignorance and
claimed that the decision had been taken
unilaterally by the PDP. Reacting sharply,
the BJP warned the PDP that
remaining in power is not a priority for BJP
and it will not allow any laxity on the issue
of national security and in dealing with sep-
aratists and militants. (Sharma 2015)
However, one of the core points of the
coalition’s common minimum programme
was facilitating a sustained dialogue
with the Hurriyat. This never happened.
Alam was rearrested within a week and
slapped with the J&K Public Safety Act
(PSA), 1978 (PTI 2015c). The PDP’s “battle
of ideas” model, thus, died an ironic
death (Greater Kashmir 2016).
vol lIiI no 10
COMMENTARY
Within a year, Sayeed died of a multiple
organ failure at the All India Institute of
Medical Sciences, New Delhi (Indian Ex-
press 2016). Back home, his funeral was
attended by a few hundreds, most of them
politicians and government functionar-
ies. Only a week earlier, some thousands
had attended the funeral procession of
an insurgent amid curfew in Kulgam
(Davedas 2015). Did people’s aspirations
need to be made any clearer? As Mufti
delayed her swearing-in ceremony, politi-
cal commentators suggested that the PDP
was considering pulling out of the coali-
tion after realising the damage the alliance
had already caused it (Kumar 2016).
However, Mufti continued with the
“unholy” coalition, with a part of the
Indian media and liberals declaring it a
historic moment for women’s empower-
ment in Kashmir. Mufti’s empowerment,
however, only caused more misery to
Kashmiri women, as unabated violations
of human rights continued. Reports and
allegations of the use of sexual violence
against Kashmiris by the Indian military
have surfaced since the early days of in-
surgency. While the intensity of this has
certainly declined, there have been high-
profile cases in recent times—be it the
Shopian double rape and murder case in
2009 or the Handwara molestation case
in 2016. Of course, a lot goes unreported
and much is left unsaid. In April 2016,
the Indian Army killed five civilians who
were protesting after a girl accused the
forces of molestation. In order to justify
the killings, the girl was taken into “pro-
tective custody,” kept at an undisclosed
location and made to record a video state-
ment, under duress, exonerating the
forces (Pandit 2016). The girl continues
to fight the case to date, while the enquiry
into the killing of the five civilians is still
awaiting a “logical conclusion” after two
years. The government, headed by a
woman, far from taking up for the vic-
tims, provided cover to the perpetrators.
Mass Blinding, Human Shields
The year 2016, for Kashmir, went down
as a year of “mass blinding” (Waheed
2016) and “dead eye” epidemic (Barry
2016). The killing of the young and popu-
lar insurgent “Commander” Burhan Wani
led to a wave of protests in Kashmir in
15
COMMENTARY
July 2016. The authorities responded with
disproportionate force, killing 100 civil-
ians, mostly youth. Curfew was imposed
and Kashmir remained in shutdown
mode for months. The pellet shotguns,
though not new, injured more than 3,000
people, many of them in the eyes, render-
ing them partially or fully blind. The doc-
tors reported the victims as having “muti-
lated retinas, severed optic nerves, [and]
irises seeping out like puddles of ink”
(Barry 2016). The teenage girl Insha
Mushtaq became the face of the brutality
of “non-lethal” weapons in Kashmir
(Fareed 2017). She was blinded when a
volley of iron pellets was fired indiscrimi-
nately at her as she tried to peep out
through the window to see the protests
underway outside her home in Kashmir’s
Shopian district. As rightly pointed out by
Shenila Khoja-Moolji (2018),
A more appropriate way to describe these
[non-lethal] pellets and rubber bullets, then,
is “lethal over time.” The language of non-
lethality is simply a rhetorical excuse by cru-
el governments to wage wars while carefully
eliding responsibility for mass debilitation.
Over weeks and months, the coalition
government continued defending every
bullet and pellet fired. Thousands were
arrested. The internet was blocked for
months, leaving Kashmiris incommuni-
cado with each other and the rest of the
world. Newspapers were banned and
human rights defenders slapped with the
PSA. The repercussions of such high-hand-
edness were soon visible on the ground.
In April 2017, by-elections for the Sri-
nagar Lok Sabha constituency were to be
conducted after it fell vacant due to the
M the streets—unarmed—facing tear gas
resignation of the then PDP parliamen-
tarian Tariq Hameed Karra (PTI 2017b)
in protest against the government’s han-
dling of the 2016 uprising. However,
these were boycotted with a meagre voter
turnout of 7% and mass protests on poll-
ing day, in which eight civilians were killed
(Hindustan Times 2017). Re-elections were
held in 84 polling stations, resulting in an
even lesser turnout, pegged at 2% (PTI
2017b). Thereafter, the by-elections for
the Anantnag Lok Sabha constituency
were cancelled (Ramachandran 2017)
and the government is still to take a call on
it. Alongside, the PDP and other opposi-
tion parties have already asked for the
cancellation of panchayat elections,
16
which were due in the month of Febru-
ary 2018. In a situation where such a
huge government machinery has not
been able to conduct even a by-election,
the continuation of the PDP–BJP coali-
tion in power baffles one and all.
During these by-elections, an army
major of the 53 Rashtriya Rifles assaulted
a civilian Farooq Ahmad Dar, tied him to
the bonnet of an army jeep, and paraded
him through different villages of Budgam
district for hours as a “human shield” (Al
Jazeera 2017). The army and the govern-
ment in Delhi defended it as a “precau-
tionary measure” and an “innovative
idea” against stone pelting, the major
was awarded a commendation by the
Indian Army chief (Al Jazeera 2017).
Kashmiris have been used as human
shields before. What was different this time
was that the particular incident came to
the limelight and the media unwittingly
T
made a hero out of the perpetrator.
In the same month, when students of
Z
Government Degree College, Pulwama
protested against the installation of a mil-
itary bunker near the college, the forces
G
entered the college premises and used
disproportionate force killing one and in-
A
juring more than 50. This led to a wave of
student protests in Kashmir (Chakravarti
and Naqash 2017). Students in school uni-
forms with scarves and ties came out onto
and pellet shots of the forces. Schools in
the region were shut for days.
In recent times, social media has be-
come an alternative space, in addition to
militarised streets, to register protest in
Kashmir, especially for the young. Sev-
eral students took to posting videos on
Facebook Live of stone-pelting stand-offs
with the army in Kashmir (Qadri 2017).
Realising the potency of this, the state
has, over the years, exercised its puni-
tive authority to ban social media web-
sites and issue indefinite cyber curfews,
thereby controlling the lives and emerg-
ing narratives of people.
Propaganda and Deception
Far from addressing or even acknowl-
edging its wrongs, the BJP has chosen to
not raise objections to a petition filed by
a lesser-known civil society organisation
“We, The Citizens” that sought the striking
MARCH 10, 2018
down of Article 35A (Anand 2017). This
article enables the J&K legislature to de-
fine a “permanent resident” and is close-
ly linked to Article 370 that guarantees
special status to the state, which none-
theless has been eroded over time. This
no-objection by the government coupled
with the extension of the goods and ser-
vices tax to the state is an indication of
the encroachment of the special status.
This is the exact opposite of what the
PDP had promised or included in the
agenda of the alliance.
In November 2016, the Indian govern-
ment’s “demonetisation fiasco” (Shepard
2016) created a cash crunch, adversely
impacting the poor. Though Kashmir,
for the most bit, remained unaffected
E R
(Hindu 2016), the then Minister of Defence
Manohar Parrikar claimed that demon-
etisation had brought an end to stone
pelting in the Valley (Zargar 2017). It is a
familiar ploy, wherein state propaganda
seeks to invisibilise the political aspira-
tions of ordinary Kashmiris and to dis-
miss people’s participation in mass pro-
tests, as motivated by the lure of money
or performed by a fringe group. Howev-
er, not only has stone pelting continued,
in fact, people have taken to barging to
encounter sites and engaging forces in
stone pelting in order to help insurgents
escape (Qadri 2017).
In July 2017, the National Investiga-
tion Agency (NIA) raided several places
in Kashmir in an alleged “terror fund-
ing” case and subsequently, arrested
most of the second-rung Hurriyat lead-
ership, a businessman, and a young pho-
tojournalist, which led to further pro-
tests (Ashiq and Singh 2017). Many more
were summoned by the NIA, including a
sitting legislator and a university scholar
(PTI 2017c). Hurriyat maintains that the
Indian government led by the right-wing
BJP is trying new tactics to curb the
movement for right to self-determination,
and NIA is but the latest addition to its
military campaign against Kashmiris.
The months of September and Octo-
ber 2017 saw Kashmir gripped in mass
panic when incidents of “braid chopping”
were reported (Safi and Farooq 2017).
The police and the government were
clueless with their “unscientific” investi-
gations, referring to the phenomenon as
vol lIiI no 10 EPW Economic & Political Weekly

“hallucination, a madness, and … mass
hysteria” (Ganai 2017). However, the po-
lice simultaneously announced rewards
for information on culprits. On the
ground, people saw it as a deliberate act
by the state to create fear and mistrust
among people, so as to prevent them
from sheltering insurgents. The inci-
dents stopped as suddenly as they had
started. Something similar had hap-
pened in the 1990s during “Operation
Bhoot (ghost).”1 These incidents have
served as constant reminders for the
people to remember the visible and
invisible forces active in the Valley and
capable of altering their lives.
In October 2017, the Indian govern-
ment appointed an “interlocutor” for a
“sustained dialogue” with all stakehold-
ers in Kashmir (Gupta 2017). The inter-
locutor’s past few visits, however, have
only entailed meetings with govern-
ment-chosen delegations, who talked
anything but the resolution of Kashmir.
All factions of the Hurriyat Conference,
trade unions and civil society groups in
the Valley declined to meet the former
intelligence officer. In the proposed
“sustained dialogue,” the interlocutor is
actually talking only to the government.
Such declarations and appointments by
the Government of India seek to demon-
strate to the world that India cares to ac-
M
commodate Kashmiri aspirations, but they
are almost instantly rendered hollow.
In fact, the notorious “crackdowns”2
that were a routine in the 1990s have re-
turned to the Valley in the form of cor-
don and search operations, which are
extended to multiple villages simultane-
ously (Naqash 2017), with the forces en-
tering houses, damaging properties and
assaulting people. Furthermore, the frisk-
ing of people on roads, in buses, and at
public places is back.
Swelling Youth Insurgents
However, the more the repression, the
stronger the rebellion. The number of
young persons joining insurgent ranks
has gone up in these four years in Kashmir.
This year alone the government provid-
ed a figure of 126 local youth joining dif-
ferent armed groups. Some reports sug-
gest that the actual number may be as
high as 200 (Wani 2018). Insurgents have
Economic & Political Weekly EPW MARCH 10, 2018
gone back to the old tactics of deadly
fedayeen (guerrilla) attacks. Though high-
ly educated youth turning insurgents is
not new in Kashmir, when gun-wielding
photos of a local Kashmiri youth, Manaan
Wani, pursuing a doctoral degree from
Aligarh Muslim University, appeared on
social media it took the insurgency to a
whole new level.
In a conflict zone like Kashmir, focus-
ing on numbers takes us away from many
aspects of the everyday militarisation of
life but as Peter Beaumont (2010) argues,
valid estimates provide true meaning to
[the] narrative of memory and history … It
allows us to accurately define events; make
comparative judgments both morally and
politically, to understand the intention be-
R
hind acts and the weight of suffering.
The number of deaths in Kashmir under
E
this coalition government (Table 1) is a
clear manifestation of the conflict.
T
Conclusions
Z
While the army, through “Operation All-
Out,”3 seems to have blurred the lines
between combatants and protesting
G
civilians, it has not stopped the youth from
engaging the forces during encounters
A
to try and help insurgents escape. The
army’s increasing interventions in civil
affairs,4 and the successful pervasion of
cries of “Pakistan Zindabad” (long live
Pakistan) from the streets of Kashmir to
the legislature (Manhotra 2018), demon-
strate the increasing volatility in Kashmir.
An analysis into the three years of the
coalition shows that the BJP is driving the
PDP into submission and collaboration,
reducing the former into a surrogate ad-
ministration. The periodic demands of
self-rule, an end to human rights viola-
tions, and revocation of the AFSPA, fail to
get any response beyond lip service. This
is a familiar script in Kashmir followed by
successive governments and opposition
parties, whose legitimacy, however, is
under challenge like never before.
Table 1: Killings in Kashmir under the PDP–BJP
Government (2014–Present)
Victims of Conflict 2015 2016 2017 2018 (Jan–Feb)
Civilians 55 145 108 22
Insurgents 106 138 217 20
Armed forces 58 100 125 31
Ikhwanis 0 0 1 0
Total 219 383 451 73
Source: JKCCS (2015b, 2016, 2017).
vol lIiI no 10
COMMENTARY
Notes
1 In the 1990s, Kashmir was gripped in nocturnal
trauma when incidents of people seeing ghosts
who attacked their houses were reported. Later,
it was claimed to be a military tactic to instil
fear among the masses who supported the
armed insurgency and sheltered the insurgents.
2 In Kashmir, “crackdown” is understood as an
operation by the forces where a village or two
are cordoned, the menfolk made to assemble in
open, paraded (sometimes beaten up and tor-
tured) while the forces search houses for insur-
gents and their hideouts.
3 In early 2017, the counter-insurgency network
in Kashmir, including the army, Central Re-
serve Police Force, Jammu and Kashmir Police,
and different intelligence agencies, announced
“Operation All-Out” which they claimed was a
blueprint to “neutralise” 258 insurgents from
different groups. More than 200 insurgents,
including 18 commanders, were killed in this
operation (Yasir 2017). In February 2017, the
Indian Army chief also warned insurgent sup-
porters in Kashmir of “going helter-skelter after
them” and further said that “they may survive
today but we will go after them tomorrow”
(PTI 2017a). This warning was issued mainly for
the youth, who go near encounter sites and en-
gage army by pelting stones and raising slogans.
4 In January 2018, the Indian Army chief again
stoked a controversy when he blamed govern-
ment schools in the Valley for “radicalisation of
youth.” Questioning the separate map for Jam-
mu and Kashmir, he said “in schools in J&K
[Jammu and Kashmir], there can be seen two
maps, one of India, another of J&K. Why do we
need a separate map for J&K? What does it
teach the children? Most misguided youth
come from schools where they are being radi-
calised” (First Post 2018).
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vol lIiI no 10 EPW Economic & Political Weekly

Upholding Fiscal Federalism
Terms of Reference of
the Fifteenth Finance Commission
G R Reddy
The appointment of the Fifteenth
Finance Commission has come at
a time of momentous changes
in Indian fiscal federalism. The
XV-FC has a challenging task in
addressing these developments.
A number of considerations
in the terms of reference of the
XV-FC, however, point to a
bias in the ToR towards the
union government.
M mission—a parallel channel of resource
Views expressed are personal.
G R Reddy (grreddy45@gmail.com) is a former
official of the Indian Economic Service and
currently adviser to the Government of
Telangana.
Economic & Political Weekly EPW MARCH 10, 2018
T
he appointment of the Fifteenth
Finance Commission (XV-FC) by a
presidential order on 27 November
2017 has come at a time of momentous
changes in Indian fiscal federalism. The
replacement of the Planning Commission
by the National Institution for Transform-
ing India (NITI) Aayog in January 2015,
R
the removal of the distinction between
plan and non-plan expenditure in the
E
budgets of the union and the states from
2017–18, and the 101st constitutional
T
amendment resulting in the introduction
of the long-awaited goods and services tax
Z
(GST) from 1 July 2017 across the country
are game changers in the area of fiscal
federalism. Perhaps, such game chang-
G
ing developments did not take place in
the period immediately preceding the
A
appointment of any other commission.
The Impact of the Changes
The replacement of the Planning Com-
transfers to states not envisaged under the
Constitution—by NITI Aayog—which does
not have an allocative role—is expected to
address the problem of multiple channels
of resource transfers that bedevilled fiscal
federalism in the country so far. The main
functions of NITI Aayog, among others,
are to provide a shared vision of national
development priorities, and to foster co-
operative federalism through structured
support initiatives and mechanisms with
the states on a continuous basis.
The Fourteenth Finance Commission
(XIV-FC) considered the entire revenue
account. Its terms of reference (ToR) did
not bind it to look at only non-plan revenue
account. The replacement of the Plan-
ning Commission, with the removal of
the practice of classifying expenditure
into plan and non-plan, has conferred
full freedom to the XV-FC to look at the
entire revenue expenditure in totality,
vol lIiI no 10
COMMENTARY
instead of a fragmented view of resource
allocations. As observed by the High
Level Committee on “Efficient Manage-
ment of Public Expenditure” (Rangarajan
Committee, 2011), the non-plan and plan
distinction in the budget was neither
able to provide developmental and non-
developmental dimensions of public ex-
penditure, nor was it an appropriate
budgetary framework.
The introduction of the GST marks a
watershed in the reforms of indirect taxa-
tion in the country. It has ushered in an era
of sharing a common tax base by the union
and the states in place of exclusive juris-
diction over certain taxes based on the
principle of total separation. Furthermore,
the GST being a destination-based tax has
shifted the tax base from production to
consumption. This may impact revenue
yield from indirect taxes as between the
predominantly producing and consum-
ing states. As the revenue impact of the
GST across the states is not yet known, the
XV-FC will have the challenging task of
addressing this issue as its recommenda-
tions are applicable till 2024–25, beyond
the five-year duration of compensation
scheme for states that may suffer revenue
loss, following the introduction of GST.
Besides these major changes, there is a
slowdown in the growth of the economy
since last year and pressures building up
on both the union and state finances.
There are incipient signs of states, which
so far, by and large, adhered to the Fiscal
Responsibility and Budget Management
(FRBM) limits, slipping on them.
Functions of Finance Commission
The XV-FC has a major task on hand in
putting in place a transfer system con-
sistent with the recent changes in fiscal
federalism, promoting cooperative fiscal
federalism and ensuring fiscal stability.
The main intent of this article is to analyse
whether the ToR of the XV-FC reflect the
above imperatives in letter and spirit.
The main function of a finance commis-
sion as mandated in Article 280 of the
Constitution is to make recommendations
on (i) the distribution of net proceeds of
divisible pool of taxes between the union
and the states; (ii) inter se allocation of
states’ share; (iii) principles which should
govern the grants-in-aid to states by the
19
COMMENTARY

finance commission; and (iv) measures
to augment the Consolidated Fund of a
state to supplement the resources of
panchayats and municipalities.
These constitutionally mandated func-
tions are reproduced as such in the ToR
of all the finance commissions. In terms
of clause (d) of Article 280, any other
matter can be referred to a finance com-
mission in the interest of sound finance.
It has become a practice to specify in the
ToR certain considerations that a finance
commission shall have regard to, among
others, while making its recommenda-
tions. While the considerations related
to only grants till the Sixth Finance
Commission, from the seventh onwards,
the considerations covered both grants
as well as tax devolution. These consid-
erations have become a source of fric-
tion between the union and the states.
of whether revenue deficit grants should
be provided at all.
The deficit grants have been criticised
mainly on the ground that they create
perverse incentives to states to remain
profligate and not exploit their revenue
resources to their full potential. This is in
the hope that the finance commission will
recommend grants to bridge the esti-
mated differential between the revenue
requirement and their revenue realisation.
This criticism, though still valid to a limited
extent, has lost much of the ground follow-
ing the adoption of a normative approach
by the finance commissions for forecast-
ing the revenue and expenditure of
states. This coupled with the progressivity
in the formulae for tax devolution as
well increase in the vertical share of the
states in the divisible pool of union taxes
has resulted in a drastic reduction in the
number of states getting deficit grants.
reduction from 60.4% in the case of XI-
FC to 36.3% in the case of XIV-FC. This is
despite the fact that the latter consid-
ered the entire revenue account as com-
pared with the previous commissions
which considered only the non-plan rev-
enue account.
The question that arises is, how do we
address the post-tax devolution revenue
deficits of states in the absence of deficit
grants? There are limits beyond which the
tax devolution formula cannot be made
progressive enough to ensure that no
state is left with a deficit. This is neither
desirable nor feasible as it will drastically
cut down tax devolution to performing
states, whose average per capita income
is above the national average. This will
R
amount to disincentivising development
and making states weaker. Besides, the

E
fundamental issue is that such a course
of action will breach the constitutional

T
Additional Matters The number of states receiving revenue provision for giving grants-in-aid to
As in the case of the previous commission, deficit grants has come down from 15 in states under Article 275 (Rao 2017).

Z
XV-FC is mandated to review the current the case of Eleventh Finance Commission
status of finance, deficit, debt levels, and (XI-FC) to 11 in the case of XIV-FC. Among Compression of Fiscal Space?
fiscal discipline efforts of the union and the 11 states assessed to be revenue deficit, The XV-FC has been mandated to take

G
the states and recommend a fiscal consoli- as many as eight are special category into consideration, among others, the
dation road map for sound fiscal manage- states. What is significant to note is that impact of the fiscal situation of the central

A
ment. The important additional items the share of the revenue deficit grants in government of substantially enhanced
included in the ToR of XV-FC relate to the total grants recommended by the finance tax devolution, following the recommen-
review of cash balances and examination commissions has witnessed a significant dations of XIV-FC. The XIV-FC while

M
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20 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly

explicitly stating that there was little
scope for increasing the aggregate trans-
fers to states strongly expressed the
desirability of a compositional shift in
transfers from grants to tax devolution.
This would enhance the share of the
states in unconditional transfers without
imposing any additional fiscal burden
on the centre. In this context, the XIV-FC
observed that aggregate transfers to states,
as a percentage of gross revenue receipts
of the union, went up from 49.9% in
2010–11 to 53.7% in 2011–12 before com-
ing down to 49% in 2012–13. Keeping
these trends in view, the commission ex-
pected that the union would maintain
the prevailing level of aggregate trans-
fers at about 49% of its gross revenue
receipts (Finance Commission 2014).
Following the increase in tax devolu-
tion, the union government dispensed
with the formula-based normal plan
assistance to states and terminated a
number of schemes like Backward Re-
gions Grant Fund and increased the
matching contribution of states in respect
of a number of centrally-sponsored
schemes (CSSs). In the first three years of
the XIV-FC award period, aggregate trans-
fers hovered around 48% of centre’s
gross revenue receipts.
Thus, the impression that the increase
in tax devolution resulted in the com-
pression in the fiscal space of the centre
is fallacious and not borne out by facts.
In such a situation, inclusion of the con-
sideration regarding the fiscal position
of the union following the enhanced tax
devolution is not in the spirit of coopera-
M programmes of Government of India,
tive fiscal federalism. It creates an impres-
sion that inclusion of this consideration
amounts to indirectly asking the XV-FC
to reduce tax devolution to states.
Raising Loans
Another consideration relates to the con-
ditions that the union may impose on
the states while providing consent under
Article 293 (3) of the Constitution. Under
this article, a state cannot raise any loan
without the consent of the union, if there
is any part of an outstanding loan from
the union to the state. Under clause (4)
of this article, consent can be granted
subject to such conditions, as the Govern-
ment of India may think fit to impose.
Economic & Political Weekly EPW MARCH 10, 2018
This consideration seems to have been
included in the ToR for the first time,
presumably because the share of the loans
from the union in the outstanding debt
of the states has been coming down signifi-
cantly following the termination of central
government loans to states from 2005–06
onwards. This was on the advice of the
Twelfth Finance Commission that the centre
should dispense with the practice of acting
as an intermediary and instead allow the
states to approach the market directly.
At the end of 2016–17, loans from the
centre constituted less than 5% of the
total outstanding debt of all states. It is
likely that over the next few years, many
states may liquidate all their borrowings
from the centre, thus freeing themselves
from the condition of seeking consent
for raising loans internally. However,
lation to contain their debt levels and
E
states are still bound by the FRBM legis-
R take effective measures to moderate the
T
maintaining a surplus on their revenue
account. Therefore, the idea of imposing
Z
conditionalities on states’ borrowings is
not in the spirit of cooperative federalism.
G
Other Considerations
The XV-FC has been asked to consider
A
proposing measurable performance-based
incentives for states in the areas, such as,
deepening the tax net under GST, achieve-
ments in the implementation of flagship
progress made in increasing capital ex-
penditure, progress made in improving tax
and non-tax revenues, efforts in promoting
ease of doing business, provision of grants
to local bodies, progress made in sanitation
and control or lack of control in incur-
ring expenditure on populist measures.
Asking the finance commission to follow
an incentive-based approach in recom-
mending transfers to states and absence
of any such considerations for nudging the
union to perform better is indicative of
the lopsidedness of the considerations
listed in the ToR. Fiscal prudence is a joint
responsibility of the union and the states
in a federation. Leaving out the union from
such a responsibility will not result in
fiscal prudence, and restricting them to
states that have, by and large, adhered to
FRBM stipulations, goes against the spir-
it of cooperative fiscal federalism. More
importantly, the consideration relating
vol lIiI no 10
COMMENTARY
to populist measures is highly subjective.
What constitutes a populist measure dif-
fers widely across states. The centre is
also equally guilty of populist measures.
Population Data
All the finance commissions since the
seventh were asked to use population
data of 1971 in all cases where population
was regarded as a factor for determina-
tion of devolution of taxes, duties, and
grants-in-aid. This was in consonance
with the National Family Welfare Policy,
1977, which stipulated use of 1971 popu-
lation figures till 2001 where population
was a factor in the transfer of resources
from the union to states.
This was done to ensure that states
growth of their population (Reddy 2007).
The XV-FC has been mandated to use the
population data of 2011 while making its
recommendations. This is a welcome
development. As observed by the XIV-FC,
migration is an important factor in the
growth of a state’s population, apart
from factors like fertility and mortality
rates. Migration imposes a burden on
the destination states and taking dated
population for the purpose of central
transfers is a double whammy for such
states. In fact, the requirements of states
depend on the current levels of popula-
tion, and therefore, the XV-FC should have
been mandated to take into account the
latest available mid-year population as
estimated by the Registrar General and
Census Commissioner of India.
To sum up, the XV-FC has a challenging
task on hand in addressing the game-
changing developments in Indian fiscal
federalism and in making cooperative
fiscal federalism a reality. Going by the
track record of the previous commissions,
it is hoped that the XV-FC will not be con-
strained in its working by the considera-
tions given to it that appear to be biased
in favour of the centre.
References
Finance Commission (2014): Report of the Four-
teenth Finance Commission, December.
Rao, Govinda M (2017): “The Fifteenth Finance
Commission, Redefining the Commission’s
Mandate?” Financial Express, 5 December.
Reddy, G R (2007): “Imbalance in Agenda of Fi-
nance Commission,” Economic & Political
Weekly, Vol 42, No 51, pp 8–10.
21
COMMENTARY
Caste in Britain
Public Consultation on Caste and
Equality Law
Annapurna Waughray
The United Kingdom government
has started a public consultation
on caste in Great Britain and the
equality law with the official
response expected soon. British
Dalits have demanded protection
in legislation from caste
discrimination for many years,
but have faced concerted
opposition not just to legislation
but even to raising the issue at all,
mainly from faith-based
organisations and a handful of
politicians and civil society actors,
some of whom object to any legal
protection against caste
discrimination, including
developments in case law which
might extend protection through
the existing Equality Act from
discrimination based on ethnic
origins to discrimination based
on caste.
I thank Sameena Dalwai for initiating the
contact with EPW and David Mosse,
Pritam Singh and Meena Dhanda for their
comments on the initial draft of this article.
Annapurna Waughray (a.waughray@mmu.ac.uk)
is a reader in Human Rights Law, Manchester
Law School, Manchester Metropolitan
University, UK.
22
O
n 28 March 2017, Theresa May’s
Conservative government laun-
ched a public consultation on the
Caste in Great Britain and Equality Law
(henceforth Equality Law) (https://www.
gov.uk/government/consultations/caste-
in-great-britain-and-equality-law-a-public-
consulation). Participants were asked to
choose between two options for prohibit-
ing caste discrimination by law: Option (1)
relying on the development of case law
to include caste within the meaning of
T
“ethnic origins” in Section 9 of the Equality
Act, 2010, or Option (2) specifying caste in
Z
the Equality Act. The consultation closed
on 18 September 2017; the government’s
response is expected this year. Since its
G
announcement on 2 September 2016, the
premise of the consultation was ques-
A
tioned by British Dalit organisations
and other civil society actors, given that
in 2013 Parliament had amended the
Equality Act, 2010 by imposing a statu-
M
tory duty on the government to intro-
duce secondary legislation specifying
caste in the Equality Act, “as an aspect
of” the protected characteristic of race—a
duty which remains unimplemented.
British Dalits have demanded protec-
tion in legislation from caste discrimi-
nation for many years, but have faced
concerted opposition not just to legisla-
tion but even to raising the issue at all,
mainly from faith-based organisations
and a handful of politicians and civil so-
ciety actors, some of whom object to
any legal protection against caste dis-
crimination, including developments in
case law which might extend protection
through the existing Equality Act from
discrimination based on ethnic origins
to discrimination based on caste.
The Equality Act 2010, introduced by
the 2005–10 Labour government, does not
at present specifically prohibit caste dis-
crimination. British anti-discrimination
MARCH 10, 2018
legislation has never been all-encom-
passing; it prohibits discrimination on
grounds of certain personal characteristics
in certain defined areas, outside of which
discrimination is lawful. The Equality Act
does not cover conduct or behaviour in the
private or intimate spheres (for example,
friendships, socialising); discrimination in
these areas is not unlawful. The grounds
of discrimination, or “protected charac-
teristics,” are extended either by legisla-
tion, or by judicial interpretation of exist-
ing grounds in cases that come before
courts and tribunals (case law).
The Labour government decided against
including an explicit prohibition of caste
discrimination in the Equality Bill, 2009
(now the Equality Act), arguing that there
R
was no “strong evidence” of such dis-
crimination in Britain, despite studies by
E
British Dalit organisations (Dalit Solidarity
Network 2006; Anti-Caste Discrimination
Alliance 2009), evidence in earlier aca-
demic research (Nesbitt 2017), and a
United Nations (UN) study on the issue.1
Instead, it agreed to insert a discretionary
power in Section 9(5)(a) for a govern-
ment minister to amend the Equality Act
in the future by order (that is, secondary
legislation) by adding caste as “an aspect
of” race. Race is currently defined in
Section 9(1) as including colour, nation-
ality, and ethnic or national origins. Using
descent—the international legal category
which captures “caste”—was rejected by
Parliament in case it opened the door to
claims on grounds such as social class.2
In April 2013, Section 97 of the Enter-
prise and Regulatory Reform Act (ERRA),
2013 replaced the discretion in Section
9(5) of the Equality Act with a duty to
make caste “an aspect of” race (so that
caste discrimination would become a
subset of race discrimination); but the
duty has not been implemented, and it
contains no deadline. Section 97 of the
ERRA also permits review and repeal of
the duty in Section 9(5) or any orders
made under it, any time after five years
from the adoption of the ERRA, that is,
from 26 April 2018 (the “sunset clause”).
In July 2013, the Conservative–Liberal
Democrat coalition government (2010–15)
published a timetable (https://www.
gov.uk/government/uploads/system/
uploads/attachment_data/file/225658/
vol lIiI no 10 EPW Economic & Political Weekly

130726-Caste-Discrimination.pdf) for the
introduction of secondary legislation on
caste “through the Equality Act duty,”
which included a public consultation; but
that consultation never took place. By con-
trast, the 2017 consultation is not about
how to introduce caste legislation through
the Equality Act duty, but whether legis-
lation is needed at all.
In resisting the duty to add caste to the
law, the coalition government and now
the Conservative government has relied on
a December 2014 decision (http://www.
bailii.org/uk/cases/UKEAT/2014/0190_
14_1912.html) by the Employment Appeal
Tribunal (EAT) in the case of Chandhok v
Tirkey which established that, although
caste is not yet an autonomous concept
within the Equality Act, there may be
factual circumstances involving caste
which, depending on the facts, may be
capable of coming within the “ethnic
origins” limb of the definition of race
in the Equality Act, as ethnic origins is a
“wide and flexible” concept which includes
the notion of descent (the category which
captures caste under the International
Convention on the Elimination of All
Forms of Racial Discrimination—ICERD)
(Ford 2015; Dalwai 2016; Waughray
2016a; Waughray and Dhanda 2016).
However, the EAT judge stressed that
this decision was limited to the facts of
the particular case and that he was not
making a definitive decision in principle
that discrimination on grounds of caste
was or was not within the scope of the
Equality Act as currently worded.
The Conservative government “agrees
M (UK) and the Vishva Hindu Parishad (VHP)
that legal protection from caste discrimi-
nation is appropriate”3 but says the EAT
judgment “suggests there is an existing
legal remedy for claims of caste-associated
discrimination under the ethnic origins
element of Section 9 [race] of the EA”4
that is, specifying caste as a ground
of discrimination in the Equality Act is
unnecessary. The consultation document
states that the Tirkey judgment means
that “it is likely that anyone who believes
that they have been discriminated against
on grounds of caste could now bring a race
discrimination claim under the existing
ethnic origins limb of the race provisions
in the EA because of their descent” (em-
phasis in original)—especially, it says, as
Economic & Political Weekly EPW MARCH 10, 2018
it is not clear what aspects of caste would
fall outside the concept of ethnic origins.
British Dalit organisations complained
that the consultation document was
misleading, badly structured, difficult to
follow, omitted critical information, and
fell short of government consultation
principles (http://www.civilservant.org.
uk/library/2016_consultation_principles.
pdf). Its purpose, they argued, should
have been to inform the introduction of
secondary legislation on caste; but it
was not. Participants were asked to re-
spond to 17 questions relating to the two
options. By presenting case law and leg-
islation as competing “options” for pro-
tection from caste discrimination, and
promoting case law as the preferred op-
tion and numbering it Option 1 while
overstating its advantages and minimis-
ing its limitations, the consultation,
E
they insisted, was clearly biased againstR
T
legislation.
The National Council of Hindu Temples
Z
UK (NCHT), an opponent of legislation, was
“delighted” by the consultation announce-
ment on 2 September 2016, describing it
G
as “wonderful news for the British Hindu
community” who could now present evi-
A
dence justifying their opposition to legisla-
tion; but by May 2017 a collection of org-
anisations, including the Hindu Council
UK, the National Hindu Students’ Forum
(UK) had condemned the consultation as
“misguided” for appearing to “presume
that caste discrimination exists in the UK,”
rejecting both options and demanding
repeal of the Equality Act’s Section 9(5)
entirely.5 Journalists reported a “Hindu
backlash” against the consultation, with
Theresa May “worried about upsetting
powerful Hindu groups” if the consulta-
tion went ahead (Purohit 2017) and
“influential Hindu, Sikh and Jain lob-
bies denying that caste-based discrimi-
nation exists in Britain,” whereas Dalit
and other groups “insist that discrimi-
nation exists, making law a necessity”
(Sonwalker 2017b).6
Despite their criticisms of the consul-
tation, British Dalit organisations joined
forces (http://casteintheuk.org/urging)
people to send “a clear message to the
government that legislation should protect
people subjected to caste discrimination”
vol lIiI no 10
COMMENTARY
by specifically choosing the option to
specify caste in the Equality Act.7
Vacillations
In 2005, when British Dalits initiated
their campaign for the inclusion of caste
in the Labour government’s proposed
new Equality Act, they faced opposition
from a political establishment reluctant
to acknowledge caste discrimination as
a domestic issue, wary of being accused
of “cultural intrusion,” and unconvinced
that legal regulation was necessary.
They also anticipated a backlash from
sections of the Indian diaspora commu-
nity (Waughray and Dhanda 2016). Dur-
ing parliamentary debates on the Equal-
ity Bill in 2009–10 the government resi-
sted attempts to add caste. However, in
March 2010, in order to secure agree-
ment on the legislation before the disso-
lution of parliament, it agreed to an
amendment from the late Lord Avebury
(Liberal Democrat) (a humanist, secular
Buddhist and advocate of legislation on
caste discrimination) inserting the dis-
cretionary power in Section 9(5)(a).
There was another reason: Baroness
Thornton, the government minister res-
ponsible for the bill, was persuaded to
include the “caste power” after hearing
powerful direct testimony from British
Dalits. She also commissioned a study
from the National Institute of Economic
and Social Research (NIESR) on caste
discrimination and harassment in Great
Britain. This found evidence suggesting
discrimination in areas covered by the
Equality Act, and it recommended legis-
lation, but was dismissed as flawed rese-
arch by anti-legislation groups. For over
two years the Conservative-dominated
coalition government deflected calls by
British Dalits to utilise the “caste power,”
insisting it was “carefully considering”
the NIESR findings—before, in March
2013, announcing education, not legisla-
tion, as its chosen approach.8
By April 2013, the coalition govern-
ment was facing the loss of a politically
important piece of legislation, the Enter-
prise and Regulatory Reform Bill (now
the ERRA). Twice the Lords adopted
amendments to the bill moved by Lord
Harries (a cross-bencher and former
Bishop of Oxford) immediately inserting
23
COMMENTARY

caste as a subcategory of race in the on 22 April 2013, Labour peer Lord and on 24 April 2013 in the Lords
Equality Act—both times rejected by the Bhikhu Parekh, an expert on multicul- (Waughray 2014).
Commons. Reluctantly, the government turalism, criticised the amendments for In late 2013, the UK Equality and
proposed its own amendment which adopting the wrong approach (legisla- Human Rights Commission (EHRC) con-
replaced the discretion in EA Section 9 to tion). While untouchability should be tracted a team of academic researchers,
make caste an aspect of race with a duty countered, he said, there was no evidence including this author, to help develop
to do so (Waughray 2014). Its amend- of wider caste discrimination; it would be the required secondary legislation by
ment included the sunset clause (which “extremely problematic” to get rid of the undertaking sociolegal research on British
received cross-party support despite category of caste, the hierarchy among equality law and caste to identify the
being unprecedented in relation to a dis- categories, or the principle of heredity; relevant legal issues and by holding
crimination ground) allowing the removal caste was too “nebulous” a concept to expert and stakeholder seminars to cap-
of caste legislation “once the concept [of capture in law, and legislation would ture the varied experiences and opinions
caste] has disappeared from UK society.”9 only lead to “frivolous complaints.”11 relevant to implementation of the legis-
The Harries amendments had been sup- Five Conservative Asian peers (Lords lation. Two reports (Dhanda et al 2014a,
ported by the veteran Liberal Democrat Ahmad, Popat, and Sheikh and Baron- 2014b) made proposals for defining caste
lawyer Lord Lester QC (an initiator of the esses Warsi and Verma) voted against for the purposes of the Equality Act,
UK’s first anti-discrimination legislation, the amendments as did Liberal Demo- collated testimonies of caste discrimi-
the Race Relations Act 1965), Baroness crats Lords Loomba and Dholakia. nation, presented the varied views on
Flather (cross-bench, a Hindu and the
first female Asian peer), and Lord Singh
(cross-bench) who described caste as
“negative cultural clutter” in Hinduism,
Asian peers supporting Harries were
(Labour) Lords Patel of Bradford, Parekh,
Desai; Lord Hussein (Liberal Demo-
crat); and crossbenchers Lords Patel,

E Rlegislation, and recommended the addi-

tion of caste as a fifth subset of race; but
the expected government action did
not follow.

T
while denying the existence of caste Bilimoria and Singh, and Baroness Flather. The EHRC had intended to, but did
among Sikhs.10 In the House of Lords On 23 April 2013, the government’s amen- not, commission research to measure

Z
debate on the second Harries amendment dment was adopted in the Commons, the extent of caste discrimination in

A Handbook of Rural India

G
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A Handbook of
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SURINDER S JODHKA
”Rural” and “urban” are the foremost categories through which social life has been visualised and engaged with in modern

M
and contemporary times.
The idea of the “rural” or the “village” has been of particular significance in India. British colonisers represented India to
the world as a land of “village republics”. This representation was so influential that even the nationalist leaders accepted
Essays from Economic and Political Weekly

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24 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly

Britain (baseline information necessary
for the review power in the sunset clause)
apparently because it felt it “might be
intrusive and ruin good relations in
communities.”12 Instead, the government
commissioned its own study (https://
www.gov.uk/government/publications/
measuring-caste-discrimination-in-brit-
ain-a-feasibility-study) on the feasibility
of measuring caste discrimination. This
was completed in October 2014 but despite
repeated calls remained unpublished until
March 2017. The study concludes that
there are no significant ethical or metho-
dological barriers preventing a survey
measuring the extent of caste discrimi-
nation in the UK; yet no survey has been
carried out.
Throughout 2014 and 2015, pro-legis-
lation parliamentarians in both Houses
who questioned the delay in introducing
the legislation were met with the same
answer—the government was “consider-
ing” the situation. During a House of Lords
debate on caste-based discrimination in
July 2016 (https://hansard.parliament.
uk/Lords/2016-07-11/debates/3EEC4BE4-
C98F-4155-82E2-E8485A752C94/Caste-
BasedDiscrimination) the government
stated that the ruling in Tirkey v Chandhok
“may well” already provide “the appro-
priate level of protection that is needed
against caste discrimination” and that it
believed the UK was already compliant
with its international law obligations on
caste.13 In August 2016, it asserted before
the UN Committee on the Elimination of
Racial Discrimination (CERD) that the
“Equality Act 2010 offered legal protec-
M are mistaken or malign.
tion against discrimination on grounds
of ethnic origin, which included caste.”14
Indian Diaspora
Opposition to legislation began to be
voiced following the DSN’s 2006 study
on caste discrimination in the UK. Since
2013, concerted opposition to caste legis-
lation in the UK has emerged from various
organisations claiming to represent the
views of religious communities—Hindus,
Sikhs and recently Jains—and from actors
such as the Hindu Lawyers’ Association
and City Hindus Network.15 Much of this
opposition has appeared online in blog-
posts or in press releases. A recurring
claim is that there is no credible and
Economic & Political Weekly EPW MARCH 10, 2018
“universally accepted” proof of caste dis-
crimination in the UK, alternatively no
evidence of such discrimination in areas
covered by the Equality Act.16 Yet the
existence of discrimination “based on
family background, religious tradition
or jaati (caste)” within Hindu communi-
ties was recognised in a 2006 Hindu
Forum of Britain (HFB) report (Berkeley
2006: 12, 58). In 2013, the Alliance of
Hindu Organisations (AHO) cited Anil
Bhanot (Hindu Council UK) saying, “I am
clear in my own mind that discrimination
exists … the only difference between us
is that we are asking for a different
approach to eradicate it” (AHO 2013); but
in 2014 the AHO ridiculed the idea that
“a terrible phenomenon called ‘caste
discrimination”’ exists in the UK (AHO
2014). Evidence of discrimination from
E
Dalit organisations has been dismissed,
the NIESR report and the EHRC caste in R
T
Britain reports have been repeatedly
attacked as flawed and anti-Indian, and
Z
the independence of the EHRC reports
and the scholarship of the academics in-
volved has been repeatedly called into
G
question (AHO 2014; Law, Culture, Reli-
gion blog 2014a, 2015; National Council
A
of Hindu Temples 2017). Yet no evidence
has been produced showing that caste
discrimination is non-existent in the UK
or that accounts of caste discrimination
Opponents argue that legislation will
introduce, reinscribe or entrench caste
identities and boundaries and inter-group
tensions amid claims that caste is mean-
ingless, irrelevant, declining or non-
existent. Yet the continued relevance of
caste identity and caste divisions in Brit-
ain irrespective of religion or community
and across generations is well-docu-
mented (for example by Ghuman 2015;
Dhanda 2017) and indeed is acknowl-
edged by some who question the value
of anti-caste legislation in the diaspora
(see for example, Jaspal and Takhar
2016). In 2013, the government endorsed
the erosion of caste (hence their support
for the sunset clause): “We do not believe
or accept that caste and caste divisions
should have any long term future in
Britain” (Grant 2013). Conversely, oppo-
nents of legal protection against caste
discrimination claim that legislation
vol lIiI no 10
COMMENTARY
threatens “Indian associational needs,”
for example, the existence of organisa-
tions “based on an extended kinship
structure like a jati,” that it will under-
mine Indian communities in Britain,
and will result in spurious and malicious
claims of caste discrimination against
Indian businesses and community organ-
isations (Law, Culture, Religion blog 2013,
2014b, 2014c); but there is no evidence
for this, and these arguments misunder-
stand how British discrimination legisla-
tion works.
Specifying caste as an aspect of race
in the Equality Act will not affect associ-
ational activities or religious rituals, nor
will individuals be required to disclose
caste identities (Dhanda et al 2014a;
Waughray 2016b). Such arguments posi-
tion Indian organisations, businesses,
and employers as the victims of legisla-
tion, which is depicted not as a source of
protection from caste discrimination but
as a threat to the continued existence of
Indian communities (Law, Culture, Reli-
gion blog 2014b, 2014c). Presumably, Indi-
ans campaigning for protection from caste
discrimination are not part of these com-
munities. Caste is framed as a benign cul-
tural or associational identity, delinked from
discrimination and inequality (Natrajan
2012). There is no acknowledgement that
discrimination on grounds of caste might
be a genuine issue for anyone in the UK,
or that the impact and effect of caste
varies, or that the experience of caste is
negative for some whilst beneficial for
others (Dhanda et al 2014(a): iii–iv).
Some anti-legislation campaigners have
argued, like the government, that spe-
cific legislation is unnecessary because
the EAT judgment in Tirkey means that
legal protection against caste discrimi-
nation is already available under the
Equality Act through judicial interpreta-
tion of the ethnic origins element of
race. As Lord Lester QC stated in the
2016 Lords debate on caste discrimina-
tion, this view is “not sustainable.”17 The
judgment was not a definitive decision
in principle on the question of whether
mistreatment because of someone’s per-
ceived caste is or is not unlawful under
the Equality Act.18 It does not establish a
binding and authoritative precedent
that caste is part of race/ethnic origins;
25
COMMENTARY
it left it open. Unless and until the
Supreme Court establishes a precedent,
or a body of jurisprudence develops, the
law will remain uncertain (Dhanda et al
2014a; Waughray 2016a). The CERD has
asked the UK three times to introduce
legislation against caste discrimination
(in 2003, 2011 and 2016); other UN bod-
ies, including the former UN High Com-
missioner for Human Rights and the
EHRC have all called on the government
to comply with the statutory duty to leg-
islate (see for example, EHRC 2016: 85).
If “within the Indian diaspora there is
a huge gap even in acknowledging the
social reality of the caste system in the
UK” (Ghuman 2015: 564), religious “hurt”
has become the justification for refusing
to discuss caste discrimination. The Sikh
Council UK cites the reference to the
Sikh faith in the Equality Act explanatory
note on caste (Sikh Council UK, January
2015) as a reason for opposing the legis-
lation, even though caste was recognised
“as an important aspect of the self” in a
small 2016 study of young British Sikhs
(Jaspal and Takhar 2016). Dhanda sug-
gests that opposition to legislation by
some Sikh organisations such as the
Sikh Council UK “is connected to the
barely hidden fear that the routine way
of practising caste-based identities will
come under scrutiny” (Dhanda 2017)—
while affirming that the contestation
within the Sikh community on the caste
spiritual vitality in the community.19
Meanwhile, established Hindu organi-
sations and the various religion-based
M
issue is a sign of continuing political and
anti-legislation umbrella groups that have
emerged since 2013 frame caste discrimi-
nation legislation as “a hate crime
against Hindus and Jains,” “racist,” “offen-
sive,” “Hindu-phobic,” “religious perse-
cution” against a successful minority
(NCHT 2017). The “British Hindu commu-
nity” has become the subject of “a cam-
paign of public vilification,” the Hindu
faith “desecrated,” said the HFB in 2014.
This move to shift the terms of the de-
bate away from the question of address-
ing discrimination sits badly with gov-
ernment and EHRC research which emp-
hasises that caste is not religion-specific
and is subscribed to by (and affects)
members of any or no religion, and that
26
while attitudes and practices of caste
have always been regulated or modified
by religion, discrimination on grounds
of caste is a cross-religion or non-religious
phenomenon (NIESR 2010: vi; Dhanda
et al 2014a: 20).
A linked strand of opposition depicts
calls for caste discrimination legislation
in the UK as part of a wider campaign of
transnational Christian proselytism and
foreign interference in India’s internal
affairs, rooted in disdain for Indian tra-
ditions with the aim of pressuring India
to extend reservations to Muslims and
Christians and augmenting conversions
to Christianity. Its proponents assert that
the “caste system” is a Western, colonialist,
missionary construction and has never
existed in India (NCHT 2017). David
Mosse terms this the
“externalisation of caste,” whereby anti-leg-
islation actors seek to convince government
T
and parliament that “it is not the Dalit expe-
rience of discrimination that motivates the
Z
introduction of “caste” into UK equality law,
but a persisting (missionary-colonial) cul-
tural imagination that vilifies Hindus and
unnecessarily exposes them to litigation,
G
presuming that they practice caste discrimi-
nation. (Mosse 2016)
A
Yet “caste” clearly has meaning in the
UK: the government’s feasibility study
found that “the concept of caste appears
to be widely understood”; moreover, “an
individual’s lack of understanding of the
concept does not mean they cannot be
discriminated against by others who
attribute a caste to that person” (Howat
et al 2017: 19).
Conclusions
Legislating against caste discrimination
in the UK is not only contentious, it has
become highly politicised. Then Prime
Minister David Cameron (2010–16)
reportedly vetoed a proposal agreed
upon by ministers to make caste dis-
crimination unlawful, to avoid legislat-
ing on the issue ahead of the 2015 gener-
al election (denied by the government)
(Woolf 2014). The NCHT (a charity) was
scrutinised by the Charity Commission
for seemingly encouraging its members
to vote Conservative in the 2015 election
because of their anti-legislation stance,
in contravention of the rules (Sinha 2015).
Bob Blackman (member of Parliament),
MARCH 10, 2018
a vocal anti-legislation campaigner, chair
of the All Party Parliamentary Group for
British Hindus and Conservative MP for
Harrow East (which has a large Hindu
population) urged the government in
October 2016 to abandon caste legisla-
tion, claiming that over 85% of British
Hindus consider it “unnecessary, ill-con-
sidered and divisive”20 (Sonwalkar 2017a;
Ram 2016).
The DSN believes that the government
is being lobbied “at the highest level”
to drop caste discrimination legislation
(Economist 2015). Lord Desai during a
recent House of Lords debate on caste-
based discrimination attributed the gov-
ernment’s resistance to legislation to a
“very strong … caste Hindu lobby which
E R
is powerful, prosperous and persistent”;
the government, he said, was “playing a
vote bank game.”21 Amrit Wilson believes
“this is not just about legislation outlaw-
ing caste discrimination but a demon-
stration of the power of right-wing Hindu
forces in Britain and their ability to get
their own way” (Wilson 2017).
Lord Popat claims that the “British
Indian community” has left caste behind,
and that pushing for legislation will
“bring to the surface” “irrelevant social
forces” and undermine “community
cohesion.” Yet for Dalits in Britain—
unless one discounts all testimonies and
evidence of caste discrimination as mistak-
en, unreliable, dishonest or malicious—
these “social forces” are neither irrelevant
nor below the surface, neither has caste
been left behind. There is no ackno-
wledgement within the anti-legislation
lobby that those who say they have expe-
rienced discrimination should be listened
to. Instead, by bringing the issue of caste
discrimination into the open, Dalit orga-
nisations are held responsible for caus-
ing hurt and offence to “dharmic com-
munities”—the backlash anticipated by
Dalit activists almost two decades ago
(Waughray and Dhanda 2016: 181).
The debate in the UK suggests that
legislating against caste discrimination
will be contested in other diaspora states,
just as it has been at the international
level, where UN regulation of caste-based
discrimination as a form of descent-
based racial discrimination under ICERD
is not accepted by India. While the need
vol lIiI no 10 EPW Economic & Political Weekly

to legislate against race discrimination
is now rarely if ever subject to opposition
or scrutiny, legal measures against caste
discrimination do not have the same
legitimacy and in the diaspora risk being
criticised by mainstream politicians as
unwarranted cultural intrusion. Yet as
Desai pointed out in the Lords debate
on caste discrimination in 2016, the pro-
posed UK legislation is “a minimal pro-
gramme for preventing discrimination
and bringing our law into line with our
UN obligations … this is the law in India
… this is not a law which is un-Indian …
it is entirely in coherence with India’s
constitution and law.”22 The next step in
the legal regulation of caste discrimination
in the UK is the government’s response to
the public consultation. Its importance for
the development of UK equality law and for
legal treatment of caste discrimination
in the diaspora cannot be underestimated.
Notes
1 A Eide and Y Yokota, UN Sub-commission on
the Promotion and Protection of Human
Rights, Second Expanded Working Paper on
Discrimination based on Work and Descent;
UN Doc. E/CN.4/Sub.2/2004/31.
2 H L Deb, Vol 716, col 345, 11 January 2010. Descent
is one of five grounds of racial discrimination
under the International Convention for the
Elimination of all Forms of Racial Discrimina-
tion (ICERD)—the others are race, colour, na-
tional or ethnic origin—and has been inter-
preted by the Committee on the Elimination of
M
Racial Discrimination (CERD) to include caste.
The term “caste” does not appear in any inter-
national human rights law treaty.
3 UN Doc CERD/C/GBR/21–23, 16 July 2015, para 8.
4 See for example, Castes: Discrimination: Written
question—HL3664 at http://www.parliament.
uk/business/publications/written-questions-
answers-statements/written-question/Lords/
2015–11–18/HL3664/, accessed on 29 August
2017.
5 Hindu Council UK et al, Guidance Notes:
“Caste in Great Britain and Equality Law: A
Public Consultation, 25 May 2017.
6 Pritam Singh explains that some Sikh groups
saw a right-wing Hindu (Hindutva) agenda be-
hind opposition to caste legislation and have
supported the pro-legislation initiatives (per-
sonal correspondence).
7 See http://www.secularism.org.uk/news/2017
/06/anti-caste-discrimination-groups-issue-
urgent-call-to-participate-in-governments-
consultation, accessed on 29 August 2017.
8 H C Deb Vol 559, col 39WS, 1 March 2013.
9 H C Deb Vol 561, col 790, 23 April 2013.
10 H L Deb Vol 734, col 1305, 4 March 2013;
H L Deb Vol 744, col 1306–07, 22 April 2013.
11 H L Deb, Vol col 1305–06, 22 April 2013. See
Dhanda (2015) for a detailed discussion of Lord
Parekh’s remarks in this debate. He did however
vote in favour of the Harries amendment.
12 H C Deb Vol 584, col 140WH, 9 July 2014.
13 House of Lords Debate, Caste-based Discrimi-
nation, Vol 774, 11 July 2016.
Economic & Political Weekly EPW MARCH 10, 2018
14 UN Doc CERD/C/SR.2455, 12 August 2016,
para 25.
15 There are deep divisions in the Sikh community
on this issue. A small but vocal section seems to
have been won over by certain right-wing Hindu
actors and this section is opposed to caste legis-
lation, but very large sections of the Sikh com-
munity that include some Dalit groups too sup-
port pro-legislative campaigning groups (per-
sonal correspondence with Pritam Singh).
16 See note 5.
17 See note 13.
18 Chandhok & Anor v Tirkey, Appeal No UKE-
AT/0190/14/KN, paras 1, 55.
19 Personal communication.
20 H C Deb, Vol 616 Caste Discrimination Consulta-
tion 27 October 2016.
21 See note 13.
22 See note 13.
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27
COMMENTARY
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Row Reaches Boiling Point,” Hindustan Times,
17 September.
Waughray, Annapurna (2009): “Caste Discrimina-
tion: A Twenty-first Century Challenge for UK
Discrimination Law?” Modern Law Review,
Vol 72(2): 182–219.
Counting Jobs in India
A Detailed Review of Labour Database
Jitender Singh, Arup Mitra
A detailed review of various
sources of labour statistics in
India highlights the lack of
long-time series data on total
employment. The Labour Bureau’s
attempt since the last couple of
years in this respect has been
helpful. To gauge the accuracy
of these estimates, it is desirable
to have data from at least two
sources. Dependence on one
specific source can be risky.
M ments. The survey generates informa-
The authors are indebted to the anonymous
referee and the editorial team for their
constructive comments.
Jitender Singh (jtndrdahiya@gmail.com) is
with the Department of Financial Services,
Ministry of Finance, Government of India; and
Arup Mitra (arup@iegindia.org) is with the
Institute of Economic Growth, Delhi.
28
— (2014): “Capturing Caste in Law: Caste Dis-
crimination and the Equality Act 2010,” Human
Rights Law Review, Vol 14(2): 359–79.
— (2016a): “Is Caste Discrimination in the UK Pro-
hibited by the Equality Act 2010?” International
Labor Rights Case Law, Vol 2, pp 70–76.
— (2016b): “Against Caste in British Law,” Book
Review, South Asia Research, Vol 36 (3), pp 409–13.
Waughray, Annapurna and Meena Dhanda (2016):
“Ensuring Protection against Caste Discrimi-
nation in Britain: Should the Equality Act 2010
I
nternationally, countries depending
on their size and degree of develop-
ment compile quality information on
job creation. In the United States (US),
T
Bureau of Labor Statistics (BLS) conducts
monthly household and establishment
Z
surveys to generate information on em-
ployment and unemployment. Besides, a
Quarterly Census of Employment and
G
Wages (QCEW) also generates estimates
on employment.
A
The establishment survey (also called
payroll survey) covers non-farm wage
and salary jobs. On a monthly basis, it
covers approximately 1,46,000 establish-
tion on employment, hours of work, and
earnings across industries and geogra-
phies in the country. Simultaneously, a
monthly household survey is also car-
ried out, covering approximately 60,000
eligible households every month. In
addition, the QCEW is conducted and
published with a six months’ time lag for
the evaluated quarter. This shows that a
sound system of statistics is in place for
the generation of updated high frequency
information on employment in the US.
Many European countries also estimate
employment quarterly.
Employment Statistics in India
The Government of India spends huge
resources on collection of employment
statistics. Substantial human labour is
employed to generate reliable and timely
estimates. The mechanisms and systems
are in place: various central government
MARCH 10, 2018
be Extended?” International Journal of Discri-
mination and the Law, Vol 16 (2–3), pp 177– 96.
Woolf, Marie (2014): “Cameron ‘Blocks Ban on Caste
Bias’,” Sunday Times, 21 December.
Wilson, Amrit (2017): “Why Is the UK Government
Wheeling Back on Legislation against Caste
Discrimination?,” Open Democracy, 24 May,
https://www.opendemocracy.net/uk/amrit-
wilson/why-is-uk-government-wheeling-back-
on-legislation-against-caste-discrimination.
[All URLs accessed on 29 August 2017.]
departments/organisations are directly
involved and appropriate statutes have
been enacted to enforce information
collection.
Interestingly, in India, the sources of
employment data are many. The National
Sample Survey Office (NSSO) carries out
the most comprehensive quinquennial
E R
Employment and Unemployment Survey
(EUS). The survey collects information
from households, across industries and
geographies in the country, but only once
in five years though recently a decision
has been reached that annual labour
force surveys will be carried out by the
NSSO instead of the Labour Bureau. A
huge time gap of five years reduces the
utility of the data in assessing individu-
als’ livelihood opportunities that may be
changing fast in response to economic
variations. This, in turn, dampens the
scope of initiating new policies in the
short-run based on such low frequency
data. In fact, the quinquennial surveys
are useful only for five-year planning
and research.
The Labour Bureau, under the Ministry
of Labour and Employment, has been
conducting labour force surveys every
year though the sample size is quite small.
The Labour Bureau has also been con-
ducting Quarterly Employment Survey
(QES) since January 2009. However, the
scope of QES is limited as it covers only
few industries, including textiles, metals,
automobiles, gems and jewellery, trans-
port, information technology/business
process outsourcing, and mining. The
latest survey is available up to Septem-
ber 2015. Its sample size is also small.
Nevertheless, QES is useful to monitor
the impact of global slowdown on employ-
ment in export-oriented industries.
The Labour Bureau compiles useful
information on industrial disputes, covering
closures, retrenchments, and lay-offs.
vol lIiI no 10 EPW Economic & Political Weekly

However, this information is limited
to factories employing 100 and more
workers.
Besides, Labour Bureau compiles a
Statistics on Factories report every year.
However, only 40.82% of the total work-
ing factories submitted their annual ret-
urns for 2012, indicating gross underes-
timation. Besides, the results are released
with a time lag.
Since 1959, the Central Statistics Office
(CSO) has been conducting the Annual
Survey of Industries (ASI). It is the most
comprehensive data set for registered
manufacturing. It covers factories em-
ploying 10 or more workers with power
and 20 or more without power. Micro,
small and medium enterprises (MSME)
census reports comprise another source
of information on employment. The CSO
conducts Economic Census every five
years and the latest is for 2013–14 for
the reference period January 2013 to
April 2014.
The Directorate General of Employment
and Training (DGET), Ministry of Labour
and Employment, produces two reports.
One is Employment Exchange Statistics
and the second is Employment Reviews.
The first is annual and collects information
on registration, placement, live register
and submission from about 978 employ-
ment exchanges across states. The sec-
ond report provides information at short
intervals about the structure of employ-
ment in public and organised private
sector at the state and national levels.
The Employees’ Provident Fund Or-
ganisation (EPFO), Ministry of Labour
M vidual.” The MCA21 (MCA) and the Public
and Employment, collects information
on monthly basis from 187 specified in-
dustries/classes of establishments as
specified in schedule I of the Industries
(Development and Regulation) Act (IDRA),
1951 or any activity notified by the central
government in the official gazette. Every
year, the Department of Public Enterprises
(DPE), Ministry of Heavy Industries and
Public Enterprises, publishes the Public
Enterprises Survey reports based on 290
central units. The Department of Indus-
trial Policy and Promotion (DIPP) receives
information on potential job creation
through Industrial Entrepreneurs Memo-
randum (IEMs) under the IDRA, 1951. Besi-
des, MCA21 data is recorded by Ministry
Economic & Political Weekly EPW MARCH 10, 2018
of Corporate Affairs (MCA) for the com-
panies incorporated under the Compa-
nies Act, 1956. In addition, National
Technical Manpower Information System
(NTMIS) collects data from students, ed-
ucational institutions, and users of tech-
nical manpower to estimate the demand
and supply of technical manpower in
India. The Department of Commerce,
Government of India, publishes informa-
tion on employment in special economic
zones (SEZs).
The following inferences can be drawn
from the above elaboration:
(i) Multiple departments/organisations
under the central government are engaged
in collecting information on employment/
jobs in India. The NSSO, CSO, DGET, EPFO,
Labour Bureau, Office of Development
Commissioner (MSME), DPE, DIPP, and
MCA are some of the prominent ones.
(ii) Multiple statutes are backing the
E R
T
collections of information. The IDRA, 1951;
the Employment Exchanges (Compulsory
Z
Notification of Vacancies) Act, 1959; the
Employees’ Provident Funds and Miscel-
laneous Provisions Act, 1952; the Factories
G
Act, 1948; the Industrial Dispute Act, 1947;
the Collection of Statistics Act, 2008 and
A
the Companies Act, 2013 are important.
(iii) Multiple approaches are followed to
collect information such as “enterprise,”
“establishment,” “household,” and “indi-
Enterprises Survey (DPE) follow the “en-
terprise” approach. The “establishment”
approach is followed by QES (Labour
Bureau), Statistics on Industrial Disputes,
Closures, Retrenchments and Lay-offs
(Labour Bureau), Statistics of Factories
(Labour Bureau), ASI (CSO), MSME census
reports (Development Commissioner),
Economic Census report (CSO), Employ-
ment Market Information Programme
(EMIP) (DGET), Employees’ Provident
Funds Data (EPFO) and IEMs (DIPP). The
“household” approach is followed by
NSSO’s quinquennial EUS and Labour
Bureau’s Annual EUS. Information is col-
lected from individuals in Employment
Exchange Statistics by DGET.
(iv) In some of the sources, the responsi-
bility of reporting lies with the employer,
especially in cases where employers should
file compliance reports under some stat-
ute. In some other sources, the collecting
vol lIiI no 10
COMMENTARY
agency approaches the employer for
collecting information. Data on employ-
ment exchange is based on self-targeting
where individuals register themselves.
(v) The frequency of data sources also
varies. The sources for monthly infor-
mation include Statistics on Industrial
Disputes, Closures, Retrenchments and
Lay-offs, EPFO data and IEMs. The sources
for quarterly information include QES
(Labour Bureau) and Employment Re-
views under the EMIP (DGET). The annual
EUS and Statistics of Factories by Labour
Bureau, ASI by CSO, Employment Ex-
change Statistics by DGET, the Public En-
terprises Survey reports by DPE and
MCA21 by MCA collect information every
year. There are also quinquennial and
decadal reports produced by the CSO,
the NSSO and the Ministry of MSME.
(vi) Various sources also differ in their
scope, coverage, and other details that
may arise due to the differences in the
purpose of collection.
Data Sources
Broadly, these data sources fall into two
categories. First, when the onus of col-
lecting information lies on the govern-
ment, it can be called “survey based.”
Second, when, the onus of submitting
returns is on employer/establishment/
enterprise/individuals it can be called
“return based.” The survey-based sourc-
es include NSSO surveys, QES and EUS
(Labour Bureau), ASI, and Census and
Economic Census by CSO and MSME
census. The return-based data sources
include factory statistics, EMIP, employ-
ment exchange data, Statistics on Indus-
trial Disputes, Closures, Retrenchments
and Lay-offs and EPFO data. The survey-
based data is comprehensive and is used
to feed into the statistical system in
India. However, the return-based data is
for specific purpose and is generated as
a by-product of enforcement of an act.
The survey-based data is more updated
than return-based. Survey-based data is
also more complete and reliable. How-
ever, its frequency is very low: decadal,
quinquennial, yearly. On the other hand,
the frequency of return-based data is
high. Multiple organisations are respon-
sible for the collection of return-based
data, using different approaches and
29
COMMENTARY

frequencies. But it is incomplete, outdat-
ed, and unreliable due to its poor re-
sponse rate and slow processing.
Estimates of Employment
The employment estimates given in
Table 1 varies across sources due to vari-
ation in their reference period and dif-
ference in their coverage, and so on. The
latest employment estimates available
as of now is up to September 2015 by
QES, Labour Bureau. However, it is limited
only to a few industries.
The employment figure in the Statistics
of Factories reports appears to be grossly
underestimated. The ASI estimates em-
ployment for 2012–13 (financial year) at
129.5 lakh persons, while the Statistics of
Factories estimates only 13.12 lakh per-
sons for 2013 (calendar year). The differ-
ence exists even though the coverage in
ASI and Statistics of Factories is almost
the same. Moreover, despite the Statis-
tics of Factories being return-based, its
latest estimates are available up to 2013
only, while ASI estimates are more up-
dated and available up to 2014–15.
Comparable estimates by the EMIP for
2012 are 295.43 lakh persons. The EMIP
covers all establishments in the public
sector irrespective of their size and
non-agricultural establishments in the
private sector employing 10 or more
persons. The estimates on employment
from various sources are difficult to rec-
oncile. The return-based data are also
incoherent and inconsistent with survey-
based data.
The quality of return-based data is
poor due to low response from employers.
Only 66% of the total registered working
factories submitted returns in the Statis-
tics of Factories, 2013. The low response
is probably because of weak mechanisms
to ensure compliance in filing timely re-
turns. The delays in aggregation and
publishing information can be attribut-
ed to limited administrative capacity,
duplicity of tasks, and multiple aggrega-
tion points. The technology used in pro-
cessing this information is also obsolete.
All these factors taken together make the
return-based data on employment/jobs
irrelevant, non-actionable, incomplete,
unreliable, incoherent, and inconsistent.
The multiplicity of acts requires an
employer to file the same information
for different regulatory agencies. This
overburdens the employer. It also ham-
pers the ease of doing business in the
country. The 2014 Labour Bureau report
also acknowledges the fact that labour

E R statistics in its present form is dated

and of poor quality, thus limiting its
reliability and use. The report also
examined various laws and rules, and
Table 1: Employment Estimates in Various Sources
Sources
1 Sixth Economic Census,
CSO*
2 Employment Exchange,
Employment/Job Estimates
1277.08 lakh

Additional 3.39 lakh job

Reference Period
During January
2013–April 2014

Z T Concept/Coverage
Total person employed. Excluding crop production, plantation, public
administration, defence and compulsory social security services activities.
During January 2014 to Placement of jobseekers during reference period.

G
DGET** seekers placed (out of 31 December 2014
482.61 lakh job seekers).
3 Employment Market 295.43 lakh As on 31 March 2012 EMIP covers only the organised sector; all establishments in the public sector

A
Information irrespective of their size, and non-agricultural establishments in the private
Programme sector employing 10 or more persons.
(EMIP), DGET Non-agricultural establishments in the private sector employing 25 or more
persons is collected under the provisions of Employment Exchanges (Compulsory

M
Notification of Vacancies) Act, 1959, data from the establishments employing
10–24 persons are collected on a voluntary basis.
4 Statistics of Factories, 40.023 lakh During 2012 Only registered factories.
Labour Bureau$ Persons employed directly or through any agency in factories using power and
employing 10 or more workers or not using power and employing 20 or more workers.
5 Quarterly Additional 1.35 lakh December 2015 over Number of persons employed either directly by the establishment or through a
Employment Survey December 2014 contractor. Selected sectors include textiles, metals, automobiles, gems and
October 2015 to jewellery, transport, information technology/business process outsourcing,
December 2015 and mining.
6 MSME Census, 594.61 lakh persons Reference year Registered and unregistered MSMEs. Employment is comprised of own account
2006–07 2006–07 workers, direct workers or contract/causal employees who contribute in the
process of production or rendering of services.
7 Annual Survey 135.199 lakh 2013–14 Figures limited to organised manufacturing. Total persons engaged include the
of India employees and all working proprietors and their family members who worked in
or for the factory in any direct and productive capacity. The number of workers or
employees is an average number obtained by dividing man-days worked by the
number of days the factory had worked during the reference year.
8 Public Enterprises 13.51 lakh people 2013–14 Public Enterprises Survey traditionally covers, besides statutory corporations,
Survey (excluding contractual those government companies wherein more than 50 % equity is held by the
workers) central government.
9 NSSO survey 2,483 lakh 2011–12 Non-agriculture sector. Measured as principal status plus subsidiary status.
* Person employed include all persons (including children under 15 years of age) working on the last working day prior to the date of fieldwork in the establishment, either as owners,
members of the household, co-owner or partner or family members helping the owner in running the establishment, including other persons engaged by the establishment, whether
hired or not, besides regular and salaried employees, casual/daily wage labourer are considered as workers for the establishment.
** A jobseeker is placed depending on an employer's acceptance of a person into a remunerative job through the employment exchange. This includes: acceptance by employers of
applicants submitted by exchanges for training/apprenticeship with the objective of their becoming paid employees on completion of their training/apprenticeship. All jobseekers are not
necessarily unemployed. All unemployed are not necessarily registered with employment exchanges as registration is voluntary. There are chances of delicacy in registration. Jobseekers
can be employed independently from employment exchanges.
$ Average daily employment calculated by dividing total attendance (man-days worked) in a year by the total number of working days during the year.
Source: Compiled by authors.

30 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly

recommended that they be simplified. It
also suggested that data should be cap-
tured electronically. However, the scope
of the report was restricted only to labour
laws monitored by the Labour Bureau.
There is a need to take a comprehensive
review of return-based sources of em-
ployment estimates for collection of
timely, reliable, and actionable informa-
tion on employment/jobs.
The workforce participation rates
(WPR) (principal and subsidiary workers)
given by Labour Bureau (Table 3) do not
match with the corresponding NSSO rates
(Tables 2 and 3). Part of the difference
can be attributed to the fact that the
NSSO rates in parentheses in Table 3 cor-
respond to ages 15 to 59 years while the
Labour Bureau rates cover the age groups
15 years and above.
Table 2: Workforce Participation Rate (Principal
and Subsidiary Workers), NSSO (all ages combined,
as a percentage of total population)
1983 1993– 1999– 2004– 2009– 2011–
94 2000 05 10
Rural male 54.7 55.3 53.1 54.6
Rural female 34 32.8 29.9 32.7
Urban male 51.2 52.1 51.8 54.9
Urban female 15.1 15.5 13.9 16.6
Source: NSSO–EUS, various years; Thomas (2015).
Table 3: Workforce Participation Rate (Principal
and Subsidiary Workers), Labour Bureau (15 years
and above, %)
2011–12
Rural male 77.5 (82.0)
Rural female 32.5 (37.2)
Urban male 71.3 (78.4)
Urban female 17.0 (21.0)
Figures in parentheses against 2011–12 correspond to
NSSO estimates for age 15 to 59.
Source: Labour Bureau and NSSO.
Though the Labour Bureau WPR do not
exactly tally with the NSSO WPR, a reason-
ably good panel data set has been emerg-
ing that can be utilised to identify the
determinants of participation. The state-
level cross-section-time-series pooled data
can be used to determine the impact of
growth fluctuations on employment—an
issue that has been bothering both policy-
makers and researchers for a while.
The other control variables could be state
level ones like state government expen-
ditures that can vary every year, and other
cultural, social, demographic, and infra-
structure variables that are not likely to
show huge changes in the short run. A
detailed analysis based on state-level data
brings out a wide range of interesting
Economic & Political Weekly EPW MARCH 10, 2018
results with important policy implica-
tions (Mitra and Okada forthcoming).
However, as mentioned before, the
Labour Bureau’s surveys on labour force
has been discontinued. The NSSO, in-
stead of conducting the EUS once in five
years has now initiated the annual labour
force surveys. Since the NSSO has al-
ready acquired the expertise of carrying
out the EUS and has established a reputa-
tion among the users with regard to the
reliability of the employment figures,
similar exercises annually may not be
difficult. However, in the recent past, the
2009–10 estimates were questioned, and
thus, the EUS survey had to be repeated in
2011–12 much before the five-year period
got over.
The engagement of contractual inves-
tigators who have replaced the regular
resulted in such discrepancy between
E R
investigators to a large extent might have
T
the estimates and the expected outcome
12 for 2009–10. But if that is the case, the
Z
54.7 54.3 same argument can hold for the annual
26.1 24.8 surveys to be conducted by the NSSO. On
54.3 54.6 the other hand, Labour Bureau had ac-
G
13.8 14.8
quired reasonable experience to handle
such surveys after repeating similar ex-
A
ercises for the last several years. Maybe
for the initial years, the figures showed
2013–14 some discrepancy, but over time the
74.3 Labour Bureau figures were tending to
M
35.1 converge with the NSSO figures. If
71.4
Labour Bureau surveys were to continue,
17.5
the users could have more than one
source of labour and employment statis-
tics at least once in five years to compare
and determine the reliability of the agg-
regate nationwide employment data.
Now the users will be left with no choice:
the NSSO data will have to be accepted
without any questions. If in a given year,
the biases are strong in comparison to
the immediate past year, the differences
in the estimates will be interpreted as
the actual change in employment.
Suggestions
The technology used in collecting infor-
mation is evolving very fast. The use of
computer network, digital gadgets,
customised software and mobile web
portal can reduce the cost of data entry
and aggregation considerably. Faster
processing of the data can save time.
vol lIiI no 10
COMMENTARY
Technology can enable storage of larger
data sets, easy transformation in usable
form, easy retrieval, and query-based
outcomes. There is a need to examine the
further use of technology in collection,
processing, storage and dissemination of
labour/employment statistics in India.
Let us assume there is a digital product,
which can be a mobile app, and estab-
lishments/enterprises have to feed only
few figures every month/quarter/year.
These figures can be verified if needed
through random checks or putting pos-
sible error alerts. The digital product
can also automatically remind the re-
spondent to feed the information and
help locate the respondent through the
global positioning system.
It will provide the information of the
contact person and can maintain the list
of contact (active or passive) persons.
These few figures are the main indicators
and can be churned out from various
returns (production, labour, disputes,
etc) a respondent is required to file at
various times to different agencies.
Since the information sent through this
digital product can be accessed by all
agencies simultaneously, including the
monitoring agency in the central govern-
ment, the information can be compiled
concurrently at the centre and state levels
without any time lag. It will avoid duplicity
of data entry and the entry at the respond-
ent level will be sufficient. It will save
time, money, human labour, and provide
updated data on employment/job crea-
tion in time.
References
Labour Bureau (2014): “Report on Simplification of
Returns under Labour Laws,” Chandigarh.
Mitra, Arup and Ava Okada (forthcoming): “Labour
Market Participation in India: A Region and
Gender Specific Study,” Singapore: Springer.
Thomas, Jayan Jose (2015): “India’s Labour Market
during the 2000s: An Overview,” K V Rama-
swamy (ed), Labour, Employment and Economic
Growth in India, Cambridge.
available at
Churchgate Book Stall
Churchgate Station
Opp: Indian Merchant Chamber
Mumbai 400 020
31
Western Medical Education
and Women’s Healthcare in
Colonial Bengal
Manas Dutta
S
ocial histories of health and medi-
cine in colonial India have emerged
as major themes of interdisciplinary
research in South Asian history since the
late 1990s. These studies aimed at tran-
scending conventional boundaries. Several
important works have appeared in recent
times on diverse aspects of women’s
healthcare in colonial India within the
framework of gender, medicine, and soci-
ety. Among them is Sujata Mukherjee’s
authoritative account, Gender, Medicine,
and Society in Colonial India: Women’s
Health Care in Nineteenth and Early 20th
Century Bengal.
The monograph under review takes
a broad view of the subject, but focuses,
geographically, on Bengal. Muk herjee
begins with an impressive introduction
which delineates the historiography of
the role of medical missionaries in wom-
en’s healthcare in India; medicalisation
of childbirth; politics of reproductive
health; growth of women’s medical edu-
cation and profession; careers of female
practitioners of indigenous medicine;
curative facilities for female patients in
hospitals and asylums; and philanthrop-
ic involvement of British women in
designing healthcare for Indian women.
This sets the stage for a more nuanced
understanding of colonial health policy
during the 19th and early 20th centuries
in India. Mukherjee says:
Crucial developments in the discursive as well
as empirical fields of medicine and health-
care touched the lives of women in signifi-
cant ways, and that gender and politics of
medicine contributed in multiple ways in
formulating perceptions and identities at
the intersection of colonialism, class, caste,
communities and nation. (p xii)
The study has drawn upon a number
of Bengali women’s magazines, popular
health magazines and professional medical
32
book reviewS
Gender, Medicine, and Society in Colonial India:
Women’s Health Care in Nineteenth and Early
Twentieth Century Bengal by Sujata Mukherjee,
New Delhi: Oxford University Press, 2017; pp XXXV + 223,
`895.
journals in English and Bengali that
represent both nationalist and official
viewpoints on the medicalisation of
childbirth and maternal and infant health.
T
It has also used annual reports of the
medical institutions to chart the history
Z
of institutionalisation of midwifery and
has drawn upon archival sources—
the medical and educational proceedings
G
in particular—in the West Bengal State
Archives and the National Archives of
India (pp 186–90).
A
The study begins from the early 19th
century when the earliest scientific essays
on women’s healthcare, including child-
M
birth and pregnancy, began to appear in
Bengali women’s magazines such as
Bamabodhini Patrika, Bharati, Antahpur,
and Mahila. The author focuses not only
on the women’s healthcare but throws
light on issues concerning different cur-
ative institutions, reforming midwifery,
notions of sexuality, marriage reforms,
birth control, discourses on delivery and
healthcare, evolution of public health
administration, politics of control, and
emergence of women’s associations in
the late colonial period. One must point
out that the reforming of midwifery consti-
tuted one of the ways of modernising the
middle-class women as mothers. In the
20th century, the argument for medicali-
sation was further driven by nationalist
recognition of family and health as im-
portant elements of the nation-building
process. This study provides a historical
analysis of how institutionalisation of
MARCH 10, 2018
midwifery was shaped by the debates on
“the women’s question,” nationalism and
colonial public health policies, all inter-
secting with each other in Bengal.
Impact of Colonialism on Bengal
Bengal being the earliest seat of British
power in India was also the first to expe-
rience contact with Western civilisation,
culture and thought. It also had the most
elaborate medical establishment along
Western medical lines since the foundation
of the Calcutta Medical College (CMC) in
1835. The aim of the CMC was to imple-
ment systematic education of Western
medicine, to train the native youth irre-
spective of caste and creed in techniques
E R
of surgery, curative medicine, midwifery,
etc (p 35). In the early 19th century,
Bengal’s institutions of Western medi-
cine were ahead of both Madras and
Bombay presidencies.
Bengal’s sluggish response to reforming
women’s healthcare was perceived as a
consequence of the long-standing Bengali
perception of childbirth and women’s
health as an exclusively feminine domain,
defended by practices of seclusion (purdah)
and, therefore, impassable to Western
medicine. Unlike the West, where profes-
sionalised obstetrics was characterised
as an essentially male domain, the evolv-
ing professional sphere of obstetrics in
Bengal was largely dominated by female
doctors. The study demonstrates that
since the 1880s, the domain of medical
knowledge in Bengal was shared by both
female and male medical practitioners.
Together, they contributed to the evolu-
tion of a new medical discourse on child-
birth and health policies in colonial
Bengal. The study shows how the late 19th
century initiatives to reform practices of
childbirth were essentially a modernist
response of the Western-educated colo-
nised middle class to the colonial critique
of Indian sociocultural codes.
Women and Medical Knowledge
The chief objective of the book is to
analyse how women’s healthcare emerged
in relation to social reform movements
of the 19th century as well as nationalist
politics and colonial public health policies
vol lIiI no 10 EPW Economic & Political Weekly

of the 20th century. At the same time,
it seeks to explore the role played by
Christian missionaries as agents for mod-
ernising practices of childbirth, especially
in the early years of colonial rule, and
locate issues of women’s healthcare with-
in a wider and more complex range of
social drivers. The monograph argues
that in the 20th century the profession
of obstetrics came to constitute an ever-
expanding space mediated by a wide
range of actors such as the medical pro-
fessionals, middle-class women activists,
and the local self-governing bodies who
were influenced as much by nationalism
and colonial public health policies as by
global discourses on health. In analysing
the shifting strands of women’s health-
care in Bengal over a century, the study
seeks to discern the process through
which Bengali women’s bodies—which
were once perceived as the repository of
modesty and cultural purity, and hence,
shielded from public sight by patriarchal
norms of seclusion—became, by the end
of the colonial period, a subject of in-
tense medical, public, and nationalist scr-
utiny. It also demonstrates how Western
medical knowledge mingled with local
medical traditions; this entailed a dy-
namic interpretation of two distinct sys-
tems of thoughts that caused both of
them to lose some of their steadfastness
and undergo a process of reformation
M
and rearticulation in a bid to comple-
ment or replace each other. The unravel-
ling of a range of vernacular “medical”
literature also demonstrates a vibrant
coexistence of Western and local medical
knowledges available for women. Favour-
able situations were being created so
that native women could receive educa-
tion in Western healthcare.
Native Women Medics
The earliest institutions devoted to
women’s health were lock hospitals in
different presidencies from around 1805,
which were essentially established for
the confinement and treatment of pro-
stitutes suspected of suffering from
venereal diseases. Gradually, overcom-
ing racial and gender discrimination,
social taboos, and active opposition from
authorities and their families, several
women were capable enough to receive
Economic & Political Weekly EPW MARCH 10, 2018
Western medical education and thereby
become doctors and practising physi-
cians. Brahmo Samaj, Bamabodhini
Sabha and several women’s organisa-
tions and agencies helped women fulfil
their dreams. Both hospital medicine
and preventive medical care popular-
ised Western forms of medical care in
the 19th and the early 20th centuries in
Bengal. This created a space where
women could receive Western medical
care in contrast to the native forms of
medical care and they were able to rec-
eive it outside the purdah or zenana for
the first time.
The sociocultural reform movements
during the colonial period played a pivotal
role in bringing about changes in attitudes
towards women, who had, till then, been
R
confined to the domestic sphere. Govern-
ment support, efforts of the Christian mis-
E
sionaries, and the zeal of elite Indians
led to significant reforms affecting wom-
T
en’s lives; this laid the foundations of
women’s medical education.
Z
Mukherjee says that enthusiastic
Brahmo reformers like Durga Mohan
Das and Dwarkanath Ganguly were the
G
earliest supporters of medical education
for women. She quotes from Brahmo
Public Opinion:
A
We know of several instances in orthodox
Hindu families, where the female members
suffer from the most complicated diseases,
but yet would not allow male doctors to visit
and treat them. The consequence is, they are
treated second-hand through the assistance
of uneducated quake native midwives, and
in ninety-nine out of a hundred, they are
never radically cured. (p 44)
Therefore, the admission of women into
medical education, the reformers thought,
would help solve these problems as
women themselves would become doctors
and address issues like surgery, pregnancy,
childbirth, and women-related diseases.
It was not Bengal, but Madras, which pro-
vided leadership in the field of women’s
medical education (p 45). The entry of
women medics into the medical profession
was not smooth in the colonial period.
Indian women faced racial discrimination,
sexism, and even hostility, which made it
extremely difficult for them to carry on
their professional duties in the hospitals.
Sometimes, male colleagues made dero-
gatory comments. They were denied full
vol lIiI no 10
BOOK REVIEW
salaries and permanent appointments,
unlike their European, Eurasian, or even
Indian native male counterparts.
However, there were several women
medics, such as Kadambini Ganguly,
Jamini Sen, Virginia Mary Mitter, and
Haimabati Sen, who excelled in their
careers and created new opportunities
for aspiring women who wanted to join
the medical profession. Mukherjee ar-
gues that the contributions of less prom-
inent lady doctors also need to be
acknowledged, as they often took up
practice in the mofussils and faced hos-
tility from the local male populace (pp
57–60). She points out, however, that
Western healthcare and treatments were
available only to a handful of fortunate
women mostly residing in urban and
semi-urban areas; the majority were of-
ten denied such medical assistance due to
several reasons (p 60).
Reproductive Health,
Sexuality and Domesticity
Apart from institutionalisation of mid-
wifery (in Bengal they were called dhai)
training, various means were adopted
for reproductive healthcare for women.
The knowledge of prenatal and postnatal
care through guidebooks and essays were
circulated among pregnant mothers.
Here the author mentions names such
as Jadunath Mukhopadhyay and Sundari
Mohan Das who wrote tracts in simple
Bengali language on maternity and
childbirth so that a large number of
women could easily understand them.
Even, the Bamabodhini Patrika published
detailed and informative articles on mid-
wifery, discussing pregnancy, its symp-
toms, appropriate care, and the process
of delivery. Madhusudan Gupta asked
for official intervention on these issues
(p 71). The gradual reform of midwifery
started in Bengal since 1870 that enabled
not only literate but also illiterate women
—who often belonged to lower classes
and castes and were associated with the
task of midwifery—to learn the art of
childbirth and care for infant.
A new colonial discourse of domesti-
city, Indian family life, and values were
propounded in such a manner that the
idea of giving birth to a strong and
healthy child became very important.
33
BOOK REVIEW
These ideas were disseminated through
contemporary vernacular texts, domes-
tic and official medical manuals, guide-
books, pedagogical writings, and verna-
cular periodicals. Concern for a healthy
nation in general and Bengali community
in particular became a major preoccu-
pation of middle-class Hindu Bengalis.
According to the author, this new discourse
played a significant role in formulating
the indigenous idea of modernity, which
could be strengthened with the intro-
duction of Western science and medicine
and by restructuring the Indian nation.
Discourses on sexual and conjugal lives
and ideas of domesticity focused on re-
modelling women’s roles as health-con-
scious good wives and mothers. Mukherjee
shows how contemporary Bengali peri-
odicals as well as medical and quasi-
medical literature explained that social
customs like child marriage, masturbation,
and excessive sexual intercourse even with
one’s own husband could harm women’s
health, leading to maternal mortality or
birth of sick and weak babies (p xxv). This
literature also emphasised that women
should learn proper home management,
scientific nurturing of children, regula-
tion of dietary habits, and maintenance
EPW’s Special and Review Issues Published in 2017
34
of hygiene. She was expected to know a
bit of all forms of medical care, includ-
ing folk medicine, allopathy, homeopa-
thy, kaviraji (Ayurvedic medicine) and
hakimi (Unani medicine).
Discussions around sexuality and do-
mesticity give us an idea of the private
domain of the nation. These coincided
with debates and demands for marriage
reforms. Colonial modernity is arguably
coterminous with the changing notions
of health and hygiene, giving rise to a new
idea of colonial domesticity. Mukherjee
shows that the second half of the 19th
century saw social reforms which articu-
lated its demands in terms of physiological
and medical concerns, as becomes evi-
dent from debates around the age of
consent and marriage. Women’s organi-
sations also participated in these de-
bates. The colonial government could
not ignore such demands as these were
voiced as medical concerns.
T
The first half of the 20th century saw
sociopolitical developments in India that
Z
prioritised public health. Alongside gov-
ernment initiatives, there were other or-
ganisations such as Lady Reading Fund,
G
Lady Chelmsford Fund, Women’s Indian
Association (WIA), Mahila Samiti and
A
MARCH 10, 2018
Saroj Nalini Dutt Memorial Association
for Women (SNDMA), which tried to train
native women in domestic science and
hygiene both in rural and urban areas.
Mukherjee points out that there were
250 autonomous agencies in 1925, which
increased to 305 by 1930, for promoting
sanitation and public health. The issue
of birth control gained attention around
this time both from colonial officials and
a section of native women medics who
argued that birth control is necessary
for reasons of health, social-economic
considerations, and national well-being
(pp 133–36).
Women, Public Health and Famine
One of the strongest chapters is on issues
related to the growth of public health-
E R
care administration and its impact on
women’s health, which ends with an
account of the devastating famine of
1943–44. During the famine, women died
in large numbers not only due to famine-
induced epidemics, but also because they
suffered abandonment and destitution,
leading to the adoption of survival strat-
egies that affected their health. The
famine exposed how poor health, ineffi-
ciency of public health administration,
vol lIiI no 10 EPW Economic & Political Weekly

dietary deficiency particularly among
women and children, etc, made them
vulnerable to starvation-induced deaths,
lowering the health status of women
even further.
Recent researches illustrate the rela-
tionship between famine, epidemics, and
mortality in colonial India. The Bengal
famine of 1943 led to a breakdown of the
social fabric and produced a series of
immediate problems that further affected
the mortality and sickness patterns of the
population. Poverty, insufficient availa-
bility (or non-availability) of food, the
onset of diseases, and poor public health
administration (especially the health con-
ditions of women and children) continued
to get complicated due to the famine.
Therefore, Mukherjee (2012) argues:
The famine of Bengal and the resultant epi-
demics exposed the vulnerability of the poor
rural population, as well as the inefficiencies
of the public health organisation in Bengal.
While like earlier famines of the colonial
period it magnified the forces of death already
present in the region, its uniqueness lay in
the fact that it exposed the defects of the
public health organisation of colonial Bengal
as well as the limitations of imperial medical
policy. The quinine policy, for example, left
such strong loopholes that artificial, man-made
scarcity could be created to add to the woes
of the famine-stricken population, which led
to a tremendous rise in mortality. (p 162)
Mukherjee observes that women suf-
M
fered more than men in the famine of
1943. Women seemed to get inadequate
relief because of abandonment and des-
titution. Following Paul Greenough’s
study (1983), the author says that patri-
archal norms did not allow women to be
proactive in getting food for the family.
In rural Bengal, we know that women
customarily had low socio-economic
status in the family, and the famine as
well as the wartime situation further
exacerbated their limited access to food
and other life-saving essential require-
ments (p 167).
Following Mukherjee, one can explain
how the shortage of cloth curtailed wom-
en’s mobility. They could not have moved
about like men to get food or to seek
temporary work in the nearby towns or
in far-flung cities. Citing the statement
of F O Bell, a civil servant during the
time of famine of 1943–44, Mukherjee
Economic & Political Weekly EPW MARCH 10, 2018
says that women were “badly off for
clothing as the people who used to help
them [were] badly off” (p 168).
This chapter also highlights how
women, especially those who were
younger, got entrapped in prostitution
because of poverty, hunger, destitution,
abandonment by male members of the
family, and for the sake of other family
members. They considered it as an
alternative means of survival. This was
rampant in Chittagong, Comilla, and
Noakhali. This was mostly visible in can-
tonment areas. Following P C Joshi’s
estimate, Mukherjee argues that 30,000
out of 1,25,000 destitute women were in
brothels and one in four of them was
a young girl. She goes on to say that
distress and famine forced poor women
R
to join the Military Labour Corps where
they were infected by venereal diseases.
E
The army health report in India from
1938 to 1944 witnessed a sharp increase
T
in venereal diseases. The government
report pointed out that this was because
Z
of the presence of large numbers of
women in cantonment areas. Later on,
the government’s continued negligence
G
had been criticised by the All Bengal
Women’s Self Defence Committee, the
All India Women’s Conference (AIWC),
A
and the Nari Sewa Samiti for not taking
any step in solving the problems of sexu-
ally transmitted diseases and venereal
diseases (p 169).
The sharp decline of childbirth, accor-
ding to the author, had been evident due
to the adverse effects of the famine of
1943–44 in Bengal. This could perhaps
be explained by several complex factors,
like decrease in marital intercourse
because of separation, deliberate birth
control or self-restraint, stillbirths, abor-
tions, and even psychological changes
because of starvation, all of which are
known to render women infertile. One
can further argue that the famine made
the situation worse for women who were
about to give birth. The Health Survey
and Development Committee, also
known as the Bhore Committee, after
considering all these issues declared in
its report in 1946 that “any plan for im-
proving the health of the community
must pay special attention to the devel-
opment of measures for adequate health
vol lIiI no 10
BOOK REVIEW
protection to mothers and children”
(p 169). The committee also criticised
existing public health services and sought
better healthcare for women (p 181). The
fact that dietary deficiency among Indians,
especially women and children, was
responsible for poor health had been
highlighted in the final report of the
Famine Enquiry Commission.
Concluding Remarks
Overall, this book is a welcome step
towards the understanding of ideas/ide-
ologies, and their corresponding con-
tradictions, which shaped colonial pub-
lic health policy and issues related to
women’s healthcare in colonial Bengal
from the 19th century to the early 20th
century. Using Bengal as a case study, the
book goes beyond conventional narra-
tives and traces the beginnings of wom-
en’s healthcare and health policies of the
colonial government. The role of rhetoric,
nationalist politics, and institutions (such
as CMC, Calcutta Municipal Corporation,
WIA, AIWC) assumes centrality in this
analysis. This book combines two app-
roaches: the “women in medicine” app-
roach, which examines the role played by
women in medical practices and poli-
cies; and the “gender and medicine”
framework which explores how new
forms of medical knowledge and growth
of institutions produced certain stereo-
types about gender (p xxviii). It will
hopefully encourage further research on
the subject. Building upon existing re-
search by Biswamoy Pati, Mark Harrison,
Deepak Kumar, Raj Sekhar Basu, Amba-
lika Guha and others, Mukherjee has
successfully produced an authoritative
account on gender and medicine in
colonial India.
Manas Dutta (manas.dutta@knu.ac.in) teaches
history at Kazi Nazrul University, West Bengal.
References
Deepak, Kumar and Raj Sekhar Basu (eds) (2013):
Medical Encounters in British India, New Delhi:
Oxford University Press.
Greenough, Paul R (1983): Prosperity and Misery in
Modern Bengal: The Famine of 1943–44, New
Delhi: Oxford University Press.
Guha, Ambalika (2018): Colonial Modernities: Mid-
wifery in Bengal, c 1860–1947, London; New
York: Routledge.
Pati, Biswamoy and Mark Harrison (eds) (2009):
The Social History of Health and Medicine in
Colonial India, New York; London: Routledge.
35
BOOK REVIEW
Navigating Spaces of
Economic Growth
Chetan Ghate
I
t is well known from the voluminous
literature on economic growth that
national policies and institutions
play a major role in driving differences
in per capita incomes across countries
(Acemoglu 2009). These factors do so by
affecting the incentives to invest in tech-
nology, and induce households to accu-
mulate physical and human capital. Any
institutional analysis of growth out-
comes, however, tends to be embedded
in a long run framework. Developing
countries like India experience episodic
growth, which is subject to phase transi-
tions. The challenge becomes how to op-
erationalise the role of institutions on
economic growth in the medium run,
where the relevant growth cycle may be,
say, of a 15-year duration. The Political
Economy of India’s Growth Episodes by
Kunal Sen and Sabyasachi Kar does ex-
actly this. It provides a political economy
reading of India’s growth experience
since 1950, using a medium run institu-
tionalist perspective. In Chapter 1, the
authors econometrically identify four
growth episodes in India using a two-
stage procedure. The first stage utilises
the well-known Bai–Perron procedure
to identify structural breaks. The second
stage uses a magnitude-filter (for exam-
ple, growth regimes must last a mini-
mum of eight years) to further refine the
set of candidate break-points estimated
in the first stage. This yields four growth
episodes: 1950–92; 1993–2001; 2002–10;
and the post-2010 period.1
States of Growth
The authors emphasise that the focus
should be on understanding transition
paths between these episodes. To do
this, they define four growth states: mir-
acle growth, where per capita income
growth is greater than 5%; stable
growth, where per capita income growth
is between 0% and 5%; stagnant growth,
where per capita income growth is 0%;
36
The Political Economy of India’s Growth
Episodes by Sabyasachi Kar and Kunal Sen, United
Kingdom: Palgrave Macmillan, 2016; pp xii + 105, price not
indicated.
and a growth crisis, where per capita in-
come growth is negative. They then pro-
vide a unifying institutional framework
to understand the drivers of growth ac-
celerations (movement from the stagna-
tion and crisis states to miracle or stable
growth), growth collapses (movement
from miracle and stable growth to a pov-
erty trap), and the maintenance of steady
state growth.
T
Chapter 2 outlines the overarching
conceptual framework of the book. The
Z
first ingredient is the “deals space.” The
authors’ caveat is that for developing
countries like India, the appropriate
G
institutions are not so much the formal
institutions engaged in, say, property
right protection that can be enforced le-
A
gally. Rather, the institutional environ-
ments in these countries are character-
ised by personalised deals. Developing
M
countries can be thought of as deals-
based economies rather than rules-
based economies. Deals are further bro-
ken up into ordered deals, where the
sanctity of contracts is maintained, and
disordered deals, where the sanctity of
contracts is not maintained. Both kinds
of deals can either be open (widely
available to investors) or closed (offered
to a select economic or political elite).
The authors argue that growth acceler-
ations take place when there is a move-
ment in the deals space from disordered
to ordered deals. This occurs because
maintaining the sanctity of contracts
encourages particular forms of invest-
ment with large positive spillovers (such
as equipment investment), which ulti-
mately drive growth, as seen in the
growth recovery of the 1980s. This is,
however, a sufficient condition, and not
a necessary condition.
MARCH 10, 2018
The second ingredient is the “rent
space.” The rent space (p 27: Fig 2.2) par-
titions the entire production side of the
economy based on the degree to which
firms can extract excess profits (rents) in
their sector. If firms are export-oriented
and operate in rent-thick sectors, they
are called “rentiers” (for example, natural
resource firms). Domestic market-oriented
firms in rent-thick sectors are called
“powerbrokers” (for example, utility and
communication firms). Competitive (low
rent) export-oriented firms are called
“magicians” (for example, manufacturing
and service exporters). Competitive firms
oriented towards the domestic market
are called “workhorses” (for example,
informal manufacturing).
The third ingredient is the “political
E R
space,” which refers to the balance of
power between elites and non-elites.
While horizontal power refers to the dis-
tribution of power within a particular
political group, vertical power refers to
the distribution of power between elites
and non-elites. Importantly, the nature
of political competition matters for the
form that growth takes.
The main hypothesis is that changes
in these three spheres—the deal space,
the rent space, and the political space—
drive the four growth episodes estimated
for India. Incentives in all three spaces
need to be aligned for economic growth
to accelerate. Once accelerated, maintain-
ing growth requires structural transfor-
mation, or the ability of a country to pro-
duce a diverse product mix. The authors
also emphasise that while both closed
order (pro-business) and open order
(pro-market) deals can lead to positive
growth episodes, closed ordered deals
can lead to crony capitalism, and to neg-
ative economic and political feedback
loops, which ultimately makes the closed
ordered deal disordered, and brings the
positive growth episode to an end.
Politics of Stagnation
The rest of the book applies the above
framework to understand transitions in
India’s growth episodes. Chapter 3 dis-
cusses why a disordered deals environ-
ment prevailed during the first growth
episode (1950–92), despite the dominance
of the Congress party. This led to low
vol lIiI no 10 EPW Economic & Political Weekly

average per capita income growth dur-
ing the period (1.86%). The authors ar-
gue that in the Nehru–Mahalanobis
public sector–centric growth model, dis-
trust of the private sector would have led
to a lack of credible commitment, and to
disordered deals. The vertical distribu-
tion of power also became less concen-
trated within the Congress party in the
early 1980s, with non-Congress parties
increasingly beginning to challenge the
hegemony of the Congress. Political sur-
vival therefore necessitated Indira Gandhi
adopt a more growth-oriented strategy.
When Rajiv Gandhi came to power in
1985, one can see this as a shift to a more
ordered deals environment. This envi-
ronment was consolidated in the 1990s,
leading to a recovery in growth in the
1980s, and a growth acceleration from
1993 onwards.
While the above description is true, I
would like to propose an alternative ex-
planation for why growth stagnated.
During this period, India was stuck, for
lack of a better phrase, in a “political
growth trap.” Assume, like the authors
do, that policymakers are rent-seekers.
They exercise discretionary powers to
grant privileges. As the economy liberal-
ises, the scope for rent-seeking goes
down. But as the economy expands, the
scale of rent-seeking expands. Politicians
do not want to give up the “scope” for
M
rent-seeking because they do not see the
“scale” of rent-seeking clearly (because
of too much risk and uncertainty sur-
rounding economic reforms). That is
why countries can get stuck in a political
growth trap, and need a crisis to motivate
reform, in order to get out of such a trap.
In India, this crisis occurred in 1991,
leading to systematic reforms. This is
also possibly why the reforms initiated in
the 1980s were piecemeal and tentative.
Chapter 4 discusses the 1993–2001
growth acceleration, which was India’s
first episode of high growth. Average per
capita income growth rose 4.15% com-
pared to 1.86% in the previous episode,
driven by a resurgence in corporate sec-
tor investment (equipment investment),
which led to strong private sector growth.
However, more political fragmenta-
tion—a changing political landscape
with more regional parties—led to more
Economic & Political Weekly EPW MARCH 10, 2018
political competition, and a stronger
pro-business orientation. There was a
surge in ordered deals, which energised
the magician (IT and chemical) and
workhorse (hotel and restaurant) sec-
tors, and which should have resulted in a
further opening up of the deals space be-
cause of second round effects. This did
not happen due to mitigating changes in
the rent and political spaces, which led
to a more closed deals environment in
the next growth episode, 2002–10.
As discussed in Chapter 5, while aver-
age per capita income growth from 2002
to 2010 rose to 6.42%, the industrial
structure shifted to more natural re-
source/rentier sectors as political frag-
mentation changed the nature of deals.
This also led to a decline in structural
R
transformation. Corruption stemming
from closed deals increasingly became
E
the norm across sectors (for example,
telecommunications and the 2G scam).
T
The drivers of growth also shifted to the
non-tradable sectors.
Z
Closed Deals and Corruption
What is less clear in Chapters 4 and 5
G
is how closed/open/ordered/disordered
deals generally relate to corruption.
While the authors do mention that closed
A
ordered deals do not necessarily imply
corruption (p 88), casual empirical evi-
dence suggests that routine corruption
costs something like 1%–3% of total pro-
duction expenditure in many economic
sectors, and is budgeted in as such by
businesses. This is a cost, but not a bind-
ing constraint, except at the margin, al-
though there are additional costs con-
nected with the social erosion that come
with corruption. In this regard, an inter-
national comparison is also appropriate.
Comparing the economic trajectories of
Mauritius and Madagascar, Mauritius
was more dirigiste than Madagascar, but
subjectively, civil servants were more
interested in economic growth and
therefore willing to cut corners and re-
move obstacles positively. The same point
can be made about local party officials
in China and Vietnam, whose level of
control is high, but whose motivation to-
wards economic growth (a lot of which
is selfish) is also high. In other words,
closed deals need not be a hindrance to
vol lIiI no 10
BOOK REVIEW
growth per se, even in a dynamic long
run sense. Further, in India, there is also
the politics of relative corruption: the in-
cumbent is constantly trying to prove
that the opposition is more corrupt than
the incumbent. Would this be a force for
the emergence of more open ordered
deals? Redistribution could also be cover-
ing for market failure, not just providing
political patronage, but the authors do
not develop this point.
Chapter 6 discusses the post-2010
growth slowdown, the fourth growth
episode for India. The main result is that
the economy in this phase witnesses a
secular slowdown in most sectors, but
especially in those identified with closed
deals. There is a sharp drop in investor
perception of institutional quality in
India, and a rise in rent-seeking and cor-
ruption, leading to negative feedback
loops that characterised the 2002–10
growth episode. The primary culprit is
political fragmentation, which led to a
breakdown of the political settlement
and a more disordered deals environ-
ment. Chapter 7 provides concluding ob-
servations. The book ends on a some-
what ominous note given the Indian ex-
perience with institutional decline and
political fragmentation, and changes in
the deals space.
New Perspectives
I have a few suggestions on how to make
the arguments in an already interesting
book more compelling. First, the authors
need more precise statistical indicators
Through EPW Engage,
our new digital initiative, we seek to
explore new and exciting possibilities
of communicating research in a
creative and accessible manner
to a wider audience.
www.epw.in/engage
37
BOOK REVIEW
of the deal/rent/political environments
outlined in the book. In the absence of
this, the arguments remain wordy and
untested. Second, the book has more of a
national focus, and less of an interstate
perspective, although arguably, a lot of
the interesting economic policy experi-
mentation has been taking place at the
state level, certainly post 2000. This
suggests that the forces of competitive
federalism are likely to underlie India’s
future growth trajectory. Third, and
somewhat surprisingly, the book takes
an overt factor accumulation perspective
on Indian economic growth, with barely
any discussion of the role of productivity
or efficiency (total factor productivity or
TFP) in the Indian growth process. This
is possibly because of the burst of invest-
ment that occurred in the aftermath
of the 1991 reforms in capital-intensive
sectors, due to the prevalence of labour
laws. This led to higher growth rates of
capital, and a slower growth rate of TFP.
This certainly seems to be borne out in
the recent KLEMS data,2 which is now
publicly available for the 1980–2011 time
period. A plot of growth in output per
worker against growth in capital per
worker from 1980–2011 using the KLEMS
data set shows an uncannily close co-
movement. This implies that the dy-
namics of growth in India—at least to a
first approximation—appears to follow a
Ayyar, R V Vaidyanatha (2017); History of Educa-
tion Policymaking in India, 1947–2016, New
Delhi: Oxford University Press; pp xix + 583,
`1,995.
Balachandran, Aparna, Rashmi Pant and Bhavani
Raman (eds) (2018); Iterations of Law: Legal
Histories from India, New Delhi: Oxford Uni-
versity Press; pp viii + 302, `950.
Bechain, Sheoraj Singh (2018); My Childhood on
My Shoulders, New Delhi: Oxford University
Press; pp xx + 255, `595.
Bhambhri, C P (2017); The Indian State Since Inde-
pendence: 70 Years, Delhi: Shipra Publications;
pp x + 225, `1,250/$62.50
Fernandes, Edna (2018); The Hollow Kingdom: ISIS
and the CULT of JIHAD, New Delhi: Speaking
Tiger; pp 254, `499.
Gandhi, Mayank and Shrey Shah (2018); AAP &
Down: An Insider’s Story of India’s Most Contro-
versial Party, New Delhi: Simon & Schuster
India; pp xii + 291, `350.
38
Solow–Swan style growth model in the
medium run.3 Some more discussion,
however, of how a deals-based institu-
tional framework impinges on productivi-
ty, and therefore on prospects for produc-
tivity-led growth would have been useful.
Having said this, the view that eco-
nomic reforms are the dominant instru-
ment behind rapid growth in India—es-
pecially in many pre- and post-1991 com-
parisons—has become jaded, and needs
fresh consideration. The institutional
approach taken in this book provides
this perspective. The book is short and
well written. The authors must be con-
gratulated for producing an insightful
book on how to think about institutional
quality in the Indian context, its inter-
play with economic growth, and what
this implies for India’s future growth
transitions.
I thank Stephen Wright for discussions related
T
to the KLEMS data set, and Tom Timberg for
discussions related to the Indian economy.
Chetan Ghate (cghate@isid.ac.in) is with
Z
the Economics and Planning Unit, Indian
Statistical Institute, New Delhi.
G
Notes
1 These growth regimes are different than what
has been estimated in the vast literature on In-
A
dian economic growth (see Ghate and Wright
2012, 2013; Das et al 2015). In the first decade
after independence, Indian aggregate real GDP
growth averaged approximately 3.9%. This
performance compared favourably to the
M
Books Received
Goswamy, B N with Vrinda Agrawal (ed) (2018);
Oxford Readings in Indian Art, New Delhi:
Oxford University Press; pp xix + 537, `1,995.
Hoskote, Ranjit (2018); Jonahwhale, Gurgaon:
Penguin Random House; pp xiii + 128, `499.
Jha, Mithilesh Kumar (2018); Language Politics and
Public Sphere in North India: Making of the
Maithili Movement, New Delhi: Oxford University
Press; pp xix + 343, `1,195.
Kara, Siddharth (2017); Modern Slavery: A Global
Perspective, New York: Columbia University
Press; pp xii + 342, $35/£ 27.95 (hardcover);
$34/£27.95 (ebook).
Kothari, Rita (ed) (2018); A Multilingual Nation:
Translation and Language Dynamic in India,
New Delhi: Oxford University Press; pp vii + 365,
`1,495.
Limbale, Sharankumar and Jaydeep Sarangi (eds)
(2018); Dalit Voice: Literature and Revolt, New
Delhi: Authorspress; pp 282, `1,200/$60.
Muller, Jerry Z (2018); The Tyranny of Metrics,
Princeton and Oxford: Princeton University
Press; pp 220, £19.95.
MARCH 10, 2018
pre-independence growth stagnation from
1900 onwards. After the first decade, growth
began to decline and got stuck in the “Hindu
rate of growth.” The over-regulation of the
economy with the goal of redistributing wealth
ultimately led to rampant corruption and crony
capitalism. The second phase of India’s growth
was in the 1980s–90s. There was ad hoc liber-
alisation starting in the mid- to late-1980s,
which increased growth. Expansionary fiscal
policy also stimulated growth in the late 1980s,
although this led to fiscal profligacy and laid
the seeds of the 1991 balance of payments cri-
sis. The third phase of growth occurs in the
2000s because it took time for entrepreneurs to
think that the reform process initiated in 1991
were permanent. As a result, a lot of the bene-
fits of the 1991 reforms in terms of higher
growth were experienced in the 2000s.
2 KLEMS data relates gross output to capital (K),
labour (L), energy (E), material (M) and ser-
vices (S) inputs.
3 Ghate et al (2016) calibrate a 2-sector growth
model to India and show how public–private
capital complementarities, labour laws, and
TFP growth affect long run growth outcomes.
E R
References
Acemoglu, Daron (2009): Introduction to Modern
Economic Growth, Princeton: Princeton Univer-
sity Press.
Das, Samarjit, Chetan Ghate and Peter Robertson
(2015): “Remoteness, Urbanization and India’s
Unbalanced Growth,” World Development,
Vol 66, pp 572–87.
Ghate, Chetan and Stephen Wright (2012): “The
‘V Factor’: Distribution, Timing, and Corre-
lates of the Great Indian Growth Turnaround,”
Journal of Development Economics, Vol 99,
No 1, pp 58–67.
— (2013): “Why Were Some Indian States So Slow
to Participate in the Turnaround?,” Economic &
Political Weekly, Vol 48, No 13, pp 118–27.
Ghate, Chetan, Gerhard Glomm and Jialu Liu
(2016): “Sectoral Infrastructure Investment In
An Unbalanced Growing Economy: The Case of
Potential Growth in India,” Asian Development
Review, Vol 32, No 2, pp 144–66.
Neelima, Kota (2018); Widows of Vidarbha: Making of
Shadows, New Delhi: Oxford University Press;
pp xxxviii + 245, `550.
Pai, Sudha and Sajjan Kumar (2018); Everyday
Communalism: Riots in Contemporary Uttar
Pradesh, New Delhi: Oxford University Press;
pp xiv + 349, `995.
Roy, Rohan Deb and Guy N A Attewell (eds) (2018);
Locating the Medical: Explorations in South
Asian History, New Delhi: Oxford University
Press, pp vi + 307, `950.
Shah, Alpa, Jens Lerche, Richard Axelby, Dalel
Benbabaali, Brendan Donegan, Jayaseelan Raj
and Vikramaditya Thakur (2018); Ground Down
by Growth: Tribe, Caste, Class and Inequality in
21st Century India, New Delhi: Oxford Univer-
sity Press; pp xviii + 281, `850.
Sugirtharajah, R S (2018); Jesus in Asia, Cam-
bridge: Harvard University Press; pp v + 311,
$29.95.
The Book of Aleph (2018); Volume Seven, New
Delhi: Aleph Book Co.; pp 147, price not
indicated.
vol lIiI no 10 EPW Economic & Political Weekly
PERSPECTIVES
Challenges before the
Fifteenth Finance Commission
V Bhaskar
The terms of reference of the
Fifteenth Finance Commission are
significantly different from those
of earlier finance commissions.
Some of these changes are within
the mandate of the Constitution.
Some do not appear to be so.
Others appear extraneous. Some
appear to urge the commission
to asymmetrically treat a group
of states. This article examines
the challenges the XV-FC will face
while addressing these changes.
The author is grateful to Indira Rajaraman for
her insightful comments on an earlier version
of this article.
V Bhaskar (mrvbhaskar@gmail.com) was
Special Chief Secretary Finance to the
Government of Andhra Pradesh, and Joint
Secretary, Thirteenth Finance Commission.
Economic & Political Weekly EPW MARCH 10, 2018
T
he Fifteenth Finance Commission
(XV-FC) has been appointed with
the terms of reference (ToR) noti-
fied in a presidential order dated 27 No-
vember 2017. The ToR is significantly dif-
ferent from those of earlier finance com-
missions. We examine the issues arising
out of these changes and review the
challenges the XV-FC will face while ad-
dressing them.
Clause 3(b) of Article 280 of the Con-
stitution is usually merged with part of
Article 275 (1) and included in the ToR of
a finance commission. The ToR s of the
last 12 finance commissions over the
past 60 sixty years did so. The words
“[state] which are in need of assistance,”
however, do not find place in the ToR of
the XV-FC. It is not clear why this phrase
has been excluded. This can be inter-
preted as a deliberate signal to the XV-FC
to provide grants to states on grounds
other than need. This exclusion meshes
with two other references encountered
subsequently in the ToR—one, relating
to the removal of revenue deficit grants
to states in need, and the other, relating
to providing incentive grants to states
which may not be in need.
Revenue Deficit Grants
The ToR states that the commission may
also examine if revenue deficit grants
are to be provided at all. Critics argue
that this is an unwarranted invitation to
the XV-FC to discontinue the provision of
revenue deficit grants. They argue that
this inducement in the ToR can be inter-
preted as mandatory rather than direc-
tory. Such a directive untenably inter-
feres in the working of the finance com-
mission. This intrusion can be seen to be
in violation of Article 280(4) of the Con-
stitution and Section 8 of the Finance
Commission (Miscellaneous Provisions)
Act, 1951, both of which empower finance
vol lIiI no 10
commissions to independently determine
their procedure and work plan, including
the issue of whether it should provide
any grants at all.
The theology for the provision of
revenue deficit grants is well established.
Recurring revenue expenditure is not seen
as growth inducing. Revenue expenditure
should therefore never exceed revenue
receipts. All borrowings should be de-
ployed exclusively for capital expendi-
ture to accelerate growth. States with
revenue deficits should be supported to
the extent of such deficits. This will ensure
that all their borrowings are exclusively
channelled towards growth-inducing
capital expenditure.
Prima facie, such a reference seems
unimpeachable. All states have passed
their versions of the Fiscal Responsibility
and Budget Management (FRBM) Act,
2003. A cornerstone of all these FRBM
acts is compliance with the golden rule:
revenue deficit should be zero.1 There
should, thus, be no reason for the XV-FC
to provide revenue deficit grants at all.
The reality is somewhat different. The
17 states listed in Table 1 (p 40) include 11
states that were provided revenue deficit
grants by the Fourteenth Finance Com-
mission (XIV-FC). The XIV-FC projected
revenue deficits for each of the years be-
tween 2015 and 2020 and provided gap-
filling grants for each year. Column 3 of
Table 1 gives the aggregate grant provided
by the XIV-FC for 2015–20 and Column 4
gives the grant it projected for 2017–18.
Columns 5, 6, and 7 list the revenue defi-
cits reported by the state governments in
their respective budget documents.
There are significant variations be-
tween the projections for revenue deficit
made by the XIV-FC in their report and
the numbers reported by the state gov-
ernments in their budget documents.
For Kerala, the XIV-FC projected an allo-
cation of `1,529 crore as revenue deficit
grant for 2017–18. In its budget for 2017–18,
the Kerala government projected a reve-
nue deficit of `16,043 crore, more than 10
times the XIV-FC projection. West Bengal
was allocated `3,311 crore as revenue
deficit for 2016–17 by the XIV-FC. It re-
ported a revenue deficit of nearly three
39
PERSPECTIVES

times this projection, `9,469 crore for Figure 1: Number of States Incurring Revenue Deficit
that year. The Kerala and West Bengal 30

governments clearly feel that the XIV-FC 25

has underestimated their need for reve-
20
nue deficit grants.
Jammu and Kashmir (J&K) was expected 15
to incur a revenue deficit of `10,831 crore
10
and `11,849 crore for 2016–17 and 2017–18,
respectively. Accordingly, the XIV-FC pro- 5
vided matching revenue deficit grants.
0
The revenue deficit should have been zero

1990–91
1991–92
1992–93
1993–94
1994–95
1995–96
1996–97
1997–98
1998–99
1999–2000
2000–01
2001–02
2002–03
2003–04
2004–05
2005–06
2006–07
2007–08
2008–09
2009–10
2010–11
2011–12
2012–13
2013–14
2014–15
2015–16
2016–17 (RE)
2017–18 (BE)
after receipt of the grant. However, after
accounting for these grants, the J&K gov-
ernment showed a surplus in its accounts Source: RBI (2017) for data up to 2014–15; state budget documents for subsequent years.

of `7,606 crore and `9,349 crore, respec-
tively. Mizoram was expected to require a
revenue deficit grant of `2,446 crore in
2017–18. Its budget documents project it to
generate a revenue surplus of `1,787 crore
in this period. The J&K and Mizoram
governments through their budget docu-
ments indicate that the XIV-FC has overesti-
(ii) Finance commissions face information passed its FRBM act in 2003. It subse-
asymmetry problem. States know more quently amended its FRBM act in 2004,
about their finances and reveal less to 2005, 2010 (twice), and 2016. In each
the finance commissions. In this situa- amendment, the goal of reaching zero
tion, states are incentivised to game the
system. The framework adopted by suc-
cessive finance commissions sent a sig-
nal to the states that revenue deficits

E R revenue deficit was pushed back further.

The 2016 amendment commits the state to
reduce this ratio to 5% by 31 March 2019
and eliminate revenue deficit by 2019–20.

T
mated their need for revenue deficit grants. would be bridged with matching grants. Other states are more circumspect.
There is a third category of states who The XIV-FC removed the reward to states They violate the revenue deficit thresh-

Z
could claim that the XIV-FC has over- for being fiscally disciplined, compound- old without amending the FRBM act.5
looked their claims for revenue deficit ing this problem. The government of Haryana in its State-
grants. These are the states of Haryana, The argument that the FRBM law will ment of Fiscal Policy and Disclosure for

Maharashtra, Punjab, Rajasthan, Tamil
Nadu, and Uttarakhand. These six states
have been reporting significant revenue
deficits over the last three years. For
2017–18 it is projected to be `95,485
crore.2 It is noteworthy that five of the
G
compel the states to constrain their the year 2017–18 recognised the breach
revenue deficits is not corroborated by and promised that necessary amendment
actual behaviour. States and even the in the Haryana FRBM Act, 2005 would be
A
centre blithely transgress their commit-
ments under the FRBM act and seek to
rectify the situation by either amending
made on receipt of the requisite guide-
lines from the union government.6
Figure 1 shows the number of states

M
six large revenue deficit states are not the FRBM act or exploiting its escape that reported revenue deficit in their
poor states. They have a per capita income clauses. The Tamil Nadu government accounts between 1980–81 and 2017–18
above the all-India average. Table 1: Comparison of XIV-FC Revenue Deficit Grants and Actual Revenue Deficit of Select States (` crore)
No State XIV-FC Revenue Deficit Grants Revenue Deficit Reported by States in Budget Documents
2015–20 2017–18 2015–16 Actuals 2016–17 RE 2017–18 BE
Substantial Deviations 1 2 3 4 5 6 7
The XIV-FC did its work meticulously. It 1 Andhra Pradesh 22,113 4,430 7,301 4,598 415
followed the procedure adopted by pre- 2 Assam 3,379 0 -5,446 6,691 -2,400
vious commissions while making revenue 3 Haryana NR NR 11,679 12,221 11,124
4 Himachal Pradesh 40,625 8,311 -1,137 475 1,041
and expenditure projections. And yet, its
5 Jammu and Kashmir 59,666 11,849 640 -7,606 -9,349
projections went significantly awry.3 6 Kerala 9,519 1,529 9,656 13,935 16,043
There could be two reasons for such sub- 7 Maharashtra NR NR 28,190 50,572 40,119
stantial deviations: 8 Manipur 10,227 2,091 -560 -920 NA
(i) Finance commission projections are 9 Meghalaya 1,770 404 -695 -386 -632
based on snapshot data and all relevant 10 Mizoram 12,183 2,466 -1,105 -350 -1,787
parameters including the impact of future 11 Nagaland 18,475 3,700 -4,662 62 137
12 Punjab NR NR 8,550 11,362 14,784
uncertain developments cannot be incor-
13 Rajasthan NR NR 5,954 17,838 13,528
porated into their assessment. The finance 14 Tamil Nadu NR NR 11,985 15,459 15,930
commission can assimilate, to some extent, 15 Tripura 5,103 1,059 -1,558 -1,554 -1,663
risk into their projections, but they cannot 16 Uttarakhand NR NR 1,852 41 -42
incorporate uncertainty. It is this uncer- 17 West Bengal 11,760 0 9,095 9,469 0
tainty4 that is the cause of such significant Total Grants 1,94,821 35,839
NR= Grant not recommended by FC; NA= Not available; Surplus (-ve); Deficit (+ve).
deviations that often make nugatory its Sources: Reports of XIII-FC and XIV-FC; budget documents of various state governments. For Manipur, figures relate to RE
revenue deficit recommendations. 2015–16 and BE 2016–17 obtained from the Study of State Budgets, Reserve Bank of India, May 2017.

40 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly

(budget estimate or BE). FRBM acts were
passed by the state governments in a
staggered manner. Between 2002 and
2007, 26 states passed the FRBM act. Of
the 28 states in India then, 24 reported a
revenue deficit in 2002–03. This number
reduced to four in 2007–08, possibly
attributable to the FRBM acts that they
legislated.7 It gradually built up to 15 in
2014–15 before slightly reducing to 12 in
2015–16, 10 in 2016–17 (revised estimates
or RE) and eight in 2017–18 (BE). After
2010, states8 had no fresh incentive to
adhere to the FRBM prescription since
they had exhausted all the debt write-off
that came with its enactment.
Despite the fact that states embarked
on a fiscal consolidation path since
2002–03, at no time have all the 29
states simultaneously reported zero rev-
enue deficit. Kerala, Punjab, and West
Bengal have incurred revenue deficits
every year since 1990–91 (RBI 2017:
Chart 120). Worryingly, in the recent
past, states like Andhra Pradesh (since
2014–15), Haryana (since 2008–09),
Himachal Pradesh (since 2012–13), Ra-
jasthan and Tamil Nadu (both since
2013–14) have joined this club.
Two lessons can be gleaned from the
analysis presented so far. First, the pas-
sage of fiscal responsibility act by a state
government is not adequate comfort
M
that the government will conform to it.
Second, the Government of India’s instru-
ments of compellance in this regard—
monitoring the release of finance com-
mission grants or restricting borrowing
consent under Article 2939 to errant
states have either not been applied at all,
or applied only selectively so that some
states were enabled to deviate from the
requirements of their own FRBM acts.
Options before the XV-FC
What are the options available to the
XV-FC on the provision of revenue deficit
grants? If it wants to continue on the
well-trodden path and continue providing
such grants to states, it has to strengthen
the credibility of its projections so that it
can make more accurate estimations of
fiscal need.
In the power sector, regulators use the
concept of a “true up” to modify the cost
and revenue projections of a previous
Economic & Political Weekly EPW MARCH 10, 2018
year, which may have gone astray. In a
multi-year tariff scenario, the tariff for
the second year is modulated by the var-
iances between actual costs and reve-
nues from the projections made in the
previous year, so long as they can be
justified by the distribution company. If
it cannot justify these deviations, it is
not allowed to pass them on in the form
of increased tariff to consumers.
Perhaps a similar approach can be
adopted by the XV-FC for revenue deficit
grants. Its projections of revenue and ex-
penditure for all state governments could
be compared to actuals the next year, and
revenue deficit grants released only if the
state has not veered significantly and of its
own volition from its commitments in the
FRBM act. Which agency should under-
take such a review? The proposed Fiscal
Council would be the ideal institution.
The other option for the XV-FC is to
E R
T
follow the suggestion in the ToR and dis-
continue the provision of revenue deficit
Z
grants. The number of states reporting
revenue deficits is increasing. The aggre-
gate revenue deficit for BE 2017–18 re-
G
ported by the nine states in Table 1 is
`1,13,121 crore. The revenue deficit grant
requirement could work out to more
A
than `6,00,000 crore during 2020–25.
This will absorb a significant portion of
the divisible pool to the detriment of the
fiscally restrained states. A case can be
made that due to the moral hazard faced
by states, the revenue deficit grant
should be discontinued.
Base Year or Terminal Year
Earlier finance commissions were required
to assess these resources for the required
five-year period based on the revenues
likely to be reached during the year prior
to this period. This prior year is termed
as the base year, and is the jumping-off
year for the finance commissions to make
Table 2: Base Year for Finance Commissions
Finance Period Base Year Indicated in
Commission Covered by Respective ToRs to be Used
Recommendations for Projecting Revenues
for Future Five-year Period
Tenth 1995–2000 1993–94
Eleventh 2000–2005 1998–99
Twelfth 2005–2010 2003–04
Thirteenth 2010–2015 2008–09
Fourteenth 2015–2020 2014–15
Fifteenth 2020–2025 2024–25
Source: Terms of Reference of Finance Commissions.
vol lIiI no 10
PERSPECTIVES
projections into the future. It is assumed
that the finance commission would have
available to it reasonably credible fig-
ures for parameters like growth, infla-
tion, and revenue for the base year and
these figures could then be used as the
basis for making projections for the fu-
ture five-year period. Table 2 shows the
base year indicated in the ToR s of earlier
finance commissions.
The Tenth Finance Commission (X-FC)
used 1993–94 data on revenue and ex-
penditure that was available to it, as a
basis to project revenues for 1995–2000.
Similarly, all succeeding commissions
were asked to use a base year that was
before the period covered by its recom-
mendations. The ToR of the XV-FC re-
quires it to use the revenues likely to be
reached by 2024–25, the terminal year
of its recommendations as the basis for
the projections for the five-year period
starting 2020–21 and 2024–25. This is
challenging to say the least.
Potential and Fiscal Capacity
The ToR of the XV-FC states that for both
tax and non-tax revenues, the commis-
sion would also take into account the po-
tential and fiscal capacity of the central
and state governments. “Fiscal capacity”
is susceptible to multiple interpretations.
A study commissioned by the XIV-FC
posits that fiscal capacity of a state is esti-
mated by its tax to gross state domestic
product (GSDP) ratio (Raychaudhuri 2013).
A second study10 brings the expenditure
side into the concept by defining fiscal
capacity as a measure of a government’s
ability to raise revenues for provision of
services, relative to its costs of service
responsibilities. A third study has point-
ed to the inadequacy of using revenues
for measuring fiscal capacity and em-
phasises the need to simultaneously look
at tax effort (Vazquez and Boex 1997).
The XIV-FC did not compute fiscal ca-
pacity. Instead it used a proxy of fiscal
capacity for computing inter se state
shares in the horizontal devolution exer-
cise. This was the difference between
per capita income of a state and the state
with the highest per capita income.
Which approach should the XV-FC follow?
It could be argued that the XV-FC should
scrutinise three distinct parameters.
41
PERSPECTIVES
First, the entire exploitable revenue base
of a state government to assess its potential
fiscal capacity; second, the base actually
exploited to determine fiscal capacity;
and third, the efficiency in exploiting this
base to determine tax effort. It is debata-
ble whether state-level data required for
making such a comprehensive assess-
ment is available. Such a determination
will indeed be a challenge for the XV-FC
unless it takes the path laid out by the
earlier commissions.
Recommendations of the XIV-FC
The XV-FC is required11 to have regard to
impact on the fiscal situation of the union
government of the substantially enhanced
tax devolution, following the recom-
mendations of the XIV-FC, while making
its recommendations. The reference to
the impact of the increase in devolution
brought about by the XIV-FC on the fiscal
situation of the union appears both super-
fluous and irrelevant. The ToR already en-
joins the XV-FC to estimate the resources
of the union government by projecting
revenue and expenditure commitments
on the basis of values reached during the
base year.12 The impact of the enhanced
devolution award of the XIV-FC will last
only till the financial year ending 31 March
2020. Till that date, the devolution of
42% of the divisible pool remains an in-
M
escapable commitment of the central gov-
ernment. No reference to it is necessary
for the XV-FC to incorporate it into its
examination of the finances of the cen-
tral government between 2015 and 2020.
For 2020–25, the period of consideration
of the XV-FC, the award of the XIV-FC is
irrelevant. The XV-FC is required to make
an ab initio assessment of revenue pro-
jections and expenditure commitments
of both levels of governments for 2020–
25. Based on the surplus it determines
for the union for 2020–25, it decides on
the quantum of the divisible pool that
needs to be shared with states. The 42%
award of the XIV-FC is not relevant to this
exercise. The XV-FC may increase, de-
crease or maintain the devolution share
at 42%. Determining this is the sole priv-
ilege of the XV-FC, to be exercised after
its consultations and deliberations.
This reference is at best misplaced,
and at worst, a leading suggestion on
42
the possibilities of adopting a recidivist
path.
New India 2022
The ToR requires the XV-FC to also examine
the impact of the “continuing imperative
of the national development program in-
cluding New India-2022” on union gov-
ernment finances. “New India 2022” is
an ambitious movement initiated by the
central government. It has six components:
(i) poverty-free India; (ii) dirt- and squal-
or-free India; (iii) corruption-free India;
(iv) terrorism-free India; (v) casteism-free
India; and (vi) communalism-free India.13
Each of these components has subcompo-
nents. For example, the first compo-
nent—poverty-free India—includes nine
subcomponents, including promoting
inclusive growth, doubling farmers’ in-
come, and improving health, education,
and gender outcomes.
T
Three questions arise about the direc-
tion to the XV-FC to consider the impact
Z
of New India 2022 on the finances of the
union government:
(i) India 2022, as it is presently framed,
G
appears to be a vision set against a
background of sectoral aspirations. For
achieving New India 2022, a number of
A
sectoral departments in both the state
and central governments will have to
implement a number of programmes.
How these schemes/programmes will be
dovetailed with the existing government
programmes in the corresponding sec-
tors does not appear to have been clari-
fied. The additional financial commit-
ment of the central and state govern-
ments under this programme also does
not appear to have been firmed up.
(ii) Most of these sectors are operational
areas of the state governments rather
than the union government. These in-
clude agriculture, public health, hous-
ing, sanitation, and public order. Educa-
tion, electricity, and forests are in the
concurrent list, but states are respon-
sible for most of the expenditure in
these sectors.
(iii) New India 2022 can also be seen as a
political commitment of the union govern-
ment that will have to be implemented
mainly through the state governments.
Why the XV-FC should examine its im-
pact on the finances of only the union
MARCH 10, 2018
government and not the state govern-
ment remains unspecified.
Critics argue that this reference seeks
to gerrymander the XV-FC mandate. This
reference ostensibly enables the XV-FC
to underwrite the proposed central
government schemes under Article 282
for India 2022 rather than providing
grants directly to states under Article
275. Though the provision of grants un-
der Article 282 is prima facie permis-
sible,14 the finance commissions have
always been urged to confine their at-
tention to providing grants under Arti-
cle 275, rather than underwriting grants
by central/state governments under
Article 282.
R
Impact of GST
The commission is required to examine
E
the impact of goods and services tax
(GST) on the finance of the centre and
the state governments. This is to include
the payment of compensations for a pos-
sible loss of revenue for five years and
the abolition of a number of cesses.
The GST was introduced in July 2017
with the express agreement that it would
be tailored to be revenue neutral. One of
the reasons for putting in place a multi-
ple number of rates, one as high as 28%,
was so that the finances of both levels of
government should not suffer. The cen-
tral GST rules and the state GST rules
were subsequently amended to increase
the maximum rate to 20% for each tax,
an aggregate tax of 40%. This is a far cry
from the pre-GST average rate of 26.5%.15
Both the centre and the state govern-
ments wanted the GST to be revenue
neutral and clothed themselves legally
accordingly. Compensation required to
be paid, can be met from the special
compensation cess exclusively levied to
fund it. In this scenario, there appears to
be little case to ask the XV-FC to examine
the impact of GST on the finances of the
centre and the states.
It is possible that the present scenario
is far removed from the expected sce-
nario. It is also possible that aggregate
GST revenues are not reaching expecta-
tions16 while the states are making sig-
nificant claims for compensation. If so,
the remedy lies in the reform of the GST
structure, and not in burdening the
vol lIiI no 10 EPW Economic & Political Weekly
 PERSPECTIVES

XV-FC, with yet another objective to
meet with its extremely limited arsenal.
Consent to States for Borrowing
The ToR directs the XV-FC to consider
the conditions that the union govern-
ment may impose on the states while
providing consent under Article 293(3)
of the Constitution. This reference
seems driven by the report of the XIV-FC
which states:
We were alerted to the possibility that, in fu-
ture, no State may have debt outstanding to
the Union Government, due to discontinu-
ance of intermediation of loans as recom-
mended by FC-XII. It was further pointed out
that, in such an event, the Union would be
deprived of its ability to enforce fiscal rules
on the States under Article 293 (3) of the
loans to state governments matching
foreign assistance.
Table 3 lists the maturity profile of
central government’s back-to-back loans
to state governments as at end-September
2013 arising from externally aided projects.
The list of states has been arranged in
order of earliest maturity. As will be seen,
of the 17 listed states, only Chhattisgarh
will repay its back-to-back loans between
2023 and 2033. The other 16 states will
repay their loans after 2033. These 16
states will not become independent of
centre’s borrowing during 2020–25, the
period of consideration of the XV-FC. The
central government could encourage
Chhattisgarh and such of the other 12
states not listed above, who are likely to
determine at a future date a particular
state’s share of a lump sum provision
made, depending upon that state’s rela-
tive performance in respect of those in-
dicators on that future date.
If the object of the incentive exercise
is to change the behaviour of states, then
the XV-FC will have to use FLIs. While FLIs
can induce behaviour change, states ap-
prehend that the centre, being an inter-
ested party, may not objectively deter-
mine eligibility for grants based on the
use of FLIs. However, grants based on
past performance will not induce behav-
ioural change. Thus, determining what
type of incentive to deploy—a backward
looking or a forward looking incentive
grant will be a challenge for the XV-FC.

R
Constitution. (Finance Commission 2014: 200) pay off their outstanding loan to the centre
The specific provision for examining to avail external development assistance Expansion of the Tax Net

E
the use of conditionality in the grant on back-to-back basis. This would be a The GST is a cooperative enterprise be-
of permission to state governments to better way to ensure control on states’ tween the centre and the states. For the

T
borrow appears to be driven by the ap- lending in the medium term than any first time since the formation of the In-
prehension that “the Union would be proposed amendment to Article 293(3). dian federation, both the union and the

Z
deprived of its ability to enforce fiscal states have been sharing the same tax
rules on the states” and this power must Provision of Incentives base. Expansion and deepening of such
not be infringed or diluted in anyway. The XV-FC is encouraged to provide incen- a tax base under the GST is the joint re-

This dictate in the ToR seems inapt and
should perhaps be ignored by the XV-FC
for the following reasons.
As pointed out earlier, the union has
been unable to enforce fiscal rules on the
states even when it is empowered to do
G
tives to induce states to prioritise certain sponsibility of both the centre and the
developmental goals. Such incentives states. It is possible that in some states,
can be put in place through two modes: the tax base may have been extensively
A
(i) use of indicators of past performance
to determine up front the eligibility of a
state for a predetermined grant amount
trawled. In some states, this may not be
the case. States alone cannot be given
full credit for good performance nor can

M
so under Article 293(3). The nine states for the future five-year period; (ii) use of they be held accountable for lethargy in
have projected revenue deficits in their forward-looking indicators (FLIs) to widening this tax base.
budgets for 2017–18 and were all required Table 3: Maturity Profile of Outstanding Government Assistance to States (Back-to-back Loans Only)
to take the centre’s consent for borrowing for Externally Aided Projects as at End September 2013
States Percent of Total Amount Outstanding
under Article 293(3) and they have pre- 0–1 Years 1–5 Years 5–10 Years 10–20 Years Above 20 Years
sumably done so. Some of these states 1 Chhattisgarh 3.7 24.1 30.1 42.1 0
are in dire fiscal straits incurring revenue 2 Maharashtra 5.4 28.4 38.1 17.1 11.1
deficits for significantly long periods of 3 Madhya Pradesh 1.9 12.5 22.5 49.5 13.6
time. The centre has been either unwill- 4 Jharkhand 0 6.7 14.7 62.7 15.9
5 Kerala 1 6.4 23.3 47.5 21.8
ing or unable to discipline these states
6 Punjab 2.3 12.9 25 37.5 22.3
fiscally. Putting in place additional con-
7 West Bengal 0.4 8.7 22.9 34.2 22.8
ditionalities for borrowing even when 8 Bihar 0.5 5.4 18 52.5 23.6
they have no dues to the centre may 9 Karnataka 0.9 9.5 21.7 43.4 24.4
serve little purpose. 10 Haryana 0 14 20 40 26
The Twelfth Finance Commission 11 Goa 0 4.9 22.8 45.7 26.6
(XII-FC) recommended that central loans 12 Tamil Nadu 1.4 7.5 21.4 41.6 28.1
to states be disintermediated and states 13 Multi-states 0.6 10.1 20.1 40.5 28.7
14 Odisha 0.8 10.2 21.7 38.4 28.9
borrow directly from the market. However
15 Andhra Pradesh 1.4 9.2 19.3 40.6 29.4
loans taken from external development
16 Gujarat 0.1 6.1 19.4 38.9 35.5
agencies could not be disintermediated 17 Uttar Pradesh 0 3.5 17.1 42.7 36.7
by the centre as states cannot borrow 18 Rajasthan 0.4 3.1 11.6 47.6 37.3
directly from foreign agencies. The Total 1.2 9.2 21.1 43.2 25.3
centre commenced giving back-to-back Source: State Finances: A Study of Budgets, Reserve Bank of India, January 2014.

Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 43
PERSPECTIVES

Under the Goods and Services Tax
(Compensation to States) Act, 2017, state
governments are guaranteed a com-
pounded annual growth rate of 14% over
2015–16 (base year). Any shortfall in
their collections will be met by compen-
sation grants from the union govern-
ment to the extent of 100% of the no-
tional loss for the next five years.
There could be two categories of states
once the GST gets fully underway. The
first category will be the states that reach
a revenue growth rate above 14%.17 These
states will require neither the compensa-
tion nor the proposed incentive.
The second category of states are
those that report a revenue growth rate
below 14%. The compensation act signifi-
GST? It will, for the first category of
states. It is not clear whether it will also
be so for the second category of states.
The centre recently amended the GST
compensation act increasing the cess on
some motor vehicles from 15% to 25%.
Evidently, the GST Council anticipates
demands for compensation from states
to exceed original estimations. This en-
hances the concerns highlighted here.
It is therefore ironic that the XV-FC is
being asked to incentivise states for good
performance in GST, when the design of
the compensation scheme promoted by
the central government makes them in-
different to the success of the GST for the
next five years.
There are 11 states that have a replace-
ment rate above 2.1. Of these, Assam and
Chhattisgarh are fast approaching the
replacement rate of 2.1. The four north-
eastern states may not see this as a prio-
rity given their low population counts.
This effectively leaves only five states
that need to focus on their TFR to reach a
replacement rate of 2.1. The XV-FC is
thus being directed to selectively pro-
vide incentives to these five states for
reducing their TFR to 2.1.
The 18 states that have already reached
the replacement rate of 2.1 may feel such
a pointed reference in the ToR penalises
them for their past performance. This
asymmetry is further biased by the
XV-FC being asked to use 2011 popula-

R
cantly dilutes any incentive such states Population Growth tion figures in their computations. As
may have to widen and deepen the GST The ToR asks the XV-FC to incentivise seen in Table 5, the five states that stand

E
tax base. For the next five years, these “efforts and progress made in moving to gain18 by the use of 2011 population
states are guaranteed a 14% nominal towards replacement rate of population figures are the same five high population

T
growth in their GST revenues without growth.” Two issues arise. First, the con- states whose TFR is above the replace-
making any effort. Under the value add- flation of efforts and progress may not ment rate of 2.1. Thus, the low replace-

Z
ed tax (VAT) regime, the centre provided be a substitute for achieving good out- ment rate states feel that they are being
states with a graded compensation for comes. Outcomes alone may need to be disadvantaged twice over, by the inclu-
losses incurred: 100% in the first year, the decisive parameter for computing sion of this direction.

75% in the second, successively stepping
down to zero percent in the fifth year.
Such a provision gradually but inexo-
rably built up a stake of the state govern-
ments in the success of the VAT regime.
Some state governments, seeing the
G
eligibility for incentives.
Second, this reference will impact states Expenditure on Populist Measures
asymmetrically. The Population Divi- The ToR presumably encourages the XV-FC,
A
sion of the United Nations defines a total
fertility rate (TFR) of 2.1 as the replacement
level fertility rate. Out of the 29 states in
through a framework of incentives and
deterrents, to reward states that control
expenditure on populist measures and

M
writing on the wall, grew out of VAT India, 18 have already reached replace- deter states that do not exercise such
compensation during the first year itself. ment rate. Table 4 lists the states that are controls. Implementing such a direction
Will a similar experience be seen for above and below this replacement rate. will be a challenge for two reasons.
Table 4: Total Fertility Rate above and below the Replacement Table 5: Impact of the Use of 2011 Population Figures
Rate of 2.1 No Losing States if XIV-FC Had ` Crore No Gaining States if XIV-FC Had ` Crore
No States Above RR No States Below RR Adopted 2011 Population (2015–20) Adopted 2011 Population (2015–20)
1 Bihar 3.4 1 Haryana 2.1 1 Andhra Pradesh -24,340 1 Uttar Pradesh 35,167
2 Meghalaya 3 2 Odisha 2.1 2 Tamil Nadu -22,497 2 Bihar 32,044
3 Uttar Pradesh 2.7 3 Arunachal Pradesh 2.1 3 Kerala -20,285 3 Rajasthan 25,468
4 Nagaland 2.7 4 Uttarakhand 2.1 4 West Bengal -20,022 4 Madhya Pradesh 14,735
5 Jharkhand 2.6 5 Gujarat 2 5 Odisha -18,545 5 Jammu and Kashmir 5,281
6 Manipur 2.6 6 Jammu and Kashmir 2 6 Karnataka -8,373 6 Jharkhand 2,801
7 Rajasthan 2.4 7 Maharashtra 1.9 7 Assam -5,136 7 Haryana 2,766
8 Madhya Pradesh 2.3 8 Himachal Pradesh 1.9 8 Punjab -3,387 8 Nagaland 1,867
9 Mizoram 2.3 9 Andhra Pradesh 1.8 9 Chhattisgarh -1,468 9 Meghalaya 1,513
10 Assam 2.2 10 Karnataka 1.8 10 Himachal Pradesh -723 10 Gujarat 1,102
11 Chhattisgarh 2.2 11 Telangana 1.8 11 Telangana -343 11 Mizoram 679
12 West Bengal 1.8 12 Goa -272 12 Arunachal Pradesh 548
13 Tamil Nadu 1.7 13 Tripura 439
14 Goa 1.7 14 Manipur 428
15 Tripura 1.7 15 Maharashtra 342
16 Kerala 1.6 16 Sikkim 130
17 Punjab 1.6 17 Uttarakhand 82
India 2.2 18 Sikkim 1.2 Total -1,25,392 Total 1,25,391
Source: Reply to Rajya Sabha Unstarred Question No 2958, 28 March 2017. Source: Author’s calculations based on the Report of the Fourteenth Finance Commission.

44 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly

First, the definition of a populist meas-
ure may not stand the test of time. Tamil
Nadu’s Mid-day Meal Scheme and Andhra
Pradesh’s `2 rice schemes were original-
ly branded populist when they were first
introduced. Today, they have been deep-
ly integrated into entitlement-based pro-
grammes being implemented by the cen-
tral government. They are no longer
populist programmes but official policy.
Second, it may be inappropriate for
the XV-FC to deter populist programmes
introduced and implemented by a state
government in the exercise of its sover-
eign functions. If a programme is “waste-
ful” or “unnecessary,” the proper author-
ity to take deterrent action may be the
electorate, not the finance commission.
The Supreme Court has stated:
The court can strike down a law or scheme
only based on its vires or unconstitutionality
but not on the basis of its viability. When a
regime of accountability is available within
the Scheme, it is not proper for the Court to
strike it down, unless it violates any consti-
tutional principle. (Bhim Singh v Union of
India and Others. Para 76(3), Supreme Court
of India (2010), INSC 358, 6 May 2010)
The judgment of the United States
Supreme Court on the Affordable Care
Act (Obamacare) is also relevant:
We do not consider whether the Act embodies
sound policies. That judgment is entrusted to
the Nation’s elected leaders. We ask only
M
whether Congress has the power under the
Constitution to enact the challenged provi-
sions. Members of this Court are vested with
the authority to interpret the law; we possess
neither the expertise nor the prerogative to
make policy judgments. Those decisions are
entrusted to our Nation’s elected leaders,
who can be thrown out of office if the people
disagree with them. It is not our job to pro-
tect the people from the consequences of
their political choices. (US 576 2012: 6)
Two supreme courts have given clear
and unambiguous findings about the
legality of the so-called populist schemes.
The XV-FC also may need to evaluate
whether it is its job to protect people from
the consequences of their political choices.
It may therefore find it difficult to deter
states from embarking on such schemes
despite the exhortation to do so in its ToR.
Additional Matters
The ToR encourages the XV-FC to incen-
tivise state governments to accelerate
implementation of the flagship schemes
Economic & Political Weekly EPW MARCH 10, 2018
of Government of India—develop infra-
structure, improve fiscal sustainability
and quality of expenditure, improve the
ease of doing business, improve sanitation,
including the aim to end open defecation.
This is a smorgasbord of targets that
the XV-FC is asked to incentivise presum-
ably through the use of grants under
Section 275 linked to the imposition of
conditionalities. There are two challenges
that the XV-FC will face here:
(i) To encourage the state to change
course to “desired” directions, they must
be incentivised by grants of significant
value. The nine subsections of para-
graph 7 of the ToR draw attention of the
XV-FC to more than nine targets. These
goals will require substantial outlays to
be earmarked as incentives to command
the commitment of state governments.
E
Such large grants will cut into the fiscal
space available for rule-based devolution R
T
that should be the preferred mode of
operation for a finance commission.
Z
(ii) The conditionalities imposed must
be achievable. Only then will states be
able to reach the goals and draw down
G
their incentives. The Thirteenth Finance
Commission (XIII-FC) had provided a
water sector grant to all states. It re-
A
quired, amongst other conditions, that
states successively increase their recovery
rates for irrigation. Few states drew
down this grant. The political cost of
increasing water recovery charges evi-
dently exceeded the financial benefit of
receiving the grant. The challenge before
the XV-FC is not to overestimate both the
capacity and willingness of the state
governments to undertake reform while
proving sufficiently significant incentives
to induce them to reform.
Census 2011 for Computations
The use of population figures from 2011
masks a paradigm shift in the determina-
tion of the shares of states in the devolved
pool of taxes. Over the last 40 years, start-
ing from the Seventh Finance Commission
till the XIV-FC, eight finance commissions
have been mandated to use the 1971 popu-
lation for the purpose of computing state
shares (Bhaskar and Subrahmanyam 2014).
Population is an important criterion
that significantly affects a state’s share
of the devolution pool. This is because it
vol lIiI no 10
PERSPECTIVES
enters the computation of state shares
both directly and indirectly. The XIV-FC
allotted a weight of 17.5% to 1971 popu-
lation. Directly, 17.5% of a state’s share in
the divisible pool was determined on this
basis. Indirectly, the 1971 population fig-
ure was also used to scale the income
distance criterion (to which it had allotted
a weight of 50%). The explicit and im-
plicit use of population in finance com-
mission computations has a marked
effect on state shares of the devolution
pool. To demonstrate, Table 5 lists the
states and the amounts they would have
gained or lost over their presently allo-
cated share if the XIV-FC had used 2011
population both in its 17.5% population
criterion as well as for scaling the in-
come distance criterion.
Table 5 is instructive from the equity as
well as political economy point of view.
All the five southern states would have
been the biggest losers, along with West
Bengal, Odisha, Assam and Punjab. The
quantum of these contingent losses for
2015–20 are significant. The five biggest
potential gainers, Uttar Pradesh, Bihar,
Rajasthan, Madhya Pradesh, and J&K ac-
count for 90% of the total gains. The above
list of contingent losers and gainers for
2015–20 will possibly become the actual
list of losers and winners for 2020–25 with
the XV-FC having been explicitly mandated
to use the 2011 population figures.
The direction to the XV-FC to use the
2011 population figures is not appropri-
ate for three reasons.
First, over the last four decades, the 1971
population has been used as a criterion
for determining the states’ share of the
divisible pool by successive finance com-
missions even though subsequent census
figures were available to it. The direction
to the XV-FC to use the 2011 Census figures
militates against the Revised Policy State-
ment on the Family Welfare Programme
placed before Parliament in June 1977,
which guaranteed that the 1971 popula-
tion figures will be used as the parameter
for computing state devolution shares.
This assurance was confirmed by the
National Development Council (NDC) in
its meeting in 1979 and reiterated in the
National Population Policy in 2000.
The drastic change in population base
from 1971 to 2011 proposed in the ToR
45
PERSPECTIVES
should have been made after consulta-
tion with the NDC or at least the NITI
Aayog, which has accepted cooperative
federalism as one of its operational tenets.
One of the basic canons of cooperative
federalism is the need for all federating
members to provide credible commit-
ments to each other. This change belies
the commitment given by the centre to
the states in 1977, 1979, and 2000 and
weakens its capacity to make credible
commitments in future.
Second, income distance has been used
as a criterion for horizontal devolution
over the last seven finance commissions.
The XV-FC may find it difficult to discard
or substantially modify this criterion.
This criterion represents the commission’s
attempt to ensure states have the fiscal
capacity to provide comparable levels of
public services to their residents at com-
parable levels of taxation. This parame-
ter provides greater weightage to poorer
states depending upon the distance of
their per capita GSDP from that of a rich
state (Haryana in the case of the XIV-FC).
Placing high importance on equity, the
XIV-FC provided a weightage of 50% to
the income distance criterion.
If the 2011 population had been used
for computations, the five states of Uttar
Pradesh, Bihar, Madhya Pradesh, West
Bengal, and Rajasthan would have an
M
aggregate weightage of 32.48% out of the
50% weight accorded to income distance
to all the 29 states. Thus, nearly 65% of
the income distance criterion would
have been pre-empted by these five
states. While it is not this author’s case
that the income distance criterion
should not be utilised, the use of the
1971 population would have moderated
the impact of this double whammy on
the “non-poor” states.
Third, as noted in Bhaskar (2017),
trust between the federating members is
another essential component of a vibrant
federation. Trust endures when changes
from the norm are discussed between
federating members in advance, and the
approach to be adopted is agreed upon
if not unanimously, then at least by ma-
jority. This does not appear to have been
done while preparing the ToR of the
XV-FC.19 The centre has already belied the
trust of the state governments in the case
46
of CGST compensation (Bhaskar 2017),
and now the unilateral adoption of the
2011 population figures may further di-
lute this trust.
The XV-FC may therefore need to care-
fully craft its approach while providing
adequate ballast to this ToR.
Conclusions
The ToR of the XV-FC is significantly dif-
ferent from those of earlier finance com-
missions. Some of these changes are
within the mandate of the Constitution.
Some do not appear to be so. Others ap-
pear extraneous. Some appear to urge
the commission to asymmetrically treat
a group of states. The XV-FC needs to take
a considered view on how it will approach
its work. The chairperson of the Fourth
Finance Commission, P V Rajamannar in
his minute attached to the report stated:
In respect of such an important matter as
T
the determination of resources which will be
available to each state as a result of a scheme
Z
of devolution, there should not be a gamble
on the personal view of five persons, or a ma-
jority of them. (Minutes by P V Rajamannar,
G
Report of the Fourth Finance Commission
1965: 93)
All the previous finance commissions
A
have belied his apprehensions, and one
can confidently say, so will the XV-FC.
Notes
1 Some states like Tamil Nadu have additionally
defined this requirement in terms of limiting
the ratio of revenue deficit to revenue receipts.
2 Excluding Uttarakhand, which projected a
small surplus for 2017–18.
3 It is not to make a case to say that only the pro-
jections of the XIV-FC went awry. It occurred
with respect to previous finance commissions
as well. See, Bhaskar (2013).
4 Uncertainty includes additional welfare pro-
grammes implemented in future, like loan
waiver or imposition of prohibition.
5 This is true of the centre as well. The Comptrol-
ler and Auditor General reported that effective
revenue deficit targets and fiscal deficit targets
were deferred by the government in Union
Budget 2016–17 and 2017–18 without corre-
sponding amendments to the act. See, CAG
(2017).
6 http://web1.hry.nic.in/budget/frbm.pdf.
7 Or more likely, the powerful incentive that the
XII-FC provided to states that legislated and
complied with the FRBM act—the write-off of
their loans from the centre.
8 Except Sikkim and West Bengal, which passed
their FRBM acts in 2010 responding to incen-
tives offered by the XIII-FC.
9 It can be argued that grant of consent under
Article 293 has so far been linked only to state
governments remaining within the permissible
MARCH 10, 2018
fiscal deficit “authorised” by the finance
commission and revenue deficit has not been a
factor in determining consent at all. The Gov-
ernment of India may not have so far imposed
zero revenue deficit as a condition, but given its
powers under Article 293(3), nothing prevented
it from doing so.
10 www1.worldbank.org/publicsector/decentral-
ization/fiscal%20capacity.doc.
11 The word “shall” is used in para 6(1) of the ToR.
12 The reference here to the base year points to
the use of 2018–19 and not 2024–25 as men-
tioned in the ToR.
13 http://niti.gov.in/content/vice-chairmans-pres-
entation-new-india-2022.
14 Bhim Singh v Union of India and Others. Para
76(3), Supreme Court of India (2010), INSC 358,
6 May 2010.
15 The sum of standard rate of state value added
tax at 14.5% and central excise rate at 12% is
26.5%. The maximum rate of 40% has not yet
been levied, but the GST Council has now been
empowered to do so.
16 http://pib.nic.in/newsite/PrintRelease.aspx?
relid=173899. The press release dated 27 No-
R
vember 2017 notes a downward trend in GST
revenue over the five months since its imple-
mentation.
E
17 Telangana has reportedly achieved a tax
collection growth rate of 26.69% in November
2017 compared to November 2016 (Times of
India 2017).
18 Ignoring Jammu and Kashmir.
19 A formal consultation would imply seeking
views on specific issues like the use of the 2011
population. This is in contrast to a general re-
quest made by the centre to the state govern-
ments seeking suggestions on the ToR. This is a
routine exercise initiated before every new fi-
nance commission is constituted.
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Finance Commission,” Economic & Political
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— (2017): “Goods and Service Tax: A Saga of Co-
operative and Contesting Fiscal Federalism,”
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lation as a Criterion for Horizontal Devolution
by the 14th Finance Commission,” Economic &
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Raychaudhuri, Ajitava (2013): “Estimating True
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timal Growth Requirement,” Report prepared
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RBI (2017): Handbook of Statistics on Indian States,
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vol lIiI no 10 EPW Economic & Political Weekly
SPECIAL ARTICLE
Emerging Politics of Accountability
Institutional Progression of the Right to Information Act
Himanshu Jha
The implementation of the Right to Information Act,
2005 in Bihar is studied to examine the progression and
deepening of institutional change. The institutional
progression is inextricably linked to change in the
political regime and the resultant shifts in policy
priorities. The RTI Act has opened up a new space for
accountability between state and society, its use is often
linked to local politics, and a new form of elite agency
has emerged, whose practitioners this article categorises
as “agents of accountability.” These agents are different
from the category of elite agency discussed in scholarly
literature, such as the “expansive elite,” pyraveekars,
gaon ka neta, “political fixers,” or naya netas.
Himanshu Jha (himanshujha@yahoo.com.au) is at the Department of
Political Science, South Asia Institute, Heidelberg University, Germany.
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10
U
ntil 2005, governance processes in India were shrouded
in secrecy, a throwback to colonial times, and author-
ised by the Official Secrets Act, 1923, the Central Civil
Services (Conduct) Rules, 1964, and Sections 1, 2, and 3 of the
Indian Evidence Act, 1872. The Right to Information (RTI) Act,
promulgated in 2005, provides Indian citizens a legal regime
for accessing government information. It represents institu-
tional change on three counts. First, it signifies a rearrange-
ment in norms. Second, the RTI Act marks a complete depar-
ture from the previous regime, which was “locked in” (Pierson
2000) at the systemic level and institutionalised through acts
that perpetuated the norm of secrecy. Third, the RTI Act, an
act promulgated by Parliament, is justiciable, and the judiciary
has interpreted the “right to know” as a fundamental right.
But, has this institutional change in legal norms resulted in
related social, political and administrative change? If so, to
what extent? I argue that the period after institutional change
should be seen as one of “institutional progression.” Scholarly
work has highlighted numerous problems in the implementa-
tion of the RTI Act: lack of awareness among citizens, barriers
to the use of law, bureaucratic indifference, rejection of appeals,
and rising pendency (Roberts 2010; TAG and RIB 2015).
This article, in contrast, digs deeper to explore patterns of
RTI use in terms of the social, political, and administrative
changes it has caused (Mukherji 2013). It presents three argu-
ments. First, the RTI regime is directly linked to change in
political regimes and, resultantly, in policy priorities. Political
will within the state is required for policy progression. Hence,
the ideas emerging within the state matter.
Second, as a result of institutional progression, a new space
for accountability has opened up between the state and society.
A new variant of elite agents has emerged. Popularly known as
RTI activists, these agents are different in the manner in which
they engage with the state from the category of elite agents
discussed in scholarly literature, such as the “expansive elite”
(Rosenthal 1977), pyraveekars (Reddy and Hargopal 1985),
gaon ka neta (Mitra 1991), political fixers (Manor 2000) or
naya neta (Krishna 2006). This article terms this new variant
“agents of accountability.” Third, the RTI Act has resulted in a
new form of “accountability politics” locally, which is inextri-
cably linked to the issue of social and political domination at
the local level.
To examine the extent of institutional progression, I study
the RTI Act’s implementation in Bihar.1 Bihar is a puzzle. On
the one hand, it is regarded as chronically backward in terms
47
SPECIAL ARTICLE
Figure 1: RTI Continuum
Information-givers Information-seekers
Public Authorities (Citizens)
Space for Accountability
of socio-economic indicators, and also as a place where caste
divides run deep. The puzzle deepens when one considers
Bihar’s reputation for bad governance: it is believed that the
state is run by a corrupt nexus of bureaucrats, contractors,
middlemen, and sociopolitically dominant groups. To be sure,
free flow of state information in the public domain through RTI
will expose this nexus and will work against their interests.
Yet, the engagement of citizens with RTI in the state is
substantial and its use is one of the highest in the country. The
extensive use of RTI points towards high levels of sociopolitical
consciousness in a chronically backward state. Consider the
number of RTI applications received by the state information
commissions (SICs) for top five states in 2011–12. The Bihar
State Information Commission received 1,29,807 RTI applica-
tions in 2011–12,2 fewer than in developed states like Maha-
rashtra (6,82,286) or Karnataka (2,93,405), but significantly
higher than in Andhra Pradesh (1,22,133), Rajasthan (71,243),
or Odisha (52,305) in the same year.3
What explains the extensive use of RTI in Bihar? And, why
and how is RTI used to challenge the corrupt nexus? Bihar pre-
sents us with what is called a “tough case” (King et al 1994) or
a “least likely case” (Eckstein 1975), where we would expect
less RTI in a socially and economically backward state. To un-
G
ravel this puzzle and with the aim of studying these patterns
in RTI engagement on the ground, I undertook fieldwork in
A
two phases in 2014 and 2015. In the first phase, I visited Patna,
the capital of Bihar, to examine the macro-patterns of RTI
implementation and its use. In the second phase, I examined
the patterns in districts and blocks.4
M
If we imagine the RTI regime in terms of a continuum
(Figure 1), one end is represented by the information-givers,
that is, the administration, and the other end by the informa-
tion-seekers, citizens who submit RTI applications. Hence, one
end of the continuum is the “supply” and the other end is the
“demand.” The space in between is one of accountability.
Political and Policy Shifts
I will start by discussing the supply side of the RTI regime in
this section. A shift in the political leadership resulted in a
change in the governance agenda, which, I argue, is directly
linked to the evolving RTI regime in the state. To put this
argument in perspective, it is pertinent to examine the politi-
cal and policy shifts that have occurred in Bihar since 2005.
The Janata Dal (United)—JD(U), in alliance with the Bharatiya
Janata Party (BJP) (as the National Democratic Alliance
[NDA]), won the 2005 assembly elections in Bihar. Nitish Kumar
became the new chief minister of Bihar, ousting the previous
chief minister, Lalu Prasad Yadav, representing the Rashtriya
Janata Dal (RJD).
Though the RJD regime (1990–2004) resulted in the
empowerment of backward castes, it sacrificed development
for caste politics. Additionally, it is argued that the leadership
48
facilitated the weakening of administrative institutions and
public services to strengthen their rhetoric of oppressed back-
ward castes versus the dominant castes (Mathew and Moore
2011: 19–21). Due to this, a significant share of the funds allot-
ted for development programmes were underutilised in Bihar
from 1990 to 2005 (World Bank 2005). In contrast, the newly
elected NDA government, led by an alliance between the JD(U)
and BJP, saw a political shift in Bihar in 2005. The new leader-
ship was convinced that good governance is good politics. In
the words of the newly elected chief minister in 2005,
There is a reason why I emphasized governance as my first, second
and third priorities. Bihar that we inherited in 2005 was not afflicted
by bad governance; it was afflicted by absence of governance. (Govern-
ance Now 2010)5
The new regime focused on four core areas. First, it aimed
to strengthen its relationship with the administration.6
Second, it adopted legal and institutional measures such as
fast track courts and created the Bihar state auxiliary police to
E R
improve law and order. Third, the state aimed to improve
infrastructure such as road connectivity within the state.
Fourth, institutional measures such as the Janata ke Durbar
mein Mukhiya Mantri (Chief Minister in People’s Court)7 and
T
the public grievance cell were implemented to establish a
direct connection with the people.8
Z
The enactment of the RTI Act in October 2005 coincided with
the swearing in of the JD(U) government in November 2005.
The chief minister took an acute interest in the implementa-
tion of RTI Act, and the new governance framework was conse-
quential in shaping three RTI-related processes. First, it
prompted innovations in the state to process RTI applications
more efficiently. Second, it created an incentive structure for
the implementers. And, third, the incentives empowered insti-
tutions such as the SICs. Notably, we find that RTI implementa-
tion in the state was largely pushed by the personal leadership
of the chief minister. Hence, the RTI framework that evolved in
Bihar was essentially top-down, where political will played a
consequential role.
Governance Innovations
One such governance innovation initiated by the state is
known as Jankari (literally translates to information), an
information and communication technology (ICT)-enabled
governance innovation through which people from any part of
Bihar can file an RTI application by placing a call to the call
centre. As a bulk of the population in Bihar resides in rural
areas and is not highly literate, the call centre made it easy for
citizens to file applications.
The then principal secretary of the chief minister was put in
charge of setting up the call centre. The chief minister in con-
sultation with his principal secretary, Chanchal Kumar, decid-
ed to expand the scope and mandate of the existing public
grievance cell to include RTI within its ambit. Under the pub-
lic–private partnership (PPP) model, the state invited tenders
from state neutral agencies to operationalise the call centre.
The Bharat Sanchar Nigam Limited (BSNL) was involved as a
telecom provider and the Bihar State Electronics Development
MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly

Corporation (Beltron) was entrusted with the responsibility of
organising all the hardware and software components.9 The
state RTI rules were amended to accommodate this arrangement
by levelling fees for both the first and the second appeals to `10.
Two numbers—155311 to register an RTI application and 155310
as a helpline—were widely publicised in the public domain.
Like Jankari, similar governance innovations related to RTI
were undertaken by the SIC. For instance, a helpline dedicated
to receiving complaints about the harassment of RTI applicants
was set up in 2009. Along with the helpline, Phase II of Jankari
was launched, which enabled citizens to file RTI applications
through email. Yet another innovation in July 2011 was the
establishing of a video conferencing facility in the SIC, Patna.
RTI and the Bureaucracy
Did the top-down policy innovations percolate to other admin-
istrative departments? To examine this, I visited government
departments in Patna. Interviews in these departments revealed
a continuity of institutional progression. For instance, the
Department of Rural Development proactively put up details
about development programmes online, right down to the
panchayat level. The department also put up details about
monthly review meetings. Information that was frequently
requested through RTIs was made available on the website.
According to the principal secretary, rural development,
“there is no impediment to innovation, a supportive leadership
gets the system implemented.”10
G
Administrative innovations were introduced in districts as
well. In the Darbhanga Collectorate, I came across an innova-
A
tive mechanism named Lok Suchna Prashakha or Public
Information Branch.11 The branch, set up in 2007, serves as a
single point of contact for RTI users, and makes sure that the
RTI applications have been filled out correctly. To educate
ween 2008 and 2009.12
Incentive Structure within Administration
M
information-seekers as well as information-givers, 27 training
workshops on RTI were organised by the Bihar Institute of
Public Administration and Rural Development (BIPARD) bet-
Emerging policy priorities and innovations also created an
incentive structure. For instance, in 2009, during the launch
of the RTI helpline and Jankari II, nine public information
officers (PIOs) were publicly felicitated by the chief minister for
their RTI work. Additionally, the principal secretary to the
chief minister was presented with a special award for his
efforts in organising the Jankari call centre and the RTI
helpline. On the other hand, erring officials who denied or
delayed information were penalised.
The incentive structure galvanised RTI-related institutions,
such as the SIC, and empowered them. Provisions to initiate in-
quiries, which were inherent in Section 18 of the RTI Act, empow-
ered the SIC further. For example, in 2007, 262 government of-
ficials were booked for not providing information (Pioneer
2008). Even higher officials were not spared. For instance, in
April 2007, a deputy secretary and an undersecretary from the
Department of Agriculture were fined for not providing
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10
SPECIAL ARTICLE
information. Additionally, several cases of alleged corruption
in flagship development programmes like the Indira Awaas
Yojana (IAY) and Mahatma Gandhi National Rural Employment
Guarantee Scheme (MGNREGS) were brought to the notice of
the SIC through RTI applications, and the SIC used its quasi-
judicial power to direct officials to investigate them.
However, a shift in policy and political priorities had a direct
impact on institutional progression from 2012 onwards. It can
be argued that during the latter half of his second term (starting
from 2012), Nitish Kumar was experiencing political turmoil,
and his politics overshadowed his governance initiatives and
policy priorities. As a result, the state experienced lethargic
political leadership, which had an impact on RTI implementation.
This is made evident through the decline in the number of calls
received by Jankari, from 31,389 in 2010 to 12,880 in 2013.
Moreover, during my visit to Patna in March 2014, the call cen-
tre had been relegated to an inconspicuous place behind the
chief minister’s secretariat and had only six employees at the
E R
time.13 Since 2012, the SIC has not published its annual report.14
A Case of Glass Half Full?
Many of the administrative innovations during the RTI regime
T
emanated at the level of the political leadership. However, RTI
posed a challenge for both the permanent and the political
Z
executive, and its use has put considerable pressure on the
administration. This can be seen in the amendment of state
RTI rules in 2009, where the structure of fees for RTI was
amended to `10 per question, instead of `10 per application.
Moreover, it was made mandatory for the applicant to attach a
self-addressed stamped envelope. An amendment also proposed
that those from the below poverty line (BPL) category could get
copies of documents free up to 10 pages, beyond which they
would be charged for the photocopying. It can be surmised
from these policy steps that the RTI posed an immense chal-
lenge to different segments of the bureaucracy and, subse-
quently, the bureaucracy convinced the chief minister to intro-
duce these amendments in the RTI rules. In a sense, if the in-
novations flowed downstream from the top to the administra-
tion, the idea of amendments flowed upstream from the ad-
ministration to the chief minister.
The conflict between the norm of secrecy and the new
regime has created layers of ambivalence within the adminis-
tration, which give an impression of a state that is Janus-faced.
While the block development officer (BDO) of Baheri block in
Darbhanga raised his doubts about the capacity of the staff to
deal with RTI applications,15 the deputy collector in charge of
the Public Information Branch, Darbhanga, raised his doubts
regarding the existence of this branch itself:
He [RTI applicant] can come and just drop his application here and he
knows we will forward [it further]. To go to a particular block for in-
stance he has to make an extra effort. You can call this facilitation right
and at the same time also wrong. [emphasis mine]
Information is still considered a privilege by the state admi-
nistration, and one comes across bizarre incidents of alleged
denial of information. In one such instance, in 2009, a farmer
who had filed an application asking about the distribution of
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SPECIAL ARTICLE
kerosene through RTI was asked to pay `1 crore to get the
relevant documents, towards the cost of photocopying, etc.
This reluctance demonstrates that institutional changes have
only partially resulted in institutional progression in terms of
norms at the informal level.16
New Space for Accountability
A tumultuous narrative emerges between the supply (informa-
tion-givers) and the demand side (information-seekers). The
PIOs in the state capital, and at the district and the block levels,
questioned the motives of information-seekers, especially
those who habitually seek information from public authorities.
According to them, a new category of “middlemen” or “contra-
ctors” use RTI as a tool to “blackmail,” “extort money,” or “set-
tle personal scores” in cases of disputes. “Frivolous and vague
applications” and “additional workload” were also thought to
be hurdles in the operationalisation of the law.
The views of the administration are symptomatic of the
churning taking place at the lowest level of implementation—
between the nested (or rooted) norm of secrecy on the one
hand and the emerging norm of openness through RTI on the
other. In the subsequent section, I will discuss the demand side
of the RTI regime.
Agents of Accountability
Who are these “habitual” users of RTI, whom the administra-
tion views so unfavourably? Is the motive in reality blackmail
G
or troubling officials? Are they really contractors or middle-
men? I probed these issues further and systematically tried to
A
unravel the categories of users. On the basis of my field visit to
the district and blocks of Darbhanga and Supaul, I identified
the following three categories of information-seekers.
M
One-time users: The first category of people is the one-off
users who have used RTI to seek issue-specific information.
These RTI users are common citizens who seek information
from various government departments, primarily about the
services or benefits to which they are entitled, or information
related to land or revenue. For example, in 2006, a rickshaw-
puller from Machdi village in Jhanjharpur district used RTI to
get the benefits to which he was entitled (as an unintended
outcome of his RTI query).17 It has also been used to draw
attention to decisions made in panchayats and irregularities in
the implementation of development programmes.
Institutional users: The second category is the institutional
users of RTI, such as non-governmental organisations (NGOs) or
research organisations that seek information on specific issues
and schemes. For example, an NGO working on water conserva-
tion in the district of Darbhanga uses RTI regularly to get informa-
tion on water issues. Similarly, another NGO working on the Kosi
river project seeks information from the government regularly
regarding budgetary allocations, expenditure, and progress made.
Core users: The third category of users, I term as the “core” of
the RTI regime. This category engages regularly with the law.
50
These users are technical experts on legal provisions, and seek
information regularly from public authorities on a range of
issues. The quantum of RTI applications filed by this category
is large compared to that of one-off users or organisational
users.18 The core’s RTI use has resulted in the emergence of a
category of “accountability”-seeking intermediaries who I call
“agents of accountability” (popularly known as RTI activists).
Scholars have identified the role of elite agency in the local
politics. For instance, Rosenthal (1977) has discussed the role
of “expansive elite,” who have used the political and institu-
tional opportunity structures to their own advantage. In a
similar vein, Subrata Kumar Mitra (1991), in his seminal study
of Gujarat and Odisha, shows a significant role of local village
leaders situated at a critical “interface of modern state and
traditional society” in what he terms as the gaon ka neta
(village leader). These netas are usually the local elite who en-
gage with the state through various forms of protest and par-
ticipation, such as “brokers in national, regional and local elec-
E R
tions; lobbying and contacting the bureaucracy and the higher
political elite; and collective protest” (Mitra 1991: 391).
The state, in turn, consciously provides legitimacy to their
activities by providing them room to manoeuvre. By doing so,
T
the state widens its social base, which in turn provides legiti-
macy to the state and its policy actions. Anirudh Krishna
Z
(2006) has identified an emerging category of village-level
leaders termed as naya netas (new leaders), who act as media-
tors between the villagers, the politicians, and the bureaucra-
cy. Villagers rely upon these netas “for diverse purposes re-
quiring mediation with the state” (Krishna 2006: 143). Yet an-
other category of local agency is the intermediaries at the local
level who operate as “political fixers” (Manor 2000) or local
pyraveekars (Reddy and Hargopal 1985).
The agents of accountability introduced in this article are
different from the scholarly work on local leadership discussed
above. The RTI in this case has provided the opportunity struc-
ture for these agents to seek accountability from the state. Un-
like the local elite and the “intermediaries” whose legitimacy
stems from their engagement with the state, the legitimacy of
these agents of accountability emanates from seeking account-
ability from the state. By seeking accountability, the agents of
accountability often question the state. Further, I have identi-
fied two sub-types to this category: Type A (Non-political), and
Type B (Political).
Type A: Non-political
RTI applications from this category primarily seek information
regarding the local development programmes, to stop mal-
practices and corruption at the local level. This category has
the following three characteristics: (i) a large volume of RTI
applications are filed by these activists, which puts a constant
pressure on public authorities; (ii) their RTI applications are
related to multiple issues, in the larger public interest;
(iii) as a result of their technical knowledge regarding the RTI
law and also their familiarity with government departments,
the activists provide advice and guidance to people on filing
RTI applications.
MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly

Almost every district in Bihar has this kind of information-
seekers who act as “whistle-blowers” and have exposed scams
and irregularities in the locality. For instance, Nand Kishore
Sharma of Kakarhat panchayat in Saran district exposed
financial irregularities in the installation of solar lights under
the Akshay Urja Scheme. Similarly, in Khagaria district, an RTI
application by Amit Kumar revealed that the village mukhiya
(village head) was installing substandard batteries and solar
lights, and embezzling the funds. Similar RTI applications
were filed all over Bihar, exposing a scam of over `2,600 crore,
where substandard batteries and solar panels were installed,
instead of government-approved components, without due
diligence by inviting tenders for such a purchase. RTIs revealed
that the solar lights had stopped working a few months after
the installation (Hindu 2014).19 Subsequently, in 2014, a peti-
tion was filed by a group of RTI activists in the Patna High
Court against the corrupt nexus of mukhiyas and bureaucrats
(Nagrik Adhikar Manch v State of Bihar and Ors 2016).
Another significant pattern that emerged was that the
agents of accountability in Bihar have become more organised,
albeit informally. This is evident from the formation of state-
wide platforms, such as the Bihar Right to Information Manch
(BRIM)20 and Nagrik Adhikar Manch (Citizens Rights Platform).21
Apart from addressing the harassment and murder of RTI activ-
ists, this platform also investigates the corruption revealed
through RTIs.
G
Type B: Political
This category uses RTI extensively to further social and politi-
A
cal activities, and primarily to do social and public good. RTI is
also used by this category to exert power over the local admin-
istration and increase one’s social and political presence. This
second subtype of the core has the following characteristics:
M
(i) extensive use of RTI in terms of the sheer number of applica-
tions; (ii) though the overarching objective is to seek account-
ability and expose anomalies and malpractices, RTI is also
used as a tool to expand their social and political base; (iii) the
association of different subcategories to RTI is inextricably
linked to their political, social, or professional affiliation;
(iv) these RTI users engage in RTI activity to establish connections
with the administration due to their abundant RTI use, and to
enhance their local presence socially and politically.
Take, for instance, the case of Premnath Singh, whose name
invariably came up (always in a negative light) in relation to
RTI. According to an official estimate, almost 75% of RTI appli-
cations at Baheri block in Darbhanga district were filed by
Singh. His name was also mentioned at the district level, as a
“habitual” information-seeker.22 It was clear that Premnath
Singh is a politically active individual and harbours political
ambitions.23 He is affiliated to the Congress party formally,
and was president of the Prakhand Congress Committee. I
could not detect any monetary vested interests, but he himself
admitted that he has helped people in the block through the
use of RTI, which in turn has helped him build his political
base.24 Singh’s engagement with RTI is threefold: (i) he uses
RTI to build his political base by seeking accountability in
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SPECIAL ARTICLE
development projects related to the block; (ii) he uses RTI as a
tool to rattle his political competition; (iii) he establishes his
power within the local administration through RTI applica-
tions, which furthers his political ambitions.
A closer examination of Singh’s RTI applications demonstrates
that he has sought information about specific panchayat offic-
ers. In one of the applications, for example, he has sought
details about how a panchayat secretary had got his job and
about irregularities during the official’s tenure.25 In another
RTI application, Singh sought specific and rather personal
information such as the property details and income of the
mukhiya of Metuniya panchayat (SIC, Bihar).
We find yet another variant of the politics–RTI interface in
Darbhanga district. Umadhar Prasad Singh was a politician
and activist who regularly used RTI to raise public issues.26
Umadhar Singh was the sitting MLA of the Bihar assembly, who
had thrice represented the Hayaghat constituency in Darbhanga
district. Previously, Singh had been closely associated with the
E R
left movement in north Bihar and was an active central com-
mittee member of the Communist Party of India (Marxist–
Leninist). Singh’s RTI applications reveal that he has sought
information on development projects such as roads, rural
T
development programmes, and agriculture. Umadhar’s case
reveals the use of RTI as a tool to achieve social good by expos-
Z
ing corruption, irregularities, and anomalies in development
work at the grass-roots level.
Another variety of the “political” users stands out on at least
three counts. First, these RTI users harbour a profound desire
to establish an NGO or become civil society leaders. Second,
from interviews, I deduced that their RTI Act activity was often
motivated by the desire to establish their varchaswa or visibili-
ty in the locality. Third, their regular use of RTI enhances their
ability to access the local administration. In addition, this cat-
egory shares one common characteristic: outward migration
from their native place. These users have either been educated
outside Bihar or have stayed outside the state, are educated or
literate, and have tried their hand at various professions. Some
of them have been to cities, but, having being disillusioned,
have returned home.
For example, let us consider Ashok Singh,27 a lawyer who
practises in the local court. Before his legal practice, he had
spent time in Delhi and had tried his luck in journalism. Singh
was keen to start an organisation that would work on local
governance issues. He has played an instrumental role in
mobilising groups around RTI to seek accountability and trans-
parency from the local administration and, in turn, he has
boosted his own local visibility. Similarly, in Supaul district, I
interviewed Durga Prasad Choudhary, who owns an atta
chakki (flour mill) in Raghopur block,28 and, before settling
down in his native village, had spent a few years in Delhi help-
ing his uncle, an electrician. He has filed several RTI applica-
tions on issues that are both local and national.
The extensive use of RTI by these users enables them to put
pressure on the local administration and also helps them
establish linkages within the administration at the local level.
Due to the corruption and anomalies exposed through RTI in
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the local development work, their social power also potentially
increases manifold.
Three significant points emerge from the use of RTI by both
the categories discussed above. First, RTI has opened up a new
space for accountability between the state and society. If inno-
vations in the administration facilitate the RTI regime and its
use at one end, the involvement of information-seekers stren-
gthens the RTI at the other end. Second, an RTI application filed
in one district sparked a chain of RTI applications across districts,
revealing a statewide nexus of information-seekers who are
connected to each other, as can be seen in the case of the solar
light scam. This is evident from the self-organisation of RTI acti-
vists, who have come together to form informal platforms. Third,
the use of RTI by agents of accountability created “trigger points”
within the state. The SIC’s instructions to the district magis-
trates to form enquiry committees at the district level were trig-
gered by RTI applications from this category of information-
seekers. In a sense, concerted RTI use by information-seekers
puts pressure on information-givers, deepening the RTI regime
further. In this case, state and society constitute each other.
The Varchaswa Factor
I argue that RTI use has led to a new form of politics, which I
term as “accountability politics.” Francine Frankel (1989: 2)
defines dominance as the “exercise of authority” by the social
groups to achieve “politico-economic superiority,” or new
forms of social domination by closely aligning with the state
G
(Rao 1989: 39–41). The politics of accountability has led to the
new pattern of social and political domination, which does not
A
engage with the state but questions and seeks accountability
from the state. I propose that the political shift that took place
in Bihar historically lead to the emergence of new forms of so-
cial and political power. This is made evident through the use
M
of the Hindi word varchaswa (dominance or power) in the nar-
ratives of core users while explaining their objectives for filing
RTIs. For instance, Premnath Singh (discussed above) repeat-
edly talked about establishing varchaswa locally, and boasted
of how everyone in the administration knows him, from the
BDO to the chief secretary of the state.
The caste dimensions of RTI applications have not been
examined in other studies on RTI implementation. However,
caste is an important variable in a state where caste divides
run deep, especially in rural areas. One striking feature that
surfaced in villages is the close intertwining of RTI with local
politics and actors. Varchaswa is often a factor that emerges as
a result of this close intertwining. Displaced castes who were
previously socially and politically dominant have found in RTI
a tool to reclaim their power. Seeking accountability is often a
proxy for their assertion of power at the social, political, and
the administrative levels.
A long history of the socialist movement in the state and the
political establishment’s focus on the empowerment of the
backward castes has challenged, and to some extent changed, the
sociopolitical equilibrium. This is evident in the caste repre-
sentation in the Bihar legislative assembly over the years. Upper-
caste representation declined from 41.8% in 1967 to 29.9% by
52
2000, while backward-caste representation increased from
24.2% in 1967 to 36.4% in 2000. The political ascendancy of
backward castes reached its zenith in the 1995 elections with
45% members of the legislative assembly belonging to the
backward caste and only 17.1% were from the upper castes
(Kumar 2004: 266).
This is true of village politics in Bihar as well. Formerly
dominant social groups belonging to the upper castes have
given way to new dominant groups belonging to the backward
castes. Power equations have changed as the emergent groups
have found not only political power, but economic power as
well, for landownership has changed hands from the upper
castes to the lower castes. This has created pulls and pressures
in villages, and RTI has become a tool in this power struggle.
Analysis of solved RTI applications from the districts of
Darbhanga and Supaul corroborates this trend. In Darbhanga,
52% of information-seekers and 42% in Supaul belong to the
upper castes. In Darbhanga, 19% of RTI applications were filed
E R
by minority communities, and in Supaul, 7% of the informa-
tion-seekers were from minority groups. Together, the minorities
and the upper castes constitute a large chunk of RTI users: 71%
in Darbhanga and 49% in Supaul.29
T
In the above context I will examine the cases of two villages,
Ujan and Nanour.
Z
Ujan
Ujan village is located in Manigacchi block, Darbhanga dis-
trict.30 Traditionally, as it holds true for this area, the village
has been a stronghold of the Shrotriya Brahmins, or the upper-
most category of Brahmins. Interestingly, the power struggle in
this region has been historically both “intra” and “inter” caste.
Over the years, land has been transferred on a large scale to
other categories of Brahmins, locally termed as “lower Brah-
mins,” who were historically not a part of the landed gentry.
Landownership further shifted to the Other Backward Classes
(OBCs), many of whom had worked on the land owned by Brah-
mins. Another factor that strengthened the position of the OBCs
was the increase in economic opportunities in the trade, busi-
ness, and government sectors in cities and metropolitan areas.
Elections to the village panchayat were held every five years
and were the main fulcrum around which this socio-economic
and political dynamics was organised. The ascendancy of new
caste groups in terms of land and power resulted in a power
struggle in villages as traditional strongholds did not easily
accept the newly ascendant caste groups. In Ujan, the last two
decades have seen alternations in power between the Brahmins
and the OBCs, but the OBC candidate has been in power for the
last decade. In retaliation, the Brahmin candidate (or his group)
has filed a series of RTI applications against the OBC mukhiya.
The case of Ujan demonstrates that opposition politics is an
instrumental driver of RTI and the new accountability regime.
During my field trips in Bihar’s villages, this phenomenon was
repeatedly mentioned, often clearly and at times tangentially.
While it is true that RTI is being used as a tool in local politics,
it has in general enhanced awareness and acts as an empower-
ing tool to question authorities and to ensure transparency
MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
 SPECIAL ARTICLE

and accountability. Indeed, the mukhiya also clearly stated
that these RTI queries have prompted the official machinery to
become more alert and cautious about maintaining records.
This is not to suggest that these cases are false or imaginary,
but are often genuine issues taken up by these village activists
(of course with the hope of nailing the mukhiya). In the case of
Ujan, this is representative of both changing power equations
and the use of RTI as a tool for sociopolitical dominance.
Nanour
I came across a similar case of RTI being used to gain local power
by a minority group in Nanour, a village in Jhanjharpur block,
Madhubani district.31 I decided to pay a visit, as it was a group
from a minority community that was using RTI in this village.
Shahbuddin is an educated young man in his early 30s. He holds
an MA degree and has worked in Kashmir for eight years before
coming back and starting a small-scale poultry business. Upon
his return, he found that none of his kith and kin had received
any benefits under the development programmes meant for BPL
families. He took up the matter with the village mukhiya and the
BDO, only to be rudely dismissed. In his own words,
This had then become the fight for varchaswa. Through RTI, I got the
and policy priorities of the new government under the new
leadership in 2005. In this light, it can be argued that the insti-
tutional progression at the state level is contingent upon the
prevailing political regime and the political will of the leader
at top. The evidence examined in this article demonstrates
that the presence or absence of political will has a direct
impact on institutional progression. The case of Bihar demon-
strates the significance of political leadership and the top-down
flow of ideas. The governance agenda of the chief minister en-
couraged bureaucratic innovations within the administration
and the implementing agencies. In this case, the political lead-
ership was instrumental in convincing and encouraging the
bureaucracy to initiate some of these innovations.
The RTI has opened up a new space for accountability bet-
ween the administration and the citizens, which is inhabited
by a new form of elite agency, whom I have termed as agents of
accountability. However, this elite agency is different from the
earlier scholarly literature dealing with local leadership

E R
(Rosenthal 1977; Reddy and Haragopal 1985; Mitra 1991;
Manor 2000; Krishna 2006). This is a new form of local leader-
ship which seeks accountability from the state and, hence, the
nature of engagement with the state is different from the

T
list of beneficiaries under IAY and MGNREGS and escalated the mat- traditional forms of local leadership discussed in the literature.
ter from district level to the state department for Rural Development. RTI has been extensively used in Bihar to get responses on enti-

Z
Meanwhile, at the village level, the mukhiya and the BDO retaliated by tlements and public services and to methodically expose cor-
booking me under a false criminal case. Finally, with much effort and
ruption at the local level. In this sense, the RTI has posed a
representations to the higher authorities an investigation was ordered.
challenge to the dominant vested interests at the grass roots in

G
This forced the mukhiya and the BDO to implement the sche- Bihar. As our cases have shown, RTI has been used in Bihar to
mes properly and pay the BPL families the necessary benefits. expose both petty and grand corruption.

A
The mukhiya had been the elected representative for the
last decade and wielded considerable social and political power.
The RTI filed by Shahbuddin, and the resulting investigation,
challenged the mukhiya’s power. In a sense, Shahbuddin’s use
A new variant of local politics has emerged in the form of
accountability politics. Findings from the field study show that
formerly powerful social groups use RTI applications to seek
accountability regularly from politically and economically

M
of RTI had created an alternate centre of power in the village,
located within the minority community. The mukhiya under-
stood this shift in the power dynamics and made amends by
improving her relationship with Shahbuddin and his group:
“Both power and people have shifted from the mukhiya to us,
even mukhiya now comes to us for advice and informs us of all
her decisions.” Shahbuddin recounts that the subsequent BDOs
received him with much mann-samman or respect. Nanour is
an example of how RTI is used as a tool to gain power in local
politics and enhance one’s local visibility and identity.
Conclusions
This article shows that the institutional progression of the RTI
regime in Bihar is inextricably linked to the governance agenda
emergent social groups. This linkage between RTI and social
power is closely related to caste politics in Bihar, where the em-
powerment of backward castes in the past 25 years has shifted
local social, political, and economic power from traditionally
dominant castes to empowered backward castes. Interestingly,
at the grass-roots level, RTI is used in opposition politics.
However, the institutional progression is partial and still
evolving. The culture of secrecy still prevails within the local
bureaucracy, and is evident in their hesitancy to share infor-
mation. Information-seekers are regarded unfavourably, and
the RTI Act is seen as only adding to their workload. Indeed,
scepticism regarding the RTI Act’s potential to deepen democ-
racy and development still persists, more than a decade after
its promulgation.

notes
1 The act was passed centrally at the union gov-
ernment level, but its power extends to both
central and state public authorities. State gov-
ernments need to actualise the act and enact
their own statutory rules to provide implemen-
tation architecture. This necessitates both hor-
izontal and vertical implementation of the law.
The sub-national level probe would reveal
whether the change in “formal norms” has
caused a change in the related “informal
norms.” I examine the implementation of the
RTI Act at two levels. One level is the change in
bureaucratic behaviour and attitude towards
sharing official information. The second level
concerns RTI users, of whom I ask the follow-
ing questions: Who are the users? Why do they
use it? What is the nature of RTI use? The two
levels would tell us about the RTI regime and
about the givers and seekers of information.
2 The Bihar State Information Commission has
published annual reports only until 2011–12. I
have used the latest published figures (2011–12).
3 Annual reports of state information commis-
sions (SICs) of various states, 2012. Also, see
CHRI (2013).
4 To do so, I selected Darbhanga and Supaul, two
districts in north Bihar, for their similarities
and dissimilarities. The districts are of the
same size and flood-prone. They lie in the same

Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 53
SPECIAL ARTICLE
sociocultural region, are linguistically similar,
and have a similar literacy level. However,
Darbhanga is more prosperous, has better
health indicators and a rich history of social
and political movements, and receives more
RTI applications than Supaul. I visited these
districts in 2014. I conducted open-ended inter-
views with bureaucrats, RTI users, serving and
non-serving state information commissioners
in Patna, and public information officers in the
two selected districts, blocks, and villages.
5 In 2010, during his second term, the political in-
tention and policy priorities of the government
were reiterated by laying out a detailed pro-
gramme on governance (sushasan, in Hindi) pub-
lished in the Bihar Gazette on 16 December 2010.
Also see Mukherji and Mukerji (2015: 206–07).
6 Nitish Kumar handpicked some of his close as-
sociates, such as the 1975 batch India Adminis-
trative Services (IAS) officer of the Bihar cad-
re, R C P Singh, as his principal secretary, and a
young IAS officer of the 1991 batch, Chanchal
Kumar, as his secretary.
7 This was usually held every Monday at the
chief minister’s residence, where he listened to
people’s grievances from 9 am to 5 pm. Each
Monday would be allotted to a specific set of
departments.
8 There were multiple objectives to this call centre.
On the one hand, it enabled the chief minister
to be directly in touch with the implementation
and monitoring of development programmes
at the grass-roots level and, on the other, it reg-
istered people’s grievances directly with the
chief minister’s secretariat. Feedback received
through the call centre was scanned and directly
forwarded to the secretary of the concerned
department. The process was reviewed and
monitored personally by the chief minister.
9 Interview with Chanchal Kumar, former secre-
tary to the chief minister of Bihar, March 2014;
visit to Jankari call centre in March 2014.
10 Interview, Principal Secretary, Department of
Rural Development, Government of Bihar,
M
March 2014.
11 Visit to Darbhanga Collectorate in December
2014.
12 Visits to BIPARD, Patna, in March 2014. Various
interviews with former Director of BIPARD,
Sudhir K Rakesh.
13 Jankari was previously located in the state
government’s software technology park. There
was a reduction in the staff at the call centre.
14 The current state of the SIC website is a symp-
tom of shifting policy priorities of the top lead-
ership. During the peak period of governance
initiatives, the SIC website served as a rich re-
pository of RTI-related information, such as
the district-wise database of solved RTI appli-
cations with an option of tracking the applica-
tions under review. When last checked in Feb-
ruary 2018, this potent website was inoperative
for the past eight months, demonstrating the
lack of interest and political will of the top
leadership.
15 Interview with the BDO, Baheri block, Darb-
hanga district, December 2014.
16 I was exposed to this during my fieldwork. It
was ironical that the Jankari officials were
reluctant to share basic information with me
(contrary to the name Jankari) regarding the
number of calls received, when I visited the
Jankari office in 2013. I experienced a similar
reluctance at the district level. Though, I could
procure necessary information after interven-
tions from higher officials.
54
17 Interview with Mazloom Nadaf, Machdi, Jhan-
jarpur Block, December 2014.
18 The negative image of the RTI users within the
administration was specifically directed towards
this category of RTI users.
19 Interview with Shiv Prakash Rai (Nagrik Adhikar
Manch), RTI activist, Patna, Bihar, March 2014.
20 Parveen Amanullah, who had filed approxi-
mately 600 applications between 2007 and
2010, provided the leadership for this platform,
which had members from all over Bihar.
21 Interview with Shiv Prakash Rai, Patna, Bihar,
in February 2014.
22 Visits to Baheri block, Darbhanga district,
December 2014 and January 2015.
23 Interview with Premnath Singh, Baheri block,
Darbhanga district, Bihar, January 2015.
24 For example, the information he procured
through RTI revealed corruption regarding the
building of the block hospital. As a result, a
senior block health official was suspended and
the new public health centre (PHC) was built in
the block.
25 In yet another application, Singh sought similar
information regarding a panchayat assistant
(panchayat sahayak).
26 Umadhar Prasad Singh died in June 2014.
27 Interviews with Ashok Singh during number of
visits to Jhanjharpur block, Madhubani dis-
trict, December 2014–January 2015.
T
28 Interview with Durga Prasad Choudhary, Rag-
hopur block, Supaul district, January 2015.
29 Apart from the field interviews, I examined
Z
RTI applications filed in the districts of Darb-
hanga and Supaul. These applications from
2007 to 2013 could be accessed from the SIC
database (the database is also an indication of
G
the robust RTI system which was created with-
in the state; http://www.biharonline.gov.in/
sic/common/pio_district.aspx). I used the “sys-
A
tematic random sampling method” to select
10% of the applications that were appealed at
the State Information Commission (SIC), with
Patna, as the “representative sample.” I dis-
cerned the caste patterns from the representa-
tive sample of RTI applications. Even though
caste is not mentioned in the RTI application, I
ascertained the caste from the surnames or
family names of the applicants. Obvious sur-
names related to the upper castes and the mi-
nority could definitely be weeded out from the
RTI applications. For instance, family names
like Jha, Mishra, Singh, etc, were definitely
from the upper castes. Similarly, Mohammad,
Yaqub, etc, were surely from minority commu-
nities. It was, however, impossible to identify
the backward castes and SC or ST groups ac-
cording to surnames, as they can often be mis-
leading or surnames could be dropped. Hence,
the rest of the applicants were put together in
the “other” category. For the upper castes and
minority communities, only those applicants
were selected for the respective category
whose surnames unambiguously represented
their caste; any ambiguity would put them in
the other category.
30 Visits to Ujan, Manigacchi block, district Darb-
hanga, Bihar, December 2014–January 2015.
31 Visits to Nanour, Jhanjharpur block, Madhubani
district, December 2014.
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vol lIiI no 10 EPW Economic & Political Weekly
SPECIAL ARTICLE
Levelised Cost of Electricity for Nuclear Power
Using Light Water Reactor Technology in India
Anoop Singh, Saurabh Sharma, M S Kalra
The development of nuclear power generation in India is
proposed to be enhanced with international cooperation,
for sourcing fuel and setting up commercial nuclear
power plants. The cost of power produced at such plants
is examined. The levelised cost of electricity for light
water reactor technology in India is estimated for
once-through cycle and twice-through cycle options.
A reference point for international cost comparisons is
provided, and a sensitivity analysis for key input
parameters is carried out. The base case, levelised cost of
electricity is estimated to be 13.93 cents per kilowatt-hour
and 14.13 cents per kilowatt-hour for once-through cycle
and twice-through cycle options, respectively.
Anoop Singh (anoops@iitk.ac.in) is with the Department of Industrial
and Management Engineering, Indian Institute of Technology Kanpur.
Saurabh Sharma (saurabh.sharma.2010@iitkalumni.org) is with the
CHINO Innovation Center, Itabashi-ku, Japan. M S Kalra (msk@iitk.
ac.in) is with the Nuclear Engineering and Technology Programme,
Indian Institute of Technology Kanpur.
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10
T
he Indian power sector has witnessed a series of reform
and restructuring measures since the mid-1990s. These
include sectoral unbundling and the setting up of inde-
pendent regulatory commissions.1 However, the sector continues
to face challenges in terms of power shortages, requiring large
capacity addition in a context of poorly performing state-
owned electric utilities. Bottlenecks in enhancing the supply
of domestic coal, concerns about large hydroelectric projects,
and the limited availability of cleaner fuels such as natural gas
call for exploring the possibilities of a greater role for renewa-
ble energy and nuclear energy.
While renewable energy sources hold promise for augmenting
electricity supply given their declining costs, their dependence on
nature remains a challenge.2 Renewable energy still needs to be
supported with financial incentives for certain applications like
rural energy access, and an appropriate regulatory and policy
environment to help its interconnection with the grid. Though it
has resulted in a notable growth in renewable energy-based power
generation capacity, varying economics, operational characteris-
tics, and respective limitations suggest that varied fuel options,
including coal, hydropower, renewables, and nuclear are
explored for long-term capacity addition in the power sector.
While India’s nuclear power generation programme has
been envisaged as primarily domestically driven, bilateral
cooperation with specific countries, especially Russia, has
been crucial for capacity expansion. As of 31 December 2015,
India’s nuclear power generation capacity was 5,780 mega-
watts (MW) and accounted for less than 2% of its total electric-
ity generation capacity (CEA 2015). Presently, nuclear power
generation is the responsibility of the Nuclear Power Corpora-
tion of India Limited (NPCIL).
The development of nuclear power in India faces several
constraints, including high capital costs, access to technology
and fuel, and safety concerns. The issue of access underlines
the need to expand nuclear power generation capacity through
greater international cooperation. Over the past decade, the
country has initiated a process of international cooperation to
secure technology and fuel to achieve this goal. However, the
economic viability of electricity generated from nuclear power
needs to be examined in the context of a changing environ-
ment, one of access to civilian nuclear technology.
India’s nuclear power generation capacity is dominated by
pressurised heavy water reactors (PHWRs). Worldwide develop-
ments in light water reactor (LWR) technology hold promise
for its adoption in new nuclear power plants in India through
55
SPECIAL ARTICLE
international cooperation. A LWR-based nuclear power plant
has been built at Koodankulam in Tamil Nadu through an
agreement with Russia. In order to achieve a nuclear power
generation capacity target of 20,000 MW by 2020, a more lib-
eralised access to LWR technology and fuel would be desirable.
In this direction, a major role is being played by the Nuclear
Suppliers Group (NSG) and leading countries in nuclear tech-
nologies. The Department of Energy (DAE) has signed memo-
randums of understanding with the United States (US), France,
Britain, Kazakhstan, and other countries to develop nuclear
power plants in India. The 123 Agreement in 2007 between the
US and India paved the way for furthering this cooperation.
These steps are expected to address constraints regarding
access to nuclear fuel and civilian nuclear technology in the
future. The large-scale deployment of civilian nuclear techno-
logy for electricity generation would also be influenced by its
economics, when compared with other sources.
In this context, it is important to evaluate the economics of
nuclear power generation using LWR technology in India. In
this article, we develop a financial model to evaluate the
economics of nuclear power generation under the emerging
scenario in the country. The model’s assumptions and input
parameters have a significant influence on the estimation of
the levelised cost of electricity (LCOE). The LCOE represents the
average unit cost of electricity over the life cycle of a power
plant, including all elements of cost during its construction,
operation, and decommissioning.
G
A number of studies on the economics of nuclear power have
been conducted in the context of developed countries. These
A
include MIT (2003, 2009), Du and Parsons (2009), de Roo and
Parsons (2009, 2011), and EMWG (2004). In the Indian context,
Bharadwaj, Tongia and Arunachalam (2006) and Bharadwaj,
Krishnan and Rajgopal (2008) discuss various fuel options for
M
generating electricity and the economics of nuclear power.
However, the approach and a number of key input parameters
used in their analyses lack clarity. This article uses the LCOE
approach, and attempts to overcome a number of limitations
of previous studies, especially in the Indian context. Our model
also incorporates the tax benefit of depreciation, often ignored
in previous studies.
This article considers India-specific parametric values for
taxes, depreciation, and return on equity. We also develop alter-
native scenarios over a range of parametric values for key inputs
such as overnight costs, fuel costs, operation and maintenance
(O&M) costs, cost of debt, discount rate, and return on equity.
The model results are compared with MIT (2003, 2009), Du
and Parsons (2009), de Roo and Parsons (2009), Bharadwaj,
Tongia and Arunachalam (2006), Bharadwaj, Krishnan and
Rajgopal (2008), and EMWG (2004). The methodology and the
financial model for LCOE are discussed in the next section.
Economics of Nuclear Power Generation
Due to the long construction period and high capital costs, the
cost of setting up a nuclear power plant is expected to be higher
than conventional power plants. Concerns about availability,
and the rising prices of coal and natural gas give rise to some
56
uncertainty for investors and buyers of electricity. Using data
available in IEA and OECD (2010), we estimate that the shares
of the cost of fuel in the LCOE for coal- and gas-based power
plants are 30.19% (23.95%) and 70.03% (64.20%), as compared
to 18.19% (11.62%) for nuclear power for a 5% (10%) discount
rate. About one-third of the fuel cost is due to the cost of
uranium. Uranium fuel, its enrichment, the waste fund, fuel
fabrication, and uranium conversion costs account for 35%,
35%, 17%, 9%, and 4% of the total fuel cost respectively
(ERI 2008, quoted in Kidd 2012). Thus, a variation in price of
uranium would not have a significant impact on the price of
power, thus lowering the risks associated with the same, as
compared with other thermal power technologies.
The economics of electricity generation from a technology
can be assessed in terms of the LCOE. We construct a financial
model to evaluate the LCOE for a 1,000 MW nuclear power plant
in India using LWR technology for once-through cycle (OTC)
and twice-through cycle (TTC) options.3 Based on a literature
E R
review, we discuss the assumptions regarding the choice of key
parameters, including overnight cost, construction schedule,
financial structure, fuel cost, O&M cost, decommissioning cost,
fuel reprocessing cost, tax benefits of depreciation, discount rate,
T
cost of insurance, disposal cost, inflation, cost of debt, return
on equity, depreciation, and interest during construction. We
Z
also construct scenarios for ascertaining the impact of change
on the major input parameters.
Levelised Cost of Electricity
The LCOE represents the average unit cost of electricity over
the life cycle of a plant. It is defined as the net present value
(NPV) of the total life cycle costs of the project divided by the
discounted quantity of electricity produced over the plant’s
lifetime (Equation 1).
LCOE =
where
PVcosts
DTE
PVcosts = Present value of life cycle costs
DTE = Discounted total quantity of electricity produced over
the plant’s lifetime.
...(1)
In this article, we consider a construction phase of five years
and an operational life of 60 years for a commercial nuclear power
plant.4 At the end of the operational life of a power plant, there
is a plant decommissioning phase. During the phase of con-
struction, the main costs are capital costs and interest during
construction. In the operational phase, the major costs5 pertain to
O&M, fuel, insurance, depreciation, and interest. Finally, during
the decommissioning phase, costs associated with decommis-
sioning of the nuclear power plant are incurred in order to
safely process, store, and dispose off the plant’s facilities.
We analyse two options for fuel cycles, OTC and TTC. In the
TTC option, additional costs are incurred because of the repro-
cessing plant. Its elements include capital costs, the O&M cost of
the reprocessing plant and storage facility, as well as their decom-
missioning. These are also considered. It is argued that the fuel
recycle option would impose an insignificant additional cost
on nuclear power (MIT 2009). This essentially indicates that the
MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
 SPECIAL ARTICLE

cost of fuel in the case of recycling is only marginally above the ­ 5 (K t  IDC t ) TTC
½
OM F OM_R t
once-through case. Apart from economics, a number of factors °¦ t 1 t  ¦ t656 t t  ¦65t 6 t t  ¦70t 11 t °
(1  r) (1  r) (1  r) (1  r)
would determine the choice between the two options. These ° °
° 70 t 75 t 65 TDep °
° ¦ t 11 DFt / 1  r   ¦ t 16DF_R t / 1  r   ¦ t 6 (1  r) t
t
include concerns regarding proliferation, safety of disposal, secu- °
® ¾
rity of the fuel supply, and public acceptance. Our analysis focuses ° 70 TDep_R t ROE COD DECOM t °
only on economic criteria. A costly fuel cycle may be selected if ° ¦ t 11 t
 ¦65t 6 tt  ¦17t 6 tt  ¦ t 71 t °
(1  r) (1  r) (1  r) (1  r)
° °
issues other than economics dominate the policy decision. °  ¦ t 76 DECOM_R t / (1  r) t °
LCOE TTC ¯ ¿
Disposal costs associated with spent fuel depend on the nature 65 t
¦t 6 U t / (1  r)
...(3)
of fuel recycling. An OTC does not involve fuel reprocessing. A
TTC must consider the cost of reprocessing and the recovery of where,
fuel. The life cycle cost of electricity considers various elements, Kt = Capital cost (overnight cost) incurred during construction;
including capital cost (Kt), interest during construction (IDCt),  t = 1–5
O&M cost (OMt), fuel cost (Ft), disposal cost of spent fuel (DFt), IDCt = Interest during construction;  t = 1–5
the return on equity, cost of debt (CODt), tax benefit of depre- OMt = O&M cost of power plant;  t = 6–65
ciation (TDept), reprocessing cost (OM _ R t) and the cost of OM_R t = O&M cost of reprocessing plant;  t = 11–70
decommissioning cost (DECOMt). Since each of these are in- ROEt = Return on equity;  t = 6–65
curred over the lifetime of the plant, these are discounted at CODt = Cost of debt;  t = 6–17
an appropriate discount rate to arrive at their present values. FtOTC = Fuel cost for OTC;  t = 6–65
The LCOE for the OTC and TTC options are defined as

­ 5 (K t  IDC t )
°
°
®
¦t 1
(1  r)
t
OM F
OTC
 ¦ 65t 6 t t  ¦ 65t 6 t t  ¦ 70t 11 t t °
(1  r) (1  r)
DF ½

(1  r) °
¾
R
FtTTC = Fuel cost for TTC;  t = 6–65
DFt = Disposal cost of spent fuel;  t = 11–70

E
DF_Rt = Disposal cost of reprocessed spent fuel (MOX);  t = 16–75
TDept = Tax benefit of depreciation for nuclear power plant;

T  t = 6–65
° ¦ 65 TDep t  ¦ 65 ROE t  ¦17 COD t  ¦ DECOM t °
t 6 t t 6 t t 6 t t 71 t
°
¯ (1  r) (1  r) (1  r) (1  r) °
¿
LCOEOTC 65 t
TDep_R t = Tax benefit of depreciation for reprocessing plant;

Z
¦t 6 U t / (1  r) ... (2)  t = 11–70
Table 1: Values of Input Parameters
Studies/Parameters Overnight Yearly Reprocessing Fuel Cost O&M Cost Decommis- IDC Income Tax Inflation/ Discount Cost of Return on

G
Costs Construction Plant Cost (cents/kWh) (cents/kWh) sioning Escalation Rate Rate Debt Equity
($/kW) Schedule (%) (mills*/kWh) Costs ($/kW)
MIT (2003) 2,000 9.5, 25, 31, — 0.5–0.6 Fixed: 350 — 37% 3% inflation, 7.8% — 15%

A
25, 9.5 $56/kW/year 1% O&M weighted nominal
Variable: real escalation, average ROE
0.42 mills/ 0.5% fuel cost of
kWh real escalation capital
(WACC)

M
MIT (2009) 4,000 9.5, 25, 31, — 0.69 Fixed: 700 — — — 7.8% — 15%
25, 9.5 $56/kW/year WACC nominal
Variable: ROE
0.42 mills/kWh
Du and Parsons (2009) 4,000 9.5, 25, 31, — 0.69 0.77 700 — 37% 3% inflation, 7% — 15%
25, 9.5 1% O&M WACC nominal
real escalation, ROE
0.5% fuel
real escalation
de Roo and Parsons (2009) 4,000 9.5, 25, 31, — 0.69 0.77 700 — — — 10% — 15%
25, 9.5 WACC nominal
ROE
Bharadwaj, Krishnan and 2,000– 25, 25, 20, — 0.35 1.49 100 20% of — — — — 10%
Rajgopal (2008) 3,000 20, 10 capital nominal
cost WACC
Bharadwaj, Tongia and 1,300 — 0.50 0.60 100 25% of — — — — 10%
Arunachalam (2006) capital nominal
cost WACC
EMWG (2004) 2,262 10, 25, 30, — 0.40 0.86 300 $372 38.90% — 5% 7.4% 12%
25, 10 million WACC ROE
Present article 3,000 10, 25, 30, 2.103** 0.65 0.85 340 $324.05 33.99% 3% inflation, 10.19% 8% 23.48%
25, 10 million 1% O&M (CERC) ROE on
real escalation, pre-tax
0.5% fuel basis
real escalation estimated
using a
base rate
of 15.5%
*A mill equals one-tenth of one US cent. ** Schneider et al (2009).

Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 57
SPECIAL ARTICLE
decomt = Decommissioning cost of nuclear power plant; t = 71
decom_Rt = Decommissioning cost of reprocessing plant; t = 76
Ut = Total quantity of electricity produced;  t = 6–65
r = Discount rate.
The fuel cost (Ft) differs across the OTC (FtOTC) and TTC
(FtTTC) options as a smaller amount of fresh nuclear fuel is
required in the case of the latter. In Equations (2) and (3), it is
important to note the time associated with each cost component
as they appear during the lifetime of a project. The range of
values for various input parameters that go into determining
the LCOE as per Equations (1) and (2) are discussed in the next
section, and also the input parameters based on a literature
review. The LCOE is estimated in terms of the 2010 dollar.6
Input Parameters for the LCOE
The LCOE is significantly influenced by input values for key
parameters in Equations 2 and 3. Based on a detailed review
of the literature, we choose appropriate values of these
parameters for the analysis (Table 1, p 57). Adequate adjustments
have been made for changes in price levels and expected
inflation. We account for the existing fiscal and regulatory
environment in India to choose an appropriate tax rate, cost of
debt, rate of depreciation, and discount rate. The following
subsections present a discussion on values for key input
parameters for evaluating the LCOE.
Overnight costs: The capital costs—or overnight costs—are in-
G
curred during the construction of various facilities of a plant.7
The overnight costs include the cost of equipment as well as
A
construction of the plant and associated facilities. Other than
the cost of engineering, procurement and construction, there are
additional costs, such as interest during construction (IDC), which
are not part of overnight costs, and are considered separately.
M
We can observe from Table 1 that the estimates of overnight
costs (that is, without interest charges and financing costs)
adopted by previous studies vary widely, between $1,300 and
$4,000/kW. In the Indian context, Bharadwaj, Tongia and
Arunachalam (2006) use a much lower capital cost of $1,300/
kW, which was updated to $2,000–$3,000/kW by Bharadwaj,
Krishnan and Rajgopal (2008). While capital costs are expected to
reduce due to learning benefits and innovative designs of reactors,
an increase in material cost and additional safety measures may
lead to their increase. We assume a base case overnight cost to
be $3,000/kW at 2008 prices. Given a range of cost estimates
and the concerns about cost increases, we construct alterna-
tive scenarios for a range of capital costs between $1,950/kW
and $4,050/kW with an increment of $150/kW. The overnight
cost is appropriately adjusted with a 3% per annum rate of in-
flation to express these in 2010 prices. The costs of construc-
tion are distributed over a five-year construction phase.
Table 1 provides a year-wise investment schedule during the
construction period. Our assumptions for the same are largely
in line with the literature. A delay in construction would fur-
ther increase the cost of generation. A change in exchange rate
on capital costs would imply a change in overnight cost. This is
further discussed with the results of a sensitivity analysis.
58
Reprocessing plant cost: For a TTC nuclear power plant, we
assume that the spent fuel produced by uranium-fuelled LWRs
will be reprocessed. We further assume that the construction
of the first reprocessing plant and related interim storage
facilities begins in 2010. The estimated construction time of
a reprocessing facility is about 10 years. The overall cost of
reprocessing spent fuel generated includes the capital cost
of the reprocessing plants, Table 2: Cost of Reprocessing
O&M costs of the reprocessing Phase Cost
(mills/kWh)
plants, capital cost of the in- Reprocessing plant—
terim spent fuel storage facil- construction 0.664
ities, O&M cost of the interim Reprocessing plant—O&M 1.136
storage facilities, and cost of Storage capacity—
construction 0.174
decommissioning of the re-
Storage—O&M 0.096
processing and related facili-
Reprocessing plant—
ties. The discounted unit costs decommissioning 0.033
for these elements are shown Total 2.103
in Table 2.8 Due to the lack of Source: Schneider et al (2009).
R
alternative data, we rely on these estimates and appropriately
adjust these to current price levels.
E
Cost of fuel: The major credential of nuclear energy is its lower
T
fuel costs as compared to coal-, oil-, and gas-fuelled power
plants. Nuclear energy is considered a clean energy option as
Z
far as carbon emissions are concerned. The important issues in
the analysis of the nuclear fuel cycle are waste management
of the spent fuel and its safe disposal. For our analysis, fuel
bundle cost is taken as $2,300/kg which is close to $2,346/kg
for 2007 given by WNA (2009). The fuel cycle cost is then esti-
mated assuming a fuel requirement of 2.77 kg/gigawatt-hour
(gWh). An escalation of 0.5% is assumed between 2007 and
2010. Table 1 presents a comparative analysis of per unit fuel
cost according to various studies.9
Operations and maintenance costs: The O&M costs in a
nuclear power plant depend on the nuclear reactor technology,
the size of the power plant, and the nuclear power plant’s life.
The choice of base values for O&M costs is based on the litera-
ture (Table 1). Those are subjected to sensitivity analysis in
later sections.
Tax benefits of depreciation: This article explicitly uses capi-
tal cost, including IDC in the analysis. Hence, a separate treat-
ment of depreciation is not required. However, the fact is that
depreciation provides a tax shield; it must be explicitly consid-
ered in the financial modelling. To estimate the LCOE, capital
assets are depreciated as per the applicable tax accounting
laws in that country. MIT (2003, 2009), Du and Parsons (2009),
and de Roo and Parsons (2009) use a 15-year Modified Acceler-
ated Cost Recovery System (MACRS) depreciation schedule.
Comparatively, some of these studies use a 20-year MACRS
depreciation schedule for coal power plants, even though
both coal and nuclear power plants are assumed to have a
plant life of 40 years each. In the present study, we assume that
the regulatory environment for commercial nuclear facilities
in the future may allow a reasonable return and appropriate
MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly

depreciation in a manner similar to that laid out by the Central
Electricity Regulatory Commission (CERC). Depreciation is
calculated annually based on a straight-line method using a
rate of depreciation of 5.28% per annum as specified by CERC
(2009). This is applied for a period of 12 years and, after that,
90% of the remaining value is spread over the remaining use-
ful life of the plant. Previous studies in the Indian context
(Bharadwaj, Tongia and Arunachalam 2006; Bharadwaj,
Krishnan and Rajgopal 2008) do not elaborate treatment of
depreciation or the tax benefit thereof.
Cost of decommissioning: There is a wide variability across
countries, utilities, and reactor sites on various aspects of
decommissioning. Although some of the differences are phys-
ical (like the type and size of reactor), others relate to decom-
missioning strategies and the way decommissioning costs are
estimated and financed. Table 1 reports decommissioning
costs used in previous studies. We have considered a decom-
missioning cost of $340/kW. In practice, an annual levy
linked to electricity production is used to finance the costs
of decommissioning.
Interest during construction: The IDC is the interest that ac-
crues on the amount borrowed to finance capital costs during
Z
the period of construction. As there is no operational income
during construction, this amount is included in the cost of cap-
ital, thereby raising the final debt, equity contributions, and
G
total capital cost. For a nuclear power plant having a construc-
tion period of five to seven years, this cost could be substantial
A
and needs to be accounted for. Based on the CERC estimates, we
calculated the IDC to be $324.05 million as per a loan disbursal
schedule during the construction phase. EMWG (2004) considered
an IDC component of $372 million. Bharadwaj, Krishnan and
M
Rajgopal (2008) regarded 20% of the capital cost as IDC with
a five-year construction period and Bharadwaj, Tongia and
Arunachalam (2006) considered 25% of the capital cost as IDC.
Income tax: The power sector in India is provided with a tax
holiday of 10 years, which is considered to begin with the first
year of operations. This policy is expected to be available for
new investment in nuclear power generation as well. MIT
(2003) and Du and Parsons (2009) use a tax rate of 37%. A tax
rate of 38.9% is considered in EMWG (2004). In our analysis, a
tax rate of 33.99% (including surcharge) is considered as per
CERC (2009). Previous studies in the Indian context do not
elaborate on the tax rate used, if any.
Inflation and escalation rates: Inflation influences project
costs due to the long period of construction over which capital
costs are incurred. As per MIT (2003), the overnight cost is
estimated to be $2,000/kW at 2002 prices, and $4,000/kW at
2007 prices, a twofold rise during the period. A part of the
increase in the cost of the plant may be attributed to inflation
while a part can be attributed to improvements in design and
specification. MIT (2003) and Du and Parsons (2009) assume a
3% inflation rate, 1% real escalation in O&M, and 0.5% real
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10
SPECIAL ARTICLE
escalation in fuel for the analysis. We adopt the same in
the present work.
Discount rate: The present value of costs across the years is
estimated by discounting these at an appropriate discount rate.
The discount rate chosen for the analysis depends on the capital
cost of the project, its risk profile, and that of the country of
investment. Du and Parsons (2009) and de Roo and Parsons
(2009) use a 7% and 10% rate of discount respectively. MIT
(2003, 2009) uses a 7.8% weighted average cost of capital (WACC)
to evaluate the present value of unlevered after-tax cash flows.
EMWG (2004) uses a 5% discount rate in the study of generation IV
reactor systems. Previous studies in the Indian context consider
a 10% WACC as the rate of discount. In the Indian context, the
CERC specifies a 10.19% rate of discount to be used for evaluation
of price bids received for new plants. This rate would be an ap-
propriate one to be used for discounting in our analysis.
R
Cost of debt: Given the high capital costs of nuclear power
plants, investor’s equity is supported through substantial debt.
E
For a typical power plant, a 70:30 debt-to-equity ratio10 is often
assumed for analysis in the Indian context, and is also gener-
T
ally allowed by power sector regulators on a normative basis.
EMWG (2004) considers a 7.4% cost of debt. Previous Indian
studies (Bharadwaj, Tongia and Arunachalam 2006; Bharad-
waj, Krishnan and Rajgopal 2008) also assume a 70:30 debt-
to-equity ratio. However, these studies do not clearly specify
the cost of debt used in the analysis. Long-term cost of debt is
assumed to be 8% in this study, as prescribed by CERC regula-
tions. Due to high capital costs, the repayment of loans often
extends for a long period. We assume an annual loan repay-
ment over 12 years, starting with the first year of operation.
Return on equity: We assume that the cost of regulation
framework may be adopted for the nuclear power sector and
that it may derive basic principles from those prevalent in the
power sector as per relevant CERC regulations. Accordingly, we
use a 23.48% return on equity (ROE) on a pre-tax basis, esti-
mated by using a base rate of 15.5% as per the rate applicable
in the power sector (CERC 2009). Given the varying risk assess-
ment by investors, we develop alternate scenarios for a range
of returns on equity. MIT (2003, 2009), Du and Parsons (2009),
and de Roo and Parsons (2009) use a 15% nominal ROE, whereas
EMWG (2004) is based on a 12% ROE. Bharadwaj, Tongia and
Arunachalam (2006) and Bharadwaj, Krishnan and Rajgopal
(2008) use a 10% nominal WACC.11
Base Case LCOE Estimates
The value of key input parameters in Equations (2) and (3)
have a significant influence on the estimation of the LCOE for a
LWR-based nuclear power plant in India. The base values of all
input parameters arrived at after the above literature review
are summarised in Table 3. The expected plant load factor
(PLF) of 85% determines the amount of electricity produced
and sold to the grid. The cost of fuel duly accounts for fuel
reprocessing, if any. The estimation of the fuel cost takes into
59
SPECIAL ARTICLE

account the cost of fabricated fuel assemblies, burn-up rate,
and cost of refuelling. Cost escalation and inflation are also
duly accounted for various cost elements across time.
It is assumed that the capital cost of a plant is financed
through investors’ equity, and borrowings from banks and
financial institutions. The interest cost during construction is
calculated on the amount of loan disbursed. Banks and finan-
cial institutions often charge up to 2% of the loan amount as
financing fees, which include commitment fees, legal fees, etc.
We assume that such costs are built into the interest cost on
the loan given by the lenders. Investors seek returns on the
equity invested in the project. We assume that in the near
future, the regulatory approach for tariff determination for
nuclear power plants may follow the rate of return regulation
approach adopted by power sector regulators like the CERC.
Accordingly, the financial approach and values of some of the
key parameters are based on the CERC’s “Terms and Conditions
of Tariff Regulations, 2009” (CERC 2009). The cost of insurance is
assumed to be 1% of the total investment. In order to estimate
Table 3: Input Parameters and Their Base Values
Parameter
Capacity (MW)
Base Values
1,000
the present value of total costs for each year of the life of the
plant, a discount rate of 10.19% is used. We use a 3% rate of
inflation and 1% escalation rate during the project’s lifetime.
Based on the above base values of input parameters, the
LCOE for OTC and TTC were estimated as per Equations 1 and 2
respectively. Table 4 provides the estimated base values of
LCOE along with those estimated by previous studies.
The base case, estimated values of the LCOE are 13.93 cents/
kWh and 14.13 cents/kWh for the OTC and TTC options respec-
tively. These estimates are higher than those reported in the
literature. The reasons for the higher estimates by this study
are highlighted below.12 One should also note that the current
estimates are in 2010 prices and hence, take into account infla-
tion and escalation over historical estimates, both of which
result in an increase in capital costs and, hence, also lead to
higher interest burden on debt raised to finance the project.
Given the increase in the cost of key inputs such as steel
and cement, one would expect such escalation in the cost of
R
construction of a nuclear plant. Further, cost escalations and
inflation are built into fuel cost as well as capital cost related to

E
fuel reprocessing, and decommissioning costs. The high cost
of financing and rate of return in the Indian context would

T
Plant load factor (%) 85 mean that the cost of electricity generated from a privately
Capital cost ($/kW) 3,000 owned commercial nuclear plant would be high. In the case of

Z
Capital cost of reprocessing plant ($/kW) 968.01 publicly owned nuclear plants, a lower rate of return on equity
Plant O&M cost (cents/kWh) 0.85
may be acceptable to the government and this can bring down
O&M cost of reprocessing plant (cents/kWh) 0.11
the LCOE to some extent.

G
Fuel cost (cents/kWh) 0.65
Decommissioning cost ($/kW) 339.84
Sensitivity Analysis
Inflation rate (%) 3

A
O&M escalation rate (%) 1 To account for the uncertainty associated with key input
Fuel cost escalation rate (%) 0.5 parameters, we undertake a sensitivity analysis to evaluate
Tax rate (%) 33.995 the impact of various aspects of uncertainty on the LCOE. We
Debt-to-equity ratio 70:30 construct independent scenarios for a range of values for the

M capital cost, discount rate, fuel cycle cost, O&M cost, and ROE.
Debt rate (%) 8
Return on equity (%) 23.48 A range of ±35% around the base value for a particular input
Discount rate (%) 10.19 parameter is used to develop these scenarios. The results for
Annual construction schedule for investment (%) 10, 25, 30, 25, 10
the LCOE for OTC and TTC are given in Figures 1 and 2 (p 61)
Interest during construction (%) 8
respectively. The values plotted in the figures represent the
Depreciation rate (%) 5.28*
corresponding LCOE for the range of values for each of the six
Plant life (years) 60
Base year 2010
key parameters while all other parameters are kept constant at
* Based on a straight line method. their base values. The estimated range of LCOE widens on the
lower as well as on the higher side if we consider more than
Table 4: Levelised Cost of Electricity for OTC and TTC
Studies LCOE—OTC (cents/kWh) LCOE—TTC (cents/kWh) one parameter for sensitivity analysis. For example, in the case
MIT (2003) 6.70 (in 2002 dollars)# – of lower capital cost as well as low financing cost, the estimat-
MIT (2009) 8.40 (in 2007 dollars) – ed LCOE would be lower than the estimated lower range values
Du and Parsons (2009) 7.53 (in 2007 dollars) 7.69 (in 2007 dollars) of the individual scenarios. The corresponding range of values
de Roo and Parsons (2009) 7.53 (in 2007 dollars) 7.69 (in 2007 dollars) for the above-mentioned independent scenarios is given in
Bharadwaj, Krishnan and Tables A1 and A2 in the appendices (p 64).
Rajgopal (2008) 10.12–13.871 –
A change in capital cost has the largest impact on the LCOE.
Bharadwaj, Tongia and
Arunachalam (2006) 5.461 – A competitive capital cost of $1,950/kW gives an LCOE of 10.79
EMWG (2004) 3.04 (in 2002 dollars) – (10.99) cents/kWh for the OTC (TTC). A higher capital cost of
Present study 13.93 (in 2010 dollars) 14.13 (in 2010 dollars) $4,050/kW gives an LCOE of 17.06 (17.27) cents/kWh for the
` 9.05/ kWh1 ` 9.18/kWh1 OTC (TTC). A high capital cost also leads to a greater need for
`7.66/ kWh2 `7.77/kWh2 debt and equity financing, and a high IDC. This, coupled with
# The LCOE is expressed in the monetary values of the year mentioned in parentheses.
1 `65 per dollar.
high interest costs and high ROE, increases the LCOE. Unless
2 `55 per dollar. competitive bidding for nuclear power brings down the capital
60 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
 SPECIAL ARTICLE
Figure 1: Sensitivity Analysis for LCOE, Once-through Cycle Figure 2: Sensitivity Analysis for LCOE, Twice-through Cycle
18 18
Cost of electricity (cents/kWh)

Cost of electricity (cents/kWh)

17 17
16 16
15 15
14 14
13 13
12 12
11 11
10 10
-35 -30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 35 -35 -30 -25 -20 -15 -10 -5 0 5 10 15 20 25 30 35
% Change in Input Parameters % Change in Input Parameters
Overnight Cost ROE Discount Rate Overnight Cost ROE Discount Rate
Fuel Cost (OTC) O&M Cost (Excluding Reprocessing) Cost of Debt (TTC)
Fuel Cost (OTC) O&M Cost(Excluding
O&M Cost (Including Reprocessing)
Reprocessing) Cost of Debt
The O&M cost excludes the cost of reprocessing. The O&M cost includes the cost of reprocessing.

cost, and the sector receives financial incentives and support rely on domestic coal have also been awarded at even lower
as in the case of renewable energy, the cost of power for new tariffs than those based on imported coal. In comparison, the
nuclear power plants may turn out to be on the higher side. estimated LCOE for LWR-based nuclear power plants is expect-
An adverse change in the exchange rate would give rise to a ed to be on the higher side.
significant increase in the cost of capital. The sensitivity analysis Some of the competitively bid power projects listed in Table 5
captures an impact of an increase of up to 35% in overnight are now facing serious problems due to fuel supply issues and a
cost. This increase could be on account of a change in the over- significant rise in the cost of fuel, especially in the case of
night cost itself and/or the depreciation of the rupee to that plants based on imported coal. Significant increase in landed
extent.13 One can interpret the results of the sensitivity analysis of cost of imported coal has led some these project developers to
overnight cost as an impact of change in the exchange rate. seek an increase in “competitively” bid tariffs.
The adverse effects of the depreciation of the rupee could be Table 5: Tariffs of Thermal UMPPs in India
addressed to some extent with a higher domestic share in the Project Sasan Power Coastal Krishnapatnam Tilaiya
supply of capital equipment and components. Ltd Gujarat Project Power Project
Power Ltd
The impact of the exchange rate on the cost of imported fuel Company Reliance Tata Power Reliance Reliance
can be interpreted as an increase in the fuel cost per se. Given Power Power Power

the low share of fuel cost in the LCOE, this impact would be Quoted price (`/kWh) 1.20 2.26 2.33 1.77
Capital cost (` billion) 18.342 17 16 16–18
very minimal. The impact of the exchange rate on foreign debt
Cost per MW (` million) 46.3 42.5 40 40–45
is not expected to be significant as most of the foreign debt
Date of commercial May August September –
may be used towards the import of capital equipment. The operation 2013 2012 2013
impact on interest payments on foreign debt would also depend Fuel source Domestic Imported Imported Domestic
on the scale of depreciation/appreciation of the rupee during coal coal coal coal
Source: Compiled by the authors.
the course of payment.
As discussed above, the construction of nuclear power The tariffs of existing nuclear power plants as approved by
plants often experiences delays leading to higher costs of the the Department of Atomic Energy (DAE) are reported to be
project, thereby increasing the cost of electricity produced `2.42/kWh on average, with `0.94/kWh for the oldest plant
from such plants. By evaluating the impact of delaying com- and `3.4/kWh for recently commissioned plants. The average
missioning of nuclear power plants, we constructed scenarios nuclear power tariff is reported to be `2.71/kWh for 2013–14
for eight-year and 10-year construction periods. The LCOE is (DAE 2015). Such low tariffs are a result of hidden subsidies,
estimated to be 16.23 cents/kWh and 17.85 cents/kWh respec- as discussed below. Some of the plant-specific tariffs are given
tively for the base-level cost and operational parameters. This in Table 6 (p 62).
clearly highlights the enhanced risk for investment in nuclear A study by Raju and Ramana (2013) of the six European
power plants. Buyers of electricity, that is the utilities, may be Pressurised Reactors (EPRs) from Areva to be installed at Jaita-
safeguarded from this risk by providing for a fixed construc- pur, Maharashtra, finds that the levelised tariff15 for the EPRs
tion period while determining the electricity tariff in power to be `12.32/kWh for a 40-year period, with an overnight cost
purchase agreements. of $4,000/kW. The first-year tariff was calculated at `15.03/
kWh. This is higher than the estimate in this article.
Outlook for Nuclear Power The economic disadvantages of nuclear power are partially
The results presented in the previous section are further dis- redeemable if one considers the equivalent cost of carbon
cussed in comparison with tariffs discovered for coal-based emitted from burning fossil fuels in thermal power plants.
thermal power generation. Some of the coal-based ultra mega However, this still does not make the cost comparable, and
power projects (UMPPs) have been awarded at a much lower nuclear power seems to be an expensive option. Even if one
levelised cost to buyer utilities.14 Table 5 provides details with considers the relative scarcity due to the limited available
respect to some of the coal-based UMPPs. Power projects that resources of fossil fuels in the country, the same is argued for
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 61
SPECIAL ARTICLE

uranium-based nuclear power. LWR-based plants would rely
on imported uranium. The low share of fuel cost in the case of
nuclear power provides some comfort. Renewable energy,
which neither leads to direct carbon emissions nor entails fuel
imports, clearly seems to score over nuclear power. The cost of
electricity production from renewable sources is competitive
when compared with the one estimated for nuclear power in
this article. A conducive policy and regulatory environment
has led to a growth in renewable energy capacity. This is ex-
pected to grow further in future and dwarf the share of nucle-
ar power. While a host of fiscal incentives lower the cost of re-
newable energy, the Electricity Act, 2003 mandates the pro-
curement of electricity by distribution utilities from such
sources (Singh 2009, 2010b). Consequently, the electricity pro-
duced from renewable energy sources is procured at rates
higher than conventional power.
Table 6: Nuclear Power Tariffs in India
on hydro- and open-cycle gas turbines. The falling cost of solar
power is showing encouraging results with grid-connected
solar PV capacity reaching 16,070 MW by the end of December
2017 (MNRE 2018). Given the targets under the JNNSM, the
share of solar energy generation may soon surpass that of
nuclear energy.
While the economics of nuclear energy seems to be fast los-
ing ground to solar PV, the ability of the former to meet the
baseload requirements of a grid remains its only technical ad-
vantage over the latter until cost-effective and environment-
friendly storage solutions are in place. Further, worries about
nuclear safety, especially after the Fukushima accident of
March 2011, raises additional concerns for nuclear power in
the short run. Concerns regarding the high cost of nuclear
power are accentuated by the expected cost of damages arising
from low-probability catastrophes. From an investor’s point of
view, unlimited liability for such accidents would further raise
the cost of power. To safeguard the investor’s interests, such

R
Plant Tariff Lifetime Plant Load Date of First Grid
(`/kWh) Factor (up to 2014) (%) Connection costs are socialised by the government in case such an event
Kaiga-1 2.79 69.3 12 October 2000
takes place. As per the Civil Liability for Nuclear Damage Act,

E
Kaiga-2 2.79 68.9 2 December 1999
2010, the operator’s liability is limited to `15 billion per nuclear
Kaiga-3 – 58.0 11 April 2007
incident for nuclear reactors having a thermal power equivalent

T
Kaiga-4 – 71.8 19 January 2011
Kakrapar-1 2.04 63.5 24 November 1992
of 10 MW or above, while the maximum liability per nuclear
Kakrapar-2 2.04 74.1 04 March 1995 incident has been capped at the rupee equivalent of 300 million

Z
Madras-1 1.81 51.4 23 July 1983 special drawing rights.
Madras-2 1.81 55.1 20 September 1985 The historical costs of nuclear power generation in India
Narora-1 1.91 53.0 29 July 1989 using the PHWR technology are lower than LWR technology,

G
Narora-2 1.91 56.6 5 January 1992 and the approved tariffs for the former are comparable to oth-
Rajasthan-1 – 18.7* 30 November 1972 er conventional sources (Table 6). As this study suggests, the
Rajasthan-2 2.79 55.1 1 November 1980

A
same may not hold true for new nuclear plants based on LWR
Rajasthan-3 2.79 75.6 10 March 2000
technology. Given the low average cost of power procurement
Rajasthan-4 2.79 77.4 17 November 2000
by power utilities and the comparatively low cost of some of
Rajasthan-5 – 92.9 22 December 2009
the recent power projects, the high LCOE estimates reduce the

M
Rajasthan-6 – 77.7 28 March 2010
Tarapur-1 0.97 63.1 1 April 1969
economic attractiveness of LWR-based nuclear power plants in
Tarapur-2 0.97 63.7 5 May 1969 the present context. Given the precarious financial state of
Tarapur-3 2.65 73.6 15 June 2006 electricity utilities, their ability to absorb a significant amount
Tarapur-4 2.65 60.9 4 June 2005 of baseload nuclear power is questionable, and this would
Koodankulam-1 3.88 40.0* 22 October 2013 place additional pressure of raising consumer tariffs.
* Up to 2015. However, growing fuel shortages, of coal as well as natural
Sources: IAEA (2016); DAE (2015).
gas, and the prevailing power shortages, may justify nuclear
Electricity from solar power plants is purchased at signifi- power to be part of the country’s long-term energy basket. Power
cantly higher rates which, however, are declining as the tech- shortages have seen the average price on the power exchanges
nology matures, and due to increased competition in the to reach `7.49/kWh in 2008–09, subsequently falling to
supply of solar photovoltaic (PV) modules. In December 2010, `3.57/kWh in 2011–12 (CERC 2012) and `2.72/kWh in 2015–16
NTPC Vidyut Vyapar Nigam Ltd received solar PV bids under (CERC 2016). Even though short-term market prices did breach
the Jawaharlal Nehru National Solar Mission (JNNSM) averag- the two-digit barrier on numerous occasions in the past, it
ing `12.16/kWh against a reference price of `17.91/kWh. Solar does not reflect the price of baseload power, which is expected
thermal bids averaged `11.48/kWh against a reference price of to be served by nuclear power plants. We can conclude that
`15.31/kWh. Recent bids for solar PV-based power plants dis- unless there are sufficient and justifiable financial incentives,
covered a low of `4.63/kWh (in November 2015) for a 500 MW power generation from LWR plants will remain an expensive
capacity plant in Andhra Pradesh, and `4.34-`4.36/kWh (in proposition, especially if this power is ultimately purchased by
January 2016) for a 420 MW capacity plant in Rajasthan. Grid financially weak distribution utilities across the country. The
integration and reliability of supply pose some technical chal- commercial aspects and operational experience of the LWR-
lenges to the growing share of renewable energy. This can be based plant at Koodankulam, which began operations in 2014,
addressed to some extent by improved forecasting of variable should shed more light on the economics of LWR plants once
renewable energy, and a reasonable share of capacity based reliable cost-related data is available.16
62 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
 SPECIAL ARTICLE

Due to the high cost, and the risk of low-probability catastro-
phes, governments often provide direct or indirect subsidies
for nuclear power development. Koplow (2011) identifies and
discusses various subsidies in the nuclear industry for investor-
owned utilities (IOUs) and publicly owned utilities (POUs) in the
US. The study estimates that subsidies for existing reactors
are 0.74–4.16 cents/kWh and 1.53–5.77 cents/kWh for IOUs
and POUs respectively. The subsidies for new reactors are
estimated to be 5.01–11.42 cents/kWh and 4.20–8.68 cents/kWh
respectively. In the Indian context, Ramana (2007) identifies
subsidies to the heavy water used in PHWR. Such indirect
subsidies are often part of the government support to the
sector. He mentions subsidies to the extent of `12,000/kg being
offered. The high estimated cost of nuclear power generation
would dissuade investors and buyers of electricity in the
absence of adequate financial subsidies or incentives. Fiscal
incentives and custom duty waivers have often been used to
make investment attractive in the power sector. Given that the
growth in renewable energy has been supported with signifi-
cant incentives, a case for policy support for nuclear energy
may not be ruled out. However, the environmental and safety
issues with nuclear energy would tilt the balance in the long-
agreement between the governments of the US and India were
aimed at increasing private and public investments to establish
LWR nuclear power plants on a commercial basis. The com-
mercial attractiveness and the ability of the power sector to
absorb LWR-based nuclear power would be guided by the
economics of the same.
This article develops a model to estimate the levelised cost of
electricity for the OTC and TTC options using LWR technology.
It considers all the major cost components, including fuel cycle
cost, reprocessing costs, and decommissioning. In doing so, we
also consider financial components such as interest during
construction, financing costs, the tax benefits of depreciation,
and return on equity. Assumptions for various input parameters
are supported with a review of the literature. The base case
LCOE is estimated to be 13.93 cents/kWh and 14.13 cents/kWh
for OTC and TTC respectively. A sensitivity analysis allows for a
range of values around the base values of key input para-
meters. We find that the LCOE is significantly affected by the

E R
discount rate, capital costs, and ROE. Further research may
explore the impact of a change in operating conditions as well
as the exchange rate.
A long-term energy security perspective may justify nuclear

T
term in favour of renewable energy.17 power to be a part of the energy basket of the country. This
may, however, be overshadowed by the rapid development of

Z
Conclusions renewable energy sources. Project costs of LWR-based nuclear
The Indian economy is poised to continue to grow in the near power plants can be reduced through indigenisation and
future, thus increasing the demand for electricity. Historically, cheaper financing, leading to a lower cost of electricity genera-

G
nuclear power has played a limited role in meeting the elec- tion. Unless there are sufficient and justifiable financial incen-
tricity needs of the country. Concerns about limited resources tives, the high cost of electricity generated through LWR-based

A
of fossil fuels and their environmental hazards have led to an
emphasis on expanding the role of nuclear power in the coun-
try. This is being facilitated through international coopera-
tion. Developments in India towards the civilian nuclear
nuclear plants would make it challenging for the financially
weak distribution utilities to absorb a large proportion of this
costly power and pass on the same through higher tariffs to
the consumers.

Notes

M
1 A detailed account of power sector reforms in
India and the evolving market structure can be
found in Singh (2006, 2010a).
2 While renewable energy sources (RES) offer
advantages in terms of lower direct environ-
mental impacts, their dependence on nature
6 This article considers costs in dollar terms;
some proportion of the costs would also be
incurred in the local currency though. A depre-
ciation in the value of the rupee against the

EPW E-books
dollar would lead to a further hike in the LCOE
as most of the cost components (such as
capital equipment and fuel imports) would be
denominated in dollars. It is also likely that a

also imposes technical challenges for system

integration and operation, if RES are to garner Select EPW books are now available as e-books in Kindle and iBook (Apple) formats.
a higher share in the future. Improved weath-
er forecasting tools and load management The titles are
can help the integration of a larger share of
renewable energy in the power system in 1. Village Society (ED. SURINDER JODHKA)
the future.
(http://www.amazon.com/dp/B00CS62AAW ;
3 Fuel cycles involving the direct disposal of the
spent fuel are called once-through cycle https://itunes.apple.com/us/book/village-society/id640486715?mt=11)
(OTC) and those involving reprocessing of the
spent fuel are referred to as twice-through 2. Environment, Technology and Development (ED. ROHAN D’SOUZA)
cycle (TTC).
4 Given that the construction of nuclear plants in
(http://www.amazon.com/dp/B00CS624E4 ;
India and elsewhere are often marred by de- https://itunes.apple.com/us/book/environment-technology-development/
lays, we optimistically use a five-year construc- id641419331?mt=11)
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project delays, our estimates of the LCOE (http://www.amazon.com/dp/B00CS622GY ;
would be optimistic as well. Results presented
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that consider delays in construction.
5 Costs due to provision for contingencies are Please visit the respective sites for prices of the e-books. More titles will be added gradually.
assumed to be included in the capital cost.

Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 63
SPECIAL ARTICLE
part of the loan may be in a foreign currency.
Thus, interest costs would also have a dollar
component.
7 We do not explicitly consider capacity derating
and costs of refurbishments in future. We
thank a reviewer for pointing this out. If these
aspects are considered, the estimated LCOE for
LWR technology would be even higher than the
levels estimated in this article.
8 This article does not consider the loss of fuel
during reprocessing. This would marginally in-
crease the LCOE for TTC.
9 The above costs are related to the dollar values
of the years mentioned in parentheses. In the
case of Bharadwaj, Krishnan and Rajgopal
(2008), Bharadwaj, Tongia and Arunachalam
(2006), and EMWG (2004), the corresponding
information is not available.
10 MIT (2003, 2009) and Du and Parsons (2009)
assume a 50:50 debt-to-equity ratio.
11 The inherent assumptions regarding the rate of
corporate tax for estimating the WACC and the
rate of debt and equity are not elaborated in
the case of these two studies.
12 We do not consider fuel loss in reprocessing in
SOR-regulations-on-T&C-of-tariff-05022009.
pdf.
— (2012): “Report on Short-term Power Market in
India: 2011–12,” Central Electricity Regulatory
Commission, New Delhi, viewed in July 2012,
http://www.cercind.gov.in/2012/market_moni-
toring/Annual%20Report%202011-12.pdf.
— (2016): “Report on Short-term Power Market in
India: 2015–16,” Central Electricity Regulatory
Commission, New Delhi, viewed in January
2017, http://www.cercind.gov.in/2016/MMC/
AnnualReport15-16.pdf.
DAE (2015): “Cost of Production of Nuclear Energy,”
Rajya Sabha: Unstarred Question No 326,”
Department of Atomic Energy, Government of
India, New Delhi, viewed in February 2016,
http://www.dae.nic.in/writereaddata/parl/
budget2015/rsus326.pdf.
de Roo, G and J E Parsons (2009): “Nuclear Fuel
Recycling, the Value of the Separated Tran-
suranics and the Levelized Cost of Electricity,”
Working Paper 09–008, Center for Energy
and Environmental Policy Research, Massa-
chusetts Institute of Technology, Cambridge,
MA.
MIT (2003): The Future of Nuclear Power: An Inter-
disciplinary MIT Study, Massachusetts Institute
of Technology, Cambridge MA, viewed in Janu-
ary 2010, http://web.mit.edu/nuclearpower/ .
— (2009): Update of the MIT 2003 Future of Nuclear
Power: An Interdisciplinary Study, Massachusetts
Institute of Technology, Cambridge MA, viewed
in January 2010, http://web.mit.edu/nuclear-
power/pdf/nuclearpower-update2009.pdf.
MNRE (2016): “Physical Progress (Achievements):
Programme/Scheme-wise Physical Progress in
2015–16 up to the month of January 2016,” Min-
istry of New and Renewable Energy, Govern-
ment of India, New Delhi, viewed in March 2016,
http://mnre.gov.in/mission-and-vision-2/
achievements/.
— (2018): “Physical Progress (Achievements):
Programme/Scheme-wise Physical Progress in
2017–18 and Cumulative up to the Month of
December 2017,” Government of India, New
Delhi, http://mnre.gov.in/mission-and-vision-2/
achievements/.
Parthasarathy, K S (2014): “Nuclear Power: Safe,
Cost Effective, and Environment Friendly,”
16 December, viewed in March 2016, https://

the TTC case. This would marginally increase
the estimated LCOE for the TTC option.
13 If the long-term exchange rate of the rupee
R
ksparthasarathy.wordpress.com/2014/12/16/
— (2011): “A Methodology for Calculating the Lev-
nuclear-power-safe-cost-effective-and-envi-
elized Cost of Electricity in Nuclear Power Sys- ronment-friendly/.
tems with Fuel Recycling,” Energy Economics,

to the dollar remains in the range witnessed
in 2015–16 (`61–`67 per dollar), the rupee-
denominated cost would be more than the
E
PFC (2010): “Report on Performance of State Power
Vol 33, No 5, pp 826–39.
Utilities for the Years 2006–07 to 2008–09,”
Du, Y and J E Parsons (2009): “Update on the Cost Power Finance Corporation, New Delhi.
of Nuclear Power,” Working Paper 09–004,

results reported here.
14 The UMMPs at Krishnapatnam and in Tilaiya
have experienced setbacks regarding project
T
Raju, S and M V Ramana (2013): “Cost of Electricity
Center for Energy and Environmental Policy
from the Jaitapur Nuclear Power Plant,”
Research, Massachusetts Institute of Technology,
Economic & Political Weekly, Vol 48, Nos 26–27,
Cambridge, MA. pp 51 – 60.

development, and may witness rebidding.
15 The base year for the calculated LCOE or
the first-year tariff are not mentioned in
their paper.
Z
EMWG (2004): “A Generic EXCEL-based Model for
Computation of the Projected Levelized Unit
Electricity Cost (LUEC) from Generation IV Re-
actor Systems,” Economic Modeling Working
Ramana, M V (2007): “Heavy Subsidies in Heavy
Water: Economics of Nuclear Power in India,”
Economic & Political Weekly, Vol 42, No 34,
pp 3483–90.

G
16 The nuclear plant at Koodankulam attracted Group, viewed in February 2016, http://nuclear.
Schneider, E A, M R Deinert and K B Cady (2009):
protests due to concerns over nuclear safety. inl.gov/deliverables/docs/emwg_excelmod_
“Cost Analysis of the US Spent Fuel Reprocessing
On 6 May 2013, the project received clearance docu.pdf. Facility,” Energy Economics, Vol 31, pp 627–34.
ERI (2008): “Fuel as a Percentage of Electric Power

for commissioning from the Supreme Court.
17 The economic efficiency and effectiveness of
support mechanisms for renewable energy are
discussed in Singh (2009, 2010b).
A
Production Cost, 2007,” Energy Resources
International Inc, Washington DC.
IAEA (2016): Country Statistics: India, Internation-
al Atomic Energy Agency/PRIS, viewed in
Singh, A (2006): “Power Sector Reform in India:
Current Issues and Prospects,” Energy Policy,
Vol 34, No 16, pp 2480–90.
— (2009): “Nationally Tradable Renewable Ener-
gy Credits for Renewable Portfolio Obligation

M
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Bharadwaj, A, R Tongia and V S Arunachalam
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Tariff) Regulations, 2009: Statement of Objects
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Appendices
Table A1: Scenario-based Sensitivity Analysis for Once-through Cycle
Input Parameter
Capital cost ($/kW)
Discount rate (%)
Fuel cycle cost (cents/kWh)
Fuel bundle cost ($/kg)
Plant O&M cost (cents/kWh)
Return on equity (%)
Cost of debt (%)
Input Parameter Range in Cost of Electricity,
Sensitivity Range LCOE-based Approach
(cents/kWh)
1,950–3,000–4,050 10.79–13.93–17.06
6.62–10.19–13.76 12.47–13.93–16.06
0.42–0.65–0.88 13.69–13.93–14.19
1,525–2,346–3,167 13.69–13.93–14.19
0.55–0.85–1.15 13.33–13.93–14.54
15.26–23.48–31.70 12.81–13.93–15.04
5.20–8.00–10.80 13.51–13.93–14.34
Table A2: Scenario-based Sensitivity Analysis for Twice-through Cycle
Input Parameter
Capital cost ($/kW)
Discount rate (%)
Fuel cycle cost (cents/kWh)
Fuel bundle cost ($/kg)
Plant O&M cost (cents/kWh)
Return on equity (%)
Cost of debt (%)
Input Parameter
Sensitivity Range
1,950–3,000–4,050
6.62–10.19–13.76
0.55–0.85–1.15
1,525–2,346–3,167
0.67–0.97–1.27
15.26–23.48–31.70
5.20–8.00–10.80
Range in Cost of Electricity,
LCOE-based approach
(cents/kWh)
10.99–14.13–17.27
12.71–14.13–16.25
13.90–14.13–14.40
13.90–14.13–14.40
14.06–14.13–14.20
13.02–14.13–15.25
13.72–14.13–14.55

64 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
SPECIAL ARTICLE
Caste, Religion, and Health Outcomes in India,
2004–14
Vani Kant Borooah
There has been little investigation into whether the
“social gradient to health”—whereby people belonging
to groups higher up the social ladder have better health
outcomes than those belonging to groups further
down—exists in developing countries like India. The
relative strengths of economic and social status in
determining the health status of persons in India is
evaluated using the National Sample Survey Office data
set for 2004 and 2014. This is evaluated with respect to
two health outcomes: the age at death and the
self-assessed health status of elderly persons.
Vani Kant Borooah (vkborooah@gmail.com) teaches at the University of
Ulster, Northern Ireland, United Kingdom.
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10
T
he publication of the Black report (Black et al 1980)
spawned a number of studies that examined the social
factors underlying health outcomes in industrialised
countries. The fundamental finding from these studies, par-
ticularly with respect to mortality and life expectancy, was the
existence of “a social gradient” in mortality, “wherever you
stand on the social ladder, your chances of an earlier death are
higher than it is for your betters” (Epstein 1998). The social
gradient in mortality was observed for most of the major
causes of death: for example, Marmot (2000) showed that, for
every one of 12 diseases, the ratio of deaths (from the disease)
to numbers in a civil service grade rose steadily as one moved
down the hierarchy.
Since, in the end, it is the individual who falls ill, it is
tempting for epidemiologists to focus on the risks inherent in
individual behaviour: for example, smoking, diet, and
exercise. However, the most important implication of a social
gradient to health outcomes is that people’s susceptibility to
disease depends on more than just their individual behaviour;
crucially, it depends on the social environment within which
they lead their life (Marmot 2000, 2004). Consequently, the
focus on interpersonal differences in risk might be usefully
complemented by examining differences in risk between
different social environments.
For example, even after controlling for interpersonal differ-
ences, mortality risks might differ by occupational class. This
might be due to the fact that while low status jobs make fewer
mental demands, they cause more psychological distress than
high status jobs (Karasek and Michael 1996; Griffin et al 2002;
Marmot 2004) with the result that people in higher level jobs
report significantly less job-related depression than people in
lower-level jobs (Birdi et al 1995).
In turn, anxiety and stress are related to disease: the stress
hormones that anxiety releases affect the cardiovascular and
immune systems with the result that prolonged exposure to
stress is likely to inflict multiple costs on health in the form of,
among others, increased susceptibility to diabetes, high blood
pressure, heart attack, and stroke (Marmot 1986; Wilkinson
and Marmot 1998; Brunner and Marmot 1999). So, the social
gradient in mortality may have a psychosocial basis, relating
to the degree of control that individuals have over their lives.1
The “social gradient to health” is essentially a Western
construct and there has been very little investigation into
whether, in developing countries as well, people’s state of
health is dependent on their social status. For example, in
65
SPECIAL ARTICLE

India, we know from studies of specific geographical areas Figure 1: Mean Age at Death (Years) in India by Social Group
that health outcomes differ systematically by gender and eco- 140
nomic class (Sen et al 2007). In addition, local government 120
spending on public goods, including health-related goods, 2014 (71st round)
after controlling for a variety of factors, is lower in areas with 100
2004 (60th round)
greater caste fragmentation compared to ethnically more 80
60
52
homogeneous areas (Sengupta and Sarkar 2007). 43 48 50 49
Considering India in its entirety, two of its most socially 60

depressed groups, the Adivasis2 and the Dalits,3 have some of 40

the worst health outcomes. As Guha (2007) observes, 28.9% of 55
45 42 49 43 44
Adivasis and 15.6% of Dalits have no access to doctors or 20

clinics and only 42.2% of Adivasi children and 57.6% of Dalit 0

children have been immunised. Of course, it is possible that Scheduled Scheduled OBC non- OBC Muslim Upper Caste Forward Caste
Tribe Caste Muslim Muslim non-Muslim
the relative poor health outcomes of India’s socially backward
Source: NSSO, 60th and 71st rounds.
groups has less to do with their low social status and much

R
more to do with their weak economic position and with their (vi) Non-Muslim upper classes (NMUC): These comprised 25%
poor living conditions. The purpose of this paper is to evaluate of the 65,923 households in the 71st NSSO round and 26% of the

E
the relative strengths of economic and social status in deter- 73,640 households in the 60th NSSO round. Of the 16,219 house-
mining the health status of persons in India. In other words, holds in this category in the 71st NSSO round, 93% were Hindu.

even after controlling for non-community factors, did the fact
that Indians belonged to different social groups, encapsulating
different degrees of social status, exercise a significant influ-
ence on the state of their health?
T
In addition to information about the social group of the
households, the NSSO surveys also provided information about
the households’ living conditions. The information about the

Data Sources

G
We answer the above questions using data from the 60th round
(January–June 2004) and the 71st round (January–June 2014)
Z
conditions reported in both the 60th and the 71st NSSO rounds
and the variables constructed for the purposes of this study
from this information are the following:
(i) The first component of living conditions related to the
quality of the latrines used by the deceased. The variable

A
of the Morbidity and Health Care Surveys of the National Sample
Survey Office (NSSO).4 The 60th round surveyed 73,911 house-
holds and the 71st round surveyed 65,975 households. An item
“latrine” was assigned the value 1 if the latrines were flushing
toilets or emptied into a septic tank; and 0 otherwise.
(ii) The second component of living conditions related to the

M
of particular interest to this study was the construction of the
social groups with each person in the estimation sample being
placed in one, and only one, of these groups. The NSSO catego-
rised persons by four social groups [Scheduled Tribes (ST),
Scheduled Castes (SC), Other Backward Classes (OBC), and
“Others,” and simultaneously by eight religion groups (Hinduism,
Islam, Christianity, Sikhism, Jainism, Buddhism, Zoroastrianism,
“Other”)]. Combining the NSSO “social group” and “religion”
categories, we subdivided households into the following
groups that are used as the basis for analysis in this paper:5
(i) Scheduled Tribes (ST): These comprised 13% of the 65,786
households in the 71st NSSO round. Approximately 56% of
these households were Hindu, and 33% were Christian.6
(ii) Scheduled Castes (SC): These comprised 17% of the 65,786
households in the 71st NSSO round, and 93% of the 10,994
households in this category were Hindu.7
(iii) Non-Muslim Other Backward Classes (NMOBC): These
comprised 33% of the 65,786 households in the 71st NSSO
round, and 97% of the 21,455 households in the NMOBC category
were Hindu.
(iv) Muslim Other Backward Classes (MOBC): These comprised
7% of the 65,786 households in the 71st NSSO round.8
(v) Muslims who were not from the OBCs: They are, hereafter,
referred to as Muslin upper classes (MUC) and comprised 6%
of the 65,786 households in the 71st NSSO round, and 7% of the
73,640 households in the 60th NSSO round.
66
quality of the drains. The variable “drain” was assigned the
value 1 if the drains associated with the deceased’s home were
underground or were covered; and 0 otherwise.
(iii) The third component of living conditions related to the
quality of the source of drinking water used by the deceased.
The variable “water source” was assigned the value 1 if the
source of drinking water was from a tap; and 0 otherwise.
(iv) The fourth component of living conditions related to the
nature of the cooking fuel used by the deceased’s household.
The variable “cooking fuel” was assigned the value 1 if the cooking
fuel was gas, gobar gas, kerosene, or electricity; and 0 otherwise.
The primary aim of this paper is to examine whether, after
controlling for several non-group factors, (i) the health out-
comes of household members varied systematically according
to the social group to which people belonged; (ii) health
outcomes had significantly altered in the 10-year interval
between the 60th and 71st NSSO rounds.
Two health outcomes were considered: (i) the age at death
of household members, and (ii) the self-perceived health
status of household members, 60 years or older.
Deaths in Households
Each household was asked if there had been a death (or
deaths) in the household in the previous 365 days, and if yes,
particulars of these deaths.9 The specific information that this
study was interested in was the “age at death” of the person
MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
 SPECIAL ARTICLE

concerned, and specifically, whether the age at death varied Figure 2: Perception of Current State of Health, by Persons Aged 60 Years
or More
by the six social groups distinguished in this study: (ST, SC, Percentage in various states of health: Percentage in various states of health:
NMOBC, MOBC, MUC, NMUC). 60th round (33,181 persons) 71st round (27,234 persons)
Figure 1 (p 66) shows that, in 2014, the age at death was 5.5 6.3
highest for persons from NMUC households (60 years), and Excellent Excellent
lowest for persons from ST households (43 years). In the 10 24.8 26
Poor
years between the 60th and 71st rounds, the age at death had Poor

Table 1: Predicted Age at Death from Regression Equations, 71st and 60th
NSSO Rounds
71st Round (January–June 2014)* 69.7 67.6
Conditioning Variable Age at Death Marginal SE t value Pr>|t| Fair Fair
Change
1 2 3 4 5 6
By social group of household
Scheduled Tribe 46.6 -10.0 1.90 -5.2 0.00 Source: NSSO.
Scheduled Caste 49.5 -7.1 1.65 -4.3 0.00
Non-Muslim OBC 51.8 -4.7 1.39 -3.4 0.00 increased for all households reporting a death from 42 to 48

R
Muslim OBC 50.7 -5.9 2.28 -2.6 0.01 years for SC households, 49 to 52 years for NMOBC households,
Muslim upper class 48.5 -8.1 2.25 -3.6 0.00 43 to 50 years for MOBC households, 44 to 49 years for MUC

E
Non-Muslim upper class [R] 56.6 households, and 55 to 60 years for NMUC households.
Household occupation Table 1 shows the results from a regression of age at death of
Labourer household [R] 48.2

T
persons from households in which a death (or deaths) occurred
Non-labourer household 52.6 4.4 1.32 3.3 0.00
as recorded in the 71st NSSO round (2,383 households) and the
Household’s location
60th round (1,636 households) using the following explanatory

Z
Rural [R] 51.6
Urban 51.7 0.1 1.25 0.1 0.93 variables: (i) the social group of households (as defined
Household’s state of residence earlier); (ii) whether the household was a casual labourer,

G
Forward state [R] 54.7 self-employed or regular salaried employment household;
Backward state 48.9 -5.8 1.05 -5.6 0.00
(iii) whether the household lived in rural or urban area;
Household living conditions: Latrine
(iv) whether the household lived in a “forward” or a “back-

A
Flush or septic tank [R] 53.4
Other type of latrine (including no latrine) 50.2 -3.2 1.27 -2.5 0.01 ward” state;10 (v) the quality of the household’s latrine and
Household living conditions: Cooking fuel cooking fuel (as discussed earlier).
Gas, gobar gas, electricity, kerosene [R] 54.8 Following the advice of Long and Freese (2014), the results

M
Other Fuels 49.4 -5.4 1.39 -3.9 0.00 from the estimated equation are presented in Table 1 in the
60th Round (January-June 2004)** form of predicted average age at death (AAD) from the
Conditioning Variable Age at Death Marginal SE z value Pr>|z| estimated regression coefficients of the “age at death”
Change
1 2 3 4 5 6 equation. It should be emphasised that, with respect to the
By social group of household predictions shown in Table 1, the relationship between social
Scheduled Tribe 47.5 -3.9 2.55 -1.5 0.13
group and AAD was analysed ceteris paribus, that is, after
Scheduled Caste 42.7 -8.7 2.31 -3.8 0.00
controlling for the effects of the variables (i) to (v) outlined
Non-Muslim OBC 48.7 -2.6 1.90 -1.4 0.16
earlier. Consequently, the predicted AAD for the six caste
Muslim OBC 44.3 -7.0 3.42 -2.1 0.04
Muslim upper class 44.3 -7.0 2.97 -2.4 0.02
groups shown in Table 1 will, and do, differ from the raw
Non-Muslim upper class [R] 51.4 sample proportions shown in Figure 2.11
Household occupation The second column of Table 1 shows that, for the 71st round,
Labourer household [R] 45.2 after controlling for other variables, NMUC households had the
Non-labourer household 48.4 -3.3 1.71 -1.9 0.06 highest predicted AAD (56.6 years), followed by NMOBC house-
Household’s location holds (51.8 years). Next were MOBC households (50.7 years),
Rural [R] 48.7
followed by SC and MUC households (49.5 and 48.5 years, res-
Urban 45.1 3.6 1.89 1.9 0.05
Household’s state of residence
pectively). ST households predicted the lowest ADD (46.6 years).
Forward state [R] 51.7 These predicted AAD for the NMUC households in the 71st round
Backward state 44.4 -7.2 1.47 -4.9 0.00 were computed by assuming that all the 2,383 households
Household living conditions: Latrine were NMUC (that is, the NMUC coefficient applied to their attrib-
Flush or septic tank [R] 49.4
utes); the AAD under this scenario was 56.4 years. Similarly, the
Other type of latrine (including no latrine) 46.9 2.6 2.00 1.3 0.20
predicted AAD for the NMUC households in the 60th round
Household living conditions: Cooking fuel
Gas, gobar gas, electricity, kerosene [R] 52.9 were computed by assuming that all the 1,636 households from
Other fuels 45.6 7.3 2.17 3.4 0.00 that round were NMUC (that is, the NMUC coefficient applied to
* Estimated on data for 2,383 households in which a death occurred in the 71st NSSO round. their attributes), the AAD under this scenario was 51.4 years.
** Estimated on data for 1,636 households in which a death occurred in the 60th NSSO round.
R=Reference category.
The predicted AAD for the other social groups was computed in
Own Calculations from NSSO, 60th and 71st rounds. similar fashion. Since the only factor that was different between
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 67
SPECIAL ARTICLE

these six “social group” scenarios was the households’ social
group (ST, SC, NMOBC, MOBC, MUC, and NMUC), differences be-
tween these six predicted AAD were entirely the result of dif-
ferences in the households’ social group.
The marginal AAD, shown in column 3 of Table 1, are the dif-
ferences between the predicted AAD of the ST, SC, NMOBC,
MOBC, and MUC households and that of (the reference) NMUC
households. Dividing these marginal probabilities by their
standard errors (column 4 of Table 1) yields the z-values
(column 5 of Table 1). These show that all the marginal proba-
bilities, for both the 71st and the 60th rounds, were signifi-
cantly different from zero. In other words, the predicted AAD
for households from the five social groups (ST, SC, NMOBC,
MOBC, and MUC) were all significantly lower than for NMUC
households in 2014 and 2004.
5.8 years in the 71st round and by 7.2 years in the 60th round.
Compared to living in a rural area, living in an urban area
significantly reduced the AAD by 3.6 years in the 60th round
but, in the 71st round, there was no difference between the
AAD in rural and urban locations.
It is seen that between the 10 years of the 60th and the 71st NSSO
rounds, the predicted AAD increased for all the groups, except for
ST for which it fell from 47.5 years to 46.6 years. For SC, it increased
from 42.7 years to 49.5 years; for NMOBC from 48.7 years to
51.8 years; for MOBC 44.3 years to 50.7 years; for MUC from 44.3
years to 48.5 years; and for NMUC from 51.4 years to 56.6 years.
However, from a policy perspective, the relevant issue is
whether these improvements were statistically significant or
whether they could be accommodated within a “no change”
null hypothesis. In order to answer this question we re-estimated

R
However, for both the 71st and the 60th rounds, the difference the AAD equation, specified in Table 1, jointly over all the rele-
in predicted AAD was: (i) not significantly different between vant observations for the 71st and 60th rounds (a total of 4,019

E
the non-Muslim and Muslim households from the OBC; observations on households that reported a death) and then
(ii) not significantly different between the SC and the MUC tested whether the predicted AAD was significantly different

T
households; (iii) not significantly different between house- between the two rounds.
holds from the ST and the SC; (iv) not significantly different be- Columns 2 and 3 of Table 2 show the predicted AAD for the
tween households from the OBC (considered in their entirety to 71st and 60th NSSO rounds respectively, while column 4 records
include both Muslims and non-Muslims) and the SC.
The non-social group variables showed that, compared to
being a labourer, a non-labouring job significantly increased
the AAD by 4.4 years in the 71st round and by 3.3 years in the
60th round. Similarly, compared to living in a “forward” state,
G Z
the difference; the standard error of the difference is shown in
column 5 and dividing the difference by its standard error
yields the t value, shown in column 6. The p value in column 7
shows the probability of obtaining this t value under the null
hypothesis that there was no difference between the predicted
living in a “backward” state significantly reduced the ADD by

Table 2: Predicted Age at Death—Differences between the 71st and 60th Rounds

A AAD of both the NSSO rounds.

The predicted AAD for the 71st round, for NMUC households,
was computed by assuming that all the 4,019 households in

M
Conditioning Variable Predicted Predicted Difference SE of t value Pr>|t|
Age at Death Age at Death Difference the combined sample were NMUC from the 71st round (that is,
71st Round 60th Round the 71st round NMUC coefficient applied to their attributes).
(2014) (2004)
1 2 3 4 5 6 Computing the AAD under this scenario: this was 55.8 years
By social group of household (column 2). Similarly, the predicted AAD for the 60th round for
Scheduled Tribe 45.9 48.4 -2.5 2.49 -1.0 0.31 the NMUC households were computed by assuming that all the
Scheduled Caste 48.7 43.6 5.1 2.06 2.5 0.01 4,019 households in the combined sample were NMUC from the
Non-Muslim OBC 51.1 49.6 1.5 1.46 1.0 0.32
60th round (that is, the 60th round NMUC coefficient applied
Muslim OBC 50.0 45.2 4.7 3.57 1.3 0.19
Muslim upper class 47.7 45.2 2.5 3.20 0.8 0.44
to their attributes) and computing the AAD under this scenar-
Non-Muslim upper class 55.8 52.3 3.6 1.77 2.0 0.04 io: this was 52.3 years (column 3). The difference between the
Household occupation two rounds in their predicted AAD for NMUC households was
Labourer household 47.5 46.0 1.5 1.85 0.8 0.41 3.6 years (column 4) and, as the t-value in column 6 shows,
Non-labourer household 51.9 49.2 2.7 0.98 2.7 0.01 this was significantly different from zero.
Household’s location Table 2 shows that the predicted AAD was significantly higher
Rural 50.9 49.9 1.0 1.20 0.8 0.43
Urban 51.0 46.3 4.7 1.60 2.9 0.00
for households from NMUC and SC, however, for households
Household’s state of residence from other social groups, there was no significant difference.
Forward state 54.0 52.4 1.6 1.27 1.3 0.19 For non-labourer households, the predicted AAD was signifi-
Backward state 48.2 45.1 3.1 1.19 2.6 0.01 cantly higher in the 71st round, compared to the 60th (51.9 years
Household living conditions: latrine and 49.2 years respectively), but for labourer households there
Flush or septic tank 52.8 50.1 2.8 1.68 1.7 0.10 was no significant difference (47.5 years versus 46 years).
Other type of latrine
Similarly, the predicted AAD was significantly higher for urban
(including no latrine) 49.7 47.5 2.2 1.21 1.8 0.07
Household living conditions: cooking fuel households in the 71st round, compared to the 60th round
Gas, gobar gas, electricity, (51 years versus 46.3 years), but for rural households, there
kerosene 54.4 53.2 1.2 1.82 0.7 0.51 was no significant difference (50.9 years versus 49.9 years).
Other fuels 48.9 45.8 3.1 1.24 2.5 0.01 Lastly, the predicted AAD was significantly higher for “back-
Estimated for data from 4,019 households in which a death occurred in the 71st and 60th
rounds.
ward” state households in the 71st round compared to the 60th
Own calculations from 71st and 60th rounds of the NSSO. (48.2 years versus 45.1 years), but for “forward” state households,
68 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly

Figure 3: Perception of Being in Poor Health by Social Group and Gender
Percentage of persons, 60 years or over, in the relevant group who perceived themselves as
being in poor health
70
2014 (71st round)
60
2004 (60th round)
50
40 27
26
30 24
20
28
10 25
19
0 The results from estimating the health perception equation
All Respondents
Scheduled Tribe
Scheduled Caste
Source: NSSO.
there was no significant difference between the predicted AAD
from the two rounds (54 years versus 52.4 years).
Self-assessed Health Status
Both the NSSO rounds asked respondents aged 60 years or
more about their perception of their current state of health in
terms of one of the following categories: (i) excellent/very
good; (ii) fair; (iii) poor. Figure 2 (p 67) shows the responses to
these questions for the two rounds.
If one focuses, as this paper does, on the perception of being
in poor health, then this perception varied by social group and
by gender. Figure 3 shows Muslims, both OBC and upper class,
had the highest perception of being in poor health (over 30%
in both rounds). STs had the lowest perception of being in poor
health, with less than one-fourth declaring that they were in
poor health. There was also a gender divide in terms of poor
health: 23%–24% of men and 27%–28% of women declared
themselves to be in poor health.
We explore the factors that influence people’s perception of
their current state of health (in particular, their perception of
being in poor health) and whether there have been significant
changes to this perception between the 60th (2004) and the
71st (2014) NSSO rounds. In order to do so, we estimate an
ordered logit model, estimated on observations over persons
who answered the “health perception” question. The dependent
variable takes the value 1, 2 and 3 if a person reported their
health as “excellent/very good,” “fair,” or “poor” respectively.
The ordered logit model is described in the Appendix (p 73);
here we focus on the variables that determined the values
assumed by the dependent variable.
Some of the variables used in the ordered logit “perception
of health” equation were also used in the “age at death”
equation described earlier. These variables are social group,
“casual labourer” household, rural/urban household, forward/
backward state, and the quality of the latrine and cooking
facilities in a household. In addition to these variables, the
Economic & Political Weekly EPW
SPECIAL ARTICLE
following variables were also considered in the perception of
health equation: (i) The quintile of monthly household per
capita expenditure (HPCE) to which the person’s household be-
longed where Q5 is the highest quintile of HPCE and Q1 is the
lowest quintile of HPCE. (ii) The general education level of the
35 35 person: illiterate, literate without formal schooling, primary
28 and middle school, secondary and higher secondary (includ-
25 24 24 ing higher secondary equivalent diplomas), graduate (includ-
ing graduate equivalent diplomas) and above. (iii) The gen-
der, age, and marital status of the person.12 (iv) The number
32 31 27
25 23 23 of living sons and daughters of the person.
are shown, for the 71st and 60th NSSO rounds in Tables 3 and 4
OBC non-Muslim
OBC Muslim
Men
Women
Forward Caste non-Muslim
Upper Caste Muslim
(p 70), respectively. These results are shown in terms of the
predicted probabilities of poor health (PPH), derived from the
R
ordered logit estimates, for each of the household and person-
al categories. The second column of Tables 3 shows that for the
E
71st round, after controlling for other variables, Muslims had
the highest predicted PPH (33.3% for MOBC and 35.2% for MUC)
T
and persons from ST had the lowest (20.8%).
These predicted PPH were computed by assuming that all
the 24,210 persons in the 71st round were from a particular
G Z
social group (say, MUC) and applying the coefficient for that
group to the attributes of all these 24,210 persons. The predicted
PPH computed under these different scenarios are shown in
column 2 of Tables 3 and 4 under the rubric “social group.”
Since the only factor that was different between these six
A “social group” scenarios was the households’ social group (ST,
SC, NMOBC, MOBC, MUC, and NMUC), differences between the
six predicted PPH were entirely the result of differences in the
M
social group to which the persons belonged.
The marginal probabilities, shown in column 3 of Tables 3
and 4, under the social group rubric, are the differences
between the predicted probabilities of the ST, SC, NMOBC,
MOBC, and MUC households and that of (the reference) NMUC
households. Dividing these marginal probabilities by their
standard errors (column 4) yields the z-values (column 5). These
show that the marginal probabilities for Muslims and ST in
the 71st NSSO round were significantly different from zero. In
other words, in 2014, the predicted PPH for Muslims was
significantly higher, and the predicted PPH for the ST was
significantly lower, than for NMUC persons. There was, how-
ever, no significant difference between the predicted PPH of
NMOBC persons, and the predicted PPH of SC persons, and that
of NMUC persons.
The results of Tables 3 and 4 show that the predicted PPH
was significantly higher for persons in “wage labour” house-
holds than for persons in self-employed/regular salaried
households for both the NSSO rounds. In the 71st round
(though not in the 60th), the predicted PPH of persons in
urban areas was significantly higher than that of those living
in rural areas, and in both rounds, the predicted PPH of persons in
“forward states” was significantly lower than that of those in
“backward” states.
The economic circumstances of a person’s household also
played a significant role in determining the predicted PPH. In
MARCH 10, 2018 vol lIiI no 10 69
SPECIAL ARTICLE

both rounds, persons living in households in the lowest two
quintiles of HPCE were significantly more likely to have a higher
predicted PPH than persons in the highest quintile of HPCE.
Environmental factors played a significant role in determining
the predicted PPH. Evidence from both the 71st and 60th NSSO
rounds shows that having a flush or septic tank latrine, com-
pared to latrines of other types or having no latrine in the
house, significantly reduced the predicted PPH. Similarly,
cooking with gas or electricity, compared to cooking with
other fuel types, significantly reduced the predicted PPH.
Table 3: Predicted Probability of Being in Poor Health from the Estimated
Ordered Logit Equations, NSSO 71st Round
Conditioning Variable Probability Marginal SE
of Being in Probability
Poor Health
1 2 3 4
In addition to these household-level factors, personal attributes
of a person were also important in determining his/her predict-
ed PPH. Prominent among these was gender: for both the 71st
and the 60th rounds, the predicted PPH was significantly higher
for women than for men. The predicted PPH was also signifi-
cantly affected by a person’s marital status. Married persons had
a lower predicted PPH than persons who were single, widowed,
or divorced. Lastly, a person’s educational level also had a sig-
nificant effect on their predicted PPH. For both rounds, com-
pared to the reference category of persons who were graduates
Table 4: Predicted Probability of Being in Poor Health from the Estimated
Ordered Logit Equations, NSSO 60th Round
z value Pr>|z| Conditioning Variable Probability Marginal SE z value Pr>|z|
of Being in Probability
Poor Health
5 6 1 2 3 4 5 6

R
By social group of household By social group of household
Scheduled Tribe 0.208 -0.053 0.009 -5.9 0.00 Scheduled Tribe 0.179 -0.056 0.008 -6.9 0.00

E
Scheduled Caste 0.261 0.000 0.008 0.0 0.99 Scheduled Caste 0.260 0.024 0.008 3.1 0.00
Non-Muslim OBC 0.258 -0.003 0.007 -0.5 0.62 Non-Muslim OBC 0.239 0.004 0.006 0.7 0.47
Muslim OBC 0.333 0.072 0.013 5.7 0.00 Muslim OBC 0.295 0.060 0.013 4.5 0.00

T
Muslim upper class 0.356 0.095 0.014 6.9 0.00 Muslim upper class 0.308 0.072 0.011 6.5 0.00
Non-Muslim upper class [R] 0.261 Non-Muslim upper class [R] 0.235

Z
Household occupation Household occupation
Labourer household [R] 0.288 Labourer household [R] 0.259
Non-labourer household 0.259 -0.029 0.008 -3.8 0.00 Non-labourer household 0.239 -0.021 0.006 -3.2 0.00

G
Household’s location Household’s location
Rural[R] 0.250 Rural[R] 0.242
Urban 0.283 0.033 0.006 5.3 0.00 Urban 0.243 0.001 0.006 0.2 0.84

A
Household’s state of residence Household’s state of residence
Forward state [R] 0.241 Forward State [R] 0.232
Backward state 0.290 0.048 0.005 9.1 0.00 Backward state 0.254 0.022 0.005 4.5 0.00
Household living conditions: latrine Household living conditions: latrine

M
Flush or septic tank [R] 0.248 Flush or septic tank [R] 0.234
Other type of latrine (including no latrine) 0.279 0.031 0.006 5.1 0.00 Other type of latrine (including no latrine) 0.247 0.013 0.007 2.0 0.05
Household living conditions: cooking fuel Household living conditions: cooking fuel
Gas, gobar gas, electricity, kerosene [R] 0.245 Gas, gobar gas, electricity, kerosene [R] 0.218
Other fuels 0.279 0.034 0.007 4.9 0.00 Other fuels 0.254 0.036 0.007 5.2 0.00
Household income quintile Household income quintile
Bottom quintile 0.274 0.021 0.009 2.3 0.02 Bottom quintile 0.269 0.053 0.008 6.3 0.00
Second quintile 0.277 0.024 0.010 2.5 0.01 Second quintile 0.254 0.038 0.008 4.7 0.00
Third quintile 0.254 0.001 0.008 0.1 0.90 Third quintile 0.242 0.026 0.008 3.5 0.00
Fourth quintile 0.260 0.007 0.009 0.8 0.42 Fourth quintile 0.231 0.015 0.007 2.2 0.03
Top quintile [R] 0.253 Top quintile [R] 0.216
Person’s gender Person’s gender
Male [R] 0.244 Male [R] 0.224
Female 0.283 0.039 0.006 6.7 0.00 Female 0.261 0.036 0.005 6.8 0.00
Person’s marital status Person’s marital status
Married [R] 0.256 Married [R] 0.237
Single, widowed, divorced 0.276 0.020 0.006 3.3 0.00 Single, widowed, divorced 0.250 0.012 0.005 2.3 0.02
Person’s education level Person’s education level
Illiterate 0.279 0.096 0.011 9.0 0.00 Illiterate 0.252 0.079 0.012 6.8 0.00
Literate without formal schooling 0.280 0.097 0.023 4.2 0.00 Literate without formal schooling 0.242 0.069 0.012 5.5 0.00
Primary 0.262 0.079 0.010 7.8 0.00 Primary 0.232 0.060 0.012 5.1 0.00
Secondary and higher secondary 0.229 0.046 0.011 4.2 0.00 Secondary and higher secondary 0.204 0.032 0.013 2.5 0.01
Graduate and above [R] 0.183 Graduate and above [R] 0.173
Continuous variables: age, sons, daughters Continuous variables: age, sons, daughters
Age at median (62 years) 0.223 0.013 0.001 22.8 0.00 Age at median (62 years) 0.202 0.012 0.000 40.7 0.00
Median number of sons (2) 0.264 0.000 0.002 -0.2 0.84 Median number of sons (2) 0.242 0.001 0.001 0.9 0.38
Median number of daughters (2) 0.264 0.002 0.002 1.2 0.24 Median number of daughters (2) 0.243 -0.001 0.002 -0.5 0.60
Estimated on data for 24,210 persons, aged 60 or above, in the 71st NSSO round, on the Estimated on data for 27,815 persons, aged 60 or above, in the 60th NSSO round, on the
basis of their self-assessed current state of health. basis of their self-assessed current state of health.
R=Reference category. R=Reference category.

70 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
 SPECIAL ARTICLE

or above, persons with lower educational levels had significantly
higher predicted PPH. For example, Table 3 shows that the pre-
dicted PPH of illiterate persons was 27.9% and this was signifi-
cantly higher than the predicted PPH of 18.3% for graduates.
Figure 3 shows the proportion of all persons aged 60 years
or more who regarded their health as “poor” increased from
25% in 2004 to 26% in 2014. Furthermore, save for persons
from SC households for whom there was a small decrease,
there was a rise in this proportion for persons in every category
(Figure 3). Were these increases of statistical significance or
could they be accommodated within a “no change” null
hypothesis? In order to answer this question we re-estimated
Table 5: Difference between the 71st and 60th Rounds in the Predicted
Probability of Being in Poor Health
Predicted Probability of Being in Poor Health
Conditioning Variable 71st 60th Difference Standard z value Pr>|z|
the health perception equation, specified in Table 3, jointly
over all the relevant observations for both the rounds (a total
of 52,040 observations on persons, aged 60 years or more,
who reported their health perception), and then tested whether
the predicted PPH was significantly different between the two
rounds. These results are reported in Table 5.
Columns 2 and 3 of Table 5 show the predicted PPH for the
71st and 60th NSSO rounds respectively, while column 4 records
the difference. The standard error of the difference is shown in
column 5 and dividing the difference by its standard error
yields the z value, shown in column 6. The p value in column 7
shows the probability of obtaining this z value under the null
hypothesis that there was no difference between the predicted
PPH of the 71st and 60th rounds.
The overall predicted PPH for the two rounds (shown under

R
Round Round Error of the row marked “overall”) were obtained by first, assuming
Difference
1 2 3 4 5 6 7 that all the 52,040 persons in the combined sample were from

E
Overall 0.265 0.244 0.021 0.004 5.6 0.00 the 71st round (that is, the 71st round coefficients applied to
By social group of household their attributes) and predicting the PPH under this scenario

T
Scheduled Tribe 0.207 0.182 0.025 0.010 2.5 0.01 (26.5%). Second, assuming that all the 52,040 persons in the
Scheduled Caste 0.262 0.260 0.002 0.009 0.2 0.87
combined sample were from the 60th round (that is, the 60th
Non-Muslim OBC 0.259 0.241 0.018 0.006 3.0 0.00
round coefficients applied to their attributes), and predicting

Z
Muslim OBC 0.337 0.295 0.042 0.017 2.5 0.01
the PPH under this scenario (24.4%). Since the only difference
Muslim upper class 0.360 0.307 0.053 0.017 3.2 0.00
Non-Muslim upper class 0.262 0.237 0.025 0.007 3.7 0.00
between these two calculations was the coefficients used (71st

G
Household occupation versus 60th round) to evaluate the common set of attributes
labourer household 0.290 0.260 0.030 0.009 3.2 0.00 (of the 52,040 persons), the difference between the two
Non-labourer household 0.260 0.240 0.020 0.004 4.8 0.00 predicted PPH (of 2.1 points) was entirely due to the passage of

A
Household’s location time between the two rounds.
Rural 0.253 0.243 0.009 0.005 1.9 0.06
The difference between the two rounds in their predicted
Urban 0.287 0.245 0.043 0.007 6.1 0.00
(overall) PPH was 2.1 percentage points, and the standard
Household’s state of residence

M
Forward state 0.242 0.234 0.008 0.005 1.7 0.10 error of this difference was computed as 0.021. This yields a
Backward state 0.292 0.255 0.037 0.006 6.6 0.00 z-value of 5.6. As the p-value (Table 5, column 7) shows, this
Household living conditions: latrine difference of 2.1 points between the predicted PPH of the two
Flush or septic tank 0.246 0.236 0.010 0.006 1.6 0.11 rounds was significantly different from zero.
Other type of latrine
The predicted PPH for the 71st round, for (say) NMUC
(including no latrine) 0.279 0.249 0.030 0.005 5.5 0.00
Household living conditions: cooking fuel
persons, was similarly obtained by assuming that all the
Gas, gobar gas, electricity, kerosene 0.244 0.222 0.022 0.007 3.2 0.00 52,040 persons in the combined sample were NMUC from the
Other fuels 0.278 0.257 0.021 0.006 3.9 0.00 71st round. This predicted PPH at 26.2%. Similarly, the predicted
Household income quintile PPH for the 60th round for NMUC persons obtained by assum-
Bottom quintile 0.276 0.268 0.008 0.008 0.9 0.35
ing that all the 52,040 households in the combined sample
Second quintile 0.279 0.254 0.025 0.009 2.9 0.00
were NMUC from the 60th round, predicted the PPH at 23.7%.
Third quintile 0.255 0.242 0.013 0.007 1.8 0.07
The difference between the two rounds in their predicted PPH
Fourth quintile 0.261 0.231 0.030 0.008 3.8 0.00
Top quintile 0.254 0.217 0.037 0.009 4.2 0.00
for NMUC persons was 2.5 percentage points and, as the z-value
Person’s gender in column 6 shows, this was significantly different from zero.
Male 0.245 0.226 0.019 0.005 3.6 0.00 Table 5 shows that persons from all the groups, except from
Female 0.285 0.261 0.024 0.006 4.2 0.00 SC, recorded a significant increase in their predicted PPH
Person’s marital status
Married 0.257 0.239 0.018 0.005 3.7 0.00
Single, widowed, divorced 0.278 0.251 0.027 0.006 4.2 0.00
Person’s education level available at
Illiterate 0.277 0.255 0.022 0.005 4.3 0.00
Literate without formal schooling 0.278 0.245 0.033 0.023 1.5 0.14 Delhi Magazine Distributors
Primary 0.260 0.236 0.024 0.008 3.1 0.00
Pvt Ltd
Secondary and higher secondary 0.226 0.209 0.017 0.012 1.4 0.15
110, Bangla Sahib Marg
Graduate and above 0.178 0.178 -0.001 0.014 0.0 0.97
Estimated on data for 52,040 persons, aged 60 or above, in the 71st and 60th NSSO rounds
New Delhi 110 001
combined, on the basis of their self-assessed current state of health the basis of their self- Ph: 41561062/63
assessed current state of health.

Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 71
SPECIAL ARTICLE
between 2004 and 2014. For persons from both labourer and
non-labourer households, the predicted PPH was significantly
higher in 2014. Similarly, the predicted PPH was significantly
higher for persons in urban and rural areas in 2014. Lastly, the
predicted PPH was significantly higher for “backward” state
households in 2014 compared to 2004, but for “forward” state
households, there was no significant difference between the
predicted PPH of the two rounds.
Conclusions
This paper investigated if there was a social gradient to health
in India with respect to two health outcomes: the age at death and
the self-assessed health status of elderly persons. The evidence
suggested that living in a forward state (compared to living in
a backward state) and belonging to a relatively affluent house-
hold significantly improved all four health outcomes. In addition,
the age at death and the self-assessed health status of elderly
persons was significantly affected by their living conditions.
However, even after controlling for these “group independent”
factors, the social group to which people in India belonged had
a significant effect on their health outcomes. Compared to
households from the non-Muslim upper class, the average age
at death in India in 2014—after imposing all the controls—
was 10 years lower for SC households, 7.1 years lower for ST
households, 4.7 years lower for non-Muslim OBC households,
5.9 years lower for Muslim OBC households, and 8.1 years
lower for Muslim upper class households.
G Z
A
Similarly, compared to elderly persons from non-Muslim
upper class households, elderly persons from the ST, Muslim OBC,
M
EPWRF India Time Series
Module on Educational Statistics
The EPWRF ITS has 17 modules covering a range of macro-economic, financial and social sector indicators on the Indian economy
For more details visit www.epwrfits.in
72
and Muslim upper class, were—after imposing all the controls—
significantly more likely to be in poor health by 5.3, 7.2, and
9.5 points, respectively. It is true that in the decade between
2004 and 2014, the predicted age at death has risen for all
groups, but as a counter, the predicted probability of elderly
persons being in poor health has also risen for both groups.
However, underlying both findings, is the fact that inter-group
disparities in health outcomes have continued to flourish.
It is important to note that there are several deficiencies
inherent in this study. First, there are important health-related
attributes of individuals (smoking, diet, exercise, nature of
work) which are not—and, indeed, given the limitations of the
data, cannot be—taken into account. All these factors are
included in the “unobservable.” If these unobservable factors
were randomly distributed among the population, this in
R
itself, would not pose a problem. However, there is evidence
that there may be a group bias with respect to at least some of
E
these factors. For example, if hard physical work is more inimi-
cal to health than more sedentary jobs, then of the males aged
T
25–44 years, 42% of ST and 47% of SC, compared to only 10%
of persons from the non-Muslim upper class, worked as casual
labourers (Borooah et al 2007).
There is a natural distinction between inequality and ineq-
uity in the analysis of health outcomes. Inequality reflects the
totality of differences between persons, regardless of the
source of these differences, and in particular, regardless of
whether or not these sources stem from actions within a person’s
control. Inequity reflects that part of inequality that is gener-
ated by factors outside a person’s control. In a fundamental
Features
Presents all-India
and state-wise
annual data from
1981 onwards.
Structured in three
sections :
• Literacy in India
• School Education
• Higher Education
Includes data on
SC/ST students and
school education in
rural areas.
MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly

sense, therefore, while inequality may not be seen as “unfair,”
inequity is properly regarded as being unfair.
The point about group membership is that while it may
not be the primary factor behind health inequality, it is the
main cause of health inequity. This paper’s central message,
conditional on the caveats noted earlier, is that belonging to
notes
1 Psychologists distinguish between stress caused
by a high demand on one’s capacities, for exam-
ple, tight deadlines, and stress engendered by a
low sense of control over one’s life.
2 There are about 85 million Indians classified
as belonging to the Scheduled Tribes. Of
these, Adivasis refer to the 70 million who live
in the heart of India, in a relatively contiguous
hill and forest belt extending across the states
of Gujarat, Rajasthan, Maharashtra, Madhya
Pradesh, Chhattisgargh, Jharkhand, Andhra
Pradesh, Odisha, Bihar, and West Bengal
(Guha 2007).
3 Dalits, who number about 18 million, refer to
those who belong India’s Scheduled Castes.
4 See Tendulkar (2007).
5 The fact that Muslims, too, have their “back-
ward” classes and “forward” classes, with a
conspicuous lack of intermarriage between the
two groups, meant that it was sensible to sepa-
rate Muslims into two groups: Muslims from
the OBC (MOBC) and Muslims from the “upper
classes” (MUC).
6 Figures relate to the 71st round. The 60th
round figures are similar and not shown. This
category also included 264 Muslim households.
Since Muslim ST persons are entitled to reser-
vation benefits, these households have been
retained in the ST category.
7 This category also included 74 Muslim
M
households. Since Muslims from the SC are not
entitled to SC reservation benefits, these Mus-
lim SC households were moved to the Muslim
OBC category.
8 Including Muslim SC households (note 7).
9 Of the 1,716 households in the 60th NSSO round,
reporting deaths in the previous year, 1,634
households reported a single death, 70 house-
holds reported two deaths, and 12 households
reported three deaths. Of the 1,716 households
in the 71st round reporting deaths in the previ-
ous year, 2,310 households reported a single
death, 82 households reported two deaths, and
three households reported three deaths.
10 For the 71st NSSO round: “forward” states were
Himachal Pradesh, Punjab, Chandigarh, Hary-
ana, Delhi, West Bengal, Gujarat, Daman and
Diu, Dadra and Nagar Haveli, Maharashtra,
Andhra Pradesh, Karnataka, Goa, Kerala, Tamil
Nadu, Puducherry, and Telangana. “Backward”
states were Uttarakhand, Rajasthan, Uttar
Pradesh, Bihar, Sikkim, Arunachal Pradesh,
Nagaland, Manipur, Mizoram, Tripura, Megha-
laya, Assam, Jharkhand, Odisha, Chhattisgarh,
Lakshadweep, Andaman and Nicobar Islands.
11 For example, if living in a “forward” state raises
the average age at death and if ST households
are disproportionately concentrated in “back-
ward” states, then this will show up in the raw
data as a low age at death for ST households;
however, this age will be raised when the state
of residence is controlled for.
12 As mentioned before, the age of the persons, to
whom the health perception question was
addressed, were 60 years and above. Marital
status was defined as married, or single,
widowed, divorced.
Economic & Political Weekly EPW MARCH 10, 2018
the ST, the SC, or being Muslim in India seriously impaired the
“capabilities” of persons to function in society. This is be-
cause, as this study has shown, if you stand at the bottom of
the social ladder in India, your risk of suffering premature
death, poor health, and lack of access to treatment and care is
substantially higher.
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Thousand Oaks, California.
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Epstein, H (1998): “Life and Death on the Social
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Control at Work and Home on Depression and
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Guha, R (2007): “Adivasis, Naxalites, and Indian
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Appendix on Ordered Logit Models
Suppose there are N persons (indexed i=1…N).
Let the values taken by the variable Yi repre-
sent the health status of these persons such
that: Yi=1, if the person answered “excellent/
very good health”; Yi=2 if the person answered
vol lIiI no 10
SPECIAL ARTICLE
“fairly good health”; and Yi=3 if the person
answered was in “poor health.” Since these
outcomes are inherently ordered—in the sense
that the outcome associated with a higher
value of Yi is less desirable than that associated
with a lower value—the appropriate method of
estimation is that of ordered logit.
The idea behind this model (Borooah 2002) is
that the health of a person may be represented by
the value of the latent variable, Hi, with higher
values of Hi representing poorer health. One
may consider this latent variable to be a linear
function of K health-determining factors whose
values for an individual i are: Xik, k=1...K. Con-
sequently,
K
Hi = ∑Xikβk + εi = Zi + εi
...(1)
k=1
where: k is the coefficient associated with the
kth variable and Zi=X ikk . An increase in the
k
value of the kth factor will cause the health of
a person to improve if k<0 and to deteriorate
if k>0.
Since the values of Hi are, in principle and in
practice, unobservable, equation (1) represents
a latent regression which, as it stands, cannot
be estimated. However, what is observable is a
person’s health status (in this study: good, fair-
ly good, poor) and the categorisation of persons
in the sample in terms of health status is implic-
itly based on the values of the latent variable Hi
in conjunction with “threshold values,” 1 and
2 (1< 2) such that:
Yi=1, if Hi < 1
Yi=2, if 1 <Hi < 2 ...(2)
Yi=3, if Hi > 2
The 1, 2 of equation (2) are unknown
parameters to be estimated along with the k
of equation (1).
A person’s classification in terms of his/her
health status depends on whether the value of
Hi crosses a threshold and the probabilities of a
person being in a particular health status are:
Pr(Yi=1)=Pr(1 <1–Zi)
Pr(Yi=2)=Pr(1 –Zi < 1 <2–Zi) ...(3)
Pr(Yi=3)=Pr(1 <1–Zi)
If it is assumed that the error term i, in equa-
tion (1), follows a logistic distribution then
equations (1) and (2) collectively constitute
an ordered logit model (the assumption that i
are normally distributed results in an ordered
probit model). The estimates from this model
permit, through equation (3), the various prob-
abilities to be computed for every person in
the sample, conditional upon the values of the
health-determining factors for each person.
73
NOTES
Fourteenth Finance Commission
Impact of Its Recommendations
Mita Choudhury, Ranjan Kumar Mohanty, Jay Dev Dubey
Preliminary evidence on the
impact of the recommendations
of the Fourteenth Finance
Commission suggests that there
has been an increase in central
transfers and social sector
expenditures in a number of
states in 2015–16. This evidence is
biased upwards due to two factors.
First, much of the gains have been
measured with respect to a low
base year. Second, the inferences
are affected by systematic
differences between actuals,
revised estimates, and budget
estimates. Using a modified base
and comparable estimates for 15
major states, it is seen that these
are much smaller. Besides, in
most states, social services have
received a lower priority over
economic services in 2015–16.
The authors are thankful to Diwan Chand for
providing excellent support with data and
understanding of the related issues. They are
also grateful to Rathin Roy and Tapas Sen for
selected insights.
Mita Choudhury (mita.choudhury@nipfp.org.in),
Ranjan Kumar Mohanty (ranjan.mohanty@nipfp.
org.in) and Jay Dev Dubey (jaydev.dubey@
nipfp.org.in) are with the National Institute of
Public Finance and Policy, New Delhi.
74
T
he recommendations of the Four-
teenth Finance Commission (FFC)
have important implications for
revenues and expenditures of state govern-
ments. The share of states in divisible pool
of taxes has increased from 32% to 42%
following the FFC recommendations: an
increase much higher than the levels rec-
ommended by the previous finance com-
missions.1 To accommodate this increase,
the union government was expected to re-
duce conditional transfers to states in the
T
form of grants, as the available fiscal space
was inadequate to absorb the increase in
Z
tax devolution.2 The reduction in grants,
however, has been an issue of concern as
much of the grants relate to centrally spon-
G
sored schemes (CSS), initiated to support
expenditures in the social sector and the
A
development of infrastructure. Although
increased tax devolution has provided the
states with untied resources to compen-
sate the loss in grants, questions on what
M
has been the net gain in resources at the
state-level, and how have individual states
used the increased untied resources to
meet their fiscal priorities have remained
matters of empirical investigation.
The FFC recommendation for increas-
ing tax devolution to states was primarily
intended to bring about a shift in the com-
position of central transfers to states. With
increased tax devolution, it was expected
that the states would receive a larger vol-
ume of untied funds relative to tied funds.
This will enhance the states’ autonomy
in deciding their expenditure priorities.
Much of the tied transfers to states were
towards CSS, which were initiated by
the central government, but required a
“matching contribution” of funds from the
states. It has been pointed out by various
state governments that the requirement
of matching contribution in most CSS
schemes had squeezed the fiscal space of
states (Finance Commission 2015). Many
MARCH 10, 2018
of the CSS schemes were also on subjects
in the state and concurrent lists of the
Indian Constitution, and an expansion
of these schemes have led to an increase
in the union government’s expenditure
on subjects other than those on the union
list (Chakraborty 2015). The increased
tax devolution, therefore, was not only
expected to provide states with a greater
degree of expenditure autonomy, but
also allow the union government to fo-
cus more on areas that are constitution-
ally enlisted in the union list.
The net gain or loss of resources in states
will be determined by the relative increase
or decrease of untied and tied funds in
R
the states. Transfers are also affected by
changes introduced by FFC with respect
E
to the criteria for horizontal distribution
of resources across states. The net gain or
loss of transfers in states depends on the
combined effect of changes in tax devolu-
tion, grants and the criteria for horizontal
distribution of resources among states.3
Net Gain in Resources?
Preliminary evidence on receipts of central
transfers in states almost unanimously
suggested a net gain in resources follow-
ing the FFC recommendations. Studies on
Bihar and Odisha have shown that the
estimated gain from increased tax devo-
lution is likely to be more than adequate
to compensate for the loss of grants
(Chakraborty 2016; OBAC 2015). In Ma-
harashtra too, the increased tax devolu-
tion is likely to have expanded the fiscal
space (Shetty 2016). A broader study of
19 states for the first year of the award
period of FFC had also shown that there
had been a substantial increase in re-
sources in almost every state in the first
year of the FFC award period (Accounta-
bility Initiative 2016).
Similarly, a World Bank study for 20
states showed that in almost all the states,
there was a net gain in resources follow-
ing the FFC recommendations (World
Bank 2016). The only contrasting evi-
dence was provided by an early study in
Karnataka, which showed that the gain in
share of taxes in the state was unlikely
to compensate for the loss in grants in
the first year of the FFC award period
vol lIiI no 10 EPW Economic & Political Weekly
 NOTES
Figure 1: Aggregate Transfers to States (As % of GTR of the union government) Figure 2: Change in Central Transfers (As % of GSDP) (2015–16 over 2014–15, actuals)
Thirteenth Finance Commission Fourteenth Finance Commission 2.5 2.0 2.3
2.0 1.8 1.8
Decrease of 8 % 1.4
70 Increase of 2 % 1.5 1.1 1.2

Percent
60 1.0 0.7
Percent

50 0.3 0.5
0.5 0.1 0.2
40
0.0
30 0.0 0.0
20 -0.5
-0.6
10 63 61 56 56 55 57 58 56 -1.0

Maharashtra

Uttar Pradesh
Punjab

Gujarat

Tamil Nadu

Haryana

Rajasthan

Karnataka

Kerala

West Bengal

Bihar

Chhattisgarh

Madhya Pradesh

Odisha

Jharkhand
0
2010–11 (A)

2011–12 (A)

2012–13 (A)

2013–14 (A)

2014–15 (A)

2015–16 (A)

2016–17 (RE)

2017–18 (BE)
Source: Finance Accounts of respective states, various years. For West Bengal, data have
Source: Budget document of the union government, various years. been sourced from the state budget document.
(Kotasthane and Ramachandra 2015). Second, the existing evidence on the on “social services” vis-à-vis “economic
However, a later study by the same authors increase in central transfers and social services” in states to examine the relative
using updated information also suggested sector expenditures is likely to be biased priorities of states in the two services in
that even in Karnataka, there was likely upwards due to systematic differences in the first year of the FFC award period.
to be a net gain in resources (Kotasthane the nature of estimates used for the anal-
and Ramachandra 2016). Additionally, it yses. Much of the evidence is based on a A Note on the Data Used
has been pointed out that social sector comparison of actuals to revised estimates Information on central transfers and ex-
expenditures were likely to increase in
almost every state allaying concerns of
any adverse impact on the social sector
at the state-level following the FFC rec-
or revised estimates to budget estimates
of transfers and expenditures between
2014–15 and 2015–16.5 As actual estimates
for both these years were not available

E R
penditures pertaining to 15 major states
for the years 2011–12 to 2015–16 has been
drawn from Finance Accounts compiled
by the Comptroller and Auditor General

T
ommendations (Accountability Initiative till then, early studies have compared re- of India for each state.6 For some states,
2016). Specifically, expenditures on health vised estimates for 2014–15 with budget central transfers for the social sector

Z
and education were likely to increase in estimates for 2015–16. More recent stud- were not easily identifiable from Finance
various states (World Bank 2016). ies have compared actuals for 2014–15 Accounts as several items were clubbed
The existing studies on the issue are with revised estimates for 2015–16. together. We, therefore, use budget docu-

G
associated with two important problems. Notably, in the past, in any year, almost ments for information on central transfers
First, much of the evidence is based on a invariably, actuals were lower than revised for the social sector. Notably, data on

A
year-to-year comparison between 2014 estimates, and revised estimates were central transfers and expenditures since
and 2015 (the last year of the Thirteenth lower than budget estimates. A compari- 2014–15 are not comparable to earlier
Finance Commission or TFC award period) son of revised estimates of any year with years as a significant portion of central
and 2015–16 (the first year of the FFC budget estimates of the next year, there- transfers prior to 2014–15 were off budget
award period). In all the existing studies,
the base year for measuring changes in the
first year of FFC has, therefore, been with
reference to the single year 2014–15 of
the TFC period. This is because comparable
state-level figures of transfers and expen-
M fore, induces an upward bias in the meas-
urement of gains. Similarly, a comparison
of actuals of any year with revised esti-
mates of the next year inflates the gains.
In this paper, we add to the existing
analysis in two ways. First, using union
in nature. To ensure comparability over the
years, off-budget transfers in each year
have been included for each state. For
central transfers to states, gross tax rev-
enues (GTR) and cost of tax collection of
the union government have been com-
ditures prior to 2014–15 are not available and state budgets, we highlight the up- piled from union budget documents for
from budgets. Till 2013–14, much of the ward bias that occurs in measurement of various years.
grants under CSS were not routed through gains following FFC recommendations if
the state treasuries and were not cap- one uses 2014–15 as the base for compari- Quantum of Transfers
tured in budgetary figures of the state son, vis-à-vis the other years of the TFC Analysis suggests that increase in aggre-
governments.4 Since the last year of TFC period. Second, to reduce bias, we provide gate transfers to states from the union
(2014–15), these grants are being routed a comparison of the first year of the FFC government in the first two years of the
through state treasuries and are captured period (2015–16) with the average value FFC award period has been relatively
in budgetary figures. Thus, 2014–15 is over the TFC period, instead of a single small (Figure 1). The share of states in
the only year in the TFC period in which year 2014–15 as in existing studies. Using GTR of the union government has in-
budgetary data on transfers and expendi- this approach, we revisit two questions: creased by two percentage points in
tures are comparable with the FFC years, (i) what has been the net gain in central
and studies have used 2014–15 as the base transfers to states following the FFC
for measuring changes in the FFC period. recommendations; and (ii) how has social available at
This may be problematic if the values for sector expenditures fared in states follow- Ideal Books
2014–15 are unusually high or low with ing the FFC recommendations? Further, 26/2082, Tutors Lane, Secretariat Statue
respect to the average of the TFC period. we compare the changes in expenditure Thiruvananthapuram 695001, Kerala

Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 75
NOTES
Figure 3: Change in Central Transfers (As % of GSDP) (2015–16 over 2011–15, actuals) Figure 5: Receipts of ‘Tied Plan Grants’ in States
2.5 (As % of GSDP) (in 2014–15 and 2015–16, actuals)
2.0 6
1.5 1.0 1.2 1.2
Percent

Percent of GSDP
1.0 0.6 0.6 0.7 0.7 2014–15 2015–16
0.5 0.2 0.3
0.0 4
0.0
-0.5 -0.1 0.0 0.0 0.0
-0.3
-1.0
Maharashtra

Uttar Pradesh
Gujarat

Tamil Nadu

Punjab
Haryana

Karnataka

Bihar

Rajasthan

West Bengal

Madhya Pradesh

Chhattisgarh

Kerala

Odisha

Jharkhand
2

Maharashtra

Uttar Pradesh
Bihar

Chhattisgarh

Gujarat

Haryana

Jharkhand

Karnataka

Kerala

Madhya Pradesh

Odisha

Punjab

Rajasthan

Tamil Nadu

West Bengal
Source: Finance Accounts of respective states for various years. For West Bengal, data have
been sourced from the state budget document.

Figure 4: Untied and Tied Transfers to States (As % of GTR of the union government)
Tied plan transfers at the state-level refer to all receipts under plan grants other than
45
normal central assistance.
40
(+)8.7 Source: Finance Accounts of respective states, various years. For West Bengal 2015–16, data
35 2014–15(A)
2015–16(A) have been sourced from the state budget document.
30
Percent

25 Figure 6: Receipts of ‘Tied Plan Grants’ in States

20 (-)6.3 (As % of GSDP) (in 2014–15 and average in the period 2011–15, actuals)
30.9 39.5 6
15
23.7 17.3 2014–15
10

R
5

Per centofofGSDP
GSDP
4
0 2015–16
Untied Resources Tied Resources

E
Percent
See endnote 9. 2
Source: Budget document of the union government, various years.

T
2015–16 (the first year of the FFC award gross state domestic 0

Maharashtra

Uttar Pradesh
Bihar

Chhattisgarh

Gujarat

Madhya Pradesh

Punjab
Haryana

Jharkhand

Karnataka

Kerala

Odisha

Rajasthan

Tamil Nadu

West Bengal
period) over the previous year 2014–15 product (GSDP) in

Z
(Figure 1).7 Notably, transfers in 2014–15 states (Figure 2, p 75).
(the base year from which increase has If one uses the aver-
been measured) were particularly low age between 2011– Source: Same as Figure 5.

G
(Figure 1). In 2014–15, transfers as a 12 and 2014–15 (referred to as 2011–15 states in 2015–16. The decline in tied
proportion of GTR of the union govern- hereafter) as the base for comparison, the transfers has been largely brought about

A
ment was the lowest among all the years gains are much lower: the maximum being through a reduction of resources for CSS
in the TFC period. The 2% increase in 1.2% of GSDP (Figure 3).8 schemes as was recommended by FFC.
transfers to states since 2014–15 is a mar- The reduced volume of resources for CSS
ginal recovery from a fall of around 8% Composition of Transfers schemes is also mirrored in a decline in tied
since the beginning of the TFC period. In
fact, figures for earlier years provided in
the FFC report suggest that the level of
transfers to states in 2014–15 was the
lowest since 2008–09 (Finance Com-
mission 2015: 52). Part of the increase in
M
With little fiscal space available with the
union government to increase aggregate
transfers, the increased tax devolution
was primarily intended to change the
composition of central transfers to states.
It was expected that the union government
plan transfers at the state-level in almost
all states (Figure 5).10 Notably again, the
decline in tied plan grants at the state-
level is higher when one compares it with
the average for the period 2011–15 than
when compared to 2014–15 alone (Figure 6).
2015–16 over 2014–15 is therefore, due to would withdraw some of the transfers
measurement from a low base. In the on CSS schemes and reduce tied transfers Social Sector Expenditures
second year of the FFC award period to states. Untied transfers were expected The decline in tied plan grants from the
(2016–17), aggregate transfers show a to rise due to increase in the share of tax union government has resulted in a con-
marginal increase of one percentage point devolution. Thus, the composition of trans- traction in the volume of transfers for the
over 2015–16 (Figure 1). Thus, increase in fers to states was expected to change in social sector.11 A comparison of the grants
aggregate transfers in the first two years favour of more untied resources. for social sector between 2014–15 and
of FFC period has not been particularly As expected, there has been a reduction 2015–16 suggests that central transfers in
higher than the average of the TFC period. in conditional (tied) transfers and an in- social sectors as a percentage of GSDP fell
The upward bias in measurement of crease in unconditional (untied) transfers in almost all major states (Figure 7, p 77).
gains in central transfers in the first year to states between 2014–15 and 2015–16.9 It may be noted that a part of the grants
of FFC period (2015–16) with respect to As percent of GTR of the union govern- under schemes like Tribal Sub-plan, Border
2014–15 is reflected in transfers reported ment, tied transfers reduced by 6.3% Areas Development Programme, Special
in state budgets too. A comparison of while untied transfers increased by 8.7% Component Plan for Scheduled Castes,
changes in the volume of central transfers between the two years (Figure 4). The etc, are also used for social sector expen-
suggests that the gains in aggregate central net increase of around two percentage ditures. However, differences in the level
transfers vary between 0.1% and 2.3% of points reflects the additional transfers to of disaggregation at which these grants
76 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
 NOTES
Figure 7: Change in Central Transfers for Social Sector Figure 8: Change in Social Sector Expenditures
(As % of GSDP) (in 2015–16 over 2014–15) (As % of GSDP) (in 2015–16 over 2014–15, actuals)
0.20 2
1.6
0.10 0.08
0.08 1.5 1.3
1.2 1.2
1.0
0 1
-0.01
-0.03 -0.03 -0.01

Percent
Per cent
Percent

-0.10 -0.07 -0.06

-0.10 0.5 0.2 0.2 0.3 0.4
-0.20 -0.16
0
-0.30 -0.24 -0.24 -0.1 0.0 0.1
-0.26
-0.5 -0.3 -0.2
-0.40
-0.41 -0.38 -0.37 -0.6
-0.50 -0.42 -1

Maharashtra

Uttar Pradesh
Chhattisgarh

West Bengal

Gujarat

Punjab

Haryana

Tamil Nadu

Karnataka

Madhya Pradesh

Kerala

Bihar

Rajasthan

Jharkhand

Odisha
Uttar Pradesh

Maharashtra
Punjab

Rajasthan

Bihar

West Bengal

Kerala

Karnataka

Haryana

Chhattisgarh

Gujarat

Odisha

Tamil Nadu

Madhya Pradesh

Jharkhand
Source: Finance Accounts of respective states, various years. For West Bengal 2015–16, data
Source: State budget documents, 2016–17 and 2017–18. have been sourced from the state budget document.

are reported in state budgets make it diffi- Jharkhand and Odisha (Figure 9). Irre- FFC period in a number of states. States
cult to identify and compare the portion of spective of the base used for comparison, where both expenditures on social services
these grants that are earmarked for so- social sector expenditures have declined and economic services increased (as per-
cial sector expenditures. In most states, in Chhattisgarh, Maharashtra, Punjab, and centage of GSDP), the increase has been
the amount of such grants that cannot
be identified with any sector, account for
less than 10% of total central grants.
Even if we consider and add all such
Haryana. It is important to note that cen-
tral grants for the social sector account for
a relatively small portion of social sector
expenditures in states. Central grants for

E R
higher in the latter than in the former.
These include Uttar Pradesh, Rajasthan,
Odisha, Madhya Pradesh, and Bihar. In
others where expenditure declined in both

T
grants to transfers for the social sector, the social sector accounted for around a economic and social services (as percent-
the fall is evident in majority of states. third of the total social sector expenditures age of GSDP), the decline has been more in

Z
A number of low-income states have in the eight relatively more centrally de- the latter than the former (Table 1). These
compensated for the decline in central pendent states.13 For other states, the con- include Punjab and Maharashtra. In other
grants for the social sector. This is reflected tribution was even smaller. The changes states like Chhattisgarh, Haryana, and

G
in the fact that despite a fall in central in social sector expenditures are, there- West Bengal, while expenditure on social
transfers, social sector expenditures have fore, determined to a large extent by services has fallen, expenditure in eco-

A
increased in a number of these states states’ own revenue and fiscal priorities. nomic services has risen. On the whole,
(Figure 8 and Figure 9, p 78).12 The mag- Importantly, expenditures on social in 10 out of the 15 states under analysis
nitude of increase, however, has been less services have received a lower priority than here, expenditure in economic services
than 1% of GSDP in most states except economic services in the first year of the has been relatively higher than social
Table 1: Changes in Selected Indicators of Revenue Receipts and Expenditures in Major States (% of GSDP)

Selected Indicators

Total revenue receipts

Total central transfers
Total expenditure
Expenditure on social services
24.0
17.7
26.4
Bihar

25.2
17.9
28.2
M
Chhattisgarh

1.2
0.2
1.8
Gujarat

17.9
8.6
20.1
Haryana

17.8
9.3
20.0
Jharkhand
2011–15 2015–16 Increase/ 2011–15 2015–16 Increase/ 2011–15 2015–16 Increase/ 2011–15 2015–16 Increase/ 2011–15 2015–16 Increase/
(Average) Decrease (Average) Decrease (Average) Decrease (Average) Decrease (Average)
-0.1
0.7
-0.1
Decrease
10.6
2.7
12.7
9.4
2.4
11.6
-1.2
-0.3
-1.1
10.3
2.5
12.8
9.8
2.4
13.6
-0.5
0.0
0.8
15.6
8.9
17.3
17.6
10.1
19.3
2.0
1.2
2.0

(including rural development) 13.0 13.5 0.5 10.0 8.4 -1.6 5.4 5.1 -0.3 5.3 5.1 -0.2 8.2 9.4 1.2
Expenditure on economic services 5.7 6.4 0.7 5.6 7.0 1.4 3.6 3.2 -0.5 3.5 4.5 1.0 3.8 4.5 0.7
Karnataka Kerala Madhya Pradesh Maharashtra Odisha
Selected Indicators 2011–15 2015–16 Increase/ 2011–15 2015–16 Increase/ 2011–15 2015–16 Increase/ 2011–15 2015–16 Increase/ 2011–15 2015–16 Increase/
(Average) Decrease (Average) Decrease (Average) Decrease (Average) Decrease (Average) Decrease
Total revenue receipts 11.9 11.7 -0.2 11.0 12.4 1.4 20.0 19.6 -0.3 10.1 9.6 -0.5 18.7 20.2 1.6
Total central transfers 3.7 3.7 0.0 2.8 3.9 1.0 10.0 10.7 0.6 2.7 2.6 0.0 9.9 11.1 1.2
Total expenditure 13.9 13.6 -0.4 14.4 15.5 1.1 20.8 21.7 0.9 11.5 11.0 -0.5 19.4 22.3 2.9
Expenditure on social services
(including rural development) 5.4 5.6 0.2 5.3 5.7 0.4 9.2 9.5 0.3 5.0 4.6 -0.4 9.0 10.2 1.2
Expenditure on economic services 4.6 4.2 -0.4 2.4 2.6 0.2 5.6 6.0 0.4 2.7 2.5 -0.2 5.2 7.2 2.0
Punjab Rajasthan Tamil Nadu Uttar Pradesh West Bengal
Selected Indicators 2011–15 2015–16 Increase/ 2011–15 2015–16 Increase/ 2011–15 2015–16 Increase/ 2011–15 2015–16 Increase/ 2011–15 2015–16 Increase/
(Average) Decrease (Average) Decrease (Average) Decrease (Average) Decrease (Average) Decrease
Total revenue receipts 11.2 10.6 -0.6 15.1 14.9 -0.2 12.1 11.1 -1.0 19.2 20.3 1.1 11.7 11.7 0.0
Total central transfers 3.1 3.1 0.0 6.6 6.9 0.3 3.6 3.4 -0.1 10.3 11.0 0.7 6.4 7.0 0.6
Total expenditure 14.2 13.6 -0.6 17.2 19.1 1.8 14.1 13.8 -0.3 21.7 24.7 3.1 15.0 14.0 -1.1
Expenditure on social services
(including rural development) 4.4 4.2 -0.2 8.5 9.2 0.7 6.1 6.0 -0.1 9.1 9.5 0.5 7.5 7.2 -0.4
Expenditure on economic services 2.9 2.9 -0.1 4.2 5.2 1.0 3.0 2.9 -0.1 4.5 7.4 2.9 1.7 1.8 0.1
Source: Finance Accounts of respective states, various years. For West Bengal, 2015–16, data have been sourced from the state budget document.

Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 77
NOTES
Figure 9: Change in Social Sector Expenditures significant increase in tax therefore, not comparable prior and after
(As % of GSDP) (in 2015–16 over 2011–15, actuals) 2014–15. The two states have, therefore, been
devolution, the share of excluded from this analysis.
2
1.5 1.2 1.2 states in the GTR of the un- 7 Gross tax revenue (GTR) of the union govern-
1 0.7
0.4 0.5 0.5 ment in this analysis is net of cost of tax collection.
0.3 ion government was lower
Percent

0.5 0.2
0
8 GSDP figures for all states are based on 2011–12
-0.1 in the first year of the FFC series (except West Bengal). For West Bengal,
-0.5 -0.4 -0.4 -0.3 -0.2 -0.2 GSDP figures corresponding to 2011–12 series
-1 period than the average of
-1.5 are not available. For West Bengal, therefore,
-2 -1.6 the TFC period due to a GSDP figures are based on 2004–05 series.
Maharashtra

Uttar Pradesh
Punjab
Chhattisgarh

West Bengal
Gujarat

Haryana
Tamil Nadu
Karnataka
Madhya Pradesh
Kerala

Bihar
Rajasthan
Jharkhand
Odisha
contraction in grants. Al- Notably, we use the average for 2011–15 and
exclude 2010–11 from the analysis. This is be-
though grants from the un- cause comparable GSDP data for 2010–11 are
ion government for social not available.
9 Here, untied transfers include states’ share in
sectors have fallen in most taxes, normal central assistance, revenue defi-
Source: Finance Accounts of respective states, various years. For West Bengal, states, a number of states cit grants, and grants for compensation to
2015–16, data have been sourced from the state budget document. states for value added tax/central sales tax.
have compensated for this Tied transfers include all transfers excluding
services. Even among the eight relatively fall and increased social sector expendi- those included in untied transfers.
10 Tied plan transfers at the state level refer to all
more centrally dependent states,14 in tures. However, expenditures on social plan grants other than normal central assistance.
seven states (excluding Jharkhand) ex- services have received a lower priority 11 Social sector in this analysis includes expendi-
penditure towards social services has over expenditures on economic services ture under the budgetary heads of “social ser-
vices” and “rural development.” Correspond-
been lower than economic services. in the first year of the FFC award period.

R
ingly, “economic services” here excludes “rural
The observations made in this paper development.” We include “rural development”
in social sector as much of the employment
Summing Up are a preliminary exploration of the generation and poverty alleviation schemes

E
Preliminary evidence on the impact of changes in central transfers and social are included under this head.
Grants provided to states out of the Backward
the recommendations of the FFC suggests sector expenditures following the recom- Regions Grant Fund (BRGF) are included in social

T
that there has been an increase in central mendations of the FFC. It is likely that sector grants as these are predominantly used
for social services and rural development.
transfers and social sector expenditures 2015–16, the first year of the FFC period, 12 The magnitude of increase in social sector expend-

Z
in a number of states in 2015–16, the first was a year of transition to a new regime iture is lower, if one uses the average of 2011–15 as
the base for comparison rather than 2014–15 alone.
year of the FFC award period. Most com- of centre–state fiscal relations after the 13 The eight relatively more centrally dependent
mentaries on the issue are based on a recommendations of the FFC. Over the states include Bihar, Uttar Pradesh, Jharkhand,

G
Chhattisgarh, Madhya Pradesh, Rajasthan, Odis-
year-to-year comparison between 2014–15 medium term, the direction of change ha, and West Bengal. In these states, central
—the last year of the TFC award period— following the FFC recommendations transfers constitute a relatively high propor-
tion of total revenue receipts of states.

A
and 2015–16—the first year of the FFC may play out differently, and from that 14 These include Bihar, Uttar Pradesh, Jharkhand,
award period. Additionally, these com- perspective, trends in the first year only Chhattisgarh, Madhya Pradesh, Rajasthan,
Odisha, and West Bengal.
parisons are between actuals and revised provide an early glimpse of the emerg-
estimates or revised estimates and budget ing scenario.

estimates between 2014–15 and 2015–16.
This paper makes two contributions. Notes
First, using union and state budgets, we
show that the increase in central transfers
seems higher if one uses 2014–15 as the
base year for comparison rather than
other years of the TFC. Second, we revisit
questions on the net gain in central trans-
fers in states and how social sector expen-
ditures have fared in states in the first
year (2015–16) following the FFC recom-
mendations. In doing so, we use the aver-
age of the period 2011–15 as the base for
comparison with 2015–16, the first year
after the implementation of FFC recom-
mendations. We also examine the relative
priority that the states have given to the
social services and the economic services
in the first year of the FFC award period.
Our analysis suggests that the magni-
tude of gains from central transfers at the
state-level is much lower than what is
reported in earlier studies. Despite a
M
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Sector Expenditure in 2015–16: Summary,”
1 The shares of 32% to 42% are not strictly com- Centre for Policy Research, New Delhi.
parable. The 32% recommended by the Thir- Chakraborty, Pinaki (2015): “Getting Federal
teenth Finance Commission (TFC) was for Transfers Right,” Hindu, 8 May.
meeting states’ non-plan revenue expenditure — (2016): “Restructuring of Central Grants: Balanc-
alone. The 42% recommended by the FFC was ing Fiscal Autonomy and Fiscal Space,” Economic
meant for meeting expenditure needs of the & Political Weekly, Vol 51, No 6, pp 15–19.
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to states is likely to be of the order of 3%–4%. Commission, India.
Kotasthane, Pranay and Varun K Ramachandra
2 The limited fiscal space with the union govern-
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& Political Weekly, Vol 50, Nos 46–47, pp 16–20.
Commission (2015, Vol 1, p 90).
3 The term “horizontal distribution” refers to the — (2016): “Karnataka’s Changing Fiscal Landscape:
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ly, Vol 51, No 33, pp 20–24.
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mended by the Finance Commission. The formu- OBAC (2015): “Implication of Fourteenth Finance
lae determines the share of each state in the total Commission on Social Sector Budgeting in
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4 These grants were being released directly to Centre, http://www.obac.in/Implication%20%20
implementing agencies. of%2014%20Finance%20Commission%20on%20
5 It may be noted that revised estimates are based Social%20Sector%20Budgeting%20in%20Od-
on actual figures for at least three quarters of the isha.pdf.
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78 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
ECONOMIC NOTES
Misguided Priorities
Union Budget 2018–19
J Dennis Rajakumar
A close examination of the recent
trends in government finances
suggests that the expenditure
pattern of the government does
not provide any assurance for the
future in terms of building
adequate social capital. The
regressive nature of taxation policy
in recent years along with reduced
government spending has put
additional burden on out-of-pocket
expenditure of individuals.
J Dennis Rajakumar (dennisraja@epwrf.in) is
Director, EPW Research Foundation, Mumbai.
Economic & Political Weekly EPW march 10, 2018
EPW Research Foundation
also been a decrease in the revenue from
other communication services such as the
collection of licence fees from telecom
operators and spectrum usage charges. In
particular, the government expects to
realise licence fees and spectrum charges
to the tune of `30,737 crore in 2017–18
against budget estimates of `44,342 crore
I
f the size of government is measured by and actual collection of `70,241 crore in
expressing total government receipts 2016–17. Revenue target from communi-
and expenditure as a percentage of cation service is pegged at `48,661 crore
gross domestic product (GDP) at market in 2018–19.
price, we would see that it has been reduc- It is not clear why such vast reduction
ing in recent times. Receipts and expendi- in revenue from communication services
ture together constituted 30% of GDP in has occurred despite rising teledensity
2011–12, and declined to 26% of GDP in and demand for a wide range of telecom
2014–15. It remained nearly at that level, services. As for capital receipts, they are
thereafter (Table 1). This is budgeted to mostly accounted by borrowing and
go down to 25.8% of GDP in 2018–19. other liabilities representing gross fiscal
Except in 2014–15, total receipts generally deficit. The proceeds from disinvestment
remained higher than Table 1: Trends in Government Finances
total expenditure. Accor- SlNo Major Heads 2011– 2012– 2013– 2014– 2015– 2016– 2017– 2018–
12 13 14 15 16 17 18RE 19BE
ding to budget estimates, As % of GDP at market price
total receipts as percent- 1 Revenue receipts 8.6 8.8 9.0 8.8 8.7 9.0 9.0 9.2
age of GDP is expected to 2 Tax revenue 7.2 7.5 7.3 7.2 6.9 7.2 7.6 7.9
3 Non-tax revenue 1.4 1.4 1.8 1.6 1.8 1.8 1.4 1.3
be fractionally lower than 4 Dividend and profits 0.58 0.54 0.81 0.72 0.81 0.81 0.63 0.57
total expenditure. 5 Other non-tax revenue 0.58 0.63 0.77 0.68 0.83 0.88 0.69 0.65
In both receipts and 6 Other communication
services 0.20 0.19 0.36 0.25 0.40 0.46 0.18 0.26
expenditure, the revenue
7 Capital receipts 6.5 5.9 5.0 3.9 4.2 3.9 4.2 3.6
component is dominat- 8 Recoveries of loan 0.22 0.15 0.11 0.11 0.22 0.12 0.10 0.07
ing. Revenue receipts 9 Disinvestment receipts 0.21 0.26 0.26 0.30 0.31 0.31 0.60 0.43
remained at about 8.8% 10 Borrowing and
other liabilities 5.9 4.9 4.5 4.1 3.9 3.5 3.5 3.3
of GDP between 2011–12
11 Total receipts 15.1 14.7 14.1 12.7 12.9 13.0 13.4 12.8
and 2014–15, and this 12 Total expenditure 14.9 14.2 13.9 13.3 13.0 12.9 13.2 13.0
marginally rose to 9% in 13 Revenue expenditure 13.1 12.5 12.2 11.8 11.2 11.1 11.6 11.4
2017–18. It is expected to 14 Interest payments 3.1 3.1 3.3 3.2 3.2 3.2 3.2 3.1
go up to 9.2% in 2018–19. 15 Capital expenditure 1.8 1.7 1.7 1.6 1.8 1.9 1.6 1.6
This is largely because 16 Revenue deficit 4.5 3.7 3.2 2.9 2.5 2.1 2.6 2.2
17 Effective revenue deficit 1.9 1.5 1.0 1.5 1.2
of the increased collec- 18 Gross fiscal deficit 5.9 4.9 4.5 4.1 3.9 3.5 3.5 3.3
tion of tax revenue that 19 Gross primary deficit 2.8 1.8 1.1 0.9 0.7 0.4 0.4 0.3
went up from 6.9% of Growth rate
GDP in 2015–16 to 7.6% in 1 Revenue receipts 17.0 15.4 8.5 8.5 15.0 9.5 14.6
2 Tax revenue 17.8 10.0 10.8 4.4 16.7 15.3 16.6
2017–18, and is budgeted
3 Non-tax revenue 12.9 44.8 -0.5 27.0 8.6 -13.5 3.9
to go up further to 7.9% 4 Dividend and profits 6.2 68.2 -0.7 24.8 9.7 -13.5 0.8
in 2018–19. 5 Other non-tax revenue 23.7 37.8 -2.7 35.1 17.4 -13.2 5.7
At the same time, the 6 Other communication services 8.6 112.2 -23.7 80.0 27.4 -56.2 58.3
size of non-tax revenue 7 Capital receipts 2.3 -3.1 -14.1 20.3 3.2 18.5 -5.5
8 Total receipts 10.7 8.0 0.5 12.1 11.6 13.8 6.3
has come down in 2017–18
9 Total expenditure 8.1 10.6 6.7 7.6 10.3 12.3 10.1
due to reduced dividend 10 Revenue expenditure 8.5 10.3 6.9 4.8 9.9 15.0 10.2
and surplus from govern- 11 Interest payments 14.7 19.5 7.5 9.7 8.8 10.4 8.5
ment-owned institutions, 12 Capital expenditure 5.2 12.5 4.8 28.6 12.5 -3.9 9.9
including Reserve Bank 13 Gross fiscal deficit -5.0 2.6 1.6 4.3 0.5 11.1 4.9
GDP 13.8 13.0 11.0 10.4 10.8 10.0 11.5
of India (RBI)1 and nation- RE stands for Revised Estimates; and BE stands for Budget Estimates.
alised banks. There has Source: Author's estimates based on data extracted from Union Budget 2018–19.
vol lIiI no 10 79
ECONOMIC NOTES EPW Research Foundation
Figure 1: Annual Rate of Change in Major Taxes (%) current fiscal year, the size of budget estimates, total expenditure is
50
Indirect taxes indirect taxes would have been expected to be 13% of GDP in 2018–19, a
excluding customs
40
Taxes on income other than higher than the estimated 5.5%. further deterioration in government spen-
Major indirect taxes
corporation tax Of the various indirect taxes, ding in the ensuing fiscal year. No major
30
customs duty is expected to be change is noticed in the case of capital
20
GDP in the order of 0.8% of GDP in expenditure, which hovered around 1.7%
10
2017–18 compared to 1.5% in of GDP. Therefore, reduction in the size of
Corporation tax
0 2016–17. This is budgeted to revenue expenditure has dragged the over-
2012–13 2013–14 2014–15 2015–16 2016–17 2017– 18RE 2018–19BE
go down to 0.6% of GDP in all size of government spending.
Figure 2: Annual Percentage Change in Expenditure (%) 2018–19. Thus, bulk of indirect Revenue expenditure has gone down by
16
Revenue expenditure taxes has been accounted by 2 percentage points between 2011–12 and
GDP
12 union excise duties and ser- 2016–17 from 13.1% of GDP to 11.1%. It is
Total expenditure vice taxes (clubbed together budgeted to remain marginally higher at
8
and now known as GST, with 11.4% in 2018–19. The rate of growth of
4
an exception that union excise total expenditure and revenue expendi-
0 duties continue to be levied on ture remained less than the growth of GDP
2012–13 2013–14 2014–15 2015–16 2016–17 2017–18RE 2018–19BE
fewer items such as motor (Figure 2). Although revised estimates for

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had nearly doubled from 0.31% of GDP in spirit, high speed diesel oil, crude oil, and 2017–18 show that these expenditures have
2016–17 to 0.6% in 2017–18 and are so on). Tax policies that increase govern- grown more than GDP, they are expected

E
budgeted to remain at 0.43% of GDP in ment’s reliance on indirect taxes are to be lower than GDP growth according
2018–19. Of the total revenue to the gov- regressive in character, as such policies to budget estimates for 2018–19.

T
ernment, tax revenue has increasingly impact everyone equally (Rajakumar The government appears to have
become a major source; it used to account and Krishnaswamy 2015). remained firm in its fiscal consolidation
for 53.1% of total revenue in 2015–16 and This coupled with increased reliance on stance; gross fiscal deficit has been stead-
56.2% in 2017–18. It is further expected taxes on income other than corporation
to go up to 61.7% in 2018–19.

Declining Corporate Taxes Z

tax signals changes in government taxa-

G
tion policies that aim to tax individuals at
the time of earning an income, and at the
Direct taxes such as “corporation tax” and time of spending. The rate of growth of
fastly brought down from 5.9% of GDP in
2011–12 to 3.5% in 2017–18, and further to
3.3% in 2018–19. While growth in tax
revenues (direct and indirect) mostly from
individuals has outpaced GDP growth,

A
“income tax other than corporation tax,” taxes on income other than corporation tax growth in government expenditure has
used to be the major source of gross tax and major indirect taxes has far exceeded remained subdued compared to the GDP
revenue accounting for about 5.5% of GDP the rate of growth of GDP (Figure 1), growth. This has jointly contributed to

M
till 2016–17 and 6% in 2017–18. This has whereas corporate taxes grew at a pace the reduction in gross fiscal deficit as a
been budgeted to remain nearly at the slower than that of GDP’s growth. In a percentage of GDP.
same level (Table 2). As a percentage of nutshell, the recent fiscal policy relies
GDP, corporation tax collection exceeded more on tax revenue collected, either Reduced Thrust on Social Capital
that of other direct taxes by nearly one directly or indirectly, from individuals. In strict adherence to fiscal consolida-
percentage point in 2011–12. This gradu- This will have a direct bearing on the tion, the government is losing the thrust
ally reduced to 0.7 percentage point in consumer surplus. on building social capital by means of
2017–18, and to 0.5 percentage point in spending. This is amply clear when we
2018–19. If this trend continues, the impor- Subdued Government Spending express various heads of expenditures,
tance of corporate tax will be replaced by Not only have tax policies become regres- under both revenue and capital, as a
income taxes other than corporate taxes. sive in recent times, government spend- percentage of GDP (Table 3, p 81).
The magnitude of differences between ing has remained subdued Table 2: Trends in Gross Tax Revenue (as % of GDP at market price)
major direct taxes and indirect taxes has of as well. As a percentage of Major Heads 2011– 2012– 2013– 2014– 2015– 2016– 2017– 2018–
12 13 14 15 16 14 18RE 19BE
late become marginal. Indirect taxes have GDP, total expenditure of 1 Gross tax revenue 10.2 10.4 10.1 10.0 10.6 11.2 11.6 12.1
gone up by nearly 1.2 percentage points the government was 2 Corporation tax 3.7 3.6 3.5 3.4 3.3 3.2 3.4 3.3
from 4.4% of GDP in 2014–15 to 5.6% in 14.9% in 2011–12, lower 3 Taxes on income other
than corporation tax 1.9 2.0 2.1 2.1 2.1 2.3 2.6 2.8
2016–17. With the introduction of goods than that of total receipts
4 Customs 1.7 1.7 1.5 1.5 1.5 1.5 0.8 0.6
and services tax (GST) from 1 July 2017, by a fraction of 0.2 per- 5 Union excise duties 1.7 1.8 1.5 1.5 2.1 2.5 1.7 1.4
the tax accrued in a month is payable by centage points (Table 1). 6 Service tax 1.1 1.3 1.4 1.3 1.5 1.7 0.5
the tenth day of the succeeding month. This has been steadily 7 Goods and service tax 2.6 4.0
Thus, tax collectables in March 2018 will declining over the years Memo:
be paid in April 2018. The budget would to 12.9% in 2016–17, and 8 Major direct taxes (2+3) 5.6 5.6 5.6 5.5 5.4 5.5 6.0 6.1
9 Major indirect taxes
have made provision for this. Had this stood at 13.2% of GDP in (4+5+6+7) 4.5 4.8 4.4 4.4 5.2 5.6 5.6 6.0
been included along with the GST of the 2017–18. According to the Note and Source: Same as in Table 1.
80 march 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
EPW Research Foundation ECONOMIC NOTES

There are broadly four major heads
under which revenue expenditure of
the union government are reported,
namely, general services, social services,
economic services and grants-in-aid and
contributions.
General services are the major revenue
expenditure items consisting of accounts
mostly related to public administration
along with interest payments and servicing
of debt. Interest payments used to account
for about 3.1% of GDP (and about 24.3% of
total expenditure) and it remained at
that level over the years. Defence spending
remained at about 1.1% for a long time,
and is expected to dip marginally in 2018–
19. Pension and other retirement benefits
expenditure alone accounted for 5.6% to
5.8% of GDP (that is, 37.6% of total expend-
iture in 2011–12, and 43.7% in 2017–18).
Revenue expenditure of social services
includes education and health-related
items. Spending on social services has not
only remained abysmally low but declined.
Accounting for 1.2% of GDP in 2011–12, it
declined to 0.6 in 2017–18, and is budg-
eted to remain at that level in 2018–19.
Till 2014–15, social services expenditure
used to exceed pension and other retire-
ment benefits. Of various items reported
under social services, education is the
largest. In the early part of this decade,
spending on health-enhancing meas-
ures such as medical and public health,
Next to general services, spending on
economic services appears to be an impor-
tant form of revenue expenditure. On the
whole, economic services expenditure was
about 4.2% of GDP in 2011–12 and this
has gradually declined to about 3% in
recent years. No major change is provided
for in 2018–19. Such reduction in the
importance of economic services is largely
due to the reduced share of energy, as well
as roads and bridges. Individually, expend-
iture on rural employment accounted for
the bulk of rural development spending,
which remained at about 0.3% of GDP.2
The grants-in-aid are largely aids pro-
vided to state governments under various
schemes. This has virtually remained at

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show an increase from 0.7% of GDP in family welfare, and water supply and sani- about 2% of GDP. Thus, there appears to
2011–12 to 0.9% in 2017–18 (or from 4.7% tation used to account for nearly 0.3% of be no perceptible transfer of responsibili-

E
of total expenditure in 2011–12 to 6.6% GDP (or 2.2% of total expenditure). This ties from the union government to sub-
in 2017–18, budgeted to go up to 6.8% in gradually fell to 0.1% of GDP (or 0.8% of national governments. Although capital

T
2018–19). Overall, the general services total expenditure) in the recent years. expenditure has remained at around 1.5%
Table 3: Trends in Major Heads of Expenditure (as % of GDP at market price) of GDP, there is an increased spending on
Sl No Major Heads of Account 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18(RE) 2018–19(B) transport aimed at improving facilities of

Z
A Total expenditure (B+C) 14.93 14.18 13.88 13.34 13.01 12.95 13.21 13.04 Indian railways and roads and bridges.
B Revenue expenditure 13.12 12.51 12.21 11.77 11.17 11.08 11.58 11.44
1 General services 5.61 5.56 5.70 5.67 5.57 5.75 5.78 5.61
Capital expenditure for social services

G
2 Interest payments 3.13 3.15 3.33 3.23 3.21 3.15 3.16 3.06 constituted only a fraction of GDP.
3 Pensions and other retirement benefits 0.70 0.70 0.67 0.75 0.70 0.86 0.88 0.90 The above analysis shows that govern-
4 Defence service 1.18 1.12 1.11 1.10 1.06 1.08 1.08 1.01 ment expenditure has been reduced and

A
5 Social services 1.21 1.12 1.13 0.43 0.50 0.57 0.56 0.55
6 General education 0.54 0.52 0.50 0.14 0.14 0.14 0.14 0.14
much of the reduction has taken place in
7 Technical education 0.08 0.08 0.08 0.07 0.07 0.08 0.09 0.08 their spending on social and economic
8 Medical and public health 0.11 0.09 0.10 0.08 0.08 0.10 0.10 0.10 services. Thus, the entire responsibility

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9 Family welfare 0.11 0.10 0.10 0.01 0.01 0.01 0.01 0.01 of building up social capital is now left
10 Water supply and sanitation 0.11 0.13 0.11 0.00 0.02 0.07 0.02 0.00
to private initiatives. On the supply
11 Economic services 4.17 3.93 3.54 2.91 2.74 2.80 2.96 2.95
12 Agriculture and allied activities 1.62 1.54 1.41 1.36 1.46 1.08 1.23 1.28 side, infrastructure has to be built by
13 Food storage and warehousing 0.85 0.87 0.83 0.95 1.02 0.76 0.87 0.93 private players, and on the demand side,
14 Rural development 0.43 0.37 0.34 0.01 0.02 0.32 0.34 0.31 households are made to incur frequent
15 Rural employment 0.33 0.30 0.29 0.00 0.01 0.31 0.33 0.29
and higher out-of-pocket expenditure to
16 Special area programmes 0.03 0.04 0.04 0.04 0.03 0.03 0.22 0.23
17 Irrigation and flood control 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.02 access these services.
18 Energy 0.85 1.02 0.82 0.56 0.27 0.28 0.27 0.23
19 Industry and minerals 0.38 0.33 0.34 0.40 0.37 0.45 0.38 0.37 Ignoring Primary Healthcare
20 Transport 0.47 0.31 0.26 0.22 0.23 0.20 0.13 0.16 It is in this context of reduced government
21 Roads and bridges 0.43 0.27 0.21 0.17 0.19 0.16 0.11 0.11
22 Communications 0.09 0.06 0.07 0.07 0.11 0.15 0.11 0.11
responsibility of building social capital
23 Science, technology and environment 0.17 0.14 0.14 0.13 0.14 0.14 0.14 0.15 that one needs to closely look at the
24 General economic services 0.13 0.11 0.11 0.09 0.09 0.15 0.11 0.10 National Health Protection Scheme (NHPS)
25 Grants-in-aid and contributions 2.06 1.82 1.78 2.70 2.30 1.91 2.23 2.28 announced by the finance minister in the
26 Grants-in-aid to state governments 2.01 1.76 1.71 2.63 2.22 1.84 2.17 2.21
27 Expenditure of union territories 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.05
Union Budget 2018–19 speech. The NHPS
28 Capital, public debt and loans 1.82 1.68 1.67 1.58 1.84 1.87 1.63 1.60 aims to provide an insurance coverage of
C Capital expenditure/outlay 1.58 1.47 1.50 1.34 1.65 1.62 1.49 1.49 `5 lakh per family annually for second-
29 General services 0.87 0.80 0.78 0.72 0.66 0.65 0.61 0.59 ary and tertiary care hospitalisation for
30 Defence services 0.78 0.71 0.70 0.66 0.58 0.57 0.52 0.50
10 crore “poor and vulnerable families.”
31 Social services 0.05 0.05 0.03 0.03 0.04 0.03 0.06 0.06
32 Economic services 0.64 0.61 0.68 0.57 0.93 0.93 0.82 0.83 The NHPS is essentially a health insur-
33 Transport 0.35 0.36 0.43 0.42 0.50 0.60 0.54 0.59 ance cover. The business of health insur-
34 Indian railways–commercial ance is yet to make a meaningful break-
and strategic lines 0.23 0.24 0.24 0.24 0.25 0.30 0.24 0.28
35 Roads and bridges 0.10 0.06 0.13 0.13 0.22 0.29 0.29 0.30 through in the country, as is evident
Note and Source: Same as in Table 1. from the low level of health insurance
Economic & Political Weekly EPW march 10, 2018 vol lIiI no 10 81
ECONOMIC NOTES
penetration. Gross health insurance pre-
mium measured as percentage of GDP
was 0.15 in 2011–12 and has increased to
0.18 in 2015–16.3 Prima facie, introduc-
ing NHPS is undeniably a welcome step
towards achieving inclusive healthcare.
In the Indian context, there are three
tiers in the healthcare system. Primary
healthcare is provided through sub-centres
and primary health centres (PHCs) in
rural areas and family welfare centres in
urban areas. These centres are designed
to cater to the multiple needs of maternity
and childcare, administering immunisa-
tion, treatment of common diseases, and
so on. In most of the cases, these centres
Table 4: Status of Facilities Available in Rural
Centres (as on 31 March 2017)
Types of Facilities Number % to Respec-
Sub-centres:
Number of sub-centres functioning 1,56,231
With ANM quarter
With ANM living in sub-centrer quarter* 48,781
Functioning as per IPHS norms
Without regular water supply
Without electric supply
Without all-weather motorable
approach road
Primary health centres (PHCs)
Number of PHCs functioning
PHCs functoning on 24X7 basis
With labour room
With operation theatre
With at least four beds
Without electric supply
Without regular water supply
Without all-weather motorable
approach road
With telephone
With computer
Referral transport
Registered RKS
No of PHCs functioning as per
IPHS norms
Community health centres (CHCs)
Number of CHCs functioning
With all four specialists
With computer/accountant
With functional laboratory
With functional operation theatre
With functional labour room
With functioning stabilisation
units for newborn
With newborn care corner
With at least 30 beds
With functional X-ray machine
With quarters for specialist doctors 2,816
With specialist doctors living in quarters 1,770
With referral transport available
With registered RKS
Functioning as per IPHS norms
ANM is Auxiliary Nurse Midwife; RKS is Rogi Kalyan Samiti
and IPHS is Indian Public Health Standards
Source: Ministry of Helath and Family Welfare (2017).
82
EPW Research Foundation
are the first point of contact between the though Union Budget 2018–19 purportedly
patient and the physician. Secondary makes a modest beginning. What is more
healthcare involves referral from primary important to achieve better health outcome
healthcare centres and such care is gen- is to ensure that all PHCs, be it in rural or
erally provided in district hospitals and urban areas, do not suffer for the want of
community health centres at the block adequate health personnel and infrastruc-
level. Tertiary healthcare is basically ture facilities. Any initiatives to redress the
specialised consultative care provided in healthcare system in the country should
advanced medical research colleges and begin from PHCs that suffer from sheer
institutes, based on referrals from either neglect. Without having attained satisfac-
primary or secondary care centres. tory levels of providing primary healthcare
As the NHPS aims to cover both second- services to all, committing large resources
ary and tertiary healthcare, it requires to NHPS may find little justification.
that the primary healthcare centres should To conclude, taxation policies of govern-
have adequate facilities to address prelimi- ment in the recent period are regressive
nary requirements. However, the present in their character and this has been
status of health infrastructure and health accompanied by reduced thrust on gov-
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personnel do not aspire any confidence ernment spending on social services, thus
in the delivery of primary healthcare. putting additional burden on out-of-pocket
E
tive Total
Rural PHCs, for instance, suffer from sev- expenditure of individuals, particularly
100.0 eral deficiencies in health infrastructure for accessing better healthcare services.
T
86,525 55.4 (Table 4) and health personnel (Table 5). Though the NHPS could ameliorate access
31.2
These statistics represent situations at the to super special healthcare facilities, atten-
17,204 11.0
all-India level. The conditions vary con- tion should be paid on improving pri-
Z
31,985 20.5
37,387 23.9 siderably from state to state, with some mary healthcare services that suffer from
states performing quite well on this front. several deficiencies. Lack of provision
G
15,536 9.9 It is widely accepted that providing pre- for adequate primary healthcare services
ventive care is the main function of the can jeopardise the intended outcome of
25,650 100.0
10,044 39.2 PHCs. Any shortfall in these centres needs the NHPS and will, in no way, contribute to
A
17,688 69.0 to be amended and failure to do so will be social capital formation in the country.
9,422 36.7 inimical to achieving desirable outcomes at
19,559 76.3 Notes
the secondary and tertiary healthcare level.
M
920 3.6 1 Surplus transferred by RBI rose sharply from
Given the intended ambitious coverage of `33,010 crore in 2012–13 to `52,679 crore in
1,695 6.6
the NHPS in terms of number of persons 2013–14, and further to `65,896 crore in
2014–15. While it remained at that level in
1,361 5.3 and sum assured, the government will 2015–16, it went down drastically to `30,663
13,918 54.3 have to commit a great deal of resources, crore in 2016–17 (RBI 2017: Table XI, p 178).
16,688 65.1 2 Actual expenditure under the Mahatma Gandhi
Table 5: Vacant and Shortfall in Health Personnel National Rural Employment Guarantee Scheme
14,171 55.2 amounted to `32,463.4 crore in 2014–15 and
in Rural Areas (as on 31 March 2017)
22,077 86.1
Types of Health Workers Vacant Shortfall
`37,340.71 crore in 2015–16. In these two years,
the expenditure under this head was reported as a
Health worker [female]/ANM at sub-centre 26,172 6,104 transfer to state plans schemes, unlike the usual
3,303 12.9
Health worker [female]/ practice of reporting them under development
ANM at sub-centres and PHCs 28,741 10,112 heads of the union government’s schemes. As a
5,624 100.0 result, the share of expenditure of rural employ-
Health worker [male] at sub-centres 33,448 99,572
454 8.1 ment showed a drastic fall in these two years.
Health assistants [female]/LHV at PHCs 7,552 11,712 This constituted about 2% of total expenditure.
4,843 86.1
Health assistant [male] at PHCs 10,731 15,592 3 Gross health insurance premium comprises of
5,303 94.3 government-sponsored schemes, government
Doctors at PHCs 8,286 3,027
4,696 83.5 insurance schemes, family/floater insurance, and
Surgeons at CHCs 2,138 4,866 individual insurance. It includes premium col-
5,186 92.2
Obstetricians and gynaecologists at CHCs 1,816 4,170 lected by health insurers, including stand-alone
Physicians at CHCs 2,150 4,760 health insurers, in private and public sectors
2,237 39.8 (Handbook of Indian Insurance Statistics, Insurance
4,722 84.0 Paediatricians at CHCs 2,046 4,554
Regulatory and Development Authority of India).
4,083 72.6 Total specialists at CHCs 8,105 18,347
3,122 55.5 Radiographers at CHCs 2,061 3,629 References
50.1 Pharmacists at PHCs and CHCs 4,582 7,092
MoHFW (2017): Rural Health Statistics 2016–17,
31.5 Laboratory technicians at PHCs and CHCs 5,753 12,511 Ministry of Health and Family Welfare,
5,217 92.8 Nursing staff at PHCs and CHCs 11,288 13,194 Government of India.
Vacant means Sanctioned less In Position; and Shortfall Rajakumar, J Dennis and R Krishnaswamy (2015):
5,116 91.0 means Required less In Position. PHCs are Primary Health “Surge in Union Government Revenues: Indi-
912 16.2 Centres and CHCs are Community Health Centres. ANM is rect Tax Collection Leads Growth,” Economic &
Auxiliary Nurse Midwife; LHV is Lady Health Visitor; IPHS is Political Weekly, Vol 50, No 50, pp 82–85.
Indian Public Health Standards. RBI (2017): Annual Report 2016–17, Reserve Bank
Source: Ministry of Helath and Family Welfare (2017). of India, Mumbai.
march 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
CURRENT STATISTICS EPW Research Foundation

Wholesale Price Index Foreign Trade

The year-on-year WPI inflation rate eased to 2.8% in January 2018 from
4.3% in January 2017 and 3.6% a month ago. The index for primary articles
increased by 2.4% in January 2018 compared to 1.9% a year ago with index
for food articles rising by 3.0% from 0.3% in January 2017. The index for
fuel and power was 4.1% in January 2018, substantially slower, compared to
16.7% a year ago. The index for manufactured products, which has the highest
weightage in the index, slowed down to 2.8% in January 2018 from 3.3%
registered in the corresponding period last year.
The merchandise trade deficit widened to a 56-month high to $16.3 bn in January
2018 against $9.9 bn a year ago. Exports increased by 9.1% to $24.4 bn and
imports by 26.1% to $40.7 bn in January 2018 compared to $22.4 bn and $32.3 bn,
respectively, in January 2017. Oil imports were higher by 42.6% to $11.7 bn and
non-oil imports by 20.5% to $29.0 bn in January 2018 from $8.2 bn and $24.1
bn, respectively a year ago. During April–January 2017–18, cumulative exports
increased by 11.8% to $247.9 bn compared to $221.8 bn in the corresponding
period last year and cumulative imports by 22.2% to $379.1 bn from $310.2 bn.

Consumer Price Index Index of Industrial Production

The CPI inflation rate increased to 5.1% in January 2018 from 3.2% in January 2017,
however, it eased compared to 5.2% registered a month ago. Consumer food price
inflation rose to 4.7% in January 2018 from 0.6% a year ago but slowed down
compared to 5.0% reported in December 2017. The CPI-rural inflation rate stood
higher at 5.2% and the CPI urban inflation rate at 4.9% in January 2018, compared to
3.4% and 2.9%, respectively, a year ago. As per Labour Bureau data, the CPI
inflation rate of agricultural labourers stood higher at 2.9% and that of industrial
workers at 5.1% in January 2018 compared to 2.5% and 1.9%, respectively, a year ago.
The y-o-y growth rate of IIP increased to 7.1% in December 2017 from 2.4% in
December 2016. The index of eight-core industries increased to 6.7% in January 2018
from 3.4% in January 2017. Growth in cement production rose to 20.7% from -13.3% a
year ago and that in refinery products to 11% in January 2018. Production of crude oil,
natural gas, and fertilisers declined by -3.2%, -1%, and -1.6%, respectively, compared
to their respective growths of 1.3%, 11.6% and -1.2% in January 2017. Growth in
coal production slowed down to 3% and that in steel to 3.7% from 3.5% and 11.3%, a
year ago. Electricity generation increased by 8.2% from 5.2% in January 2017.

Movement of WPI Sub-indices January 2016–January 2018 Merchandise Trade January 2018
Year-on-Year in % January 2018 Over Month Over Year April–January
($ bn) (%) (%) (2017–18 over 2016–17) (%)
27
Exports 24.4 -9.8 9.1 11.8
18
Imports 40.7 -2.9 26.1 22.2

R
Trade deficit 16.3 9.5 64.6 48.5
Fuel and Power 4.1%
Data is provisional. Source: Ministry of Commerce and Industry.
9

E
Trade Deficits January 2016–January 2018
0
Primary Articles 2.4% $ billion
Manufactured Products 2.8%
-9 3

T
Oil Trade Deficit
0
-18 Non-oil Trade Deficit
Jan F M A M J J A S O N D Jan F M A M J J A S O N D* Jan* -3

Z
2016 2017 2018
* Data is provisional; Base: 2011–12=100 -6
-$7.8 bn
-9 -$8.5 bn
Trends in WPI and Its Components January 2018* (%) Total Trade Deficit

G
Financial Year (Averages) -12
Weights Over Month Over Year 2014–15 2015–16 2016–17
-15
All commodities 100 0.1 2.8 1.3 -3.7 1.7 -$16.3 bn
Primary articles 22.6 -1.5 2.4 2.2 -0.4 3.4

A
-18
Jan F M A M J J A S O N D Jan F M A M J J A S O N D Jan
Food articles 15.3 -2.4 3.0 5.6 2.6 4.0 2016 2017 2018
Fuel and power 13.2 0.4 4.1 -6.1 -19.7 -0.3 Oil refers to crude petroleum and petroleum products, while non-oil refers to all other commodities.
Manufactured products 64.2 0.6 2.8 2.6 -1.8 1.3
* Data is provisional; Base: 2011–12=100; Source: Ministry of Commerce and Industry.
Movement of Components of IIP Growth January 2016–December 2017

M
Year-on-Year in %
Movement of CPI Inflation January 2016–January 2018 16
Year-on-Year in % Mining
Electricity
8
Rural 8 8.4%
4.9% 4.4%
6
1.2%
0
Manufacturing
4
5.2% -8
Jan F M A M J J A S O N D Jan F M A M J J A S O N Dec*
CPI (Combined) Urban 2016 2017
5.1%
2 * December 2017 are quick estimates; Base: 2011–12=100.

0
Growth in Eight Core Industries January 2018* (%)
Jan F M A M J J A S O N D Jan F M A M J J A S O N D Jan* Financial Year (Avgs)
2016 2017 2018 Weights Over Month Over Year
2015–16 2016–17
* January 2018 is provisional; Source: Central Statistics Office (CSO); Base: 2012=100.
General index # 100 3.3 7.1 3.3 4.6
Infrastructure industries 40.27@ 3.0 6.7 3.0 4.8
Inflation in CPI and Its Components January 2018* (%) Coal 10.3 4.6 3.0 4.8 3.2
Latest Month Over Over Financial Year (Avgs) Crude oil 9.0 -0.5 -3.2 -1.4 -2.5
Weights Index Month Year 2015–16 2016–17
Natural gas 6.9 -2.2 -1.0 -4.7 -1.0
CPI combined 100 136.9 -0.2 5.1 4.9 4.5
Petroleum refinery products 28.0 1.8 11.0 4.9 4.9
Consumer food 47.3 138.1 -1.2 4.7 4.9 4.2 Fertilisers 2.6 -5.9 -1.6 7.0 0.2
Miscellaneous 27.3 129.1 0.4 3.8 3.7 4.5 Steel 17.9 5.0 3.7 -1.3 10.7
CPI: Occupation-wise Cement 5.4 3.9 20.7 4.6 -1.2
Industrial workers (2001=100) 288.0 0.7 5.1 5.6 4.1 Electricity 19.9 4.5 8.2 5.7 5.8
Agricultural labourers (1986–87=100) 895.0 -0.6 2.9 4.4 4.2 * Data is provisional; # December 2017; Base: 2011–12=100; @ The revised eight crore industries have a combined weight of
40.27% in the IIP.
* Provisional; Source: CSO (rural and urban); Labour Bureau (IW and AL). Source: CSO and Ministry of Commerce and Industry.
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.

Economic & Political Weekly EPW march 10, 2018 vol LIiI no 10 83
 CURRENT STATISTICS EPW Research Foundation
India’s Quarterly Estimates of Final Expenditures on GDP
2015–16 2016–17 2017–18
` crore | at 2011–12 Prices Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Private final consumption expenditure 1473402 (3.4) 1507162 (5.6) 1662816 (9.9) 1722032 (11.3) 1595219 (8.3) 1619781 (7.5) 1817549 (9.3) 1848300 (7.3) 1700954 (6.6) 1726102 (6.6) 1919011 (5.6)
Government final consumption expenditure 289915 (1.4) 333113 (6.1) 270997 (6.4) 229123 (2.4) 313990 (8.3) 360466 (8.2) 304372 (12.3) 302161 (31.9) 367593 (17.1) 370968 (2.9) 322815 (6.1)
Gross fixed capital formation 828440 (2.0) 833430 (3.1) 863724 (4.9) 938488 (3.9) 960255 (15.9) 921132 (10.5) 938951 (8.7) 919040 (-2.1) 975540 (1.6) 984887 (6.9) 1051930 (12.0)
Change in stocks 56898 (-7.1) 57712 (-4.9) 54991 (-2.3) 74252 (41.4) 22498 (-60.5) 22367 (-61.2) 21389 (-61.1) 76862 (3.5) 21872 (-2.8) 23656 (5.8) 22882 (7.0)
Valuables 41359 (-11.2) 48346 (16.5) 45368 (12.3) 48972 (-11.0) 37008 (-10.5) 39255 (-18.8) 37644 (-17.0) 41958 (-14.3) 83443 (125.5) 61439 (56.5) 52994 (40.8)
Net trade (Export–import) -41928 -59615 -34748 -652 -21906 -42207 -57671 -10583 -86585 -37656 -100957
Exports 582778 (-6.2) 597409 (-4.6) 579000 (-9.1) 614896 (-1.6) 603715 (3.6) 612021 (2.4) 617872 (6.7) 678256 (10.3) 639149 (5.9) 651790 (6.5) 633271 (2.5)
Less imports 624706 (-5.7) 657024 (-3.7) 613748 (-10.1) 615548 (-3.7) 625621 (0.1) 654228 (-0.4) 675543 (10.1) 688839 (11.9) 725734 (16.0) 689446 (5.4) 734228 (8.7)
Discrepancies 84041 52120 -23145 30079 46358 62743 -30143 50689 58041 46855 -19115
Gross domestic product (GDP) 2732125 (7.8) 2772268 (8.5) 2840003 (7.3) 3042294 (9.0) 2953421 (8.1) 2983537 (7.6) 3032091 (6.8) 3228427 (6.1) 3120859 (5.7) 3176251 (6.5) 3249560 (7.2)

India’s Overall Balance of Payments (Net): Quarterly

2016–17 ($ mn) 2017–18 ($ mn) 2016–17 (` bn) 2017–18 (` bn)
Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2
Current account -401 -3467 -7976 -3452 -15017 -7227 -27 [-0.1] -232 [-0.6] -538 [-1.4] -231 [-0.6] -968 [-2.5] -465 [-1.2]
Merchandise -23835 -25612 -33273 -29722 -41994 -32798 -1594 -1715 -2243 -1992 -2707 -2109
Invisibles 23434 22146 25297 26270 26977 25571 1568 1483 1706 1760 1739 1644
Services 15745 16295 17780 17636 18285 18421 1053 1091 1199 1182 1179 1184
of which: Software services 17573 17650 18002 16839 17304 17965 1175 1182 1214 1128 1115 1155
Transfers 14002 13902 13894 14186 14458 15640 937 931 937 951 932 1005
of which: Private 14161 14048 13996 14368 14603 15776 947 941 944 963 941 1014
Income -6312 -8051 -6377 -5552 -5767 -8490 -422 -539 -430 -372 -372 -546
Capital account 7181 12835 6073 10392 25776 16365 480 [1.4] 859 [2.3] 409 [1.1] 696 [1.7] 1661 [4.3] 1052 [2.6]
of which: Foreign investment 5985 23050 -1607 15796 19624 14464 400 1543 -108 1059 1265 930
Overall balance 6969 8512 -1242 7312 11405 9499 466 [1.3] 570 [1.6] -84 [-0.2] 490 [1.2] 735 [1.9] 611 [1.5]
Figures in square brackets are percentage to GDP.

R
Foreign Exchange Reserves Variation
23 February 24 February 31 March Over Over Financial Year So Far Financial Year
Excluding gold but including revaluation effects 2018 2017 2017 Month Year 2016–17 2017–18 2012–13 2013–14 2014–15 2015–16 2016–17
` crore

E
2572960 2279610 2254320 63190 293350 50590 318640 82800 251570 322660 218620 25300
$ mn 397002 341227 347765 1714 55775 3621 49237 -485 16769 40486 16297 10160

T
Monetary Aggregates Variation
Outstanding Over Month Over Year Financial Year So Far Financial Year
` crore 2018 2016–17 2017–18 2014–15 2015–16 2016–17
Money supply (M3) as on 16 February 13528640 115340 (0.9) 1266310 (10.3) 644720 (5.5) 736700 (5.8) 1032788 (10.9) 1067442 (10.1) 1174330 (10.1)

Z
Components
Currency with public 1706740 46470 (2.8) 642250 (60.3) -532770 (-33.4) 442610 (35.0) 140362 (11.3) 211078 (15.2) -333130 (-20.9)
Demand deposits 1248720 14490 (1.2) 77820 (6.6) 181070 (18.3) -148020 (-10.6) 79652 (9.8) 98198 (11.0) 406910 (41.1)
Time deposits 10553100 60290 (0.6) 541780 (5.4) 996240 (11.1) 443110 (4.4) 800144 (10.7) 757316 (9.2) 1094910 (12.1)

G
Other deposits with RBI 20090 -5900 (-22.7) 4460 (28.5) 180 (1.2) -1000 (-4.7) 12620 (640.6) 860 (5.9) 5640 (36.5)
Sources
Net bank credit to government 4037370 -4010 (-0.1) 7690 (0.2) 791190 (24.4) 180760 (4.7) -37476 (-1.2) 231096 (7.7) 618120 (19.1)
Bank credit to commercial sector 8827450 80210 (0.9) 807520 (10.1) 216860 (2.8) 415960 (4.9) 604434 (9.4) 753346 (10.7) 608420 (7.8)

A
Net foreign exchange assets 2821920 50520 (1.8) 293010 (11.6) -4810 (-0.2) 263690 (10.3) 326709 (17.0) 283071 (12.6) 24510 (1.0)
Banking sector’s net non-monetary liabilities 2183690 11370 (0.5) -157430 (-6.7) 361560 (18.3) 124220 (6.0) -137041 (-7.2) 202531 (11.4) 79910 (4.0)
Reserve money as on 23 February 2018 2293800 43570 (1.9) 647410 (39.3) -534340 (-24.5) 393320 (20.7) 195710 (11.3) 252270 (13.1) -280250 (-12.9)
Components
Currency in circulation 1782260 43700 (2.5) 617780 (53.1) -498990 (-30.0) 446990 (33.5) 147250 (11.3) 215150 (14.9) -328200 (-19.7)

M
Bankers’ deposits with RBI 490530 1740 (0.4) 24380 (5.2) -35680 (-7.1) -53600 (-9.9) 35860 (8.3) 36270 (7.8) 42300 (8.4)
Other deposits with RBI 21020 -1870 (-8.2) 5240 (33.2) 320 (2.1) -70 (-0.3) 12630 (644.4) 870 (6.0) 5630 (36.4)
Sources
Net RBI credit to Government 402220 -15810 (-3.8) -143470 (-26.3) 120690 (28.4) -218590 (-35.2) -334180 (-47.8) 60480 (16.6) 195810 (46.1)
of which: Centre 401650 -13250 (-3.2) -142420 (-26.2) 119510 (28.1) -217950 (-35.2) -336610 (-48.2) 63520 (17.6) 195040 (45.9)
RBI credit to banks & commercial sector 44230 27100 (158.2) 484970 (-110.0) -745280 (-244.7) 353500 (-114.3) 145020 (252.3) 102040 (0.0) -613810 (0.0)
Net foreign exchange assets of RBI 2723390 69290 (2.6) 296080 (12.2) 43840 (1.8) 326180 (13.6) 324760 (18.0) 256190 (12.0) 13740 (0.6)
Govt’s currency liabilities to the public 25600 0 (0.0) 650 (2.6) 3040 (13.9) 510 (2.0) 2090 (12.1) 2480 (12.8) 3180 (14.5)
Net non-monetary liabilities of RBI 901630 37010 (4.3) -9180 (-1.0) -43360 (-4.5) 68290 (8.2) -58040 (-6.9) 168890 (21.5) -120830 (-12.7)

Scheduled Commercial Banks’ Indicators ( ` crore) Variation

Outstanding Over Month Over Year Financial Year So Far Financial Year
(As on 16 February) 2018 2016–17 2017–18 2014–15 2015–16 2016–17
Aggregate deposits 11052390 74410 (0.7) 612570 (5.9) 1112530 (11.9) 294730 (2.7) 827730 (10.7) 794000 (9.3) 1430370 (15.3)
Demand 1135560 14150 (1.3) 77910 (7.4) 168650 (19.0) -145880 (-11.4) 80110 (11.2) 94970 (12.0) 392440 (44.1)
Time 9916830 60260 (0.6) 534660 (5.7) 943870 (11.2) 440610 (4.6) 747610 (10.7) 699050 (9.0) 1037920 (12.3)
Cash in hand 61270 -2010 (-3.2) 4130 (7.2) -290 (-0.5) -90 (-0.1) 7490 (16.3) 4070 (7.6) 3930 (6.8)
Balance with RBI 450430 -1890 (-0.4) 22190 (5.2) 40790 (10.5) -58340 (-11.5) 56730 (17.9) 14380 (3.9) 121320 (31.3)
Investments 3414270 38750 (1.1) 86570 (2.6) 702190 (26.7) 383310 (12.6) 279010 (12.6) 133680 (5.4) 405450 (15.4)
of which: Government securities 3413060 38970 (1.2) 87240 (2.6) 701890 (26.7) 383310 (12.7) 278560 (12.6) 134180 (5.4) 405820 (15.5)
Bank credit 8253520 82120 (1.0) 794670 (10.7) 209230 (2.9) 412050 (5.3) 542320 (9.0) 713200 (10.9) 591850 (8.2)
of which: Non-food credit 8205970 93180 (1.1) 852660 (11.6) 208950 (2.9) 418430 (5.4) 546350 (9.3) 702360 (10.9) 643180 (9.0)

Capital Markets 1 March Month Year Financial Year So Far 2016–17 End of Financial Year
2018 Ago Ago Trough Peak Trough Peak 2014–15 2015–16 2016–17
S&P BSE SENSEX (Base: 1978–79=100) 34046.94 (17.5) 35906.70 28984.49 (21.9) 29319.10 36283.30 24673.84 29648.99 27957 (24.9) 25342 (-9.4) 29621 (16.9)
S&P BSE-100 (Base: 1983–84=100) 10821.14 (17.0) 11400.00 9251.54 (26.6) 9438.57 11547.46 7655.79 9494.36 8607 (28.3) 7835 (-9.0) 9494 (21.2)
S&P BSE-200 (1989–90=100) 4572 (17.8) 4806.00 3881.34 (27.7) 3982.66 4880.57 3192.63 3991.85 3538 (31.9) 3259 (-7.9) 3992 (22.5)
CNX Nifty (Base: 3 Nov 1995=1000) 10458.35 (16.9) 11016.90 8945.80 (23.9) 9103.50 11130.40 7546.45 9173.75 8491 (26.7) 7738 (-8.9) 9174 (18.5)
Net FII Investment in equities ($ Million)* 9225 (19.0) 9687 7755 (28.8) 8003 9877 6330 7995 6978 (33.6) 6452 (-7.5) 7995 (3.3)
* = Cumulative total since November 1992 until period end | Figures in brackets are percentage variations over the specified or over the comparable period of the previous year | (-) = not relevant | - = not available | NS = new series | PE = provisional estimates
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.

84 march 10, 2018 vol LIiI no 10 EPW Economic & Political Weekly
 POSTSCRIPT
LIFESTYLE

Treadmill Times
For centuries, humans have kept fit by doing simple exercises. But today, people are falling for the gym
industry’s aggressive marketing.

vidyadhar date

A
rthur Road Jail in Mumbai, the city’s largest, is noto- importance of fitness that the central government issued in
rious for its filthy conditions and overcrowding. 2017 by saying that they had no time to exercise amidst their
About 2,800 undertrials are crammed into an area heavy schedules. Sadly, the same officers have been propos-
meant for about 800 people. The jail’s dark side is portrayed ing that police stations be equipped with modern gyms.
in the books Behind the Beautiful Forevers by Katherine Boo
and Shantaram by Gregory Roberts. Last year, a woman Industrial Origins
undertrial was beaten to death there, reportedly by jail staff, The gym is a monotonous space—a factory for producing
offering us a glimpse of the rot inside. muscles, as Rebecca Solnit describes in her book Wanderlust:
The jail is also a breeding ground for ill health. In Febru-
ary, the Maharashtra government said it wanted to improve
the inmates’ well-being by providing a spanking gym for
them, which reveals a lot about the authorities’ understan-

E R
A History of Walking, published in 2000. That is why so many
people drop out of gyms a couple of months after clever
marketing has induced them to pay for the whole year. A
gym’s main equipment is the tedious treadmill, which is part

T
ding of health. They need to urgently update themselves. of a multibillion-dollar industry, whose big companies are
Gyms are by no means the best way to become fit. On the keen to invade the Indian market. To get some perspective

Z
contrary, they are a major breeding ground for infections we should go back to the treadmill’s origins. The treadmill,
and have numerous other health hazards, as Jane The treadmill, which which the government wants to introduce in the
Brody, who writes about health for the New York the government Mumbai jail as a means for relaxation, was first

G
Times, reported in 2010, and many others closer wants to introduce used in British prisons as an instrument of tor-
home substantiate. in the Mumbai ture. In 1818, exactly two centuries ago, British

A
The authorities are offering the same solution authorities began to get prisoners to grind grain
jail as a means
to the general population. In December 2017, using a contraption that used the same principles
for relaxation,
Mumbai’s civic corporation issued a circular giving as a treadmill. There, the user’s movement on the
was first used in
housing societies 2% more floor space index (FSI) treadmill set in motion a wheel that ground the

M
British prisons as an
for building gyms. In 2015, the central govern- grain. Karl Marx strongly criticised the intro-
ment also asked its offices all over the country to
instrument duction of the treadmill form of production for
build gyms, sanctioning `5 lakh for each one. of torture British workers because it degraded the body and
The gym may have its uses, but the problem is that these spirit. It was barbaric, he said.
policies do not consider other options for maintaining good The degradation of work via the treadmill in the industrial
health, instead favouring the fitness industry and gym cul- era is criticised in Ecological Rift: Capitalism’s War on the
ture, which are mired in controversy. The authorities are Earth, by Brett Clark, John Bellamy Foster and Richard York.
also neglecting their basic duty to provide public health and The treadmill today is also degrading, when you see, by
avenues for recreation. Mumbai in particular is notorious for contrast, how exercising out in the open is so enjoyable. In
allowing private clubs, some of them run by politicians, to fact, the very phrase “on a treadmill” means being stuck in a
take over open public spaces and recreation grounds. These monotonous rut, whether in a career or other activity.
clubs are known for consumption, not for sports and exer- Yet many people are so sold on the gym myth, thinking
cise, and deprive society of public spaces. that it is the only way to remain fit. Fortunately, in the West,
Starting from 2000, the National Sports Club of India in where it all began in a big way in the 1970s, the gym is gradu-
central Mumbai, for example, began converting a public ally becoming a discredited institution. Human beings have
sports stadium into a site of consumption for the rich, with kept fit since ancient times by doing simple exercises. Walking
many irregularities. More recently, in the city government’s was an integral part of the life of ancient Greek philosophers.
budget for 2017–18, municipal officials set aside `5 crore to It stimulated their minds, and a whole new school of peripa-
build an exclusive club for themselves, a plan being opposed tetic philosophy emerged. Aristotle, in particular, liked to
by many corporators, the elected representatives. walk under an arcade while teaching.
Ultimately, even if the government usurps space for elite Romantic poets in Europe and transcendentalists in the
clubs and gyms, people need to have the time to exercise. But United States (US) loved wandering in the outdoors. Physical
several police officers have responded to a circular on the exercises and movements have also been an essential part
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 85
 POSTSCRIPT
LIFESTYLE
of performing arts training. The Russian theatre stalwart
Konstantin Stanislavski learnt fencing, while Jerzy Grotowski,
the Polish director, and others in India, such as the reputable
director and actor Vijaya Mehta, used physical exercises to
train youngsters in theatre.
Simple ordinary movement itself is medicine, Kaushik
Talukdar, who trains international athletes, was quoted in
early 2018 in the Telegraph, Kolkata. Simple exercises are
good enough, said the Harvard Medical School newsletter in
2009. These include swinging one’s arms, climbing the
stairs, even cleaning one’s home, playing with children and
doing tai-chi, which is meditation in motion.
Support for simple exercise also comes from an unlikely
source, the British Military Fitness programme, which, sur-
prisingly, is popular among civilians in the United Kingdom
(UK), precisely because its programme consists of simple
moves such as jumping, running, squats and push-ups done
outdoors. Exercising outside helps reduce anxiety and
depression, and burns more calories than in the gym, because
out in the open the body is constantly challenged in new ways,
and group dynamics help. One requires very little equipment
other than one’s own body weight and that of one’s partner’s,
the programme says.
Major Ashok Kaul, an exercise enthusiast and film director,
who worked closely for many years with Raj Kapoor, further
G
confirmed this to me at the Joggers’ Park in Bandra, a suburb
in Mumbai. This park is an oasis in Mumbai, where people
A
enjoy doing open-air exercises. A young man, his legs ampu-
tated after an accident, sometimes performs unbelievable
exercises there. This would not have been possible if entry
had not been free. Every trainer that I have spoken to there
M
has told me that the gym is totally needless.
Dave Thomas, a fitness expert in the UK, was quoted in the
Telegraph, London, in 2006 as saying that few people were
interested in advice about simple exercises because such
counsel was jargon-free, had no secret tips, and contained
none of the impressive-sounding pseudoscience peddled by
the marketing machinery of the fitness sector. Strong words,
but many echo his sentiments.
Why should we urge normal people to become energy
slaves of machines and of drudgery in the gym, to echo the
thoughts of a most relevant but forgotten Croatian–Austrian
thinker, the eminent Ivan Illich? He warned people against
the medicalisation of health, saying that this ignored key
socio-economic factors. But now we are needlessly indulging
in the mechanisation of the body and its health. The American
Medical Association has also spoken of “going beyond the
clinic walls” to address health’s social roots.
At the same time, authorities are pursuing policies ini-
mical to fostering good health. For instance, authorities in
Mumbai are handing out FSI concessions to builders for
facilities that will not benefit the city but actually add to its
problems. For example, many high-rise car parks built with
such FSI are empty or closed, resulting in a monumental loss
86
of space to the public. Providing more and more space for
parking cars also encourages more automobile use, resulting
in auto-dependence, lower exercise for users and ill health
through pollution and traffic congestion.
Nature vs Narcissism
The government is ignoring the fact that there are multiple
ways of looking at fitness and the human body, well beyond
the gym industry. Georges Hébert, a French military officer,
evolved what is known as the natural method, which uses
various exercises such as climbing balancing, throwing,
lifting, swimming and jumping. Hébert inspired the mod-
ern parkour movement. I have seen a couple of parkour
enthusiasts performing amazing feats with their bodies.
They climb walls, vault, spin their bodies and leap. Origi-
nally, Hébert’s exercises were conducted in wooded, natu-
Hébert’s motto.
E R
ral settings. Athletic skill, he argued, must be combined
with altruism and courage. Being strong to be useful was
In contrast, the average modern gym-goer can be highly
T
narcissistic, obsessed with his or her own body. So serious is
the problem of the Adonis complex, of self-love and the craving
Z
to look good that the American Psychiatry Association has
issued guidelines on handling the problem. As for the big
body-builders emerging from gyms, they may look formidable
but in contrast with athletes, they are not very agile and not
of much use in helping others in a crisis.
Another questionable feature of the government’s espous-
al of gyms is that it will hold the individual responsible for
his or her ill health! If people fall ill, then they will have
to take the blame for not having exercised enough, thus side-
lining the socio-economic causes of ill health stemming from
government policies. The government should be promoting
free fitness exercises, recreation and sports for people, not
making citizens pay for the benefit of the fitness industry.
If the government is bent on promoting a gym culture,
it should at least warn citizens about its hazards. The gov-
ernment does not even seem to be aware of these. In 2014,
for example, exercise equipment accounted for 67,000 inju-
ries in the US, of which 24,000 were caused by treadmills. The
issue came to the fore with the death of Dave Goldberg, an
American millionaire, 47, when he suffered a brain injury
after being hit on the head after falling off a treadmill during
a vacation in Mexico in 2015.
Boxer Mike Tyson’s daughter, Exodus, was killed when her
neck got caught in a treadmill cord. Children are among the
major victims of treadmills. In the US, an estimated 28 mil-
lion people use the treadmill. In India, Leelaben, 72, the
wife of former Gujarat Chief Minister Keshubhai Patel, was
among the many victims of the treadmill. In 2006, she was
electrocuted when she switched on the gym machinery, the
Telegraph, Kolkata, reported.
The latest victim is film actor R Madhavan, who got injured
in the gym in February. He has had to undergo a shoulder
MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
 POSTSCRIPT
LIFESTYLE | PERFORMING ARTS
surgery and abstain from doing action scenes for the follow-
ing five months. One reason for increased injuries is that the
devices are more powerful now. In India, the problem is com-
pounded by a shortage of trained instructors.
There is too much hype about gyms. There are many other
ways of becoming fit, without paying a paisa to the gym.
Skipping rope is now being rediscovered. A worldwide
survey of professionals conducted by the American College
of Sports Medicine suggests that people will ditch the
high-technology gym in coming days and switch to the
skipping rope, which is kinder on the joints because you
land on the balls of the feet, not the heels, the Times,
London, reported.
The problem is that the government is neglecting excellent
traditional fitness exercises such as Mallakhamb. Marvel-
lous gymnastic feats performed by youngsters on a smooth
wooden pillar or hanging ropes have fascinated Westerners.
The Hanuman Vyayam Prasarak Shala of Amravati in Maha-
rashtra has won international fame with its troupes’ perfor-
mances of various Indian traditional fitness sports. The
Surya Namaskar is also highly beneficial because after just a
dozen rounds, you get a complete body exercise. The namaz
is also considered excellent for fitness.
The writer Acharya Atre, a celebrated, multifaceted per-
sonality, paid a tribute to the Surya Namaskar, though in a
G
satirical vein, in his popular 1933 Marathi play Sashtang
Namaskar. Sadly, these easy exercises, which require little
A
space and no money, are treated as old-fashioned, while the
gym is thought to be modern. Yet the limited movement
patterns offered by standard gym equipment do not come
close to the thousands of movements our bodies are capable
M
of performing and were built to perform, Patrick Mustain, a
fitness expert told the online publication the Daily Beast.
Fitness and Fascism
A salutary trend is that a growing number of fitness profes-
sionals are rejecting the “blast-belly-fat, buy-our-product”
approach and coming up with creative solutions with easy
movements. You may develop a perfect-looking body in a gym,
which is the obsession of many, but you may still be unfit to
climb a flight of stairs and do other simple movements. The
main point is that one should be fit and agile, not simply
smart-looking. Much of the gym obsession ends in misery
because you cannot have the body of Salman Khan and other
heroes. Many such stars pay a heavy price for their body-
building as they develop numerous complications.
One should not take Narendra Modi’s references to his
56-inch-chest out of context, but it is worth pointing out that
the worship of a heroic male body was central to German and
Italian fascism, as described in the book Superman Supreme:
Fascist Body as Political Icon, by J A Mangan, published in
2000. By contrast, see Mahatma Gandhi’s bare and lean yet
very healthy body, a condition that can be attributed both to
his diet and his long walks, exemplified by the Dandi Salt
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10
March. Jawaharlal Nehru’s shirsasan, standing on one’s
head, is a classic demonstration of good health achieved
through simple exercise.
There is much more to health than gyms. Otherwise, how
does one explain the fact that in the US, where the gym
craze is highest, there is for the first time in its history a
drop in life expectancy in the past two years and such a big
increase in obesity?
Yet our politicians are obsessed with gyms. No wonder
Maharashtra’s Chief Minister, Devendra Fadnavis, announced
in August 2016 that his government would regularise 3,000
illegal gyms in the state, many of them built by politicians
and with state legislators’ funds meant for people’s welfare.
Exercise can be fun, out there in the open or in your home
or elsewhere, not in the confines of the gym. Take your
gyms and give us accessible, free public spaces. It is more
E R
fun to be fit, agile and healthy rather than be muscular, ma-
cho and heavy.
Sports obviously foster fitness, but excess gym exercise
and highly competitive sports are notorious for causing
T
injuries. Also, excess exercise leads to more eating and
increases in weight, which are very counterproductive. No
Z
amount of burning of calories is going to help if calorie con-
sumption goes on increasing, doctors point out. The best so-
lution is to do varied kinds of simple exercises and eat less. It
is that simple.
Vidyadhar Date (datebandra@yahoo.com), a senior journalist based in Mumbai, is an
enthusiast of walking and exercising outdoors.
Kathakali in Flux
Like all art forms in India, this highly developed
genre of pantomime has changed after the
radical shift in the country’s economic policies in
the early 1990s.
Vishnu Achutha Menon
A
ll art forms undergo changes over the years. Some
changes are subtle and gradual, others are dramatic
and sudden. These changes are the result of several
factors: social, economic, cultural and creative, the last of
which includes conscious experimentation by individuals
and groups.
Kathakali, a highly developed theatrical form that origi-
nated in Kerala, is no different. Kathakali, whose name is de-
rived from katha, or story, and kali, or play, is a genre of styl-
ised and intricate pantomime, a form of theatre in which the
actors do not speak. They tell the story through hand, body
and facial gestures and movements. The brightly coloured
costumes are also highly idiosyncratic. Over the past three
decades, however, Kathakali, too, has undergone changes in
87
 POSTSCRIPT
PERFORMING ARTS

several aspects: from performances and the composition of changing. Some changes are creatively exciting, such as the
audiences to the stories, costumes and training. introduction of stories based on non-traditional sources,
Recent trends, unleashed largely by the radical changes such as Shakespeare’s plays, Greek tragedies and parables
that India made to its economic policies in the early 1990s, from the Bible. Others are not, such as melodramas with
came against the backdrop of an earlier wave of transfor- action-packed plots that narrow the form’s aesthetics. In
mations sparked off by the establishment of the Some changes such presentations, delicate body movements, are
Kerala Kalamandalam in 1930 in Thrissur district are creatively often missing. What is good, however, is that there
and similar institutions over the next few dec- exciting, such as are organised efforts by promoters and enthusi-
ades. These institutions produced several skilful the introduction asts to support presentations that adhere to the
and dedicated Kathakali professionals, but also of stories based genre’s aesthetics.
changed the way the form was taught and per- on non-traditional Live music and percussion accompaniment
formed. sources, such as have also changed. Some observers feel that
The pull of nostalgia is such that we usually Shakespeare’s these components have become more prominent
tend to believe that most of these changes repre- plays, Greek over the past few decades. Some long-time view-
sent a decline in artistic standards. Some people tragedies and ers of Kathakali also feel that the sound of the
who have seen the performances of past Kathakali music has changed: it is less rustic and more clas-

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parables from
masters, for instance, feel that the current gener- the Bible. Others sical. Both these trends are neither good nor bad,
ation of practitioners does not exhibit the same are not, such as simply different from before.
level of virtuosity.
That may or may not be true, and it is a subjec-
tive evaluation. But there is no denying that
Kathakali has undergone some key changes, and
melodramas with
action-packed
plots that narrow
the form’s

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many
ing
to a
and
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Behind the scenes, training has changed. As in
Indian art forms, a personal form of teach-
passing down of an art form from a guru
shishya has been replaced by classroom-style

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it may be useful to look back and merely see what aesthetics teaching with a timetable and syllabus. This has
these have been, without judging their nature. given the Kathakali artistes wider exposure and
Take the style, duration and format of performance. has perhaps made absorbing the basics more efficient, but

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Kathakali performances used to be overnight outdoor events, some people wonder whether the new methods can fully
with one presentation often spread over many consecutive transfer the intangible aspects of technique and style.

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nights. Today, Kathakali is enacted in clubs and temples. The
Vishnu Achutha Menon (am_vishnu@cb.amrita.edu) is a project assistant at
presentations are much shorter, lasting just two to three the department of mass communication in Amrita Vishwa Vidyapeetham in
hours, with troupes enacting what used to be just a few Coimbatore.
scenes in a whole performance a few decades ago. But this

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does not necessarily mean that the quality has declined.
Indeed, some might argue that though the presentations are
shorter, or because they are so, performers are able to do a
better job and keep up the intensity throughout.
Audiences have also changed. They were drawn from a
narrower set of people, mostly those who knew the art form
LAST LINES

intimately. Over the past three decades, audiences have

become more diverse and younger, which is definitely a
positive trend. At the same time, these viewers include
people who may not be as knowledgeable about Kathakali
as the connoisseurs of old. Whether or not this broadening
of the audience has exerted subtle pressures on the per-
formers, performances and, ultimately, the art form itself is
not clear.
Younger viewers, however, do seem to have an influence
on some aspects of performance: by using social media, they
sometimes create hype around specific artistes. While over-
all, remuneration has improved, this kind of selective adula-
tion creates inequalities amongst performers that may not
coincide with artistic merit, given the knowledge levels of
many young viewers. This is certainly not a healthy trend.
Whether in response to audience demand or other factors,
the subject matter of presentations has definitely been
88 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
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The Problem of Caste

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Edited by
SATISH DESHPANDE

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Caste is one of the oldest concerns of the social sciences in India that continues to be relevant even today.
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Economic & Political Weekly EPW March 10, 2018 vol liIi no 10 89
APPOINTMENTS/PROGRAMMES/ANNOUNCEMENTS ADVERTISEMENTS

Third IHEPA-APU Summer School on

MEASURING UNIVERSAL HEALTH COVERAGE
Organised by
INDIAN HEALTH ECONOMICS AND POLICY ASSOCIATION
(IHEPA) in association with Azim Premji University
CALL FOR APPLICATIONS
Indian Health Economics and Policy Association (IHEPA) is organising its
third summer school on Measuring Universal Health Coverage at Azim
Premji University, Bangalore during June 26-30, 2018. The course targets
M.Phil/PhD students and early career researchers and young teachers
working in applied health economics and policy issues. It will introduce
participants to various approaches to understand universal health coverage
with emphasis on both concepts and measurement. A team of scholars will
help the participants to sharpen their ideas in the area of health economics
and policy and develop it into a full fledged research proposal with strong
conceptual and methodological base.
We invite applications along with a short research proposal from interested
applicants. For application forms and more details, kindly visit the IHEPA
website www.ihepa.in. The application can also be submitted online through
the link available on the website. The application will be screened by a Panel of
Reviewers of IHEPA and a final decision will be communicated through email.
Length of the research proposal should be around 1,000 words. The filled in
MAHANIRBAN CALCUTTA RESEARCH GROUP
requires Research Associate on consolidated
pay of Rs. 27,000–32,000 per month (depending
on qualification and experience) for a period 10
months. The candidate must be below 40 years
of age and have a MPhil/PhD degree in Social
Sciences or work experience in a related area
for at least 5 years. Candidates with proficiency
in English, publications and expertise in migration
studies will be preferred. Selected candidate will
be expected to join immediately.
Detailed applications along with two recomme-
ndation letters may be sent by post or by e-mail
within 20 March 2018 to the Office Secretary,
Mahanirban Calcutta Research Group, GC-45,
Sector–III, First Floor, Salt Lake, Kolkata 700106
(e-mail: chatterji@mcrg.ac.in, Phone: 91-33-2337-

R
application along with the research proposal may be submitted electronically
to secretary.ihepa@gmail.com with a copy to office.ihepa@gmail.com. 0408 and Fax: 91-33-23371523) with a copy to

E
Important dates ratan@mcrg.ac.in. Applicants are requested
Last date of submission of applications 20th April 2018 to consult the MCRG website www.mcrg.ac.in for
1st May 2018

T
Communication on acceptance from IHEPA
information on the institution. Any enquiry on this
Dates of the Summer School 26-30th June 2018
Secretary, IHEPA will be welcome.

G Z
THE K R CAMA ORIENTAL INSTITUTE
A
136, Bombay Samachar Marg, Opposite Lion Gate, Fort, Mumbai - 400 023
Tel Nos 22843893 / 22876593

M
Mobile 8879253893
E-mail: thekrcamaoi@gmail.com
Website: www.krcama.org

Applications are invited for the

MRS AVABAI B WADIA RESEARCH FELLOWSHIPS
IN MEMORY OF PHIROZ DORABJI MEHTA
FOR 2017 – 2018
Research Fellowships will be offered to researchers in the area of Oriental Studies in the fields of philosophy / religion /
culture / history for a maximum period of two years, subject to their making satisfactory progress and sending quarterly
progress reports. Applicants must be graduates from a recognised University.
Research Fellows will be paid a monthly stipend of Rs 10,000/- during the duration of the project plus an annual
amount of Rs 5,000/- for contingencies. The scholar/s should be residing in India while conducting the research.
Applications will have to be made in the Application Form available at the Institute. Request for Application Forms can
also be sent by e-mail to: thekrcamaoi@gmail.com. For more details, please access our website: www.krcama.org.
Completed Application Forms should be sent to the K R Cama Oriental Institute marked “Mrs Avabai B Wadia Research
Fellowships” within one month of the release of this advertisement.

90 March 10, 2018 vol liIi no 10 EPW Economic & Political Weekly
APPOINTMENTS/PROGRAMMES/ANNOUNCEMENTS ADVERTISEMENTS


CENTRE FOR DEVELOPMENT STUDIES
Ulloor, Thiruvananthapuram 695 011 Kerala, India
Phone: 0471-277 4200, 244 8881 Website: http:// www.cds.edu

ADMISSION 2018
MA Applied Economics and Integrated MPhil/PhD in Applied Economics
CDS invites applications for admission to its full-time academic programmes, an MA Applied Economics and an Integrated
MPhil/PhD in Applied Economics for which degrees are awarded by Jawaharlal Nehru University, New Delhi.
The MA programme will commence on July 26, 2018 and the Integrated MPhil/PhD will commence on August 01, 2018.

MA Applied Economics
This is a unique master’s programme in economics that aims at providing rigorous training in theory, tools and methods
for applied economic analysis, with a special focus on issues of economic development. This four-semester Programme
comprises sixteen courses (nine compulsory and seven optional courses). One compulsory course in the fourth semester
is a project in which the student works on an empirical issue under faculty supervision. Students from SAARC countries
(Bangladesh, Bhutan, Maldives, Nepal and Sri Lanka) can also apply.
Eligibility: A bachelor’s degree in any discipline under 10+2+3 pattern, with at least 50 percentage of marks.

Integrated MPhil/PhD Applied Economics

The four-semester MPhil programme focuses on Applied Economics from a plural perspective. It involves course-work
spread over two semesters (comprising papers in quantitative techniques, economic theory and Indian economy) and
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Eligibility: Master’s Degree in any subject or Any Professional Degree (B. Tech/MBBS/BVSC etc.) with at least
55% marks in General Category and 50% marks in OBC (NCL),SC,ST and Differently-abled.

Selection (MA & Integrated MPhil/PhD)

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of marks scored in the qualifying degree.
Selection to the MA programme will be based on an entrance test scheduled from 10.00 am to 12 noon on May 20, 2018
at Hyderabad, Kolkata, Kozhikode, New Delhi, Pune and Thiruvananthapuram. The selection procedure for students
from SAARC Countries is different. See Prospectus for more details.
Selection to the Integrated MPhil/PhD programme will be in two stages. Candidates will be shortlisted on the basis of an
entrance test conducted from 10.00 am to 12 noon on May 20, 2018 at Hyderabad, Kolkata, Kozhikode, New Delhi, Pune
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Statutory Reservation for candidates from India belonging to SC, ST, OBC (NCL) and Person with Disability (PWD)

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Financial Assistance
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fellowships from any other agency. Fellowship award will be based on a separate interview in the presence of sponsoring
agencies.
APPLICATION FOR MA & INTEGRATED MPHIL/PHD PROGRAMME CLOSES ON APRIL 11, 2018
The Prospectus, Application Form with Hall ticket & Guidelines for all the courses may be downloaded from
www.cds.edu
March 06, 2018 Director
Published on Saturday, March 10, 2018 Regd No MCW-238/2018-20
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