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MARCH 10, 2018 Vol LIII No 10

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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

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of that single date: 15th August, 1947. Historians rarely look beyond the attainment of Independence, whereas other
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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 On a Trajectory of Trade War ...............................7
us that the idea itself violates constitutional values. — Anand Teltumbde When Power Is the Glue ...................................... 8
Imperialist Assumptions ..................................... 8
What the Tripura Victory Signifies for the BJP
12 An assessment of the Bharatiya Janata Party’s victory in Tripura, the FROM 50 YEARS AGO............................................. 9
only North East state after Assam, which also follows the trajectory of MARGIN SPEAK
“mainstream” India. — Radhika Ramaseshan Return of the Mandir
—Anand Teltumbde ............................................ 10
Three Years of PDP–BJP
14 The coalition government of the Peoples Democratic Party and the Bharatiya COMMENTARY
Janata Party in Jammu and Kashmir is facing a crisis of legitimacy, and What the Tripura Victory Signifies for the BJP
democracy itself is being damaged. — Mudasir Amin —Radhika Ramaseshan ..................................... 12
Co-option, Collaboration, Conflict:
Terms of Reference of the Fifteenth Finance Commission Three Years of PDP–BJP
19 The Fifteenth Finance Commission has a challenging task of addressing —Mudasir Amin ................................................. 14
fiscal federalism in a changed landscape. A reading of the terms of reference, Upholding Fiscal Federalism: Terms of Reference
however, points to a bias towards the union government. — G R Reddy of the Fifteenth Finance Commission
—G R Reddy ....................................................... 19
Caste in Britain Caste in Britain: Public Consultation on
22 Legislating against caste discrimination in the United Kingdom is not only Caste and Equality Law
contentious, but has also become highly politicised. The UK government is —Annapurna Waughray ....................................22
consulting the public about its equality law. — Annapurna Waughray Counting Jobs in India:
A Detailed Review of Labour Database
Counting Jobs in India —Jitender Singh, Arup Mitra .............................28
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 BOOK REVIEWS
Gender, Medicine, and Society in Colonial India:
Challenges before the Fifteenth Finance Commission Women’s Health Care in Nineteenth and Early
Twentieth Century Bengal—Western Medical
39 An examination of the terms of reference of the Fifteenth Finance
Education and Women’s Healthcare in Colonial
Commission, which are distinct from earlier commissions, in the light of Bengal—Manas Dutta........................................32
changed centre–state relations — V Bhaskar The Political Economy of India’s Growth Episodes—
Navigating Spaces of Economic Growth
Emerging Politics of Accountability
—Chetan Ghate ..................................................36
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 PERSPECTIVES
new variant of local politics has emerged in the form of accountability politics, Challenges before the Fifteenth Finance
which is also now increasingly linked to social power. — Himanshu Jha Commission—V Bhaskar ...................................39
SPECIAL ARTICLES
Nuclear Power Technology in India
Emerging Politics of Accountability: Institutional
55 A long-term energy security perspective may justify nuclear power to Progression of the Right to Information Act
be a part of the energy basket of the country. This may, however, be
—Himanshu Jha ................................................47
overshadowed by the rapid development of renewable energy sources.
Levelised Cost of Electricity for Nuclear Power
— Anoop Singh, Saurabh Sharma & M S Kalra Using Light Water Reactor Technology in India
—Anoop Singh, Saurabh Sharma, M S Kalra ....... 55
Caste, Religion, and Health Outcomes, 2004–14
Caste, Religion, and Health Outcomes in India,
65 If one is at the bottom of the social ladder in India, the risk of suffering 2004–14—Vani Kant Borooah ............................65
premature death, poor health, and lack of access to treatment and care is
substantially higher. — Vani Kant Borooah NOTES
Fourteenth Finance Commission: Impact of
Impact of the Fourteenth Finance Commission Its Recommendations—Mita Choudhury,
74 An assessment of the changes in centre–state fiscal relations brought about Ranjan Kumar Mohanty, Jay Dev Dubey ............. 74
by the Fourteenth Finance Commission award — Mita Choudhury, Ranjan ECONOMIC NOTES
Kumar Mohanty & Jay Dev Dubey Misguided Priorities: Union Budget 2018–19
—J Dennis Rajakumar .......................................79
Misguided Priorities: Union Budget 2018–19
79 An examination of the trends in government finances suggests that the CURRENT STATISTICS ..........................................83
expenditure patterns and regressive taxation policies are putting an POSTSCRIPT
additional burden on out-of-pocket expenditure of individuals. Treadmill Times—Vidyadhar Date (85),
— J Dennis Rajakumar Kathakali in Flux—Vishnu Achutha Menon (87),
Last Lines (88)
Postscript
85 Vidyadhar Date looks at how gyms have monopolised the idea of being appointments/programmes
healthy; Vishnu Achutha Menon discusses how Kathakali has changed quite announcements ................................................ 89
radically since the early 1990s; and Last Lines by Ponnappa. Letters .................................................................4
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they then require tend to be even more Beyond ASER 2017

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J DENNIS RAJAKUMAR In India, before the nationalisation of Conclusions drawn from ASER such as the
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4 march 10, 2018 vol liII no 10 EPW Economic & Political Weekly
LETTERS
with Quality Education Support Trust difficult circumstances), and what school- Toiyoba, incorporated in the report, gives
(QUEST), Maharashtra and Kalike, Karna- ing means to such children’s lives, is more us a snapshot of the traumatic lives of the
taka—goes beyond the “performance- complex than one can imagine. Unless we Rohingya in Myanmar.
levels of students” and tries to understand think through our education system in such Toiyoba lived in Mongdu, Myanmar,
the complexity and nuances of literacy a deep and complex manner, and envision with her husband and four children. Her
acquisition. The project collected data on a meaningful educational change through husband had a grocery shop in the market
children, teachers, curricular materials, difficult and challenging actions and parti- and reared poultry at home. The family did
teaching–learning processes, and on chil- cipation, detention or non-detention will not have any land, other than the house in
dren’s environment beyond schools. Even continue to reproduce the existing quality which they lived. Neither Toiyoba nor her
such a study, with a larger canvas of under- and equity of our education system. husband were formally educated, and their
standing of literacy learning, confirmed As the author rightly points out, the children received their education in the
that children in both the project sites— public education system needs to be madrasa. Toiyoba communicated that the
Wada in Maharashtra and Yadgir in strengthened and the state needs to be formal education that the Burmese (the
Karnataka—perform very poorly in a held accountable to the poor children, for dominant community in Myanmar) receive
variety of reading and writing tasks. While whom quality education is still a distant in schools is not meant for the Rohingya.
understanding the politics of large-scale dream. Education cannot be left to the According to her testimony, the Rohingya
assessments like ASER and their unjusti- charity of individuals and mercy of the children, who joined the formal system of
fiable appropriation of education systems market, and the state cannot have double schooling in Myanmar were deliberately
and processes, we should not ignore this standards when it comes to the education not allowed to pass the examinations,

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other elephant in the room. of poor children. Blind endorsement of and detained in the same class for years.
I do not agree to the assertion that large-scale assessments like ASER, without Only those who paid bribes could man-

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“detention is required for ensuring learn- reflecting on their sociopolitical implica- age to pass. To put it in Toiyoba’s words:
ing.” At the same time, the Right of Chil- tions for educational policy and practice, We do not have so much money. So we did not

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dren to Free and Compulsory Education will only add fuel to the pyre, beneath even think of sending our children to such
Act, 2009 (RTE) provisions for continual which our education system lies. schools. It is better not to have education,
rather than studying with the Mogs (pejora-

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and regular support for student learning Vijitha Rajan tive way of referring to the dominant com-
is clearly not implemented on the ground. Comment on website munity). Madrasa education would at least
In the current context, neither detention give our children the chance to know Allah.

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nor non-detention is capable of making A Rohingya Woman’s Story Toiyoba further stated that even the
any deeper educational change, especially children of the Mogs would throw stones,
for children in difficult circumstances.
T he Rohingya Muslims, forcibly ousted if they found the Rohingya in the streets.
After detention, children are “given” the
same educational experience they have
received the previous year, without any
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from Myanmar, are living precarious
lives, mainly in the refugee camps in
Bangladesh and India. The military
She witnessed brutal state violence on
the Rohingya Muslims before her family
fled from Myanmar:

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change in pedagogy, classroom culture or assault on the Rohingya in Myanmar from Neighbourhood after neighbourhood was
teacher–child relationship. It is more likely 25 August 2017 onwards, compelled a large being burnt, and the young men and women
that after detention, the child either dis- number of them to flee the country in a were forcibly taken away. The young men
were either shot dead or cut into pieces, and
continues schooling, or gets an automatic desperate bid to save their lives. Rahman
the young women, after being brutally treat-
promotion in the second year, or experi- Nasiruddin has documented the stories ed, were found to be doused in petrol and
ences one more stressful school year. of some stateless Rohingya in the refu- burnt. Those of us who could escape are
The system should be able to locate gee camps of Bangladesh. A few such alive, the rest are dead.
children in the diversity of their individual stories have been incorporated in the Toiyoba’s story put us in a great
dispositions as well as in the sociocultural, Bengali report titled “The Rohingya: How predicament: How does one address such
economic, historical and political-rooted- Will They Survive?” prepared by Surajit savagery of the state and pathos of the
ness of their lives. Unless the system re- Bandyopadhyay, and published by an acti- people in the language of human rights?
sponds to this complex being of children vist forum, Manthan Samayiki on 5 Feb- Arup Kumar Sen
(or for that matter any human being), it ruary 2018 in Kolkata. The micro-story of Kolkata
will continue to treat children as “raw
materials,” uniform in nature, which can
EPW Engage
be transformed into “products” of uniform
quality. This is of course the kind of episte- The following articles have been published in the past week in the EPW Engage section (www.epw.in/engage).
mological change that educationists have (1) Budget 2018 and Interactive Media: How to Design Nuanced Games on Complex Topics
been arguing for, for decades. The point is — Bharath M Palavalli, Sruthi Krishnan
that the roots behind inadequate quality of (2) The Communal Politics of Eviction Drives in Assam—Pinku Muktiar, Prafulla Nath, Mahesh Deka
schooling, unjust and meaningless school- (3) PNB Fraud: How Do Banks Manage Operational Risk?—K Srinivasa Rao
ing experiences (especially for children in
Economic & Political Weekly EPW march 10, 2018 vol liII no 10 5
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It can therefore take up to four months for a final EPW welcomes submissions of 600-800 words on Ganpatrao Kadam Marg,
decision on whether the paper for the Special Article travel, literature, dance, music and films for Lower Parel, Mumbai 400 013, India
section is accepted for publication. publication in this section. Email: edit@epw.in, epw.mumbai@gmail.com

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- cars. On the list of US products chosen by the EU for the imposi-
ment on 1 March to impose a 25% import tariff on steel tion of retaliatory tariffs are Harley Davidson motorcycles,
and a 10% import tariff on aluminium, both on grounds which must surely have provoked Trump’s threat to hit back
of “national security,” has been widely expected to provoke a with the imposition of prohibitive tariffs on European cars. The
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

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
world economy, which would, no doubt, exacerbate the already has, however, come from Republicans, expressed forcefully by
tense geopolitical strains. Indeed, riding high on his nationalis- House Speaker, Paul D Ryan.

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tic “America First” tirade, Trump seems to be bent on generating When Canada and Mexico asked for exemptions from the import
such a dénouement. Ranting against unnamed countries that tariffs, the US reportedly told their representatives that these
had “destroyed” the aluminium and steel industries of the US, he will be granted only if they agree to US demands in the ongoing

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went on to justify the big import tariff impositions: “When it NAFTA renegotiation. The US, in effect, wants Canada and Mexico
comes to a time when our country can’t make aluminium and to renegotiate NAFTA holding a gun to their heads, as one of their
steel, then you almost don’t have much of a country.” representatives put it. Interestingly, Navarro, who also heads

A
The announcement of the import tariffs came at a meeting the Office of Trade and Manufacturing Policy, said that even as
with a group of top executives of the US aluminium and steel exemptions will not apply to individual countries, companies
industries, suggesting that domestic steel and aluminium prices can seek exemptions, opening the door for intense lobbying.

M
and profits were the prime considerations in arriving at the Interestingly, in the midst of disagreement all around, there
decision. What impact the import tariff impositions would have seems to be some sort of an establishment consensus that Trump
on the costs of production of the automotive, aerospace, con- should instead direct his trade war against China, and that he
struction, machinery, and many other steel and/or aluminium- should lead a coalition of US allies against China’s “predatory
based industries, and, in turn, on their international competitive- trade behaviour.” The question being posed is, why does he need to
ness, did not seem to matter. On 6 March, Gary Cohn, Trump’s attack countries that would otherwise be ready to join him as
chief economic adviser and head of the National Economic part of such a coalition? The more precise target seems to be
Council, who had spearheaded the earlier massive corporation China’s “piracy of software,” its “theft of trade secrets,” and its
and income tax cuts, resigned. A former top Goldman Sachs commerce in “counterfeited goods.” China is the “main culprit,”
executive, Cohn reportedly sided with Trump’s “national security” so “twist its arm” under Section 301 of the US Omnibus Trade and
team, H R McMaster, Rex Tillerson, and Jim Mattis, US National Competitiveness Act of 1988 to “punish” it for its “illegitimate”
Security Advisor, Secretary of State, and Defense Secretary transfer of technology and its “stealth” of intellectual property
respectively, who opposed the import tariffs on the plea that that have “harmed” US commercial interests. There are also
such an imposition would alienate Washington’s main “security” calls to impose prohibitive tariffs on shoes, textiles and clothing,
allies—Germany, France, Japan, Canada, and South Korea. and consumer electronics goods imported from China.
An early response to the tariff imposition came from the China, however, has refused to be provoked. Trump’s initial
European Union (EU) and from the US’s trade partners in the North “protectionist” moves must nevertheless be viewed as the
American Free Trade Agreement (NAFTA), Canada and Mexico. EU beginning of a concerted US attempt to undermine the multilateral
trade commissioner Cecilia Malmström hinted that the EU would trading system governed by WTO rules. The world might be
legally challenge the imposition in the World Trade Organization’s witnessing the beginning of something akin to the Smoot–Hawley
(WTO) Dispute Settlement Body and also impose WTO-compati- Tariff Act of June 1930, which raised import tariffs on some
ble retaliatory import tariffs on a list of US products as a counter- 20,000 goods provoking retaliatory tariffs by major US trading
measure. She seemed reluctant to call this a trade war, but Trump partners, leading to a severe trade war, the contraction of world
was quick to suggest that the US will then hit back on European trade, and exacerbation of the Great Depression.
Economic & Political Weekly EPW march 10, 2018 vol lIii no 10 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 “facilitator,” the BJP, to cobble together an alliance. It is possible
assembly elections in Meghalaya, Nagaland and Tripura in that the current alliance in power, although unwieldy, could
north-east India, it is to avoid generalisations. Based on the survive this time around as the BJP is a part of it and thus would
sweeping victory of the Bharatiya Janata Party (BJP) in Tripura, have no interest in pulling it apart.
where it decisively trounced the Communist Party of India (Marxist) Nagaland remains something of an outlier. The BJP used the
that had been in power for 25 years, the mainstream media in principle of regional parties wanting to align with the national
India wrote glowingly about the “saffron sweep” of the North East. party in power at the centre to keep the two main regional parties
They forgot, as they often do in relation to this region, that “the dangling before the elections. It had a pre-election alliance with
North East” is a geographical entity that comprises seven distinct the Nationalist Democratic Progressive Party (NDPP) led by

R
(now eight, counting Sikkim) states with different political, cultural Neiphiu Rio that was formed when the ruling Naga People’s Front
and historical features. To lump them together is to deny them (NPF) led by T R Zeliang broke apart. It was this split in the NPF,

E
their individual identities. In fact, this attitude in the “mainland” based not on substantive issues but on the rivalry between Rio and
remains a major reason for resentment in these states where people Zeliang, that gave the BJP its political advantage. In the end, though,
feel they are lumped together and relegated to the periphery. the BJP stuck with the NDPP and made up the numbers with
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
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

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own, it entered riding on the coat-tails of a regional party the ideological glue that holds disparate elements together.
demanding a separate state for the tribals of Tripura, the Indig- So, what conclusions should the “mainland” draw from the

A
enous People’s Front of Tripura (IPFT). Although the IPFT is a elections in the three north-eastern states? First, that the outcome
junior partner in the new Tripura government, it has the poten- in Tripura does not represent the political reality of the other two
tial to be a thorn in the ruling party’s flesh as there is no way the states. The BJP has won in Tripura but in the two hill states it is still
BJP at the centre will accede to the demand of a separate state. dependent almost entirely on regional formations. The prospect

M
In Meghalaya and Nagaland, it is the nature of regional poli- of it being able to form a government on its own in any of these
tics that tells the real story. Meghalaya was formed as a result of states in the foreseeable future is unlikely. Second, these elections
the struggle of the All Party Hill Leaders Conference (APHLC) demonstrate that the party with a difference, as the BJP likes to pro-
that succeeded in carving out a separate state for the Khasis, ject itself, is clearly no different from the party it chooses con-
Jaintias and Garos out of Assam in 1972. The APHLC broke apart stantly to attack, the Congress. The philosophy that anything goes
within a few years, largely due to the machinations of the so long as you come to power is common to both. Third, the BJP
Congress party that was in power at the centre in 1976, a year was able to sell the “development” mantra in these states because it
that coincided with the Indira Gandhi-imposed state of emergency. has no track record of misgovernance there unlike the Congress.
Since then, its former members either joined the Congress or This could unravel in the months leading up to the general elec-
formed smaller regional groupings. Their one attempt to come tion as little can be delivered of what has been promised. And fi-
together and form a non-Congress government in 2008 lasted nally, while there is no doubt that the BJP is a formidable opponent
only a year, ending in President’s Rule and thereafter Congress in a straight fight, as in Tripura or in Assam in 2016, in the rest of the
rule until these elections. Although the Congress emerged as North East, it only wins because it has perfected the art of being a
the largest single party this time, its record of misgovernance “facilitator,” a kinder term for “manipulator,” to cobble an alliance
notwithstanding, it did not have the abilities of the wily of unlikely partners with the lure of power as the main magnet.

Imperialist Assumptions
The debate in Britain over religious prosecution in India is hypocritical.

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n 1 March 2018, the British Parliament lamented about when he visits the United Kingdom in mid-April 2018 for the
how “freedom of religion or belief” was in danger in Commonwealth Heads of Government Meeting.
Narendra Modi’s India. Member of Parliament (MP) On the face of it, the fact that Britain has finally woken up
Martin Docherty-Hughes, a leader of the Scottish National Party, to persecution of religious minorities in India is good news.
has urged the British government to raise the issue with Modi Diplomatic pressure on a government bent on vitiating the state
8 march 10, 2018 vol lIii no 10 EPW Economic & Political Weekly
EDITORIALS

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

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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

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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

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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-

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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

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

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

Economic & Political Weekly EPW march 10, 2018 vol lIii no 10 9
MARGIN SPEAK

However, the BJP Yuva Morcha’s attempt


Return of the Mandir to hoist the national flag in Srinagar was
thwarted by the then Omar Abdullah-led
state government in Jammu and Kashmir
Anand Teltumbde as it could potentially derail the ongoing
peace process.

P
rime Minister Narendra Modi came seized the initiative. It paid off handsome As it gained in strength, the BJP main-
to power in 2014 on the back of a dividends for the BJP (then the Jan Sangh) tained a strategic silence over these issues
blitzkrieg campaign against a “cor- in terms of pushing up its tally from just and instead projected development as its
rupt” Congress party. With the support of two seats in 1984 to 86 seats in 1989. election issue. It was required to have a
its global capital patrons, he also mesme- Enthused by this success, Lal Krishna wider appeal and also to convince its
rised people with his political rhetoric of Advani, the then president of the BJP patrons in global capital. Now that it finds
achhe din (good days) and a clean India, undertook a rath yatra from Somnath in itself on shakier grounds with voters, it
both literally and metaphorically. How- Gujarat to Ayodhya in Uttar Pradesh (UP) appears to be resorting to its old game of
ever, in the past three years, public life on 25 September 1990. If Pradipsinh communal polarisation to consolidate its
has got corrupted and it may be difficult to Jadeja, then minister of state for home, is constituency.

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recover from its effects, for many years to to be believed, the architect of this yatra
come. Socially, the emboldening of the was none other than Modi (Ajay 2017). Ram Mandir, Once More
saffron brigade in terms of enacting its Advani’s arrest on 23 October 1990 at The BJP’s global patrons, however, may
fascist antics, unleashing terror on min-
orities, and spreading communal poison;
politically, systematic erosion of demo-
cratic norms, undermining of parliamen-
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 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-

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tary decorum, and saffronisation of insti- them by the Mulayam Singh govern- dhya in UP to Rameshwaram in Tamil
tutions; economically, devastation of the ment in UP on 30 October and 2 Novem- Nadu (Pradhan 2018). The yatra was to
informal sector due to irrational deci- ber 1990, eventually led to the demoli- be flagged off earlier by UP Chief Minister
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
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tion of the Babri Mosque on 6 December
1992. It sparked off communal riots

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across the country, particularly in cities
like Mumbai, Surat, Ahmedabad, Kanpur,
Delhi, and Bhopal, resulting in over
2,000 deaths, primarily of Muslims, and
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-
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.
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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
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.
Dirt of Communalism deaths of another 2,000 Muslims. The BJP’s political agenda is visible to
It is well known that Ram Mandir, Article The BJP gained hugely from these anyone: as many as 224 Lok Sabha con-
370 on Kashmir, and Pakistan, have been communal carnages. Yatras became its stituencies are being covered by the yatra
the three main issues that have propelled special purpose vehicle to whip up com- in six states—UP, Madhya Pradesh,
the BJP from a fringe party to a formida- munal frenzy among the people. The Maharashtra, Karnataka, Kerala and
ble political force in India. Among these, second rath yatra of the BJP was the Ekta Tamil Nadu, not the least—with immi-
it was the Ram Mandir issue that provided Yatra (unity rally) from Kanyakumari to nent assembly elections in Karnataka in
the moment of ascent for the BJP, when Kashmir led by the then party chief April 2018. Although, the BJP govern-
the Rajiv Gandhi government enthusias- Murli Manohar Joshi, which ended with ment kept a safe distance from the yatra,
tically ordered the opening of the locks a handful of BJP leaders, including Modi, the union home ministry has written to
of the Babri Mosque within an hour of who was the convener of the yatra, timidly the police chiefs of states through which
the Faizabad judge’s ruling on 1 February unfurling the tricolour at Srinagar’s Lal the yatra will pass, asking them to facili-
1986. Gandhi’s strategy was aimed at Chowk on Republic Day in 1992 amidst tate its progress (Jha 2018). It is interest-
undercutting the BJP’s Ram Temple cam- tight security. Another Rashtriya Ekta ing that the government that routinely
paign, underway since 1984. But it back- Yatra (national integration rally) from denies permission to activists holding
fired badly as the Sangh Parivar quickly Kolkata to Kashmir was planned in 2011. even small public meetings, without any
10 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
MARGIN SPEAK

rhyme or reason, has not only allowed their own duties, satisfied with their own never compete against the BJP on the
this yatra, despite its potential danger to work, and bereft of greed. (canto 116, verse 89) Hindutva platform. Those who egged
law and order, but also has mandated its This is the typical varna order that on Rahul Gandhi’s soft Hindutva, will
machinery to facilitate it. Gandhi believed in and our rulers soon demand a hardline stance from
The demands of this yatra are also reve- would like to have. But what about the him. It is a dangerous development
aling: the re-establishment of Ram Rajya, Dalits, Adivasis, Shudras and non- which would only hasten the establish-
inclusion of the Ramayana in syllabi of Hindus, who together constitute a vast ment of the Hindu rashtra in India.
schools and colleges, shifting weekly majority and would surely say “no” to While it is true that electoral success is
holidays from Sundays to Thursdays, such a Ram Rajya? driven by religious and caste considera-
and a declaration of a Vishva Hindu tions rather than social or public service
Diwas (world Hindu day). There is ano- Why No Outcry? records, it is not the natural order. The
ther angle to this project, which is that When it comes to resisting the BJP’s ruling classes had deliberately intrigued
Hindutva forces want to have an out-of- Hindutva, there is no real political to conserve castes and communities in
court settlement of the Ram Janmab- opposition; all parties are united in a the Constitution and cheated people on
hoomi–Babri Masjid dispute that is com- broad anti-people alliance. In the the promise of secularism as on many
ing up for its final hearing before the present instance, except for the two par- other things. Dharmanirapekshata is
Supreme Court on 14 March 2018. The liamentary communist parties (Com- not just secularism; it is a ploy to pre-

R
yatra can pressure Muslim groups to munist Party of India and Communist serve dominance of the majority reli-
acquiesce to the same as the verdict of Party of India [Marxist]), there was not gion. Had India been truly secular, we

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the Court cannot be relied upon. Ram even a whisper of opposition from the would not have had to face the spectres
Rajya, as a concept, was first articulated other opposition parties to the yatra. of the Hindu rashtra.

T
by M K Gandhi to lure the masses into The Trinamool Congress in West Bengal
his freedom movement on the promise which had been accused of “appeasing Anand Teltumbde (tanandraj@gmail.com) is a
writer and civil rights activist with the
that once independence arrived, Ram minorities,” because they are relatively

Z
Committee for the Protection of Democratic
Rajya will be established. Gandhi, in his more populous in the state, also recently Rights, Mumbai.
characteristic style, went on to change its organised a massive Brahmin conven-

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interpretation, even dissociating it from tion, namely the “Brahmin and Purohit
the Hindu religion. Responding to a Sammelan.” It was organised by a Note
1 Book 6, Lankakanda (Book of War), Valmiki
question at a prayer meeting on 26 Feb- senior party leader and Trinamool’s

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Ramayana (critical edition), Varoda: Oriental
ruary 1947, he clarified Birbhum district president, Anubrata Institute, Maharaja Sayajirao University
Mondal. All the priests who attended (compiled in the 1960s–70s).
let no one commit the mistake of thinking
that Ramrajya means a rule of Hindus. My the convention were gifted a copy of the

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Ram is another name for Khuda or God. I Bhagavad Gita, a shawl, and pictures of References
want Khuda Raj which is the same thing as Ramakrishna Paramahamsa and his
the Kingdom of God on Earth. Ajay, Lakshmi (2017): “Modi Architect of Advani’s
wife Sarada Devi. All political parties Rath Yatra: Gujarat Minister,” Indian Express,
As Chief Minister of Gujarat, Modi have similar skeletons in their closets. 22 April, http://indianexpress.com/article/india/
modi-architect-of-advanis-rath-yatra-gujarat-
explained that Ram Rajya meant a “wel- The Congress, on the other hand, proves minister-pradeepsinh-jadeja/.
fare state.” However, he went on to dis- to be a comic competitor with its soft Jha, Dhirendra K (2018): “RSS Prepares to Launch
Rath Yatra from Ayodhya to Rameswaram on 13
possess common people in the state in Hindutva, in its desperation to demon- February,” Scroll.in, 7 February, https://scroll.in/
order to satiate the unquenchable greed strate that it is not anti-Hindu. The article/867793/rss-prepares-to-launch-rath-yatra-
of crony capitalists and their corpora- manner in which the Congress presi- from-ayodhya-to-rameswaram-on-february-13.
Pradhan, Sharat (2018): “‘Ram Rajya’ Rath Yatra Is
tions. Ram Rajya, in practice, appears to dent Rahul Gandhi is being projected as a Misuse of ‘Ram’ in Politics,” National Herald,
have served as rhetoric for all political a janevudhari (holy thread wearing) 14 February, https://www.nationalheraldindia.
com/opinion/ram-rajya-rath-yatra-is-bjps-mis-
parties to appeal to gullible Hindus. The Brahmin should be condemned, but it use-of-ram-in-politics.
late Rajiv Gandhi had inaugurated the sells in “secular” India.
Congress party’s 1989 election cam- During the recent Gujarat elections,
paign from Ayodhya with a promise to Rahul Gandhi visited 27 temples to
usher in Ram Rajya as his son does stress that he too is a Hindu. The Con-
available at
today. Ram Rajya is uncritically evoked gress has interpreted its victory in the
as an ideal rule, as described in Rama- 18 constituencies where these temples Life Book House
yana. In the sixth book of Valmiki Rama- are situated (wresting 10 from the BJP)
Shop No 7, Masjid Betul
yana, Lankakanda,1 as being due to this temple run. It is nei-
Mukarram Subji Mandi Road
ther ashamed to see that even in such a
All [that is, Brahmins (the priest-class), Bhopal 462 001
Kshatriyas (the warrior-class), Vaiśyas (the surcharged anti-BJP atmosphere, as in
Madhya Pradesh
class of merchants and agriculturists), and Gujarat, it could not wrest power from
Ph: 2740705
Sudras (the servant class)] were performing the BJP, nor does it realise that it can
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 11
COMMENTARY

What the Tripura Victory (MP) Jyotiraditya Madhav rao Scindia’s


Guna constituency and are held by his

Signifies for the BJP party. Pressured by the Delhi “high com-
mand” that remains sceptical of Chief
Minister Shivraj Singh Chouhan’s loyalty
quotient towards Modi, Chouhan (who
Radhika Ramaseshan had lost two earlier by-elections in Ater
and Chitrakoot) staked his prestige, time

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The Bharatiya Janata Party is ith only 59 assembly and two and resources in the Mungaoli and
jubilant after its performance in Lok Sabha seats, Tripura is just Kolaras assembly seats. He mobilised his
about visible on the political council of ministers to launch a blitz-
the assembly elections in Tripura.
map to the Bharatiya Janata Party (BJP). krieg (in the form of public meetings
However, while it was relatively Independently or in conjunction with and road shows) in the Chambal constit-
simpler for the party to find other parties, the party rules over elec- uencies to take the message of his own
success in Assam and Tripura torally high-yielding states such as Uttar government’s “development” and that of
Pradesh, Maharashtra, Rajasthan, Madhya the centre. Therefore, is one supposed to

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because their politics essentially
Pradesh, Bihar and Andhra Pradesh. On infer that, while the north-eastern states
follows the trajectory of 3 March, hours after the trends in Tripura’s of Nagaland and Tripura ostensibly em-
“mainstream” India, cracking the
other states in the North East may
be complex and a long haul. In
the meantime, the BJP will make
assembly elections established a conclu-
sive victory for the BJP, the party broke

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out into a celebration that was matched
in scale and enthusiasm with the jubila- 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

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tion that marked its sweep in the 2017 BJP picked up only two seats.
peace with the regional forces Uttar Pradesh assembly polls. The new Modi certainly suggested that, sound-
and forsake or dilute the multi-storied BJP office with 70 rooms— ing beside himself with joy as the tidings

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its grandeur approximating a top-class from Agartala arrived. He said,
Hindutva-specific agenda
corporate headquarter and purportedly Amidst the disinformation, I am grateful to
according to expediency. It helps

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surpassing the offices of political parties the voters of the north-east. Far away, people
to have a government at the the world over—could not have heralded understood what the BJP and the BJP gov-
ernment is about. It’s difficult for them to
centre that can dangle and deliver its arrival more grandiosely.
discard the age-old perceptions and em-
Prime Minister Narendra Modi’s victory

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carrots from time to time. brace new certitudes. But when our humble,
speech to the BJP workers appropriately ordinary workers reached out to them and
used an architectural analogy to explain revealed the truth, they won over people’s
his party’s full-fledged victory in a second hearts and we won the elections.
north-eastern state after Assam. He said To reduce a mandate to a debate bet-
that vastu shastra (or the Hindu system ween “falsehood” and “truth” and contend
of architecture) considered the corner fac- that “truth” triumphed, as Modi framed
ing the north-east as the “most impor- it, is simplistic and misleading. The
tant” part of a structure because of Tripura verdict carries deeper signifiers.
which the north-east formed the pivot of A clue to one of them was visible in the
an edifice. “My country’s north-east has festivities that broke out among the BJP’s
come forward to lead our onward journey rank-and-file in Kerala and West Bengal
(‘yatra’) of development,” he declared, shortly after the trends became known.
implying that he and his government Kerala is under a Left Front government
were indeed on the “right” track. and West Bengal under the All India
In the recent elections and by-elections, Trinamool Congress (AITC) government
the BJP suffered a partial setback in that is every bit as antagonistic towards the
Gujarat while it was decisively routed in BJP as the left coalition. But the slogans
three by-polls in Rajasthan and lost two in the BJP raised were against the “barbaric
Madhya Pradesh rather narrowly. Perti- Communists.” These were counterpoised
nently, it had held all the three (one assem- with the presence of the BJP as the people’s
bly and two Lok Sabha) seats in Rajasthan, “saviour.” In West Bengal, the BJP persis-
Radhika Ramaseshan (ramaseshan.radhika@ but not those in Madhya Pradesh that fall tently portrayed Chief Minister Mamata
gmail.com) is consulting editor, Business Standard.
within Congress Member of Parliament Banerjee as “corrupt” and a “patron” of
12 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
COMMENTARY

the Muslims. In Kerala, its storyline is the BJP won the 2014 elections. The BJP because it is a Hindu majority state with
themed on the “killings” of the Rashtriya was almost always successful only in the a 9% Muslim population and a sprin-
Swayamsevak Sangh (RSS) volunteers north and the west and Karnataka in the kling of Christians among the tribals
and its own workers. Although, the RSS’s south. There are two parts to the “Act East” (Ramaseshan 2018a).
retaliatory eliminations, amounting to a agenda. The BJP clubbed the eight north- Using the inroads it has made in the
head for a head, have also been meti- eastern states (including Sikkim) into one North East to project itself as a party
culously documented. Senior journalist political grouping and the states/union that has transcended the boundaries
Subir Bhaumik noted, territory along the east coast into another of the Hindi heartland and the western
Both Tripura and West Bengal are Bengali-
grouping. The latter comprised of Tamil India may or may not work for the BJP.
majority states with long years of Left rule and Nadu, Puducherry, Andhra Pradesh, There is no denying that while the
any major progress made by the BJP in Tripura Odisha and West Bengal. Between them, Congress seems to have thrown up its
will be a source of concern for both Mamata the north-eastern states contribute 24 Lok hands out of apathy or futility, the BJP is
Banerjee’s AITC and the Left in Bengal.
Sabha MPs, and the coastal quintet, 128 assiduously working on a game plan to
(Bhaumik 2018)
of the 543 Lok Sabha seats (Ramaseshan enhance its acceptability in this region.
It is worth noting that as the BJP was 2018b). While the Tamil Nadu and West
rejoicing after its Tripura showing, Mamata Bengal grouping offers a fairly big chunk Other Parties
Banerjee lashed out against the Congress of seats, the North East is valued by the The North-East Democratic Alliance
and its president Rahul Gandhi for not BJP not for the number of seats it con- (NEDA), formed on 24 May 2016, shortly
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
beams to the country as a whole.

hard to demolish the theory that the

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It is no wonder then that Modi tried
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tains, but the political signals the region 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

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lead a larger coalition against the BJP clos- “tyranny of distance” between Delhi and centre without joining the National
er to the 2019 Lok Sabha elections. Unless Dispur and the other state capitals was a Democratic Alliance (NDA). The NEDA held

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the Congress keeps Karnataka and de- figment of the imagination in his regime. a strategy session with the chief ministers
feats the BJP in the Madhya Pradesh, He listed the various steps his govern- of Assam, Manipur, Sikkim, Arunachal
Rajasthan and Chhattisgarh polls later ment took to bridge the “distance.” He Pradesh and Nagaland soon thereafter

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this year, the sheen that Gandhi had claimed that when his government came under the chairmanship of Shah and the
acquired after the Congress’s unexpected to power, there were frequent reports of backroom endeavour of Himanta Biswa

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showing in Gujarat and the success in the the harassment and victimisation of the Sarma, a former Assam Congressman
Rajasthan by-polls may wear thin, under- residents hailing from the North East and who shifted to the BJP after the Congress
mine opposition unity, and confound the living in Delhi. Home Minister Rajnath had allegedly given him short shrift.
issue of who could lead an anti-BJP front. Singh was directed to speak to the victims However, the NEDA’s first meeting came

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
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
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
“Marxists.” Ironically, the Congress is not Delhi and spoken of in derisive terms. NEDA’s main intent was to “liberate” the
regarded with the same degree of anta- But the North East, with its mixed North East from the Congress.
gonism. A BJP strategist who worked in ethnicity and faiths, serves as a con-
Tripura described Congress leaders and venient front to the BJP and Modi to bolster Elusive Goal
sympathisers as “nationalists” and wel- their national acceptability and “prove” “Liberation” is an attractive word, but the
comed the exodus from their ranks to his that they are not insular. This idea was BJP’s interpretation has been confined to
party (Ramaseshan 2018a). Modi’s victory rejected by Meghalaya where the BJP’s the tactics of chicanery and defections
speech specifically singled out Tripura’s militant advocacy of vegetarianism, its that are an integral part of politicking
“Maoist ideologues” as being culpable “save the cow” campaign, and a back- in some of the north-eastern states. In
for the murder of “several” BJP workers handed way of slighting Christians by March 2017, when Manipur voted, the BJP
and played on the “martyrdom” trope by declaring 25 December as “good govern- was beaten to the post by the Congress,
keeping a two-minute silence for those ance day” and insisting on the participa- which emerged as the single largest party
who had perished while Shah dedicated tion of all government employees worked with 28 legislators in a 60-member as-
the victory to the “martyrs.” against its effort to shore up its “pan sembly, while the BJP got 21 seats. It
The second message emanates from the Indian” credentials (Jha 2018). cobbled a disparate majority with the help
BJP’s “Act East” outlook that germinated On the other hand, Tripura was demo- of the Naga People’s Front, the National
and evolved into a policy shortly after graphically more hospitable to the BJP People’s Party, the Lok Janshakti Party,
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 13
COMMENTARY

independents and Congress defectors and Tripura because their politics essen- References
(Singh 2017). This saga is being replayed tially follows the trajectory of “main- Bhaumik, Subir (2018): “A High-stakes Poll for ‘Red
Fort’ Tripura,” Hindu, Centre for Politics and
in Meghalaya where the BJP has become stream” India, cracking the other states Public Policy, 15 February.
a stakeholder in a coalition government may be complex and a long haul. In the Jha, Prashant (2018): “Insecure of BJP Efforts,
despite having two legislators. On the meantime, the BJP will make peace with Churches in Meghalaya Are Getting into Elec-
toral Politics,” Hindustan Times, 11 January.
other hand, the Congress is the single the regional forces in the more problem- Ramaseshan, Radhika (2018a): “Tripura, Meghalaya,
largest party but was outmanoeuvred atic states and expediently forsake or di- Nagaland Polls: BJP Leads the Charge against
the Left,” Business Standard, 12 February.
by the BJP. lute the Hindutva-specific agenda. It — (2018b): “Assembly Elections: Odisha, BJP’s
What is more, the “development” narra- helps to have a government at the centre Sunrise State in the East-Coast Blueprint,”
Business Standard, 19 February.
tive is underpinned on the twin themes that can dangle and deliver carrots from Scroll.in (2018): “‘They Didn’t Listen to Me’: Mama-
of “nationalism” and Hindutva, which time to time. But the BJP’s goal of ta Banerjee Picks on Congress after They Lose
Tripura to BJP,” 4 March.
are mired in the RSS’s ideology. While a “Congress-mukt [free]” North East Singh, Shiv Sahay (2017): “BJP Combine Invited to
success was relatively simpler in Assam remains elusive. Form Government in Manipur,” Hindu, 14 March.

Co-option, Collaboration, Conflict 2016 received 50 cases under the Armed


Forces (Special Powers) Acts (AFSPA) from
the Government of Jammu and Kashmir
Three Years of PDP–BJP

Mudasir Amin

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(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-

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nity enjoyed by the forces under the AFSPA,

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The Peoples Democratic Party n 28 January 2018, the Garhwal the J&K Chief Minister Mehbooba Mufti

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and the Bharatiya Janata Party Rifles of the Indian Army killed “promised” that the investigation in the
three civilians in Ganawpora Shopian case would be taken to a “logical
coalition government in Jammu
village of Shopian district, when they conclusion” (Tribune News Service 2018).

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and Kashmir has been marred by were mourning the killings of two insur- People in Kashmir, however, know the
doublespeak and U-turns gents and another civilian earlier that powerlessness of the chief minister in a

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vis-à-vis its poll/alliance mandate, week (Fareed 2018). The army version militarised state; that is why the father of
claims that they came under heavy stone one of the deceased youth called the inves-
gross human rights violations,
pelting by protesting youth and fired in tigation as further harassment of the griev-
and extended (cyber) curfews in self-defence. The facts are being ascer- ing family (Fareed 2018).
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,”
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-
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-
indeed democracy itself face a ing the major as well (Pandit 2018). The turbed Areas Act, 1992, followed by party
Indian media, uncritically standing by leaders ambitiously pledging a complete
legitimacy crisis.
the Indian military, took no time in cas- withdrawal of the AFSPA in the state, if
tigating the state government for the FIR voted to power. Mufti’s Peoples Demo-
which could affect the “morale of the cratic Party (PDP) has come a long way
soldiers” (Vohra 2018). from its earlier green, “soft separatism”
The furore over the police report, how- stance, with promises of a healing touch
ever, is questionable given the poor track and demand for self-rule, to forging an
record of the state, which frequently raises alliance with the “saffron” brigade that
the “probe” bogey but fails to indict the they used to despise, in public at least.
forces’ personnel. In rare cases where it
did, the perpetrators have never been A Shaky Start
prosecuted. This was recently established On 1 March 2015, Mufti Mohammad
by the Union Minister for Defence, Nirmala Sayeed was sworn in as the chief minister
Mudasir Amin (mudasiramin90@gmail.com) is Sitharaman, while replying to a question of the coalition government, comprising
a public policy scholar at the Hindu Centre for in Parliament, where she stated that the the PDP and the Bharatiya Janata Party
Politics and Public Policy, Chennai.
union government had between 2011 and (BJP), which materialised after nearly
14 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
COMMENTARY

two months of talks. The coalition was in Kashmir (Times of India 2015). A 2015 Within a year, Sayeed died of a multiple
dubbed “unethical and unholy” (PTI report by the Jammu Kashmir Coalition organ failure at the All India Institute of
2015b; Tribune News Service 2016), per- of Civil Society (JKCCS) explained how the Medical Sciences, New Delhi (Indian Ex-
haps because of the two being politically Valley’s disaster vulnerability has intensi- press 2016). Back home, his funeral was
opposed to each other on a variety of fied due to a military governance struc- attended by a few hundreds, most of them
issues, including the AFSPA and Article 370. ture and its permanent installations, and politicians and government functionar-
In the common minimum programme of criticised the militarised rescue opera- ies. Only a week earlier, some thousands
the alliance, the PDP softened its posi- tions, captured and glorified through the had attended the funeral procession of
tion on the AFSPA maintaining that cameras of mainstream media. Based on an insurgent amid curfew in Kulgam
the government will examine the need for case studies and extensive field research, (Davedas 2015). Did people’s aspirations
denotifying disturbed areas which will as a the report debunks the “heroic humani- need to be made any clearer? As Mufti
consequence enable the union government
tarianism” of the military and asserts delayed her swearing-in ceremony, politi-
to take a final view on the continuation of
the Armed Forces Special Powers Act (AFSPA) that it was Kashmiris, through their cou- cal commentators suggested that the PDP
in these areas. (India Today 2015) rageous community volunteerism, who was considering pulling out of the coali-
On the other hand, the BJP made a helped each other during the floods tion after realising the damage the alliance
U-turn on the abrogation of Article 370 and (JKCCS 2015a). The PDP got much flak for had already caused it (Kumar 2016).
agreed to maintain a status quo stating that its silence on a “humiliating package” However, Mufti continued with the
but the party leadership did not take this “unholy” coalition, with a part of the

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the present position will be maintained on
all constitutional provisions, including spe- up with its alliance partner in the centre, Indian media and liberals declaring it a
cial status. (India Today 2015) fearing a premature end to the coalition. historic moment for women’s empower-

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However, nothing in the “document” Throughout the election campaign, ment in Kashmir. Mufti’s empowerment,
has actually been executed on the ground. the PDP had vowed to keep the BJP away however, only caused more misery to

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On the very first day of the government’s from Kashmir, reminding people of the Kashmiri women, as unabated violations
formation, Sayeed stoked a controversy “Gujarat pogrom” and the role played by of human rights continued. Reports and

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by thanking Pakistan, the All Parties the BJP and particularly the incumbent allegations of the use of sexual violence
Hurriyat Conference, and insurgents in Prime Minister, Narendra Modi, therein against Kashmiris by the Indian military
the Valley for allowing the smooth con- (Sharma 2016). The PDP evoked fear among have surfaced since the early days of in-

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duct of elections in the state (PTI 2015a). the people leading up to polling day in surgency. While the intensity of this has
It was met with calculated condemna- the Valley. The BJP did the same against certainly declined, there have been high-

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tion from the BJP. However, Sayeed was the PDP in Jammu (Sharma 2016). This profile cases in recent times—be it the
not an ordinary politician, he meant seemed to have worked for both. Shopian double rape and murder case in
business. While receiving flak from eve- One week into power, the government 2009 or the Handwara molestation case
ry corner for forming government with released Hurriyat leader Masarat Alam in 2016. Of course, a lot goes unreported
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
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
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
Sayeed, in a public speech, had said jails. The BJP feigned ignorance and location and made to record a video state-
Kashmiri militants don’t need any guns be- claimed that the decision had been taken ment, under duress, exonerating the
cause their representatives are now in the unilaterally by the PDP. Reacting sharply, forces (Pandit 2016). The girl continues
assembly. (Geelani 2015) the BJP warned the PDP that to fight the case to date, while the enquiry
In the next three years of his chief remaining in power is not a priority for BJP into the killing of the five civilians is still
ministerial stint, Sayeed represented and it will not allow any laxity on the issue awaiting a “logical conclusion” after two
everyone but “militants.” of national security and in dealing with sep- years. The government, headed by a
aratists and militants. (Sharma 2015)
The PDP–BJP government came to woman, far from taking up for the vic-
power at a time when Kashmir was still However, one of the core points of the tims, provided cover to the perpetrators.
recovering from the disastrous floods of coalition’s common minimum programme
2014 that had incurred massive property was facilitating a sustained dialogue Mass Blinding, Human Shields
and agricultural losses with more than with the Hurriyat. This never happened. The year 2016, for Kashmir, went down
200 people losing their lives. The Indian Alam was rearrested within a week and as a year of “mass blinding” (Waheed
government while doling out a meagre aid slapped with the J&K Public Safety Act 2016) and “dead eye” epidemic (Barry
package made the state government pay (PSA), 1978 (PTI 2015c). The PDP’s “battle 2016). The killing of the young and popu-
`500 crore for the “rescue operations” of ideas” model, thus, died an ironic lar insurgent “Commander” Burhan Wani
executed by different national agencies death (Greater Kashmir 2016). led to a wave of protests in Kashmir in
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 15
COMMENTARY

July 2016. The authorities responded with which were due in the month of Febru- down of Article 35A (Anand 2017). This
disproportionate force, killing 100 civil- ary 2018. In a situation where such a article enables the J&K legislature to de-
ians, mostly youth. Curfew was imposed huge government machinery has not fine a “permanent resident” and is close-
and Kashmir remained in shutdown been able to conduct even a by-election, ly linked to Article 370 that guarantees
mode for months. The pellet shotguns, the continuation of the PDP–BJP coali- special status to the state, which none-
though not new, injured more than 3,000 tion in power baffles one and all. theless has been eroded over time. This
people, many of them in the eyes, render- During these by-elections, an army no-objection by the government coupled
ing them partially or fully blind. The doc- major of the 53 Rashtriya Rifles assaulted with the extension of the goods and ser-
tors reported the victims as having “muti- a civilian Farooq Ahmad Dar, tied him to vices tax to the state is an indication of
lated retinas, severed optic nerves, [and] the bonnet of an army jeep, and paraded the encroachment of the special status.
irises seeping out like puddles of ink” him through different villages of Budgam This is the exact opposite of what the
(Barry 2016). The teenage girl Insha district for hours as a “human shield” (Al PDP had promised or included in the
Mushtaq became the face of the brutality Jazeera 2017). The army and the govern- agenda of the alliance.
of “non-lethal” weapons in Kashmir ment in Delhi defended it as a “precau- In November 2016, the Indian govern-
(Fareed 2017). She was blinded when a tionary measure” and an “innovative ment’s “demonetisation fiasco” (Shepard
volley of iron pellets was fired indiscrimi- idea” against stone pelting, the major 2016) created a cash crunch, adversely
nately at her as she tried to peep out was awarded a commendation by the impacting the poor. Though Kashmir,
through the window to see the protests Indian Army chief (Al Jazeera 2017). for the most bit, remained unaffected
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
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

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(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

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[non-lethal] pellets and rubber bullets, then, made a hero out of the perpetrator. familiar ploy, wherein state propaganda
is “lethal over time.” The language of non-
lethality is simply a rhetorical excuse by cru- In the same month, when students of seeks to invisibilise the political aspira-

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el governments to wage wars while carefully Government Degree College, Pulwama tions of ordinary Kashmiris and to dis-
eliding responsibility for mass debilitation. protested against the installation of a mil- miss people’s participation in mass pro-
Over weeks and months, the coalition itary bunker near the college, the forces tests, as motivated by the lure of money

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government continued defending every entered the college premises and used or performed by a fringe group. Howev-
bullet and pellet fired. Thousands were disproportionate force killing one and in- er, not only has stone pelting continued,

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arrested. The internet was blocked for juring more than 50. This led to a wave of in fact, people have taken to barging to
months, leaving Kashmiris incommuni- student protests in Kashmir (Chakravarti encounter sites and engaging forces in
cado with each other and the rest of the and Naqash 2017). Students in school uni- stone pelting in order to help insurgents
world. Newspapers were banned and forms with scarves and ties came out onto escape (Qadri 2017).
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
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
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-
resignation of the then PDP parliamen- Kashmir, especially for the young. Sev- tojournalist, which led to further pro-
tarian Tariq Hameed Karra (PTI 2017b) eral students took to posting videos on tests (Ashiq and Singh 2017). Many more
in protest against the government’s han- Facebook Live of stone-pelting stand-offs were summoned by the NIA, including a
dling of the 2016 uprising. However, with the army in Kashmir (Qadri 2017). sitting legislator and a university scholar
these were boycotted with a meagre voter Realising the potency of this, the state (PTI 2017c). Hurriyat maintains that the
turnout of 7% and mass protests on poll- has, over the years, exercised its puni- Indian government led by the right-wing
ing day, in which eight civilians were killed tive authority to ban social media web- BJP is trying new tactics to curb the
(Hindustan Times 2017). Re-elections were sites and issue indefinite cyber curfews, movement for right to self-determination,
held in 84 polling stations, resulting in an thereby controlling the lives and emerg- and NIA is but the latest addition to its
even lesser turnout, pegged at 2% (PTI ing narratives of people. military campaign against Kashmiris.
2017b). Thereafter, the by-elections for The months of September and Octo-
the Anantnag Lok Sabha constituency Propaganda and Deception ber 2017 saw Kashmir gripped in mass
were cancelled (Ramachandran 2017) Far from addressing or even acknowl- panic when incidents of “braid chopping”
and the government is still to take a call on edging its wrongs, the BJP has chosen to were reported (Safi and Farooq 2017).
it. Alongside, the PDP and other opposi- not raise objections to a petition filed by The police and the government were
tion parties have already asked for the a lesser-known civil society organisation clueless with their “unscientific” investi-
cancellation of panchayat elections, “We, The Citizens” that sought the striking gations, referring to the phenomenon as
16 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
COMMENTARY

“hallucination, a madness, and … mass gone back to the old tactics of deadly Notes
hysteria” (Ganai 2017). However, the po- fedayeen (guerrilla) attacks. Though high- 1 In the 1990s, Kashmir was gripped in nocturnal
trauma when incidents of people seeing ghosts
lice simultaneously announced rewards ly educated youth turning insurgents is who attacked their houses were reported. Later,
for information on culprits. On the not new in Kashmir, when gun-wielding it was claimed to be a military tactic to instil
fear among the masses who supported the
ground, people saw it as a deliberate act photos of a local Kashmiri youth, Manaan armed insurgency and sheltered the insurgents.
by the state to create fear and mistrust Wani, pursuing a doctoral degree from 2 In Kashmir, “crackdown” is understood as an
among people, so as to prevent them Aligarh Muslim University, appeared on operation by the forces where a village or two
are cordoned, the menfolk made to assemble in
from sheltering insurgents. The inci- social media it took the insurgency to a open, paraded (sometimes beaten up and tor-
dents stopped as suddenly as they had whole new level. tured) while the forces search houses for insur-
gents and their hideouts.
started. Something similar had hap- In a conflict zone like Kashmir, focus- 3 In early 2017, the counter-insurgency network
pened in the 1990s during “Operation ing on numbers takes us away from many in Kashmir, including the army, Central Re-
serve Police Force, Jammu and Kashmir Police,
Bhoot (ghost).”1 These incidents have aspects of the everyday militarisation of and different intelligence agencies, announced
served as constant reminders for the life but as Peter Beaumont (2010) argues, “Operation All-Out” which they claimed was a
blueprint to “neutralise” 258 insurgents from
people to remember the visible and valid estimates provide true meaning to different groups. More than 200 insurgents,
invisible forces active in the Valley and including 18 commanders, were killed in this
[the] narrative of memory and history … It
operation (Yasir 2017). In February 2017, the
capable of altering their lives. allows us to accurately define events; make Indian Army chief also warned insurgent sup-
In October 2017, the Indian govern- comparative judgments both morally and porters in Kashmir of “going helter-skelter after
politically, to understand the intention be- them” and further said that “they may survive
ment appointed an “interlocutor” for a

R
today but we will go after them tomorrow”
hind acts and the weight of suffering.
“sustained dialogue” with all stakehold- (PTI 2017a). This warning was issued mainly for
the youth, who go near encounter sites and en-
ers in Kashmir (Gupta 2017). The inter- The number of deaths in Kashmir under

E
gage army by pelting stones and raising slogans.
locutor’s past few visits, however, have this coalition government (Table 1) is a 4 In January 2018, the Indian Army chief again
stoked a controversy when he blamed govern-
only entailed meetings with govern- clear manifestation of the conflict. ment schools in the Valley for “radicalisation of

T
ment-chosen delegations, who talked youth.” Questioning the separate map for Jam-
Conclusions mu and Kashmir, he said “in schools in J&K
anything but the resolution of Kashmir. [Jammu and Kashmir], there can be seen two

Z
All factions of the Hurriyat Conference, While the army, through “Operation All- maps, one of India, another of J&K. Why do we
need a separate map for J&K? What does it
trade unions and civil society groups in Out,”3 seems to have blurred the lines teach the children? Most misguided youth
the Valley declined to meet the former between combatants and protesting come from schools where they are being radi-

G
calised” (First Post 2018).
intelligence officer. In the proposed civilians, it has not stopped the youth from
“sustained dialogue,” the interlocutor is engaging the forces during encounters
References

A
actually talking only to the government. to try and help insurgents escape. The
Al Jazeera (2017): “Outrage Over India Award for ‘Hu-
Such declarations and appointments by army’s increasing interventions in civil man Shield’ Soldier,” 23 May, https://www.alja-
the Government of India seek to demon- affairs,4 and the successful pervasion of zeera.com/news/2017/05/outrage-india-award-
human-shield-soldier-170523110224040.html.
strate to the world that India cares to ac- cries of “Pakistan Zindabad” (long live

M
Anand, U (2017): “SC Hints at Referring Petitions
commodate Kashmiri aspirations, but they Pakistan) from the streets of Kashmir to Against Articles 370, 35A to Constitution
Bench,” News18.com, 14 August, https://www.
are almost instantly rendered hollow. the legislature (Manhotra 2018), demon- news18.com/news/india/supreme-court-hints-
In fact, the notorious “crackdowns”2 strate the increasing volatility in Kashmir. at-referring-petitions-on-articles-370-and-35a-
to-constitution-bench-1490983.html.
that were a routine in the 1990s have re- An analysis into the three years of the
Ashiq, P and V Singh (2017): “NIA Arrests 7 J&K
turned to the Valley in the form of cor- coalition shows that the BJP is driving the Separatist Leaders for ‘Creating Unrest,’” Hin-
don and search operations, which are PDP into submission and collaboration, du, 24 July, http://www.thehindu.com/news/
national/seven-kashmir-separatists-arrested/
extended to multiple villages simultane- reducing the former into a surrogate ad- article19342611.ece.
ously (Naqash 2017), with the forces en- ministration. The periodic demands of Barry, A (2016): “An Epidemic of ‘Dead Eyes’ in
Kashmir as India Uses Pellet Guns on Protest-
tering houses, damaging properties and self-rule, an end to human rights viola- ers,” New York Times, 29 August, https://www.
assaulting people. Furthermore, the frisk- tions, and revocation of the AFSPA, fail to nytimes.com/2016/08/29/world/asia/pellet-
guns-used-in-kashmir-protests-cause-dead-
ing of people on roads, in buses, and at get any response beyond lip service. This eyes-epidemic.html.
public places is back. is a familiar script in Kashmir followed by Beaumont, P (2010): “In Dresden or Darfur, the
Numbers Are Important,” Guardian, 20 March,
successive governments and opposition https://www.theguardian.com/world/2010/
Swelling Youth Insurgents parties, whose legitimacy, however, is mar/21/dresden-war-crimes-death-toll.
However, the more the repression, the under challenge like never before. Chakravarti, I and R Naqash (2017): “Violent Crack-
down at Pulwama Degree College Triggers
stronger the rebellion. The number of Table 1: Killings in Kashmir under the PDP–BJP Demonstrations across the Valley,” Scroll.in, 19
young persons joining insurgent ranks Government (2014–Present) April, https://scroll.in/article/834990/why-
Victims of Conflict 2015 2016 2017 2018 (Jan–Feb) kashmirs-students-are-facing-off-against-the-
has gone up in these four years in Kashmir. security-forces.
Civilians 55 145 108 22
This year alone the government provid- Davedas, D (2015): “LeT Commander Abu Qasim’s
Insurgents 106 138 217 20 Killing: Police Claim Big Victory, But Atten-
ed a figure of 126 local youth joining dif- Armed forces 58 100 125 31 dance at Funeral Reflects Sobering Reality,”
ferent armed groups. Some reports sug- Ikhwanis 0 0 1 0 First Post, 31 October, http://www.firstpost.
com/india/let-leader-abu-qasims-killing-cops-
gest that the actual number may be as Total 219 383 451 73 claim-big-victory-but-attendance-at-funeral-
high as 200 (Wani 2018). Insurgents have Source: JKCCS (2015b, 2016, 2017). reflects-sobering-reality-2489990.html.

Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 17
COMMENTARY
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Education System, Faces Backlash,” 15 January, Naqash, R (2017): “Army Crackdown in South Kash- Our Decision, Hadn’t Given Consent to This:
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bipin-rawat-steps-in-political-waters-by-com- 1990s,” Scroll.in, 19 May, https://scroll.in/arti- press.com/article/india/india-others/bjp-
menting-on-kashmirs-education-system-faces- cle/838003/army-crackdown-in-south-kashmir- miffed-by-pdps-decision-to-release-masarat-
backlash-4303317.html. village-brings-back-nightmares-of-the-1990s. alam-says-party-wasnt-taken-into-confidence-
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lookindia.com/website/story/ghost-of-braid- diatimes.com/india/Handwara-girl-retracts- https://thediplomat.com/2016/08/discontent-
in-kashmir-the-pdp-bjp-alliances-mistakes/.

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Geelani, G (2015): “PDP–BJP Alliance Could Be a — (2018): “Allies BJP and PDP at War Over FIR pact of India’s Demonetization Fiasco?” Forbes,
‘Paradigm Shift’ in Kashmir’s History: Mufti,” 12 December, https://www.forbes.com/sites/

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Against Army Major,” Times of India, 30 Janu-
Dawn, 27 February, https://www.dawn.com/ ary, https://timesofindia.indiatimes.com/in- wadeshepard/2016/12/12/one-month-in-
news/1166271. dia/pdp-bjp-agree-to-disagree-on-fir-against- whats-the-impact-of-indias-demonetization-
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T
Omar Asks PDP in LA,” 22 June, http://www. PTI (2015a): “CM Mufti Sayeed Credits Pakistan, Times of India (2015): “Defence Ministry Raises
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ideas-omar-asks-pdp-in-la/221135.html. position Hits Out at PM Modi,” Indian Express, June, https://timesofindia.indiatimes.com/in-

Z
Gupta, S (2017): “Kashmir’s New Interlocutor: Who 01 March, http://indianexpress.com/article/ dia/Defence-ministry-raises-Rs-500cr-bill-for-
Is Dineshwar Sharma?” Hindustan Times, 25 india/politics/cm-mufti-mohammad-sayeed- JK-flood-assistance/articleshow/47866710.cms.
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india-news/who-is-dineshwar-sharma-kash- elections-in-kashmir/. Alliance Set State on Fire: Panthers Party,” Tri-

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mir-s-new-interlocutor/story-VEGp75CXJSe- bune, 5 November, http://www.tribuneindia.
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HcPxpOaQg6K.html. com/news/jammu-kashmir/politics/-unholy-
portunist’: Congress,” Indian Express, 6 April,
Hindu (2016): “Demonetisation Effect: Kashmir Re- pdp-bjp-alliance-set-state-on-fire-panthers-
http://indianexpress.com/article/india/poli-
mains Undisturbed,” 17 November, http:// party/318783.html.

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tics/bjp-pdp-coalition-unholy-and-opportun-
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— (2015c): “Separatist Masarat Alam arrested in
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Kashmir,” BusinessLine, 15 April, https://www.
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to-logical-conclusion-mufti/535537.html.

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poll Violence, Srinagar Registers Poor Voter separatist-masarat-alam-arrested-in-kashmir/
Turnout of 7.14%,” Hindustan Times, 26 May, article7112529.ece. Vohra, Bikram (2018): “Shopian Civilian Killings:
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news/bypolls-in-8-states-triggers-violence-in- Tough Action against Local Stone-Pelters,”
2-clashes-in-srinagar-kill-7-as-voter-turnout- pelters,” First Post, 30 January, http://www.
First Post, 15 February, http://www.firstpost. firstpost.com/india/shopian-civilian-killings-
hits-less-than-10/story-V5tp2N7ISX4VoEIbsyB- com/india/kashmir-unrest-army-chief-warns-
tQI.html. murder-charges-against-soldiers-unfair-govt-
of-tough-action-against-local-stone-pelters- must-investigate-organised-mobs-of-stone-
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es Away Due to Mulitple Organ Failure,” 7 Jan- — (2017b): “Srinagar Bypoll: Only 2% Voter Turn-
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out Recorded after Repolling in Kashmir,” Hin- miri Protesters: And No One Will Face Justice,”
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passes-away-aiims-new-delhi-jk-cm-death/. Guardian, 18 July, https://www.theguardian.
times.com/india-news/srinagar-by-election- com/commentisfree/2016/jul/18/india-blind-
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ernment Agenda in Jammu and Kashmir,” 1 ing-in-kashmir/story-3lCTvA4P1s-
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YB4eXo4EeRjM.html.
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— (2017c): “Hurriyat Funding: NIA Summons J&K Militant Ranks in 2017,” New Indian Express, 6
mir-common-minimum-programme-afspa-ar- Legislator Engineer Rashid,” Economic Times,
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Jaleel, M (2018): “Shopian Firing: Why J&K Plea times.com/news/politics-and-nation/nia-sum- youth-join-militancy-in-three-years-126-
May Lead Nowhere,” Indian Express, 14 Febru- mons-independent-jammu-and-kashmir-mla- joined-militant-ranks-in-2017-1769236.html.
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and Kashmir Floods of 2014,” Jammu Kashmir ciplined Force in World,” Economic Times, 3 2017-operation-all-out-was-a-success-but-will-
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wordpress.com/2017/05/occupation-hazard- com/news/defence/jk-cm-mehbooba-mufti- html.
jkccs.pdf. rules-out-afspa-revocation-says-indian-army- Zargar, S (2017): “Here’s Why Kashmiris Are
— (2015b): “Annual Human Rights Review,” Jam- most-disciplined-force-in-world/article- Laughing Off Parrikar’s Claim That Note Ban
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18 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
COMMENTARY

instead of a fragmented view of resource


Upholding Fiscal Federalism allocations. As observed by the High
Level Committee on “Efficient Manage-
Terms of Reference of ment of Public Expenditure” (Rangarajan

the Fifteenth Finance Commission Committee, 2011), the non-plan and plan
distinction in the budget was neither
able to provide developmental and non-
developmental dimensions of public ex-
G R Reddy penditure, nor was it an appropriate
budgetary framework.

T
The appointment of the Fifteenth he appointment of the Fifteenth The introduction of the GST marks a
Finance Commission has come at Finance Commission (XV-FC) by a watershed in the reforms of indirect taxa-
presidential order on 27 November tion in the country. It has ushered in an era
a time of momentous changes
2017 has come at a time of momentous of sharing a common tax base by the union
in Indian fiscal federalism. The changes in Indian fiscal federalism. The and the states in place of exclusive juris-
XV-FC has a challenging task in replacement of the Planning Commission diction over certain taxes based on the
addressing these developments. by the National Institution for Transform- principle of total separation. Furthermore,
ing India (NITI) Aayog in January 2015, the GST being a destination-based tax has

R
A number of considerations
the removal of the distinction between shifted the tax base from production to
in the terms of reference of the plan and non-plan expenditure in the consumption. This may impact revenue

E
XV-FC, however, point to a budgets of the union and the states from yield from indirect taxes as between the
bias in the ToR towards the 2017–18, and the 101st constitutional predominantly producing and consum-

T
amendment resulting in the introduction ing states. As the revenue impact of the
union government.
of the long-awaited goods and services tax GST across the states is not yet known, the

Z
(GST) from 1 July 2017 across the country XV-FC will have the challenging task of
are game changers in the area of fiscal addressing this issue as its recommenda-
federalism. Perhaps, such game chang- tions are applicable till 2024–25, beyond

G
ing developments did not take place in the five-year duration of compensation
the period immediately preceding the scheme for states that may suffer revenue

A
appointment of any other commission. loss, following the introduction of GST.
Besides these major changes, there is a
The Impact of the Changes slowdown in the growth of the economy
The replacement of the Planning Com- since last year and pressures building up

M mission—a parallel channel of resource


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
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


federalism in the country so far. The main
functions of NITI Aayog, among others, The XV-FC has a major task on hand in
are to provide a shared vision of national putting in place a transfer system con-
development priorities, and to foster co- sistent with the recent changes in fiscal
operative federalism through structured federalism, promoting cooperative fiscal
support initiatives and mechanisms with federalism and ensuring fiscal stability.
the states on a continuous basis. The main intent of this article is to analyse
The Fourteenth Finance Commission whether the ToR of the XV-FC reflect the
(XIV-FC) considered the entire revenue above imperatives in letter and spirit.
account. Its terms of reference (ToR) did The main function of a finance commis-
not bind it to look at only non-plan revenue sion as mandated in Article 280 of the
account. The replacement of the Plan- Constitution is to make recommendations
Views expressed are personal. ning Commission, with the removal of on (i) the distribution of net proceeds of
G R Reddy (grreddy45@gmail.com) is a former the practice of classifying expenditure divisible pool of taxes between the union
official of the Indian Economic Service and into plan and non-plan, has conferred and the states; (ii) inter se allocation of
currently adviser to the Government of full freedom to the XV-FC to look at the states’ share; (iii) principles which should
Telangana.
entire revenue expenditure in totality, govern the grants-in-aid to states by the
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 19
COMMENTARY

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

explicitly stating that there was little This consideration seems to have been to populist measures is highly subjective.
scope for increasing the aggregate trans- included in the ToR for the first time, What constitutes a populist measure dif-
fers to states strongly expressed the presumably because the share of the loans fers widely across states. The centre is
desirability of a compositional shift in from the union in the outstanding debt also equally guilty of populist measures.
transfers from grants to tax devolution. of the states has been coming down signifi-
This would enhance the share of the cantly following the termination of central Population Data
states in unconditional transfers without government loans to states from 2005–06 All the finance commissions since the
imposing any additional fiscal burden onwards. This was on the advice of the seventh were asked to use population
on the centre. In this context, the XIV-FC Twelfth Finance Commission that the centre data of 1971 in all cases where population
observed that aggregate transfers to states, should dispense with the practice of acting was regarded as a factor for determina-
as a percentage of gross revenue receipts as an intermediary and instead allow the tion of devolution of taxes, duties, and
of the union, went up from 49.9% in states to approach the market directly. grants-in-aid. This was in consonance
2010–11 to 53.7% in 2011–12 before com- At the end of 2016–17, loans from the with the National Family Welfare Policy,
ing down to 49% in 2012–13. Keeping centre constituted less than 5% of the 1977, which stipulated use of 1971 popu-
these trends in view, the commission ex- total outstanding debt of all states. It is lation figures till 2001 where population
pected that the union would maintain likely that over the next few years, many was a factor in the transfer of resources
the prevailing level of aggregate trans- states may liquidate all their borrowings from the union to states.
fers at about 49% of its gross revenue from the centre, thus freeing themselves This was done to ensure that states
receipts (Finance Commission 2014).
Following the increase in tax devolu-
tion, the union government dispensed
with the formula-based normal plan
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
growth of their population (Reddy 2007).
The XV-FC has been mandated to use the
population data of 2011 while making its

T
assistance to states and terminated a maintaining a surplus on their revenue recommendations. This is a welcome
number of schemes like Backward Re- account. Therefore, the idea of imposing development. As observed by the XIV-FC,

Z
gions Grant Fund and increased the conditionalities on states’ borrowings is migration is an important factor in the
matching contribution of states in respect not in the spirit of cooperative federalism. growth of a state’s population, apart
of a number of centrally-sponsored from factors like fertility and mortality

G
schemes (CSSs). In the first three years of Other Considerations rates. Migration imposes a burden on
the XIV-FC award period, aggregate trans- The XV-FC has been asked to consider the destination states and taking dated

A
fers hovered around 48% of centre’s proposing measurable performance-based population for the purpose of central
gross revenue receipts. incentives for states in the areas, such as, transfers is a double whammy for such
Thus, the impression that the increase deepening the tax net under GST, achieve- states. In fact, the requirements of states
in tax devolution resulted in the com- ments in the implementation of flagship depend on the current levels of popula-
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,
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
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
tive fiscal federalism. It creates an impres- and control or lack of control in incur- task on hand in addressing the game-
sion that inclusion of this consideration ring expenditure on populist measures. changing developments in Indian fiscal
amounts to indirectly asking the XV-FC Asking the finance commission to follow federalism and in making cooperative
to reduce tax devolution to states. an incentive-based approach in recom- fiscal federalism a reality. Going by the
mending transfers to states and absence track record of the previous commissions,
Raising Loans of any such considerations for nudging the it is hoped that the XV-FC will not be con-
Another consideration relates to the con- union to perform better is indicative of strained in its working by the considera-
ditions that the union may impose on the lopsidedness of the considerations tions given to it that appear to be biased
the states while providing consent under listed in the ToR. Fiscal prudence is a joint in favour of the centre.
Article 293 (3) of the Constitution. Under responsibility of the union and the states
this article, a state cannot raise any loan in a federation. Leaving out the union from References
without the consent of the union, if there such a responsibility will not result in Finance Commission (2014): Report of the Four-
is any part of an outstanding loan from fiscal prudence, and restricting them to teenth Finance Commission, December.
Rao, Govinda M (2017): “The Fifteenth Finance
the union to the state. Under clause (4) states that have, by and large, adhered to Commission, Redefining the Commission’s
of this article, consent can be granted FRBM stipulations, goes against the spir- Mandate?” Financial Express, 5 December.
Reddy, G R (2007): “Imbalance in Agenda of Fi-
subject to such conditions, as the Govern- it of cooperative fiscal federalism. More nance Commission,” Economic & Political
ment of India may think fit to impose. importantly, the consideration relating Weekly, Vol 42, No 51, pp 8–10.

Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 21
COMMENTARY

Caste in Britain legislation has never been all-encom-


passing; it prohibits discrimination on
grounds of certain personal characteristics
Public Consultation on Caste and in certain defined areas, outside of which
Equality Law discrimination is lawful. The Equality Act
does not cover conduct or behaviour in the
private or intimate spheres (for example,
friendships, socialising); discrimination in
Annapurna Waughray these areas is not unlawful. The grounds
of discrimination, or “protected charac-

O
The United Kingdom government n 28 March 2017, Theresa May’s teristics,” are extended either by legisla-
has started a public consultation Conservative government laun- tion, or by judicial interpretation of exist-
ched a public consultation on the ing grounds in cases that come before
on caste in Great Britain and the
Caste in Great Britain and Equality Law courts and tribunals (case law).
equality law with the official (henceforth Equality Law) (https://www. The Labour government decided against
response expected soon. British gov.uk/government/consultations/caste- including an explicit prohibition of caste
Dalits have demanded protection in-great-britain-and-equality-law-a-public- discrimination in the Equality Bill, 2009
consulation). Participants were asked to (now the Equality Act), arguing that there

R
in legislation from caste
choose between two options for prohibit- was no “strong evidence” of such dis-
discrimination for many years, ing caste discrimination by law: Option (1) crimination in Britain, despite studies by
but have faced concerted
opposition not just to legislation
but even to raising the issue at all,
mainly from faith-based
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 E
British Dalit organisations (Dalit Solidarity
Network 2006; Anti-Caste Discrimination
Alliance 2009), evidence in earlier aca-
demic research (Nesbitt 2017), and a

Z
the Equality Act. The consultation closed United Nations (UN) study on the issue.1
organisations and a handful of on 18 September 2017; the government’s Instead, it agreed to insert a discretionary
politicians and civil society actors, response is expected this year. Since its power in Section 9(5)(a) for a govern-

G
announcement on 2 September 2016, the ment minister to amend the Equality Act
some of whom object to any legal
premise of the consultation was ques- in the future by order (that is, secondary
protection against caste

A
tioned by British Dalit organisations legislation) by adding caste as “an aspect
discrimination, including and other civil society actors, given that of” race. Race is currently defined in
developments in case law which in 2013 Parliament had amended the Section 9(1) as including colour, nation-
Equality Act, 2010 by imposing a statu- ality, and ethnic or national origins. Using

M
might extend protection through
tory duty on the government to intro- descent—the international legal category
the existing Equality Act from duce secondary legislation specifying which captures “caste”—was rejected by
discrimination based on ethnic caste in the Equality Act, “as an aspect Parliament in case it opened the door to
origins to discrimination based of” the protected characteristic of race—a claims on grounds such as social class.2
duty which remains unimplemented. In April 2013, Section 97 of the Enter-
on caste.
British Dalits have demanded protec- prise and Regulatory Reform Act (ERRA),
tion in legislation from caste discrimi- 2013 replaced the discretion in Section
nation for many years, but have faced 9(5) of the Equality Act with a duty to
concerted opposition not just to legisla- make caste “an aspect of” race (so that
tion but even to raising the issue at all, caste discrimination would become a
mainly from faith-based organisations subset of race discrimination); but the
and a handful of politicians and civil so- duty has not been implemented, and it
ciety actors, some of whom object to contains no deadline. Section 97 of the
any legal protection against caste dis- ERRA also permits review and repeal of
crimination, including developments in the duty in Section 9(5) or any orders
I thank Sameena Dalwai for initiating the
case law which might extend protection made under it, any time after five years
contact with EPW and David Mosse, through the existing Equality Act from from the adoption of the ERRA, that is,
Pritam Singh and Meena Dhanda for their discrimination based on ethnic origins from 26 April 2018 (the “sunset clause”).
comments on the initial draft of this article. to discrimination based on caste. In July 2013, the Conservative–Liberal
Annapurna Waughray (a.waughray@mmu.ac.uk) The Equality Act 2010, introduced by Democrat coalition government (2010–15)
is a reader in Human Rights Law, Manchester the 2005–10 Labour government, does not published a timetable (https://www.
Law School, Manchester Metropolitan at present specifically prohibit caste dis- gov.uk/government/uploads/system/
University, UK.
crimination. British anti-discrimination uploads/attachment_data/file/225658/
22 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
COMMENTARY

130726-Caste-Discrimination.pdf) for the it is not clear what aspects of caste would by specifically choosing the option to
introduction of secondary legislation on fall outside the concept of ethnic origins. specify caste in the Equality Act.7
caste “through the Equality Act duty,” British Dalit organisations complained
which included a public consultation; but that the consultation document was Vacillations
that consultation never took place. By con- misleading, badly structured, difficult to In 2005, when British Dalits initiated
trast, the 2017 consultation is not about follow, omitted critical information, and their campaign for the inclusion of caste
how to introduce caste legislation through fell short of government consultation in the Labour government’s proposed
the Equality Act duty, but whether legis- principles (http://www.civilservant.org. new Equality Act, they faced opposition
lation is needed at all. uk/library/2016_consultation_principles. from a political establishment reluctant
In resisting the duty to add caste to the pdf). Its purpose, they argued, should to acknowledge caste discrimination as
law, the coalition government and now have been to inform the introduction of a domestic issue, wary of being accused
the Conservative government has relied on secondary legislation on caste; but it of “cultural intrusion,” and unconvinced
a December 2014 decision (http://www. was not. Participants were asked to re- that legal regulation was necessary.
bailii.org/uk/cases/UKEAT/2014/0190_ spond to 17 questions relating to the two They also anticipated a backlash from
14_1912.html) by the Employment Appeal options. By presenting case law and leg- sections of the Indian diaspora commu-
Tribunal (EAT) in the case of Chandhok v islation as competing “options” for pro- nity (Waughray and Dhanda 2016). Dur-
Tirkey which established that, although tection from caste discrimination, and ing parliamentary debates on the Equal-
caste is not yet an autonomous concept promoting case law as the preferred op- ity Bill in 2009–10 the government resi-
within the Equality Act, there may be
factual circumstances involving caste
which, depending on the facts, may be
capable of coming within the “ethnic
tion and numbering it Option 1 while
overstating its advantages and minimis-
ing its limitations, the consultation,

E
they insisted, was clearly biased againstR 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

T
origins” limb of the definition of race legislation. amendment from the late Lord Avebury
in the Equality Act, as ethnic origins is a The National Council of Hindu Temples (Liberal Democrat) (a humanist, secular

Z
“wide and flexible” concept which includes UK (NCHT), an opponent of legislation, was Buddhist and advocate of legislation on
the notion of descent (the category which “delighted” by the consultation announce- caste discrimination) inserting the dis-
captures caste under the International ment on 2 September 2016, describing it cretionary power in Section 9(5)(a).

G
Convention on the Elimination of All as “wonderful news for the British Hindu There was another reason: Baroness
Forms of Racial Discrimination—ICERD) community” who could now present evi- Thornton, the government minister res-

A
(Ford 2015; Dalwai 2016; Waughray dence justifying their opposition to legisla- ponsible for the bill, was persuaded to
2016a; Waughray and Dhanda 2016). tion; but by May 2017 a collection of org- include the “caste power” after hearing
However, the EAT judge stressed that anisations, including the Hindu Council powerful direct testimony from British
this decision was limited to the facts of UK, the National Hindu Students’ Forum Dalits. She also commissioned a study
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)
(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)
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-
that legal protection from caste discrimi- entirely.5 Journalists reported a “Hindu lation, but was dismissed as flawed rese-
nation is appropriate”3 but says the EAT backlash” against the consultation, with arch by anti-legislation groups. For over
judgment “suggests there is an existing Theresa May “worried about upsetting two years the Conservative-dominated
legal remedy for claims of caste-associated powerful Hindu groups” if the consulta- coalition government deflected calls by
discrimination under the ethnic origins tion went ahead (Purohit 2017) and British Dalits to utilise the “caste power,”
element of Section 9 [race] of the EA”4 “influential Hindu, Sikh and Jain lob- insisting it was “carefully considering”
that is, specifying caste as a ground bies denying that caste-based discrimi- the NIESR findings—before, in March
of discrimination in the Equality Act is nation exists in Britain,” whereas Dalit 2013, announcing education, not legisla-
unnecessary. The consultation document and other groups “insist that discrimi- tion, as its chosen approach.8
states that the Tirkey judgment means nation exists, making law a necessity” By April 2013, the coalition govern-
that “it is likely that anyone who believes (Sonwalker 2017b).6 ment was facing the loss of a politically
that they have been discriminated against Despite their criticisms of the consul- important piece of legislation, the Enter-
on grounds of caste could now bring a race tation, British Dalit organisations joined prise and Regulatory Reform Bill (now
discrimination claim under the existing forces (http://casteintheuk.org/urging) the ERRA). Twice the Lords adopted
ethnic origins limb of the race provisions people to send “a clear message to the amendments to the bill moved by Lord
in the EA because of their descent” (em- government that legislation should protect Harries (a cross-bencher and former
phasis in original)—especially, it says, as people subjected to caste discrimination” Bishop of Oxford) immediately inserting
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 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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Edited by
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A
A Handbook of
Rural India
SURINDER S JODHKA
”Rural” and “urban” are the foremost categories through which social life has been visualised and engaged with in modern

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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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The idea of such a demographic transition continues to be a core element of state policy and an important indicator of positive social change
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A Handbook of Rural India brings together 36 research papers published in the Economic and Political Weekly which were written by some of the
leading social scientists from the early 1950s to the present. It provides a historical perspective on the subject of the “rural” and covers a wide
range of topics that have been critical to the imaginings and empirics of village life in contemporary India.
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Porwal | Kiranpal Singh | Virpal Singh | Peter Lanjouw | Abusaleh Shariff | A M Shah | Bernard S Cohn | M S A Rao | Krishna Kumar | John
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24 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
COMMENTARY

Britain (baseline information necessary “universally accepted” proof of caste dis- threatens “Indian associational needs,”
for the review power in the sunset clause) crimination in the UK, alternatively no for example, the existence of organisa-
apparently because it felt it “might be evidence of such discrimination in areas tions “based on an extended kinship
intrusive and ruin good relations in covered by the Equality Act.16 Yet the structure like a jati,” that it will under-
communities.”12 Instead, the government existence of discrimination “based on mine Indian communities in Britain,
commissioned its own study (https:// family background, religious tradition and will result in spurious and malicious
www.gov.uk/government/publications/ or jaati (caste)” within Hindu communi- claims of caste discrimination against
measuring-caste-discrimination-in-brit- ties was recognised in a 2006 Hindu Indian businesses and community organ-
ain-a-feasibility-study) on the feasibility Forum of Britain (HFB) report (Berkeley isations (Law, Culture, Religion blog 2013,
of measuring caste discrimination. This 2006: 12, 58). In 2013, the Alliance of 2014b, 2014c); but there is no evidence
was completed in October 2014 but despite Hindu Organisations (AHO) cited Anil for this, and these arguments misunder-
repeated calls remained unpublished until Bhanot (Hindu Council UK) saying, “I am stand how British discrimination legisla-
March 2017. The study concludes that clear in my own mind that discrimination tion works.
there are no significant ethical or metho- exists … the only difference between us Specifying caste as an aspect of race
dological barriers preventing a survey is that we are asking for a different in the Equality Act will not affect associ-
measuring the extent of caste discrimi- approach to eradicate it” (AHO 2013); but ational activities or religious rituals, nor
nation in the UK; yet no survey has been in 2014 the AHO ridiculed the idea that will individuals be required to disclose
carried out. “a terrible phenomenon called ‘caste caste identities (Dhanda et al 2014a;
Throughout 2014 and 2015, pro-legis-
lation parliamentarians in both Houses
who questioned the delay in introducing
the legislation were met with the same
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 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

T
answer—the government was “consider- Britain reports have been repeatedly protection from caste discrimination but
ing” the situation. During a House of Lords attacked as flawed and anti-Indian, and as a threat to the continued existence of

Z
debate on caste-based discrimination in the independence of the EHRC reports Indian communities (Law, Culture, Reli-
July 2016 (https://hansard.parliament. and the scholarship of the academics in- gion blog 2014b, 2014c). Presumably, Indi-
uk/Lords/2016-07-11/debates/3EEC4BE4- volved has been repeatedly called into ans campaigning for protection from caste

G
C98F-4155-82E2-E8485A752C94/Caste- question (AHO 2014; Law, Culture, Reli- discrimination are not part of these com-
BasedDiscrimination) the government gion blog 2014a, 2015; National Council munities. Caste is framed as a benign cul-

A
stated that the ruling in Tirkey v Chandhok of Hindu Temples 2017). Yet no evidence tural or associational identity, delinked from
“may well” already provide “the appro- has been produced showing that caste discrimination and inequality (Natrajan
priate level of protection that is needed discrimination is non-existent in the UK 2012). There is no acknowledgement that
against caste discrimination” and that it or that accounts of caste discrimination discrimination on grounds of caste might
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.
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-
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
tion against discrimination on grounds existent. Yet the continued relevance of argued, like the government, that spe-
of ethnic origin, which included caste.”14 caste identity and caste divisions in Brit- cific legislation is unnecessary because
ain irrespective of religion or community the EAT judgment in Tirkey means that
Indian Diaspora and across generations is well-docu- legal protection against caste discrimi-
Opposition to legislation began to be mented (for example by Ghuman 2015; nation is already available under the
voiced following the DSN’s 2006 study Dhanda 2017) and indeed is acknowl- Equality Act through judicial interpreta-
on caste discrimination in the UK. Since edged by some who question the value tion of the ethnic origins element of
2013, concerted opposition to caste legis- of anti-caste legislation in the diaspora race. As Lord Lester QC stated in the
lation in the UK has emerged from various (see for example, Jaspal and Takhar 2016 Lords debate on caste discrimina-
organisations claiming to represent the 2016). In 2013, the government endorsed tion, this view is “not sustainable.”17 The
views of religious communities—Hindus, the erosion of caste (hence their support judgment was not a definitive decision
Sikhs and recently Jains—and from actors for the sunset clause): “We do not believe in principle on the question of whether
such as the Hindu Lawyers’ Association or accept that caste and caste divisions mistreatment because of someone’s per-
and City Hindus Network.15 Much of this should have any long term future in ceived caste is or is not unlawful under
opposition has appeared online in blog- Britain” (Grant 2013). Conversely, oppo- the Equality Act.18 It does not establish a
posts or in press releases. A recurring nents of legal protection against caste binding and authoritative precedent
claim is that there is no credible and discrimination claim that legislation that caste is part of race/ethnic origins;
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 25
COMMENTARY

it left it open. Unless and until the while attitudes and practices of caste a vocal anti-legislation campaigner, chair
Supreme Court establishes a precedent, have always been regulated or modified of the All Party Parliamentary Group for
or a body of jurisprudence develops, the by religion, discrimination on grounds British Hindus and Conservative MP for
law will remain uncertain (Dhanda et al of caste is a cross-religion or non-religious Harrow East (which has a large Hindu
2014a; Waughray 2016a). The CERD has phenomenon (NIESR 2010: vi; Dhanda population) urged the government in
asked the UK three times to introduce et al 2014a: 20). October 2016 to abandon caste legisla-
legislation against caste discrimination A linked strand of opposition depicts tion, claiming that over 85% of British
(in 2003, 2011 and 2016); other UN bod- calls for caste discrimination legislation Hindus consider it “unnecessary, ill-con-
ies, including the former UN High Com- in the UK as part of a wider campaign of sidered and divisive”20 (Sonwalkar 2017a;
missioner for Human Rights and the transnational Christian proselytism and Ram 2016).
EHRC have all called on the government foreign interference in India’s internal The DSN believes that the government
to comply with the statutory duty to leg- affairs, rooted in disdain for Indian tra- is being lobbied “at the highest level”
islate (see for example, EHRC 2016: 85). ditions with the aim of pressuring India to drop caste discrimination legislation
If “within the Indian diaspora there is to extend reservations to Muslims and (Economist 2015). Lord Desai during a
a huge gap even in acknowledging the Christians and augmenting conversions recent House of Lords debate on caste-
social reality of the caste system in the to Christianity. Its proponents assert that based discrimination attributed the gov-
UK” (Ghuman 2015: 564), religious “hurt” the “caste system” is a Western, colonialist, ernment’s resistance to legislation to a
has become the justification for refusing missionary construction and has never “very strong … caste Hindu lobby which
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
existed in India (NCHT 2017). David
Mosse terms this the
“externalisation of caste,” whereby anti-leg-
islation actors seek to convince government

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-

T
2015) as a reason for opposing the legis- and parliament that “it is not the Dalit expe- ing caste discrimination but a demon-
lation, even though caste was recognised rience of discrimination that motivates the stration of the power of right-wing Hindu

Z
introduction of “caste” into UK equality law,
“as an important aspect of the self” in a forces in Britain and their ability to get
but a persisting (missionary-colonial) cul-
small 2016 study of young British Sikhs tural imagination that vilifies Hindus and
their own way” (Wilson 2017).
(Jaspal and Takhar 2016). Dhanda sug- unnecessarily exposes them to litigation, Lord Popat claims that the “British

G
gests that opposition to legislation by presuming that they practice caste discrimi- Indian community” has left caste behind,
some Sikh organisations such as the nation. (Mosse 2016) and that pushing for legislation will

A
Sikh Council UK “is connected to the Yet “caste” clearly has meaning in the “bring to the surface” “irrelevant social
barely hidden fear that the routine way UK: the government’s feasibility study forces” and undermine “community
of practising caste-based identities will found that “the concept of caste appears cohesion.” Yet for Dalits in Britain—
come under scrutiny” (Dhanda 2017)— to be widely understood”; moreover, “an unless one discounts all testimonies and
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
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
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
anti-legislation umbrella groups that have lobby that those who say they have expe-
emerged since 2013 frame caste discrimi- Legislating against caste discrimination rienced discrimination should be listened
nation legislation as “a hate crime in the UK is not only contentious, it has to. Instead, by bringing the issue of caste
against Hindus and Jains,” “racist,” “offen- become highly politicised. Then Prime discrimination into the open, Dalit orga-
sive,” “Hindu-phobic,” “religious perse- Minister David Cameron (2010–16) nisations are held responsible for caus-
cution” against a successful minority reportedly vetoed a proposal agreed ing hurt and offence to “dharmic com-
(NCHT 2017). The “British Hindu commu- upon by ministers to make caste dis- munities”—the backlash anticipated by
nity” has become the subject of “a cam- crimination unlawful, to avoid legislat- Dalit activists almost two decades ago
paign of public vilification,” the Hindu ing on the issue ahead of the 2015 gener- (Waughray and Dhanda 2016: 181).
faith “desecrated,” said the HFB in 2014. al election (denied by the government) The debate in the UK suggests that
This move to shift the terms of the de- (Woolf 2014). The NCHT (a charity) was legislating against caste discrimination
bate away from the question of address- scrutinised by the Charity Commission will be contested in other diaspora states,
ing discrimination sits badly with gov- for seemingly encouraging its members just as it has been at the international
ernment and EHRC research which emp- to vote Conservative in the 2015 election level, where UN regulation of caste-based
hasises that caste is not religion-specific because of their anti-legislation stance, discrimination as a form of descent-
and is subscribed to by (and affects) in contravention of the rules (Sinha 2015). based racial discrimination under ICERD
members of any or no religion, and that Bob Blackman (member of Parliament), is not accepted by India. While the need
26 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
COMMENTARY

to legislate against race discrimination 14 UN Doc CERD/C/SR.2455, 12 August 2016, Ghuman, Paul (2015): “Reaching Out to the Untouch-
para 25. ables,” The Psychologist, Vol 28(7), pp 564–67.
is now rarely if ever subject to opposition 15 There are deep divisions in the Sikh community Grant, Helen (2013): Letter to the AHO dated 9 May,
or scrutiny, legal measures against caste on this issue. A small but vocal section seems to http://www.mycasteishindu.org/.
have been won over by certain right-wing Hindu Howat et al (2017): “Measuring Caste in Britain—A
discrimination do not have the same actors and this section is opposed to caste legis- Feasibility Study,” https://www.gov.uk/gov-
legitimacy and in the diaspora risk being lation, but very large sections of the Sikh com- ernment/publications/measuring-caste-dis-
munity that include some Dalit groups too sup- crimination-in-britain-a-feasibility-study.
criticised by mainstream politicians as port pro-legislative campaigning groups (per- Hindu Forum of Britain (2014): “Desecration of Hin-
unwarranted cultural intrusion. Yet as sonal correspondence with Pritam Singh). du Sentiments in Parliament,” Press Release,
Desai pointed out in the Lords debate 16 See note 5. 28 February, http://bharatkalyan97.blogspot.
17 See note 13. co.uk/2014/02/desecration-of-hindu-senti-
on caste discrimination in 2016, the pro- 18 Chandhok & Anor v Tirkey, Appeal No UKE- ment-in-uk.html.
posed UK legislation is “a minimal pro- AT/0190/14/KN, paras 1, 55. Jaspal, Rusi and Opinderjit Kaur Takhar (2016):
19 Personal communication. “Caste and Identity Processes among British
gramme for preventing discrimination
20 H C Deb, Vol 616 Caste Discrimination Consulta- Sikhs in the Midlands,” Sikh Formations,
and bringing our law into line with our tion 27 October 2016. Vol 12(1), pp 87–102.
UN obligations … this is the law in India 21 See note 13. Law, Culture, Religion blog (2013): 9 April, https://
22 See note 13. aryalegal.wordpress.com/2013/04/09/caste-
… this is not a law which is un-Indian … discrimination-reflection-needed-not-legislation/
it is entirely in coherence with India’s References — (2014a): 25 June, https://aryalegal.wordpress.
com/2014/06/25/response-to-two-reports-on-
constitution and law.”22 The next step in Anti-Caste Discrimination Alliance (ACDA) (2009): caste-by-the-equality-and-human-rights-com-
the legal regulation of caste discrimination “Hidden Apartheid, Voice of the Community: mission/.
Caste and Caste Discrimination in the UK, a — (2014b): 9 October, https://aryalegal.wordpress.
in the UK is the government’s response to

R
Scoping Study,” Derby: Anti-Caste Discrimina- com/2014/10/09/uk-caste-discrimination-leg-
the public consultation. Its importance for tion Alliance. islation-implications-for-business-and-employ-
the development of UK equality law and for Alliance of Hindu Organisations (AHO) (2013a): ers/.

E
Press Release, 21 April, http://www.hindu- — (2014c): 22 November, https://aryalegal.word-
legal treatment of caste discrimination counciluk.org/2013/04/21/aho-press-release- press.com/2014/11/22/uk-caste-discrimination-
in the diaspora cannot be underestimated. lets-solve-this-problem-together/ legislation-implications-for-indian-community-

T
— (2013b): 17 May, http://mycasteishindu.org/in- organisations/.
dex.php/tutorials-mainmenu-48/aho-charter/8- — (2015): 22 July, https://aryalegal.wordpress.
Notes news/latest-news/316-john-portes-niesr-report- com/2015/07/22/why-the-british-government-
did-not-present-reliable-evidence.

Z
should-repeal-the-caste-provision-in-the-equality-
1 A Eide and Y Yokota, UN Sub-commission on — (2014): “Briefing for British Hindus,” 20 March, act-2010/.
the Promotion and Protection of Human http://www.mycasteishindu.org/index.php/
Rights, Second Expanded Working Paper on Mosse, David (2016): “Outside Caste? The Enclosure
component/content/article/20-frontpage of Caste and Claims to Castelessness in India and
Discrimination based on Work and Descent;

G
/319-aho-briefing-for-appg-20th-march-2014. the UK,” M N Srinivas Memorial Lecture, King’s
UN Doc. E/CN.4/Sub.2/2004/31.
Berkeley, Robert (2006): Connecting British Hin- College, London, 29 November (unpublished),
2 H L Deb, Vol 716, col 345, 11 January 2010. Descent dus: An Enquiry into the Identity and Public En- https://www.youtube.com/watch?v=ty2R9m-
is one of five grounds of racial discrimination gagement of Hindus in Britain, Hindu Forum of 9oLg.

A
under the International Convention for the Britain, London.
Elimination of all Forms of Racial Discrimina- National Council of Hindu Temples UK (NCHT)
Dalit Solidarity Network UK (DSN) (2006): “No (2017): “Caste, Conversion and a ‘Thoroughly
tion (ICERD)—the others are race, colour, na-
Escape: Caste Discrimination in the UK,” http:// Colonial Conspiracy,”’ http://www.nchtuk.
tional or ethnic origin—and has been inter-
dsnuk.org/wp-content/uploads/2011/08/No- org/pdfiles/caste_g_full.pdf.
preted by the Committee on the Elimination of
Escape-Report-Caste-in-the-UK.pdf.

M
Racial Discrimination (CERD) to include caste. Natrajan, Balmurli (2012): The Culturalisation of
The term “caste” does not appear in any inter- Dalwai, Sameena (2016): “Caste on UK Shores: Caste in India: Identity and Inequality in a Mul-
national human rights law treaty. Legal Lessons from the Diaspora,” Economic & ticultural Age, New York: Routledge.
Political Weekly, Vol 51, No 24, 23 January. NIESR (2010): “Caste Discrimination and Harass-
3 UN Doc CERD/C/GBR/21–23, 16 July 2015, para 8.
Dhanda, Meena (2015): “Anti-castism and Misplaced ment in Great Britain,” Hilary Metcalf and
4 See for example, Castes: Discrimination: Written
Nativism,” Radical Philosophy, Vol 192, pp 33–43. Heather Rolfe, National Institute of Economic
question—HL3664 at http://www.parliament.
uk/business/publications/written-questions- — (2017): “Between Acknowledgement and Denial: and Social Research, December, https://www.
answers-statements/written-question/Lords/ Persisting Casteism amongst Punjabis in Britain,” gov.uk/government/uploads/system/uploads/
2015–11–18/HL3664/, accessed on 29 August Economic & Political Weekly, Vol 52, No 3, attachment_data/file/85522/caste-discrimina-
2017. 21 January. tion.pdf.
5 Hindu Council UK et al, Guidance Notes: Dhanda, Meena, Annapurna Waughray, David Nesbitt, Eleanor (2017): “Researching Caste in the
“Caste in Great Britain and Equality Law: A Keane et al (2014a): “Caste in Britain: Socio- UK’s Hindu and Sikh Communities: Overview
Legal Review,” Equality and Human Rights and Reflections,” paper delivered at the inter-
Public Consultation, 25 May 2017.
Commission Research Report No 91, Manches- national seminar, “Reassessing Caste in the South
6 Pritam Singh explains that some Sikh groups ter: Equality and Human Rights Commission. Asian Diaspora,” Centre D’ Etudes de L’ Inde et de
saw a right-wing Hindu (Hindutva) agenda be- L’ Asie du Sud, Paris, 20 January (unpublished).
Dhanda, Meena, David Mosse, Annapurna Waughray
hind opposition to caste legislation and have
et al (2014b): “Caste in Britain: Experts’ Seminar Purohit, Kunal (2017): “Hindu Groups in UK Hit
supported the pro-legislation initiatives (per-
and Stakeholders’ Workshop,” Equality and Back at British Government’s Plans to Ban
sonal correspondence).
Human Rights Commission Research Report Caste-based Discrimination,” Wire, 11 July, htt-
7 See http://www.secularism.org.uk/news/2017 No 92, Manchester: Equality and Human ps://thewire.in/156080/caste-discrimination-
/06/anti-caste-discrimination-groups-issue- Rights Commission. uk-theresa-may/.
urgent-call-to-participate-in-governments-
Economist (2015): “Arguments over Caste Spread Ram, Vidya (2016): “British Indians Divided Over
consultation, accessed on 29 August 2017.
from India to Britain,” 1 November, https://www. Anti-caste Law,” Hindu, 25 November, http://
8 H C Deb Vol 559, col 39WS, 1 March 2013. economist.com/blogs/erasmus/2015/11/hin- www.thehindu.com/news/international/Brit-
9 H C Deb Vol 561, col 790, 23 April 2013. duism-britain-and-caste. ish-Indians-divided-over-anti-caste-law/arti-
10 H L Deb Vol 734, col 1305, 4 March 2013; Equality and Human Rights Commission (EHRC) cle16696490.ece.
H L Deb Vol 744, col 1306–07, 22 April 2013. (2016): “Race Rights in the UK,” https://www. Sinha, Kounteya (2015): “Hindu Organisation in
11 H L Deb, Vol col 1305–06, 22 April 2013. See equalityhumanrights.com/sites/default/files/ UK under Scrutiny for Asking Hindus to Vote
Dhanda (2015) for a detailed discussion of Lord race-rights-in-the-uk-july-2016_0.pdf. for Conservative Party,” Times of India, 6 May.
Parekh’s remarks in this debate. He did however Ford, Michael (2015): Caste Discrimination under Sikh Council UK, Press Release (2015): “14 January
vote in favour of the Harries amendment. UK Law: Chandhok v Tirkey, Oxford Human 2015,” http://sikhcounciluk.org/wp-content/
12 H C Deb Vol 584, col 140WH, 9 July 2014. Rights Hub, 25 May, http://ohrh.law.ox.ac.uk/ uploads/2015/04/Press-Release-SCUK-SCUK-
13 House of Lords Debate, Caste-based Discrimi- caste-discrimination-under-uk-law-chan dhok- Position-Vindicated-on-Caste-Legislation-14-01-
nation, Vol 774, 11 July 2016. v-tirkey/. 2015.pdf.

Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 27
COMMENTARY
Sonwalker, Prasun (2017a): “UK Lawmaker Says — (2014): “Capturing Caste in Law: Caste Dis- be Extended?” International Journal of Discri-
Legislation to Outlaw Caste-based Discrimina- crimination and the Equality Act 2010,” Human mination and the Law, Vol 16 (2–3), pp 177– 96.
tion ‘Unnecessary, Divisive’,” Hindustan Times, Rights Law Review, Vol 14(2): 359–79. Woolf, Marie (2014): “Cameron ‘Blocks Ban on Caste
30 July. — (2016a): “Is Caste Discrimination in the UK Pro- Bias’,” Sunday Times, 21 December.
— (2017b): “Indian Community Divided as UK Caste hibited by the Equality Act 2010?” International Wilson, Amrit (2017): “Why Is the UK Government
Row Reaches Boiling Point,” Hindustan Times, Labor Rights Case Law, Vol 2, pp 70–76. Wheeling Back on Legislation against Caste
17 September. — (2016b): “Against Caste in British Law,” Book Discrimination?,” Open Democracy, 24 May,
Waughray, Annapurna (2009): “Caste Discrimina- Review, South Asia Research, Vol 36 (3), pp 409–13. https://www.opendemocracy.net/uk/amrit-
tion: A Twenty-first Century Challenge for UK Waughray, Annapurna and Meena Dhanda (2016): wilson/why-is-uk-government-wheeling-back-
Discrimination Law?” Modern Law Review, “Ensuring Protection against Caste Discrimi- on-legislation-against-caste-discrimination.
Vol 72(2): 182–219. nation in Britain: Should the Equality Act 2010 [All URLs accessed on 29 August 2017.]

Counting Jobs in India departments/organisations are directly


involved and appropriate statutes have
been enacted to enforce information
A Detailed Review of Labour Database collection.
Interestingly, in India, the sources of
employment data are many. The National
Jitender Singh, Arup Mitra Sample Survey Office (NSSO) carries out
the most comprehensive quinquennial
A detailed review of various
sources of labour statistics in
India highlights the lack of
I
nternationally, countries depending
on their size and degree of develop-
ment compile quality information on
job creation. In the United States (US),

E R
Employment and Unemployment Survey
(EUS). The survey collects information
from households, across industries and
geographies in the country, but only once

T
long-time series data on total Bureau of Labor Statistics (BLS) conducts in five years though recently a decision
employment. The Labour Bureau’s monthly household and establishment has been reached that annual labour

Z
attempt since the last couple of surveys to generate information on em- force surveys will be carried out by the
ployment and unemployment. Besides, a NSSO instead of the Labour Bureau. A
years in this respect has been
Quarterly Census of Employment and huge time gap of five years reduces the

G
helpful. To gauge the accuracy Wages (QCEW) also generates estimates utility of the data in assessing individu-
of these estimates, it is desirable on employment. als’ livelihood opportunities that may be

A
to have data from at least two The establishment survey (also called changing fast in response to economic
payroll survey) covers non-farm wage variations. This, in turn, dampens the
sources. Dependence on one
and salary jobs. On a monthly basis, it scope of initiating new policies in the
specific source can be risky. covers approximately 1,46,000 establish- short-run based on such low frequency

M ments. The survey generates informa-


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
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
eligible households every month. In year though the sample size is quite small.
addition, the QCEW is conducted and The Labour Bureau has also been con-
published with a six months’ time lag for ducting Quarterly Employment Survey
the evaluated quarter. This shows that a (QES) since January 2009. However, the
sound system of statistics is in place for scope of QES is limited as it covers only
the generation of updated high frequency few industries, including textiles, metals,
information on employment in the US. automobiles, gems and jewellery, trans-
Many European countries also estimate port, information technology/business
employment quarterly. process outsourcing, and mining. The
The authors are indebted to the anonymous latest survey is available up to Septem-
referee and the editorial team for their Employment Statistics in India ber 2015. Its sample size is also small.
constructive comments. The Government of India spends huge Nevertheless, QES is useful to monitor
Jitender Singh (jtndrdahiya@gmail.com) is resources on collection of employment the impact of global slowdown on employ-
with the Department of Financial Services, statistics. Substantial human labour is ment in export-oriented industries.
Ministry of Finance, Government of India; and employed to generate reliable and timely The Labour Bureau compiles useful
Arup Mitra (arup@iegindia.org) is with the estimates. The mechanisms and systems information on industrial disputes, covering
Institute of Economic Growth, Delhi.
are in place: various central government closures, retrenchments, and lay-offs.
28 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
COMMENTARY

However, this information is limited of Corporate Affairs (MCA) for the com- agency approaches the employer for
to factories employing 100 and more panies incorporated under the Compa- collecting information. Data on employ-
workers. nies Act, 1956. In addition, National ment exchange is based on self-targeting
Besides, Labour Bureau compiles a Technical Manpower Information System where individuals register themselves.
Statistics on Factories report every year. (NTMIS) collects data from students, ed- (v) The frequency of data sources also
However, only 40.82% of the total work- ucational institutions, and users of tech- varies. The sources for monthly infor-
ing factories submitted their annual ret- nical manpower to estimate the demand mation include Statistics on Industrial
urns for 2012, indicating gross underes- and supply of technical manpower in Disputes, Closures, Retrenchments and
timation. Besides, the results are released India. The Department of Commerce, Lay-offs, EPFO data and IEMs. The sources
with a time lag. Government of India, publishes informa- for quarterly information include QES
Since 1959, the Central Statistics Office tion on employment in special economic (Labour Bureau) and Employment Re-
(CSO) has been conducting the Annual zones (SEZs). views under the EMIP (DGET). The annual
Survey of Industries (ASI). It is the most The following inferences can be drawn EUS and Statistics of Factories by Labour
comprehensive data set for registered from the above elaboration: Bureau, ASI by CSO, Employment Ex-
manufacturing. It covers factories em- (i) Multiple departments/organisations change Statistics by DGET, the Public En-
ploying 10 or more workers with power under the central government are engaged terprises Survey reports by DPE and
and 20 or more without power. Micro, in collecting information on employment/ MCA21 by MCA collect information every
small and medium enterprises (MSME) jobs in India. The NSSO, CSO, DGET, EPFO, year. There are also quinquennial and
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
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 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

T
the reference period January 2013 to collections of information. The IDRA, 1951; may arise due to the differences in the
April 2014. the Employment Exchanges (Compulsory purpose of collection.

Z
The Directorate General of Employment Notification of Vacancies) Act, 1959; the
and Training (DGET), Ministry of Labour Employees’ Provident Funds and Miscel- Data Sources
and Employment, produces two reports. laneous Provisions Act, 1952; the Factories Broadly, these data sources fall into two

G
One is Employment Exchange Statistics Act, 1948; the Industrial Dispute Act, 1947; categories. First, when the onus of col-
and the second is Employment Reviews. the Collection of Statistics Act, 2008 and lecting information lies on the govern-

A
The first is annual and collects information the Companies Act, 2013 are important. ment, it can be called “survey based.”
on registration, placement, live register (iii) Multiple approaches are followed to Second, when, the onus of submitting
and submission from about 978 employ- collect information such as “enterprise,” returns is on employer/establishment/
ment exchanges across states. The sec- “establishment,” “household,” and “indi- enterprise/individuals it can be called
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
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
“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-
and Employment, collects information (Labour Bureau), Statistics of Factories ment exchange data, Statistics on Indus-
on monthly basis from 187 specified in- (Labour Bureau), ASI (CSO), MSME census trial Disputes, Closures, Retrenchments
dustries/classes of establishments as reports (Development Commissioner), and Lay-offs and EPFO data. The survey-
specified in schedule I of the Industries Economic Census report (CSO), Employ- based data is comprehensive and is used
(Development and Regulation) Act (IDRA), ment Market Information Programme to feed into the statistical system in
1951 or any activity notified by the central (EMIP) (DGET), Employees’ Provident India. However, the return-based data is
government in the official gazette. Every Funds Data (EPFO) and IEMs (DIPP). The for specific purpose and is generated as
year, the Department of Public Enterprises “household” approach is followed by a by-product of enforcement of an act.
(DPE), Ministry of Heavy Industries and NSSO’s quinquennial EUS and Labour The survey-based data is more updated
Public Enterprises, publishes the Public Bureau’s Annual EUS. Information is col- than return-based. Survey-based data is
Enterprises Survey reports based on 290 lected from individuals in Employment also more complete and reliable. How-
central units. The Department of Indus- Exchange Statistics by DGET. ever, its frequency is very low: decadal,
trial Policy and Promotion (DIPP) receives (iv) In some of the sources, the responsi- quinquennial, yearly. On the other hand,
information on potential job creation bility of reporting lies with the employer, the frequency of return-based data is
through Industrial Entrepreneurs Memo- especially in cases where employers should high. Multiple organisations are respon-
randum (IEMs) under the IDRA, 1951. Besi- file compliance reports under some stat- sible for the collection of return-based
des, MCA21 data is recorded by Ministry ute. In some other sources, the collecting data, using different approaches and
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 29
COMMENTARY

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

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
COMMENTARY

recommended that they be simplified. It results with important policy implica- Technology can enable storage of larger
also suggested that data should be cap- tions (Mitra and Okada forthcoming). data sets, easy transformation in usable
tured electronically. However, the scope However, as mentioned before, the form, easy retrieval, and query-based
of the report was restricted only to labour Labour Bureau’s surveys on labour force outcomes. There is a need to examine the
laws monitored by the Labour Bureau. has been discontinued. The NSSO, in- further use of technology in collection,
There is a need to take a comprehensive stead of conducting the EUS once in five processing, storage and dissemination of
review of return-based sources of em- years has now initiated the annual labour labour/employment statistics in India.
ployment estimates for collection of force surveys. Since the NSSO has al- Let us assume there is a digital product,
timely, reliable, and actionable informa- ready acquired the expertise of carrying which can be a mobile app, and estab-
tion on employment/jobs. out the EUS and has established a reputa- lishments/enterprises have to feed only
The workforce participation rates tion among the users with regard to the few figures every month/quarter/year.
(WPR) (principal and subsidiary workers) reliability of the employment figures, These figures can be verified if needed
given by Labour Bureau (Table 3) do not similar exercises annually may not be through random checks or putting pos-
match with the corresponding NSSO rates difficult. However, in the recent past, the sible error alerts. The digital product
(Tables 2 and 3). Part of the difference 2009–10 estimates were questioned, and can also automatically remind the re-
can be attributed to the fact that the thus, the EUS survey had to be repeated in spondent to feed the information and
NSSO rates in parentheses in Table 3 cor- 2011–12 much before the five-year period help locate the respondent through the
respond to ages 15 to 59 years while the got over. global positioning system.
Labour Bureau rates cover the age groups
15 years and above.
Table 2: Workforce Participation Rate (Principal
and Subsidiary Workers), NSSO (all ages combined,
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
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

T
as a percentage of total population)
1983 1993– 1999– 2004– 2009– 2011–
the estimates and the expected outcome and can be churned out from various
94 2000 05 10 12 for 2009–10. But if that is the case, the returns (production, labour, disputes,

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Rural male 54.7 55.3 53.1 54.6 54.7 54.3 same argument can hold for the annual etc) a respondent is required to file at
Rural female 34 32.8 29.9 32.7 26.1 24.8 surveys to be conducted by the NSSO. On various times to different agencies.
Urban male 51.2 52.1 51.8 54.9 54.3 54.6 the other hand, Labour Bureau had ac- Since the information sent through this

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Urban female 15.1 15.5 13.9 16.6 13.8 14.8
quired reasonable experience to handle digital product can be accessed by all
Source: NSSO–EUS, various years; Thomas (2015).
such surveys after repeating similar ex- agencies simultaneously, including the
Table 3: Workforce Participation Rate (Principal

A
ercises for the last several years. Maybe monitoring agency in the central govern-
and Subsidiary Workers), Labour Bureau (15 years
and above, %) for the initial years, the figures showed ment, the information can be compiled
2011–12 2013–14 some discrepancy, but over time the concurrently at the centre and state levels
Rural male 77.5 (82.0) 74.3 Labour Bureau figures were tending to without any time lag. It will avoid duplicity

M
Rural female 32.5 (37.2) 35.1 converge with the NSSO figures. If of data entry and the entry at the respond-
Urban male 71.3 (78.4) 71.4
Labour Bureau surveys were to continue, ent level will be sufficient. It will save
Urban female 17.0 (21.0) 17.5
the users could have more than one time, money, human labour, and provide
Figures in parentheses against 2011–12 correspond to
NSSO estimates for age 15 to 59. source of labour and employment statis- updated data on employment/job crea-
Source: Labour Bureau and NSSO. tics at least once in five years to compare tion in time.
Though the Labour Bureau WPR do not and determine the reliability of the agg-
exactly tally with the NSSO WPR, a reason- regate nationwide employment data. References
ably good panel data set has been emerg- Now the users will be left with no choice: Labour Bureau (2014): “Report on Simplification of
Returns under Labour Laws,” Chandigarh.
ing that can be utilised to identify the the NSSO data will have to be accepted
Mitra, Arup and Ava Okada (forthcoming): “Labour
determinants of participation. The state- without any questions. If in a given year, Market Participation in India: A Region and
level cross-section-time-series pooled data the biases are strong in comparison to Gender Specific Study,” Singapore: Springer.
Thomas, Jayan Jose (2015): “India’s Labour Market
can be used to determine the impact of the immediate past year, the differences during the 2000s: An Overview,” K V Rama-
growth fluctuations on employment—an in the estimates will be interpreted as swamy (ed), Labour, Employment and Economic
Growth in India, Cambridge.
issue that has been bothering both policy- the actual change in employment.
makers and researchers for a while.
The other control variables could be state Suggestions
level ones like state government expen- The technology used in collecting infor-
ditures that can vary every year, and other mation is evolving very fast. The use of available at
cultural, social, demographic, and infra- computer network, digital gadgets,
structure variables that are not likely to customised software and mobile web Churchgate Book Stall
show huge changes in the short run. A portal can reduce the cost of data entry Churchgate Station
detailed analysis based on state-level data and aggregation considerably. Faster Opp: Indian Merchant Chamber
Mumbai 400 020
brings out a wide range of interesting processing of the data can save time.
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 31
Western Medical Education midwifery was shaped by the debates on
“the women’s question,” nationalism and

and Women’s Healthcare in colonial public health policies, all inter-


secting with each other in Bengal.

Colonial Bengal Impact of Colonialism on Bengal


Bengal being the earliest seat of British
power in India was also the first to expe-
Manas Dutta rience contact with Western civilisation,
culture and thought. It also had the most

S
ocial histories of health and medi- book reviewS elaborate medical establishment along
cine in colonial India have emerged Western medical lines since the foundation
as major themes of interdisciplinary Gender, Medicine, and Society in Colonial India: of the Calcutta Medical College (CMC) in
research in South Asian history since the Women’s Health Care in Nineteenth and Early 1835. The aim of the CMC was to imple-
Twentieth Century Bengal by Sujata Mukherjee,
late 1990s. These studies aimed at tran- New Delhi: Oxford University Press, 2017; pp XXXV + 223, ment systematic education of Western
scending conventional boundaries. Several `895. medicine, to train the native youth irre-
important works have appeared in recent spective of caste and creed in techniques
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
journals in English and Bengali that
represent both nationalist and official
viewpoints on the medicalisation of
childbirth and maternal and infant health.

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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

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authoritative account, Gender, Medicine, It has also used annual reports of the Bombay presidencies.
and Society in Colonial India: Women’s medical institutions to chart the history Bengal’s sluggish response to reforming

Z
Health Care in Nineteenth and Early 20th of institutionalisation of midwifery and women’s healthcare was perceived as a
Century Bengal. has drawn upon archival sources— consequence of the long-standing Bengali
The monograph under review takes the medical and educational proceedings perception of childbirth and women’s

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a broad view of the subject, but focuses, in particular—in the West Bengal State health as an exclusively feminine domain,
geographically, on Bengal. Muk herjee Archives and the National Archives of defended by practices of seclusion (purdah)
begins with an impressive introduction India (pp 186–90). and, therefore, impassable to Western
which delineates the historiography of
the role of medical missionaries in wom-
en’s healthcare in India; medicalisation
A
The study begins from the early 19th
century when the earliest scientific essays
on women’s healthcare, including child-
medicine. Unlike the West, where profes-
sionalised obstetrics was characterised
as an essentially male domain, the evolv-

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of childbirth; politics of reproductive birth and pregnancy, began to appear in ing professional sphere of obstetrics in
health; growth of women’s medical edu- Bengali women’s magazines such as Bengal was largely dominated by female
cation and profession; careers of female Bamabodhini Patrika, Bharati, Antahpur, doctors. The study demonstrates that
practitioners of indigenous medicine; and Mahila. The author focuses not only since the 1880s, the domain of medical
curative facilities for female patients in on the women’s healthcare but throws knowledge in Bengal was shared by both
hospitals and asylums; and philanthrop- light on issues concerning different cur- female and male medical practitioners.
ic involvement of British women in ative institutions, reforming midwifery, Together, they contributed to the evolu-
designing healthcare for Indian women. notions of sexuality, marriage reforms, tion of a new medical discourse on child-
This sets the stage for a more nuanced birth control, discourses on delivery and birth and health policies in colonial
understanding of colonial health policy healthcare, evolution of public health Bengal. The study shows how the late 19th
during the 19th and early 20th centuries administration, politics of control, and century initiatives to reform practices of
in India. Mukherjee says: emergence of women’s associations in childbirth were essentially a modernist
Crucial developments in the discursive as well the late colonial period. One must point response of the Western-educated colo-
as empirical fields of medicine and health- out that the reforming of midwifery consti- nised middle class to the colonial critique
care touched the lives of women in signifi- tuted one of the ways of modernising the of Indian sociocultural codes.
cant ways, and that gender and politics of
middle-class women as mothers. In the
medicine contributed in multiple ways in
20th century, the argument for medicali- Women and Medical Knowledge
formulating perceptions and identities at
the intersection of colonialism, class, caste, sation was further driven by nationalist The chief objective of the book is to
communities and nation. (p xii) recognition of family and health as im- analyse how women’s healthcare emerged
The study has drawn upon a number portant elements of the nation-building in relation to social reform movements
of Bengali women’s magazines, popular process. This study provides a historical of the 19th century as well as nationalist
health magazines and professional medical analysis of how institutionalisation of politics and colonial public health policies
32 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
BOOK REVIEW

of the 20th century. At the same time, Western medical education and thereby salaries and permanent appointments,
it seeks to explore the role played by become doctors and practising physi- unlike their European, Eurasian, or even
Christian missionaries as agents for mod- cians. Brahmo Samaj, Bamabodhini Indian native male counterparts.
ernising practices of childbirth, especially Sabha and several women’s organisa- However, there were several women
in the early years of colonial rule, and tions and agencies helped women fulfil medics, such as Kadambini Ganguly,
locate issues of women’s healthcare with- their dreams. Both hospital medicine Jamini Sen, Virginia Mary Mitter, and
in a wider and more complex range of and preventive medical care popular- Haimabati Sen, who excelled in their
social drivers. The monograph argues ised Western forms of medical care in careers and created new opportunities
that in the 20th century the profession the 19th and the early 20th centuries in for aspiring women who wanted to join
of obstetrics came to constitute an ever- Bengal. This created a space where the medical profession. Mukherjee ar-
expanding space mediated by a wide women could receive Western medical gues that the contributions of less prom-
range of actors such as the medical pro- care in contrast to the native forms of inent lady doctors also need to be
fessionals, middle-class women activists, medical care and they were able to rec- acknowledged, as they often took up
and the local self-governing bodies who eive it outside the purdah or zenana for practice in the mofussils and faced hos-
were influenced as much by nationalism the first time. tility from the local male populace (pp
and colonial public health policies as by The sociocultural reform movements 57–60). She points out, however, that
global discourses on health. In analysing during the colonial period played a pivotal Western healthcare and treatments were
the shifting strands of women’s health- role in bringing about changes in attitudes available only to a handful of fortunate
care in Bengal over a century, the study towards women, who had, till then, been women mostly residing in urban and

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seeks to discern the process through confined to the domestic sphere. Govern- semi-urban areas; the majority were of-
which Bengali women’s bodies—which ment support, efforts of the Christian mis- ten denied such medical assistance due to

E
were once perceived as the repository of sionaries, and the zeal of elite Indians several reasons (p 60).
modesty and cultural purity, and hence, led to significant reforms affecting wom-

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shielded from public sight by patriarchal en’s lives; this laid the foundations of Reproductive Health,
norms of seclusion—became, by the end women’s medical education. Sexuality and Domesticity

Z
of the colonial period, a subject of in- Mukherjee says that enthusiastic Apart from institutionalisation of mid-
tense medical, public, and nationalist scr- Brahmo reformers like Durga Mohan wifery (in Bengal they were called dhai)
utiny. It also demonstrates how Western Das and Dwarkanath Ganguly were the training, various means were adopted

G
medical knowledge mingled with local earliest supporters of medical education for reproductive healthcare for women.
medical traditions; this entailed a dy- for women. She quotes from Brahmo The knowledge of prenatal and postnatal
namic interpretation of two distinct sys- Public Opinion: care through guidebooks and essays were
tems of thoughts that caused both of
them to lose some of their steadfastness
and undergo a process of reformation
A
We know of several instances in orthodox
Hindu families, where the female members
suffer from the most complicated diseases,
circulated among pregnant mothers.
Here the author mentions names such
as Jadunath Mukhopadhyay and Sundari

M
but yet would not allow male doctors to visit
and rearticulation in a bid to comple- Mohan Das who wrote tracts in simple
and treat them. The consequence is, they are
ment or replace each other. The unravel- treated second-hand through the assistance
Bengali language on maternity and
ling of a range of vernacular “medical” of uneducated quake native midwives, and childbirth so that a large number of
literature also demonstrates a vibrant in ninety-nine out of a hundred, they are women could easily understand them.
coexistence of Western and local medical never radically cured. (p 44) Even, the Bamabodhini Patrika published
knowledges available for women. Favour- Therefore, the admission of women into detailed and informative articles on mid-
able situations were being created so medical education, the reformers thought, wifery, discussing pregnancy, its symp-
that native women could receive educa- would help solve these problems as toms, appropriate care, and the process
tion in Western healthcare. women themselves would become doctors of delivery. Madhusudan Gupta asked
and address issues like surgery, pregnancy, for official intervention on these issues
Native Women Medics childbirth, and women-related diseases. (p 71). The gradual reform of midwifery
The earliest institutions devoted to It was not Bengal, but Madras, which pro- started in Bengal since 1870 that enabled
women’s health were lock hospitals in vided leadership in the field of women’s not only literate but also illiterate women
different presidencies from around 1805, medical education (p 45). The entry of —who often belonged to lower classes
which were essentially established for women medics into the medical profession and castes and were associated with the
the confinement and treatment of pro- was not smooth in the colonial period. task of midwifery—to learn the art of
stitutes suspected of suffering from Indian women faced racial discrimination, childbirth and care for infant.
venereal diseases. Gradually, overcom- sexism, and even hostility, which made it A new colonial discourse of domesti-
ing racial and gender discrimination, extremely difficult for them to carry on city, Indian family life, and values were
social taboos, and active opposition from their professional duties in the hospitals. propounded in such a manner that the
authorities and their families, several Sometimes, male colleagues made dero- idea of giving birth to a strong and
women were capable enough to receive gatory comments. They were denied full healthy child became very important.
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 33
BOOK REVIEW

These ideas were disseminated through of hygiene. She was expected to know a Saroj Nalini Dutt Memorial Association
contemporary vernacular texts, domes- bit of all forms of medical care, includ- for Women (SNDMA), which tried to train
tic and official medical manuals, guide- ing folk medicine, allopathy, homeopa- native women in domestic science and
books, pedagogical writings, and verna- thy, kaviraji (Ayurvedic medicine) and hygiene both in rural and urban areas.
cular periodicals. Concern for a healthy hakimi (Unani medicine). Mukherjee points out that there were
nation in general and Bengali community Discussions around sexuality and do- 250 autonomous agencies in 1925, which
in particular became a major preoccu- mesticity give us an idea of the private increased to 305 by 1930, for promoting
pation of middle-class Hindu Bengalis. domain of the nation. These coincided sanitation and public health. The issue
According to the author, this new discourse with debates and demands for marriage of birth control gained attention around
played a significant role in formulating reforms. Colonial modernity is arguably this time both from colonial officials and
the indigenous idea of modernity, which coterminous with the changing notions a section of native women medics who
could be strengthened with the intro- of health and hygiene, giving rise to a new argued that birth control is necessary
duction of Western science and medicine idea of colonial domesticity. Mukherjee for reasons of health, social-economic
and by restructuring the Indian nation. shows that the second half of the 19th considerations, and national well-being
Discourses on sexual and conjugal lives century saw social reforms which articu- (pp 133–36).
and ideas of domesticity focused on re- lated its demands in terms of physiological
modelling women’s roles as health-con- and medical concerns, as becomes evi- Women, Public Health and Famine
scious good wives and mothers. Mukherjee dent from debates around the age of One of the strongest chapters is on issues
shows how contemporary Bengali peri- consent and marriage. Women’s organi- related to the growth of public health-
odicals as well as medical and quasi-
medical literature explained that social
customs like child marriage, masturbation,
and excessive sexual intercourse even with
sations also participated in these de-
bates. The colonial government could
not ignore such demands as these were
voiced as medical concerns.

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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

T
one’s own husband could harm women’s The first half of the 20th century saw in large numbers not only due to famine-
health, leading to maternal mortality or sociopolitical developments in India that induced epidemics, but also because they

Z
birth of sick and weak babies (p xxv). This prioritised public health. Alongside gov- suffered abandonment and destitution,
literature also emphasised that women ernment initiatives, there were other or- leading to the adoption of survival strat-
should learn proper home management, ganisations such as Lady Reading Fund, egies that affected their health. The

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scientific nurturing of children, regula- Lady Chelmsford Fund, Women’s Indian famine exposed how poor health, ineffi-
tion of dietary habits, and maintenance Association (WIA), Mahila Samiti and ciency of public health administration,

A
EPW’s Special and Review Issues Published in 2017

34 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
BOOK REVIEW

dietary deficiency particularly among says that women were “badly off for protection to mothers and children”
women and children, etc, made them clothing as the people who used to help (p 169). The committee also criticised
vulnerable to starvation-induced deaths, them [were] badly off” (p 168). existing public health services and sought
lowering the health status of women This chapter also highlights how better healthcare for women (p 181). The
even further. women, especially those who were fact that dietary deficiency among Indians,
Recent researches illustrate the rela- younger, got entrapped in prostitution especially women and children, was
tionship between famine, epidemics, and because of poverty, hunger, destitution, responsible for poor health had been
mortality in colonial India. The Bengal abandonment by male members of the highlighted in the final report of the
famine of 1943 led to a breakdown of the family, and for the sake of other family Famine Enquiry Commission.
social fabric and produced a series of members. They considered it as an
immediate problems that further affected alternative means of survival. This was Concluding Remarks
the mortality and sickness patterns of the rampant in Chittagong, Comilla, and Overall, this book is a welcome step
population. Poverty, insufficient availa- Noakhali. This was mostly visible in can- towards the understanding of ideas/ide-
bility (or non-availability) of food, the tonment areas. Following P C Joshi’s ologies, and their corresponding con-
onset of diseases, and poor public health estimate, Mukherjee argues that 30,000 tradictions, which shaped colonial pub-
administration (especially the health con- out of 1,25,000 destitute women were in lic health policy and issues related to
ditions of women and children) continued brothels and one in four of them was women’s healthcare in colonial Bengal
to get complicated due to the famine. a young girl. She goes on to say that from the 19th century to the early 20th
Therefore, Mukherjee (2012) argues: distress and famine forced poor women century. Using Bengal as a case study, the

R
The famine of Bengal and the resultant epi-
to join the Military Labour Corps where book goes beyond conventional narra-
demics exposed the vulnerability of the poor they were infected by venereal diseases. tives and traces the beginnings of wom-

E
rural population, as well as the inefficiencies The army health report in India from en’s healthcare and health policies of the
of the public health organisation in Bengal. 1938 to 1944 witnessed a sharp increase colonial government. The role of rhetoric,

T
While like earlier famines of the colonial in venereal diseases. The government nationalist politics, and institutions (such
period it magnified the forces of death already
report pointed out that this was because as CMC, Calcutta Municipal Corporation,
present in the region, its uniqueness lay in

Z
the fact that it exposed the defects of the
of the presence of large numbers of WIA, AIWC) assumes centrality in this
public health organisation of colonial Bengal women in cantonment areas. Later on, analysis. This book combines two app-
as well as the limitations of imperial medical the government’s continued negligence roaches: the “women in medicine” app-

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policy. The quinine policy, for example, left had been criticised by the All Bengal roach, which examines the role played by
such strong loopholes that artificial, man-made Women’s Self Defence Committee, the women in medical practices and poli-
scarcity could be created to add to the woes
All India Women’s Conference (AIWC), cies; and the “gender and medicine”

A
of the famine-stricken population, which led
to a tremendous rise in mortality. (p 162)
and the Nari Sewa Samiti for not taking framework which explores how new
any step in solving the problems of sexu- forms of medical knowledge and growth
Mukherjee observes that women suf- ally transmitted diseases and venereal of institutions produced certain stereo-

M
fered more than men in the famine of diseases (p 169). types about gender (p xxviii). It will
1943. Women seemed to get inadequate The sharp decline of childbirth, accor- hopefully encourage further research on
relief because of abandonment and des- ding to the author, had been evident due the subject. Building upon existing re-
titution. Following Paul Greenough’s to the adverse effects of the famine of search by Biswamoy Pati, Mark Harrison,
study (1983), the author says that patri- 1943–44 in Bengal. This could perhaps Deepak Kumar, Raj Sekhar Basu, Amba-
archal norms did not allow women to be be explained by several complex factors, lika Guha and others, Mukherjee has
proactive in getting food for the family. like decrease in marital intercourse successfully produced an authoritative
In rural Bengal, we know that women because of separation, deliberate birth account on gender and medicine in
customarily had low socio-economic control or self-restraint, stillbirths, abor- colonial India.
status in the family, and the famine as tions, and even psychological changes
well as the wartime situation further because of starvation, all of which are Manas Dutta (manas.dutta@knu.ac.in) teaches
history at Kazi Nazrul University, West Bengal.
exacerbated their limited access to food known to render women infertile. One
and other life-saving essential require- can further argue that the famine made
References
ments (p 167). the situation worse for women who were
Deepak, Kumar and Raj Sekhar Basu (eds) (2013):
Following Mukherjee, one can explain about to give birth. The Health Survey Medical Encounters in British India, New Delhi:
how the shortage of cloth curtailed wom- and Development Committee, also Oxford University Press.
Greenough, Paul R (1983): Prosperity and Misery in
en’s mobility. They could not have moved known as the Bhore Committee, after Modern Bengal: The Famine of 1943–44, New
about like men to get food or to seek considering all these issues declared in Delhi: Oxford University Press.
Guha, Ambalika (2018): Colonial Modernities: Mid-
temporary work in the nearby towns or its report in 1946 that “any plan for im- wifery in Bengal, c 1860–1947, London; New
in far-flung cities. Citing the statement proving the health of the community York: Routledge.
Pati, Biswamoy and Mark Harrison (eds) (2009):
of F O Bell, a civil servant during the must pay special attention to the devel- The Social History of Health and Medicine in
time of famine of 1943–44, Mukherjee opment of measures for adequate health Colonial India, New York; London: Routledge.

Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 35
BOOK REVIEW

The second ingredient is the “rent


Navigating Spaces of space.” The rent space (p 27: Fig 2.2) par-
titions the entire production side of the
Economic Growth economy based on the degree to which
firms can extract excess profits (rents) in
their sector. If firms are export-oriented
Chetan Ghate and operate in rent-thick sectors, they
are called “rentiers” (for example, natural

I
t is well known from the voluminous The Political Economy of India’s Growth resource firms). Domestic market-oriented
literature on economic growth that Episodes by Sabyasachi Kar and Kunal Sen, United firms in rent-thick sectors are called
national policies and institutions Kingdom: Palgrave Macmillan, 2016; pp xii + 105, price not “powerbrokers” (for example, utility and
indicated.
play a major role in driving differences communication firms). Competitive (low
in per capita incomes across countries rent) export-oriented firms are called
(Acemoglu 2009). These factors do so by and a growth crisis, where per capita in- “magicians” (for example, manufacturing
affecting the incentives to invest in tech- come growth is negative. They then pro- and service exporters). Competitive firms
nology, and induce households to accu- vide a unifying institutional framework oriented towards the domestic market
mulate physical and human capital. Any to understand the drivers of growth ac- are called “workhorses” (for example,
institutional analysis of growth out- celerations (movement from the stagna- informal manufacturing).
comes, however, tends to be embedded tion and crisis states to miracle or stable The third ingredient is the “political
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-
growth), growth collapses (movement
from miracle and stable growth to a pov-
erty trap), and the maintenance of steady
state growth.

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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

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erationalise the role of institutions on Chapter 2 outlines the overarching political group, vertical power refers to
economic growth in the medium run, conceptual framework of the book. The the distribution of power between elites

Z
where the relevant growth cycle may be, first ingredient is the “deals space.” The and non-elites. Importantly, the nature
say, of a 15-year duration. The Political authors’ caveat is that for developing of political competition matters for the
Economy of India’s Growth Episodes by countries like India, the appropriate form that growth takes.

G
Kunal Sen and Sabyasachi Kar does ex- institutions are not so much the formal The main hypothesis is that changes
actly this. It provides a political economy institutions engaged in, say, property in these three spheres—the deal space,
reading of India’s growth experience right protection that can be enforced le- the rent space, and the political space—
since 1950, using a medium run institu-
tionalist perspective. In Chapter 1, the
authors econometrically identify four
A
gally. Rather, the institutional environ-
ments in these countries are character-
ised by personalised deals. Developing
drive the four growth episodes estimated
for India. Incentives in all three spaces
need to be aligned for economic growth

M
growth episodes in India using a two- countries can be thought of as deals- to accelerate. Once accelerated, maintain-
stage procedure. The first stage utilises based economies rather than rules- ing growth requires structural transfor-
the well-known Bai–Perron procedure based economies. Deals are further bro- mation, or the ability of a country to pro-
to identify structural breaks. The second ken up into ordered deals, where the duce a diverse product mix. The authors
stage uses a magnitude-filter (for exam- sanctity of contracts is maintained, and also emphasise that while both closed
ple, growth regimes must last a mini- disordered deals, where the sanctity of order (pro-business) and open order
mum of eight years) to further refine the contracts is not maintained. Both kinds (pro-market) deals can lead to positive
set of candidate break-points estimated of deals can either be open (widely growth episodes, closed ordered deals
in the first stage. This yields four growth available to investors) or closed (offered can lead to crony capitalism, and to neg-
episodes: 1950–92; 1993–2001; 2002–10; to a select economic or political elite). ative economic and political feedback
and the post-2010 period.1 The authors argue that growth acceler- loops, which ultimately makes the closed
ations take place when there is a move- ordered deal disordered, and brings the
States of Growth ment in the deals space from disordered positive growth episode to an end.
The authors emphasise that the focus to ordered deals. This occurs because
should be on understanding transition maintaining the sanctity of contracts Politics of Stagnation
paths between these episodes. To do encourages particular forms of invest- The rest of the book applies the above
this, they define four growth states: mir- ment with large positive spillovers (such framework to understand transitions in
acle growth, where per capita income as equipment investment), which ulti- India’s growth episodes. Chapter 3 dis-
growth is greater than 5%; stable mately drive growth, as seen in the cusses why a disordered deals environ-
growth, where per capita income growth growth recovery of the 1980s. This is, ment prevailed during the first growth
is between 0% and 5%; stagnant growth, however, a sufficient condition, and not episode (1950–92), despite the dominance
where per capita income growth is 0%; a necessary condition. of the Congress party. This led to low
36 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
BOOK REVIEW

average per capita income growth dur- political competition, and a stronger growth per se, even in a dynamic long
ing the period (1.86%). The authors ar- pro-business orientation. There was a run sense. Further, in India, there is also
gue that in the Nehru–Mahalanobis surge in ordered deals, which energised the politics of relative corruption: the in-
public sector–centric growth model, dis- the magician (IT and chemical) and cumbent is constantly trying to prove
trust of the private sector would have led workhorse (hotel and restaurant) sec- that the opposition is more corrupt than
to a lack of credible commitment, and to tors, and which should have resulted in a the incumbent. Would this be a force for
disordered deals. The vertical distribu- further opening up of the deals space be- the emergence of more open ordered
tion of power also became less concen- cause of second round effects. This did deals? Redistribution could also be cover-
trated within the Congress party in the not happen due to mitigating changes in ing for market failure, not just providing
early 1980s, with non-Congress parties the rent and political spaces, which led political patronage, but the authors do
increasingly beginning to challenge the to a more closed deals environment in not develop this point.
hegemony of the Congress. Political sur- the next growth episode, 2002–10. Chapter 6 discusses the post-2010
vival therefore necessitated Indira Gandhi As discussed in Chapter 5, while aver- growth slowdown, the fourth growth
adopt a more growth-oriented strategy. age per capita income growth from 2002 episode for India. The main result is that
When Rajiv Gandhi came to power in to 2010 rose to 6.42%, the industrial the economy in this phase witnesses a
1985, one can see this as a shift to a more structure shifted to more natural re- secular slowdown in most sectors, but
ordered deals environment. This envi- source/rentier sectors as political frag- especially in those identified with closed
ronment was consolidated in the 1990s, mentation changed the nature of deals. deals. There is a sharp drop in investor
leading to a recovery in growth in the This also led to a decline in structural perception of institutional quality in

R
1980s, and a growth acceleration from transformation. Corruption stemming India, and a rise in rent-seeking and cor-
1993 onwards. from closed deals increasingly became ruption, leading to negative feedback

E
While the above description is true, I the norm across sectors (for example, loops that characterised the 2002–10
would like to propose an alternative ex- telecommunications and the 2G scam). growth episode. The primary culprit is

T
planation for why growth stagnated. The drivers of growth also shifted to the political fragmentation, which led to a
During this period, India was stuck, for non-tradable sectors. breakdown of the political settlement

Z
lack of a better phrase, in a “political and a more disordered deals environ-
growth trap.” Assume, like the authors Closed Deals and Corruption ment. Chapter 7 provides concluding ob-
do, that policymakers are rent-seekers. What is less clear in Chapters 4 and 5 servations. The book ends on a some-

G
They exercise discretionary powers to is how closed/open/ordered/disordered what ominous note given the Indian ex-
grant privileges. As the economy liberal- deals generally relate to corruption. perience with institutional decline and
ises, the scope for rent-seeking goes While the authors do mention that closed political fragmentation, and changes in
down. But as the economy expands, the
scale of rent-seeking expands. Politicians
do not want to give up the “scope” for
A
ordered deals do not necessarily imply
corruption (p 88), casual empirical evi-
dence suggests that routine corruption
the deals space.

New Perspectives

M
rent-seeking because they do not see the costs something like 1%–3% of total pro- I have a few suggestions on how to make
“scale” of rent-seeking clearly (because duction expenditure in many economic the arguments in an already interesting
of too much risk and uncertainty sur- sectors, and is budgeted in as such by book more compelling. First, the authors
rounding economic reforms). That is businesses. This is a cost, but not a bind- need more precise statistical indicators
why countries can get stuck in a political ing constraint, except at the margin, al-
growth trap, and need a crisis to motivate though there are additional costs con-
reform, in order to get out of such a trap. nected with the social erosion that come
In India, this crisis occurred in 1991, with corruption. In this regard, an inter-
leading to systematic reforms. This is national comparison is also appropriate.
also possibly why the reforms initiated in Comparing the economic trajectories of
the 1980s were piecemeal and tentative. Mauritius and Madagascar, Mauritius Through EPW Engage,
Chapter 4 discusses the 1993–2001 was more dirigiste than Madagascar, but our new digital initiative, we seek to
growth acceleration, which was India’s subjectively, civil servants were more explore new and exciting possibilities
first episode of high growth. Average per interested in economic growth and of communicating research in a
capita income growth rose 4.15% com- therefore willing to cut corners and re- creative and accessible manner
pared to 1.86% in the previous episode, move obstacles positively. The same point to a wider audience.
driven by a resurgence in corporate sec- can be made about local party officials
tor investment (equipment investment), in China and Vietnam, whose level of
www.epw.in/engage
which led to strong private sector growth. control is high, but whose motivation to-
However, more political fragmenta- wards economic growth (a lot of which
tion—a changing political landscape is selfish) is also high. In other words,
with more regional parties—led to more closed deals need not be a hindrance to
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 37
BOOK REVIEW

of the deal/rent/political environments Solow–Swan style growth model in the pre-independence growth stagnation from
1900 onwards. After the first decade, growth
outlined in the book. In the absence of medium run.3 Some more discussion, began to decline and got stuck in the “Hindu
this, the arguments remain wordy and however, of how a deals-based institu- rate of growth.” The over-regulation of the
economy with the goal of redistributing wealth
untested. Second, the book has more of a tional framework impinges on productivi- ultimately led to rampant corruption and crony
national focus, and less of an interstate ty, and therefore on prospects for produc- capitalism. The second phase of India’s growth
was in the 1980s–90s. There was ad hoc liber-
perspective, although arguably, a lot of tivity-led growth would have been useful. alisation starting in the mid- to late-1980s,
the interesting economic policy experi- Having said this, the view that eco- which increased growth. Expansionary fiscal
policy also stimulated growth in the late 1980s,
mentation has been taking place at the nomic reforms are the dominant instru- although this led to fiscal profligacy and laid
state level, certainly post 2000. This ment behind rapid growth in India—es- the seeds of the 1991 balance of payments cri-
sis. The third phase of growth occurs in the
suggests that the forces of competitive pecially in many pre- and post-1991 com- 2000s because it took time for entrepreneurs to
federalism are likely to underlie India’s parisons—has become jaded, and needs think that the reform process initiated in 1991
were permanent. As a result, a lot of the bene-
future growth trajectory. Third, and fresh consideration. The institutional fits of the 1991 reforms in terms of higher
somewhat surprisingly, the book takes approach taken in this book provides growth were experienced in the 2000s.
2 KLEMS data relates gross output to capital (K),
an overt factor accumulation perspective this perspective. The book is short and labour (L), energy (E), material (M) and ser-
on Indian economic growth, with barely well written. The authors must be con- vices (S) inputs.
any discussion of the role of productivity gratulated for producing an insightful 3 Ghate et al (2016) calibrate a 2-sector growth
model to India and show how public–private
or efficiency (total factor productivity or book on how to think about institutional capital complementarities, labour laws, and
TFP) in the Indian growth process. This quality in the Indian context, its inter- TFP growth affect long run growth outcomes.

is possibly because of the burst of invest- play with economic growth, and what
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
this implies for India’s future growth
transitions.

I thank Stephen Wright for discussions related

E R
References
Acemoglu, Daron (2009): Introduction to Modern
Economic Growth, Princeton: Princeton Univer-
sity Press.
Das, Samarjit, Chetan Ghate and Peter Robertson

T
to the KLEMS data set, and Tom Timberg for (2015): “Remoteness, Urbanization and India’s
capital, and a slower growth rate of TFP.
discussions related to the Indian economy. Unbalanced Growth,” World Development,
This certainly seems to be borne out in Vol 66, pp 572–87.
Chetan Ghate (cghate@isid.ac.in) is with

Z
the recent KLEMS data,2 which is now Ghate, Chetan and Stephen Wright (2012): “The
the Economics and Planning Unit, Indian ‘V Factor’: Distribution, Timing, and Corre-
publicly available for the 1980–2011 time lates of the Great Indian Growth Turnaround,”
Statistical Institute, New Delhi.
period. A plot of growth in output per Journal of Development Economics, Vol 99,

G
No 1, pp 58–67.
worker against growth in capital per Notes — (2013): “Why Were Some Indian States So Slow
worker from 1980–2011 using the KLEMS 1 These growth regimes are different than what to Participate in the Turnaround?,” Economic &
has been estimated in the vast literature on In- Political Weekly, Vol 48, No 13, pp 118–27.
data set shows an uncannily close co-

A
dian economic growth (see Ghate and Wright Ghate, Chetan, Gerhard Glomm and Jialu Liu
movement. This implies that the dy- 2012, 2013; Das et al 2015). In the first decade (2016): “Sectoral Infrastructure Investment In
after independence, Indian aggregate real GDP An Unbalanced Growing Economy: The Case of
namics of growth in India—at least to a growth averaged approximately 3.9%. This Potential Growth in India,” Asian Development
first approximation—appears to follow a performance compared favourably to the Review, Vol 32, No 2, pp 144–66.

Ayyar, R V Vaidyanatha (2017); History of Educa-


tion Policymaking in India, 1947–2016, New
Delhi: Oxford University Press; pp xix + 583,
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.
Neelima, Kota (2018); Widows of Vidarbha: Making of
Shadows, New Delhi: Oxford University Press;
pp xxxviii + 245, `550.
`1,995. Hoskote, Ranjit (2018); Jonahwhale, Gurgaon: Pai, Sudha and Sajjan Kumar (2018); Everyday
Penguin Random House; pp xiii + 128, `499. Communalism: Riots in Contemporary Uttar
Balachandran, Aparna, Rashmi Pant and Bhavani
Jha, Mithilesh Kumar (2018); Language Politics and Pradesh, New Delhi: Oxford University Press;
Raman (eds) (2018); Iterations of Law: Legal
Public Sphere in North India: Making of the pp xiv + 349, `995.
Histories from India, New Delhi: Oxford Uni-
versity Press; pp viii + 302, `950. Maithili Movement, New Delhi: Oxford University Roy, Rohan Deb and Guy N A Attewell (eds) (2018);
Press; pp xix + 343, `1,195. Locating the Medical: Explorations in South
Bechain, Sheoraj Singh (2018); My Childhood on Asian History, New Delhi: Oxford University
Kara, Siddharth (2017); Modern Slavery: A Global
My Shoulders, New Delhi: Oxford University Perspective, New York: Columbia University Press, pp vi + 307, `950.
Press; pp xx + 255, `595. Press; pp xii + 342, $35/£ 27.95 (hardcover); Shah, Alpa, Jens Lerche, Richard Axelby, Dalel
Bhambhri, C P (2017); The Indian State Since Inde- $34/£27.95 (ebook). Benbabaali, Brendan Donegan, Jayaseelan Raj
pendence: 70 Years, Delhi: Shipra Publications; Kothari, Rita (ed) (2018); A Multilingual Nation: and Vikramaditya Thakur (2018); Ground Down
pp x + 225, `1,250/$62.50 Translation and Language Dynamic in India, by Growth: Tribe, Caste, Class and Inequality in
New Delhi: Oxford University Press; pp vii + 365, 21st Century India, New Delhi: Oxford Univer-
Fernandes, Edna (2018); The Hollow Kingdom: ISIS `1,495. sity Press; pp xviii + 281, `850.
and the CULT of JIHAD, New Delhi: Speaking
Limbale, Sharankumar and Jaydeep Sarangi (eds) Sugirtharajah, R S (2018); Jesus in Asia, Cam-
Tiger; pp 254, `499.
(2018); Dalit Voice: Literature and Revolt, New bridge: Harvard University Press; pp v + 311,
Gandhi, Mayank and Shrey Shah (2018); AAP & Delhi: Authorspress; pp 282, `1,200/$60. $29.95.
Down: An Insider’s Story of India’s Most Contro- Muller, Jerry Z (2018); The Tyranny of Metrics, The Book of Aleph (2018); Volume Seven, New
versial Party, New Delhi: Simon & Schuster Princeton and Oxford: Princeton University Delhi: Aleph Book Co.; pp 147, price not
India; pp xii + 291, `350. Press; pp 220, £19.95. indicated.

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

Challenges before the commissions to independently determine


their procedure and work plan, including

Fifteenth Finance Commission the issue of whether it should provide


any grants at all.
The theology for the provision of
revenue deficit grants is well established.
V Bhaskar Recurring revenue expenditure is not seen
as growth inducing. Revenue expenditure

T
The terms of reference of the he Fifteenth Finance Commission should therefore never exceed revenue
Fifteenth Finance Commission are (XV-FC) has been appointed with receipts. All borrowings should be de-
the terms of reference (ToR) noti- ployed exclusively for capital expendi-
significantly different from those
fied in a presidential order dated 27 No- ture to accelerate growth. States with
of earlier finance commissions. vember 2017. The ToR is significantly dif- revenue deficits should be supported to
Some of these changes are within ferent from those of earlier finance com- the extent of such deficits. This will ensure
the mandate of the Constitution. missions. We examine the issues arising that all their borrowings are exclusively
out of these changes and review the channelled towards growth-inducing
Some do not appear to be so.
challenges the XV-FC will face while ad- capital expenditure.
Others appear extraneous. Some dressing them. Prima facie, such a reference seems
appear to urge the commission Clause 3(b) of Article 280 of the Con- unimpeachable. All states have passed
to asymmetrically treat a group stitution is usually merged with part of their versions of the Fiscal Responsibility
Article 275 (1) and included in the ToR of and Budget Management (FRBM) Act,
of states. This article examines
a finance commission. The ToR s of the 2003. A cornerstone of all these FRBM
the challenges the XV-FC will face last 12 finance commissions over the acts is compliance with the golden rule:
while addressing these changes. past 60 sixty years did so. The words revenue deficit should be zero.1 There
“[state] which are in need of assistance,” should, thus, be no reason for the XV-FC
however, do not find place in the ToR of to provide revenue deficit grants at all.
the XV-FC. It is not clear why this phrase The reality is somewhat different. The
has been excluded. This can be inter- 17 states listed in Table 1 (p 40) include 11
preted as a deliberate signal to the XV-FC states that were provided revenue deficit
to provide grants to states on grounds grants by the Fourteenth Finance Com-
other than need. This exclusion meshes mission (XIV-FC). The XIV-FC projected
with two other references encountered revenue deficits for each of the years be-
subsequently in the ToR—one, relating tween 2015 and 2020 and provided gap-
to the removal of revenue deficit grants filling grants for each year. Column 3 of
to states in need, and the other, relating Table 1 gives the aggregate grant provided
to providing incentive grants to states by the XIV-FC for 2015–20 and Column 4
which may not be in need. gives the grant it projected for 2017–18.
Columns 5, 6, and 7 list the revenue defi-
Revenue Deficit Grants cits reported by the state governments in
The ToR states that the commission may their respective budget documents.
also examine if revenue deficit grants There are significant variations be-
are to be provided at all. Critics argue tween the projections for revenue deficit
that this is an unwarranted invitation to made by the XIV-FC in their report and
the XV-FC to discontinue the provision of the numbers reported by the state gov-
revenue deficit grants. They argue that ernments in their budget documents.
this inducement in the ToR can be inter- For Kerala, the XIV-FC projected an allo-
preted as mandatory rather than direc- cation of `1,529 crore as revenue deficit
The author is grateful to Indira Rajaraman for tory. Such a directive untenably inter- grant for 2017–18. In its budget for 2017–18,
her insightful comments on an earlier version feres in the working of the finance com- the Kerala government projected a reve-
of this article. mission. This intrusion can be seen to be nue deficit of `16,043 crore, more than 10
V Bhaskar (mrvbhaskar@gmail.com) was in violation of Article 280(4) of the Con- times the XIV-FC projection. West Bengal
Special Chief Secretary Finance to the stitution and Section 8 of the Finance was allocated `3,311 crore as revenue
Government of Andhra Pradesh, and Joint Commission (Miscellaneous Provisions) deficit for 2016–17 by the XIV-FC. It re-
Secretary, Thirteenth Finance Commission.
Act, 1951, both of which empower finance ported a revenue deficit of nearly three
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 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- (ii) Finance commissions face information passed its FRBM act in 2003. It subse-
tively. Mizoram was expected to require a asymmetry problem. States know more quently amended its FRBM act in 2004,
revenue deficit grant of `2,446 crore in about their finances and reveal less to 2005, 2010 (twice), and 2016. In each
2017–18. Its budget documents project it to the finance commissions. In this situa- amendment, the goal of reaching zero
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-
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

G
Maharashtra, Punjab, Rajasthan, Tamil compel the states to constrain their the year 2017–18 recognised the breach
Nadu, and Uttarakhand. These six states revenue deficits is not corroborated by and promised that necessary amendment
have been reporting significant revenue actual behaviour. States and even the in the Haryana FRBM Act, 2005 would be
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
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
PERSPECTIVES

(budget estimate or BE). FRBM acts were year, which may have gone astray. In a projections into the future. It is assumed
passed by the state governments in a multi-year tariff scenario, the tariff for that the finance commission would have
staggered manner. Between 2002 and the second year is modulated by the var- available to it reasonably credible fig-
2007, 26 states passed the FRBM act. Of iances between actual costs and reve- ures for parameters like growth, infla-
the 28 states in India then, 24 reported a nues from the projections made in the tion, and revenue for the base year and
revenue deficit in 2002–03. This number previous year, so long as they can be these figures could then be used as the
reduced to four in 2007–08, possibly justified by the distribution company. If basis for making projections for the fu-
attributable to the FRBM acts that they it cannot justify these deviations, it is ture five-year period. Table 2 shows the
legislated.7 It gradually built up to 15 in not allowed to pass them on in the form base year indicated in the ToR s of earlier
2014–15 before slightly reducing to 12 in of increased tariff to consumers. finance commissions.
2015–16, 10 in 2016–17 (revised estimates Perhaps a similar approach can be The Tenth Finance Commission (X-FC)
or RE) and eight in 2017–18 (BE). After adopted by the XV-FC for revenue deficit used 1993–94 data on revenue and ex-
2010, states8 had no fresh incentive to grants. Its projections of revenue and ex- penditure that was available to it, as a
adhere to the FRBM prescription since penditure for all state governments could basis to project revenues for 1995–2000.
they had exhausted all the debt write-off be compared to actuals the next year, and Similarly, all succeeding commissions
that came with its enactment. revenue deficit grants released only if the were asked to use a base year that was
Despite the fact that states embarked state has not veered significantly and of its before the period covered by its recom-
on a fiscal consolidation path since own volition from its commitments in the mendations. The ToR of the XV-FC re-
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
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 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

T
every year since 1990–91 (RBI 2017: follow the suggestion in the ToR and dis- starting 2020–21 and 2024–25. This is
Chart 120). Worryingly, in the recent continue the provision of revenue deficit challenging to say the least.

Z
past, states like Andhra Pradesh (since grants. The number of states reporting
2014–15), Haryana (since 2008–09), revenue deficits is increasing. The aggre- Potential and Fiscal Capacity
Himachal Pradesh (since 2012–13), Ra- gate revenue deficit for BE 2017–18 re- The ToR of the XV-FC states that for both

G
jasthan and Tamil Nadu (both since ported by the nine states in Table 1 is tax and non-tax revenues, the commis-
2013–14) have joined this club. `1,13,121 crore. The revenue deficit grant sion would also take into account the po-
Two lessons can be gleaned from the requirement could work out to more tential and fiscal capacity of the central
analysis presented so far. First, the pas-
sage of fiscal responsibility act by a state
government is not adequate comfort
A
than `6,00,000 crore during 2020–25.
This will absorb a significant portion of
the divisible pool to the detriment of the
and state governments. “Fiscal capacity”
is susceptible to multiple interpretations.
A study commissioned by the XIV-FC

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that the government will conform to it. fiscally restrained states. A case can be posits that fiscal capacity of a state is esti-
Second, the Government of India’s instru- made that due to the moral hazard faced mated by its tax to gross state domestic
ments of compellance in this regard— by states, the revenue deficit grant product (GSDP) ratio (Raychaudhuri 2013).
monitoring the release of finance com- should be discontinued. A second study10 brings the expenditure
mission grants or restricting borrowing side into the concept by defining fiscal
consent under Article 2939 to errant Base Year or Terminal Year capacity as a measure of a government’s
states have either not been applied at all, Earlier finance commissions were required ability to raise revenues for provision of
or applied only selectively so that some to assess these resources for the required services, relative to its costs of service
states were enabled to deviate from the five-year period based on the revenues responsibilities. A third study has point-
requirements of their own FRBM acts. likely to be reached during the year prior ed to the inadequacy of using revenues
to this period. This prior year is termed for measuring fiscal capacity and em-
Options before the XV-FC as the base year, and is the jumping-off phasises the need to simultaneously look
What are the options available to the year for the finance commissions to make at tax effort (Vazquez and Boex 1997).
XV-FC on the provision of revenue deficit Table 2: Base Year for Finance Commissions The XIV-FC did not compute fiscal ca-
grants? If it wants to continue on the Finance Period Base Year Indicated in pacity. Instead it used a proxy of fiscal
Commission Covered by Respective ToRs to be Used
well-trodden path and continue providing Recommendations for Projecting Revenues capacity for computing inter se state
such grants to states, it has to strengthen for Future Five-year Period shares in the horizontal devolution exer-
Tenth 1995–2000 1993–94
the credibility of its projections so that it cise. This was the difference between
Eleventh 2000–2005 1998–99
can make more accurate estimations of per capita income of a state and the state
Twelfth 2005–2010 2003–04
fiscal need. Thirteenth 2010–2015 2008–09
with the highest per capita income.
In the power sector, regulators use the Fourteenth 2015–2020 2014–15 Which approach should the XV-FC follow?
concept of a “true up” to modify the cost Fifteenth 2020–2025 2024–25 It could be argued that the XV-FC should
and revenue projections of a previous Source: Terms of Reference of Finance Commissions. scrutinise three distinct parameters.
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 41
PERSPECTIVES

First, the entire exploitable revenue base the possibilities of adopting a recidivist government and not the state govern-
of a state government to assess its potential path. ment remains unspecified.
fiscal capacity; second, the base actually Critics argue that this reference seeks
exploited to determine fiscal capacity; New India 2022 to gerrymander the XV-FC mandate. This
and third, the efficiency in exploiting this The ToR requires the XV-FC to also examine reference ostensibly enables the XV-FC
base to determine tax effort. It is debata- the impact of the “continuing imperative to underwrite the proposed central
ble whether state-level data required for of the national development program in- government schemes under Article 282
making such a comprehensive assess- cluding New India-2022” on union gov- for India 2022 rather than providing
ment is available. Such a determination ernment finances. “New India 2022” is grants directly to states under Article
will indeed be a challenge for the XV-FC an ambitious movement initiated by the 275. Though the provision of grants un-
unless it takes the path laid out by the central government. It has six components: der Article 282 is prima facie permis-
earlier commissions. (i) poverty-free India; (ii) dirt- and squal- sible,14 the finance commissions have
or-free India; (iii) corruption-free India; always been urged to confine their at-
Recommendations of the XIV-FC (iv) terrorism-free India; (v) casteism-free tention to providing grants under Arti-
The XV-FC is required11 to have regard to India; and (vi) communalism-free India.13 cle 275, rather than underwriting grants
impact on the fiscal situation of the union Each of these components has subcompo- by central/state governments under
government of the substantially enhanced nents. For example, the first compo- Article 282.
tax devolution, following the recom- nent—poverty-free India—includes nine

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mendations of the XIV-FC, while making subcomponents, including promoting Impact of GST
its recommendations. The reference to inclusive growth, doubling farmers’ in- The commission is required to examine

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the impact of the increase in devolution come, and improving health, education, the impact of goods and services tax
brought about by the XIV-FC on the fiscal and gender outcomes. (GST) on the finance of the centre and

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situation of the union appears both super- Three questions arise about the direc- the state governments. This is to include
fluous and irrelevant. The ToR already en- tion to the XV-FC to consider the impact the payment of compensations for a pos-

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joins the XV-FC to estimate the resources of New India 2022 on the finances of the sible loss of revenue for five years and
of the union government by projecting union government: the abolition of a number of cesses.
revenue and expenditure commitments (i) India 2022, as it is presently framed, The GST was introduced in July 2017

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on the basis of values reached during the appears to be a vision set against a with the express agreement that it would
base year.12 The impact of the enhanced background of sectoral aspirations. For be tailored to be revenue neutral. One of
devolution award of the XIV-FC will last achieving New India 2022, a number of the reasons for putting in place a multi-
only till the financial year ending 31 March
2020. Till that date, the devolution of
42% of the divisible pool remains an in-
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sectoral departments in both the state
and central governments will have to
implement a number of programmes.
ple number of rates, one as high as 28%,
was so that the finances of both levels of
government should not suffer. The cen-

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escapable commitment of the central gov- How these schemes/programmes will be tral GST rules and the state GST rules
ernment. No reference to it is necessary dovetailed with the existing government were subsequently amended to increase
for the XV-FC to incorporate it into its programmes in the corresponding sec- the maximum rate to 20% for each tax,
examination of the finances of the cen- tors does not appear to have been clari- an aggregate tax of 40%. This is a far cry
tral government between 2015 and 2020. fied. The additional financial commit- from the pre-GST average rate of 26.5%.15
For 2020–25, the period of consideration ment of the central and state govern- Both the centre and the state govern-
of the XV-FC, the award of the XIV-FC is ments under this programme also does ments wanted the GST to be revenue
irrelevant. The XV-FC is required to make not appear to have been firmed up. neutral and clothed themselves legally
an ab initio assessment of revenue pro- (ii) Most of these sectors are operational accordingly. Compensation required to
jections and expenditure commitments areas of the state governments rather be paid, can be met from the special
of both levels of governments for 2020– than the union government. These in- compensation cess exclusively levied to
25. Based on the surplus it determines clude agriculture, public health, hous- fund it. In this scenario, there appears to
for the union for 2020–25, it decides on ing, sanitation, and public order. Educa- be little case to ask the XV-FC to examine
the quantum of the divisible pool that tion, electricity, and forests are in the the impact of GST on the finances of the
needs to be shared with states. The 42% concurrent list, but states are respon- centre and the states.
award of the XIV-FC is not relevant to this sible for most of the expenditure in It is possible that the present scenario
exercise. The XV-FC may increase, de- these sectors. is far removed from the expected sce-
crease or maintain the devolution share (iii) New India 2022 can also be seen as a nario. It is also possible that aggregate
at 42%. Determining this is the sole priv- political commitment of the union govern- GST revenues are not reaching expecta-
ilege of the XV-FC, to be exercised after ment that will have to be implemented tions16 while the states are making sig-
its consultations and deliberations. mainly through the state governments. nificant claims for compensation. If so,
This reference is at best misplaced, Why the XV-FC should examine its im- the remedy lies in the reform of the GST
and at worst, a leading suggestion on pact on the finances of only the union structure, and not in burdening the
42 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
PERSPECTIVES

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

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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

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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

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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

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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-

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This dictate in the ToR seems inapt and tives to induce states to prioritise certain sponsibility of both the centre and the
should perhaps be ignored by the XV-FC developmental goals. Such incentives states. It is possible that in some states,
for the following reasons. can be put in place through two modes: the tax base may have been extensively
As pointed out earlier, the union has
been unable to enforce fiscal rules on the
states even when it is empowered to do
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

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

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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

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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

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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-

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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.

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75% in the second, successively stepping eligibility for incentives.
down to zero percent in the fifth year. Second, this reference will impact states Expenditure on Populist Measures
Such a provision gradually but inexo- asymmetrically. The Population Divi- The ToR presumably encourages the XV-FC,
rably built up a stake of the state govern-
ments in the success of the VAT regime.
Some state governments, seeing the
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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

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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
PERSPECTIVES

First, the definition of a populist meas- of Government of India—develop infra- enters the computation of state shares
ure may not stand the test of time. Tamil structure, improve fiscal sustainability both directly and indirectly. The XIV-FC
Nadu’s Mid-day Meal Scheme and Andhra and quality of expenditure, improve the allotted a weight of 17.5% to 1971 popu-
Pradesh’s `2 rice schemes were original- ease of doing business, improve sanitation, lation. Directly, 17.5% of a state’s share in
ly branded populist when they were first including the aim to end open defecation. the divisible pool was determined on this
introduced. Today, they have been deep- This is a smorgasbord of targets that basis. Indirectly, the 1971 population fig-
ly integrated into entitlement-based pro- the XV-FC is asked to incentivise presum- ure was also used to scale the income
grammes being implemented by the cen- ably through the use of grants under distance criterion (to which it had allotted
tral government. They are no longer Section 275 linked to the imposition of a weight of 50%). The explicit and im-
populist programmes but official policy. conditionalities. There are two challenges plicit use of population in finance com-
Second, it may be inappropriate for that the XV-FC will face here: mission computations has a marked
the XV-FC to deter populist programmes (i) To encourage the state to change effect on state shares of the devolution
introduced and implemented by a state course to “desired” directions, they must pool. To demonstrate, Table 5 lists the
government in the exercise of its sover- be incentivised by grants of significant states and the amounts they would have
eign functions. If a programme is “waste- value. The nine subsections of para- gained or lost over their presently allo-
ful” or “unnecessary,” the proper author- graph 7 of the ToR draw attention of the cated share if the XIV-FC had used 2011
ity to take deterrent action may be the XV-FC to more than nine targets. These population both in its 17.5% population
electorate, not the finance commission. goals will require substantial outlays to criterion as well as for scaling the in-
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
be earmarked as incentives to command
the commitment of state governments.

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Such large grants will cut into the fiscal
space available for rule-based devolution R 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

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regime of accountability is available within
that should be the preferred mode of been the biggest losers, along with West
the Scheme, it is not proper for the Court to
strike it down, unless it violates any consti- operation for a finance commission. Bengal, Odisha, Assam and Punjab. The

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tutional principle. (Bhim Singh v Union of (ii) The conditionalities imposed must quantum of these contingent losses for
India and Others. Para 76(3), Supreme Court be achievable. Only then will states be 2015–20 are significant. The five biggest
of India (2010), INSC 358, 6 May 2010) able to reach the goals and draw down potential gainers, Uttar Pradesh, Bihar,

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The judgment of the United States their incentives. The Thirteenth Finance Rajasthan, Madhya Pradesh, and J&K ac-
Supreme Court on the Affordable Care Commission (XIII-FC) had provided a count for 90% of the total gains. The above
Act (Obamacare) is also relevant: water sector grant to all states. It re- list of contingent losers and gainers for
We do not consider whether the Act embodies
sound policies. That judgment is entrusted to
the Nation’s elected leaders. We ask only
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quired, amongst other conditions, that
states successively increase their recovery
rates for irrigation. Few states drew
2015–20 will possibly become the actual
list of losers and winners for 2020–25 with
the XV-FC having been explicitly mandated

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whether Congress has the power under the
down this grant. The political cost of to use the 2011 population figures.
Constitution to enact the challenged provi-
sions. Members of this Court are vested with increasing water recovery charges evi- The direction to the XV-FC to use the
the authority to interpret the law; we possess dently exceeded the financial benefit of 2011 population figures is not appropri-
neither the expertise nor the prerogative to receiving the grant. The challenge before ate for three reasons.
make policy judgments. Those decisions are the XV-FC is not to overestimate both the First, over the last four decades, the 1971
entrusted to our Nation’s elected leaders,
who can be thrown out of office if the people capacity and willingness of the state population has been used as a criterion
disagree with them. It is not our job to pro- governments to undertake reform while for determining the states’ share of the
tect the people from the consequences of proving sufficiently significant incentives divisible pool by successive finance com-
their political choices. (US 576 2012: 6) to induce them to reform. missions even though subsequent census
Two supreme courts have given clear figures were available to it. The direction
and unambiguous findings about the Census 2011 for Computations to the XV-FC to use the 2011 Census figures
legality of the so-called populist schemes. The use of population figures from 2011 militates against the Revised Policy State-
The XV-FC also may need to evaluate masks a paradigm shift in the determina- ment on the Family Welfare Programme
whether it is its job to protect people from tion of the shares of states in the devolved placed before Parliament in June 1977,
the consequences of their political choices. pool of taxes. Over the last 40 years, start- which guaranteed that the 1971 popula-
It may therefore find it difficult to deter ing from the Seventh Finance Commission tion figures will be used as the parameter
states from embarking on such schemes till the XIV-FC, eight finance commissions for computing state devolution shares.
despite the exhortation to do so in its ToR. have been mandated to use the 1971 popu- This assurance was confirmed by the
lation for the purpose of computing state National Development Council (NDC) in
Additional Matters shares (Bhaskar and Subrahmanyam 2014). its meeting in 1979 and reiterated in the
The ToR encourages the XV-FC to incen- Population is an important criterion National Population Policy in 2000.
tivise state governments to accelerate that significantly affects a state’s share The drastic change in population base
implementation of the flagship schemes of the devolution pool. This is because it from 1971 to 2011 proposed in the ToR
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 45
PERSPECTIVES

should have been made after consulta- of CGST compensation (Bhaskar 2017), fiscal deficit “authorised” by the finance
commission and revenue deficit has not been a
tion with the NDC or at least the NITI and now the unilateral adoption of the factor in determining consent at all. The Gov-
Aayog, which has accepted cooperative 2011 population figures may further di- ernment of India may not have so far imposed
zero revenue deficit as a condition, but given its
federalism as one of its operational tenets. lute this trust. powers under Article 293(3), nothing prevented
One of the basic canons of cooperative The XV-FC may therefore need to care- it from doing so.
federalism is the need for all federating fully craft its approach while providing 10 www1.worldbank.org/publicsector/decentral-
ization/fiscal%20capacity.doc.
members to provide credible commit- adequate ballast to this ToR. 11 The word “shall” is used in para 6(1) of the ToR.
ments to each other. This change belies 12 The reference here to the base year points to
Conclusions the use of 2018–19 and not 2024–25 as men-
the commitment given by the centre to tioned in the ToR.
the states in 1977, 1979, and 2000 and The ToR of the XV-FC is significantly dif- 13 http://niti.gov.in/content/vice-chairmans-pres-
weakens its capacity to make credible ferent from those of earlier finance com- entation-new-india-2022.
14 Bhim Singh v Union of India and Others. Para
commitments in future. missions. Some of these changes are 76(3), Supreme Court of India (2010), INSC 358,
Second, income distance has been used within the mandate of the Constitution. 6 May 2010.
15 The sum of standard rate of state value added
as a criterion for horizontal devolution Some do not appear to be so. Others ap-
tax at 14.5% and central excise rate at 12% is
over the last seven finance commissions. pear extraneous. Some appear to urge 26.5%. The maximum rate of 40% has not yet
The XV-FC may find it difficult to discard the commission to asymmetrically treat been levied, but the GST Council has now been
empowered to do so.
or substantially modify this criterion. a group of states. The XV-FC needs to take 16 http://pib.nic.in/newsite/PrintRelease.aspx?
This criterion represents the commission’s a considered view on how it will approach relid=173899. The press release dated 27 No-

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vember 2017 notes a downward trend in GST
attempt to ensure states have the fiscal its work. The chairperson of the Fourth revenue over the five months since its imple-
capacity to provide comparable levels of Finance Commission, P V Rajamannar in mentation.

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public services to their residents at com- his minute attached to the report stated: 17 Telangana has reportedly achieved a tax
collection growth rate of 26.69% in November
parable levels of taxation. This parame- In respect of such an important matter as 2017 compared to November 2016 (Times of

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ter provides greater weightage to poorer India 2017).
the determination of resources which will be 18 Ignoring Jammu and Kashmir.
states depending upon the distance of available to each state as a result of a scheme 19 A formal consultation would imply seeking

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their per capita GSDP from that of a rich of devolution, there should not be a gamble views on specific issues like the use of the 2011
on the personal view of five persons, or a ma- population. This is in contrast to a general re-
state (Haryana in the case of the XIV-FC). quest made by the centre to the state govern-
jority of them. (Minutes by P V Rajamannar,
Placing high importance on equity, the ments seeking suggestions on the ToR. This is a

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Report of the Fourth Finance Commission routine exercise initiated before every new fi-
XIV-FC provided a weightage of 50% to 1965: 93) nance commission is constituted.
the income distance criterion.
If the 2011 population had been used All the previous finance commissions

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References
for computations, the five states of Uttar have belied his apprehensions, and one Bhaskar, V (2013): “Issues before the Fourteenth
Pradesh, Bihar, Madhya Pradesh, West can confidently say, so will the XV-FC. Finance Commission,” Economic & Political
Weekly, Vol 48, No 17, pp 31–36.
Bengal, and Rajasthan would have an

M
— (2017): “Goods and Service Tax: A Saga of Co-
aggregate weightage of 32.48% out of the Notes operative and Contesting Fiscal Federalism,”
50% weight accorded to income distance Aarthika Charche. FPI Journal of Economics and
1 Some states like Tamil Nadu have additionally
Governance, Vol 2, No 1.
to all the 29 states. Thus, nearly 65% of defined this requirement in terms of limiting
the ratio of revenue deficit to revenue receipts. Bhaskar, V and P S Subrahmanyam (2014): “Popu-
the income distance criterion would lation as a Criterion for Horizontal Devolution
2 Excluding Uttarakhand, which projected a by the 14th Finance Commission,” Economic &
have been pre-empted by these five small surplus for 2017–18. Political Weekly, Vol 49, No 5, pp 20–23.
states. While it is not this author’s case 3 It is not to make a case to say that only the pro- CAG (2017): Report of the Comptroller and Auditor
jections of the XIV-FC went awry. It occurred General of India on Compliance of the Fiscal Re-
that the income distance criterion with respect to previous finance commissions sponsibility and Budgetary Management Act,
should not be utilised, the use of the as well. See, Bhaskar (2013). 2003 for the Year 2015–16, Comptroller and Au-
4 Uncertainty includes additional welfare pro- ditor General of India.
1971 population would have moderated grammes implemented in future, like loan Finance Commission (2014): Report of the Four-
the impact of this double whammy on waiver or imposition of prohibition. teenth Finance Commission, December.
the “non-poor” states. 5 This is true of the centre as well. The Comptrol- Raychaudhuri, Ajitava (2013): “Estimating True
ler and Auditor General reported that effective Fiscal Capacity of States and Devising a Suita-
Third, as noted in Bhaskar (2017), revenue deficit targets and fiscal deficit targets ble Rule for Granting Debt Relief based on Op-
trust between the federating members is were deferred by the government in Union timal Growth Requirement,” Report prepared
Budget 2016–17 and 2017–18 without corre- for the Fourteenth Finance Commission.
another essential component of a vibrant sponding amendments to the act. See, CAG RBI (2017): Handbook of Statistics on Indian States,
federation. Trust endures when changes (2017). Reserve Bank of India.
from the norm are discussed between 6 http://web1.hry.nic.in/budget/frbm.pdf. Times of India (2017): “Telangana Beats GST Glitch
7 Or more likely, the powerful incentive that the Blues, State Coffers Brim Over,” 24 December.
federating members in advance, and the XII-FC provided to states that legislated and US 567 (2012): Opinion of Roberts C J, 567 US, htt-
approach to be adopted is agreed upon complied with the FRBM act—the write-off of ps://www.scribd.com/document/98542275/
their loans from the centre. Scotus-opinion#download&from_embed.
if not unanimously, then at least by ma-
8 Except Sikkim and West Bengal, which passed Vazquez, J M and L F J Boex (1997): “Fiscal Capacity:
jority. This does not appear to have been their FRBM acts in 2010 responding to incen- An Overview of the Concepts and Measure-
done while preparing the ToR of the tives offered by the XIII-FC. ment Issues and Their Applicability in the
9 It can be argued that grant of consent under Russian Federation,” Working Paper 97-3, Andrew
XV-FC.19 The centre has already belied the Article 293 has so far been linked only to state Young School of Policy Studies, Georgia State
trust of the state governments in the case governments remaining within the permissible University.

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

Emerging Politics of Accountability


Institutional Progression of the Right to Information Act

Himanshu Jha

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The implementation of the Right to Information Act, ntil 2005, governance processes in India were shrouded
2005 in Bihar is studied to examine the progression and in secrecy, a throwback to colonial times, and author-
ised by the Official Secrets Act, 1923, the Central Civil
deepening of institutional change. The institutional
Services (Conduct) Rules, 1964, and Sections 1, 2, and 3 of the
progression is inextricably linked to change in the Indian Evidence Act, 1872. The Right to Information (RTI) Act,
political regime and the resultant shifts in policy promulgated in 2005, provides Indian citizens a legal regime
priorities. The RTI Act has opened up a new space for for accessing government information. It represents institu-
tional change on three counts. First, it signifies a rearrange-
accountability between state and society, its use is often
ment in norms. Second, the RTI Act marks a complete depar-
linked to local politics, and a new form of elite agency ture from the previous regime, which was “locked in” (Pierson
has emerged, whose practitioners this article categorises 2000) at the systemic level and institutionalised through acts
as “agents of accountability.” These agents are different that perpetuated the norm of secrecy. Third, the RTI Act, an
act promulgated by Parliament, is justiciable, and the judiciary
from the category of elite agency discussed in scholarly
has interpreted the “right to know” as a fundamental right.
literature, such as the “expansive elite,” pyraveekars, But, has this institutional change in legal norms resulted in
gaon ka neta, “political fixers,” or naya netas. 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
Himanshu Jha (himanshujha@yahoo.com.au) is at the Department of the RTI Act’s implementation in Bihar.1 Bihar is a puzzle. On
Political Science, South Asia Institute, Heidelberg University, Germany.
the one hand, it is regarded as chronically backward in terms
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 47
SPECIAL ARTICLE
Figure 1: RTI Continuum facilitated the weakening of administrative institutions and
Information-givers Information-seekers public services to strengthen their rhetoric of oppressed back-
Public Authorities (Citizens)
Space for Accountability ward castes versus the dominant castes (Mathew and Moore
2011: 19–21). Due to this, a significant share of the funds allot-
of socio-economic indicators, and also as a place where caste ted for development programmes were underutilised in Bihar
divides run deep. The puzzle deepens when one considers from 1990 to 2005 (World Bank 2005). In contrast, the newly
Bihar’s reputation for bad governance: it is believed that the elected NDA government, led by an alliance between the JD(U)
state is run by a corrupt nexus of bureaucrats, contractors, and BJP, saw a political shift in Bihar in 2005. The new leader-
middlemen, and sociopolitically dominant groups. To be sure, ship was convinced that good governance is good politics. In
free flow of state information in the public domain through RTI the words of the newly elected chief minister in 2005,
will expose this nexus and will work against their interests. There is a reason why I emphasized governance as my first, second
Yet, the engagement of citizens with RTI in the state is and third priorities. Bihar that we inherited in 2005 was not afflicted
substantial and its use is one of the highest in the country. The by bad governance; it was afflicted by absence of governance. (Govern-
ance Now 2010)5
extensive use of RTI points towards high levels of sociopolitical
consciousness in a chronically backward state. Consider the The new regime focused on four core areas. First, it aimed
number of RTI applications received by the state information to strengthen its relationship with the administration.6
commissions (SICs) for top five states in 2011–12. The Bihar Second, it adopted legal and institutional measures such as
State Information Commission received 1,29,807 RTI applica- fast track courts and created the Bihar state auxiliary police to
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

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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

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What explains the extensive use of RTI in Bihar? And, why the public grievance cell were implemented to establish a
and how is RTI used to challenge the corrupt nexus? Bihar pre- direct connection with the people.8

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sents us with what is called a “tough case” (King et al 1994) or The enactment of the RTI Act in October 2005 coincided with
a “least likely case” (Eckstein 1975), where we would expect the swearing in of the JD(U) government in November 2005.
less RTI in a socially and economically backward state. To un- The chief minister took an acute interest in the implementa-

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ravel this puzzle and with the aim of studying these patterns tion of RTI Act, and the new governance framework was conse-
in RTI engagement on the ground, I undertook fieldwork in quential in shaping three RTI-related processes. First, it

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two phases in 2014 and 2015. In the first phase, I visited Patna, prompted innovations in the state to process RTI applications
the capital of Bihar, to examine the macro-patterns of RTI more efficiently. Second, it created an incentive structure for
implementation and its use. In the second phase, I examined the implementers. And, third, the incentives empowered insti-
the patterns in districts and blocks.4 tutions such as the SICs. Notably, we find that RTI implementa-

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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.
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
Political and Policy Shifts known as Jankari (literally translates to information), an
I will start by discussing the supply side of the RTI regime in information and communication technology (ICT)-enabled
this section. A shift in the political leadership resulted in a governance innovation through which people from any part of
change in the governance agenda, which, I argue, is directly Bihar can file an RTI application by placing a call to the call
linked to the evolving RTI regime in the state. To put this centre. As a bulk of the population in Bihar resides in rural
argument in perspective, it is pertinent to examine the politi- areas and is not highly literate, the call centre made it easy for
cal and policy shifts that have occurred in Bihar since 2005. citizens to file applications.
The Janata Dal (United)—JD(U), in alliance with the Bharatiya The then principal secretary of the chief minister was put in
Janata Party (BJP) (as the National Democratic Alliance charge of setting up the call centre. The chief minister in con-
[NDA]), won the 2005 assembly elections in Bihar. Nitish Kumar sultation with his principal secretary, Chanchal Kumar, decid-
became the new chief minister of Bihar, ousting the previous ed to expand the scope and mandate of the existing public
chief minister, Lalu Prasad Yadav, representing the Rashtriya grievance cell to include RTI within its ambit. Under the pub-
Janata Dal (RJD). lic–private partnership (PPP) model, the state invited tenders
Though the RJD regime (1990–2004) resulted in the from state neutral agencies to operationalise the call centre.
empowerment of backward castes, it sacrificed development The Bharat Sanchar Nigam Limited (BSNL) was involved as a
for caste politics. Additionally, it is argued that the leadership telecom provider and the Bihar State Electronics Development
48 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
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Corporation (Beltron) was entrusted with the responsibility of information. Additionally, several cases of alleged corruption
organising all the hardware and software components.9 The in flagship development programmes like the Indira Awaas
state RTI rules were amended to accommodate this arrangement Yojana (IAY) and Mahatma Gandhi National Rural Employment
by levelling fees for both the first and the second appeals to `10. Guarantee Scheme (MGNREGS) were brought to the notice of
Two numbers—155311 to register an RTI application and 155310 the SIC through RTI applications, and the SIC used its quasi-
as a helpline—were widely publicised in the public domain. judicial power to direct officials to investigate them.
Like Jankari, similar governance innovations related to RTI However, a shift in policy and political priorities had a direct
were undertaken by the SIC. For instance, a helpline dedicated impact on institutional progression from 2012 onwards. It can
to receiving complaints about the harassment of RTI applicants be argued that during the latter half of his second term (starting
was set up in 2009. Along with the helpline, Phase II of Jankari from 2012), Nitish Kumar was experiencing political turmoil,
was launched, which enabled citizens to file RTI applications and his politics overshadowed his governance initiatives and
through email. Yet another innovation in July 2011 was the policy priorities. As a result, the state experienced lethargic
establishing of a video conferencing facility in the SIC, Patna. political leadership, which had an impact on RTI implementation.
This is made evident through the decline in the number of calls
RTI and the Bureaucracy received by Jankari, from 31,389 in 2010 to 12,880 in 2013.
Did the top-down policy innovations percolate to other admin- Moreover, during my visit to Patna in March 2014, the call cen-
istrative departments? To examine this, I visited government tre had been relegated to an inconspicuous place behind the
departments in Patna. Interviews in these departments revealed chief minister’s secretariat and had only six employees at the
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

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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

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monthly review meetings. Information that was frequently emanated at the level of the political leadership. However, RTI
requested through RTIs was made available on the website. posed a challenge for both the permanent and the political

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According to the principal secretary, rural development, executive, and its use has put considerable pressure on the
“there is no impediment to innovation, a supportive leadership administration. This can be seen in the amendment of state
gets the system implemented.”10 RTI rules in 2009, where the structure of fees for RTI was

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Administrative innovations were introduced in districts as amended to `10 per question, instead of `10 per application.
well. In the Darbhanga Collectorate, I came across an innova- Moreover, it was made mandatory for the applicant to attach a

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tive mechanism named Lok Suchna Prashakha or Public self-addressed stamped envelope. An amendment also proposed
Information Branch.11 The branch, set up in 2007, serves as a that those from the below poverty line (BPL) category could get
single point of contact for RTI users, and makes sure that the copies of documents free up to 10 pages, beyond which they
RTI applications have been filled out correctly. To educate would be charged for the photocopying. It can be surmised

ween 2008 and 2009.12

Incentive Structure within Administration


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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-
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-
Emerging policy priorities and innovations also created an ministration to the chief minister.
incentive structure. For instance, in 2009, during the launch The conflict between the norm of secrecy and the new
of the RTI helpline and Jankari II, nine public information regime has created layers of ambivalence within the adminis-
officers (PIOs) were publicly felicitated by the chief minister for tration, which give an impression of a state that is Janus-faced.
their RTI work. Additionally, the principal secretary to the While the block development officer (BDO) of Baheri block in
chief minister was presented with a special award for his Darbhanga raised his doubts about the capacity of the staff to
efforts in organising the Jankari call centre and the RTI deal with RTI applications,15 the deputy collector in charge of
helpline. On the other hand, erring officials who denied or the Public Information Branch, Darbhanga, raised his doubts
delayed information were penalised. regarding the existence of this branch itself:
The incentive structure galvanised RTI-related institutions, He [RTI applicant] can come and just drop his application here and he
such as the SIC, and empowered them. Provisions to initiate in- knows we will forward [it further]. To go to a particular block for in-
quiries, which were inherent in Section 18 of the RTI Act, empow- stance he has to make an extra effort. You can call this facilitation right
ered the SIC further. For example, in 2007, 262 government of- and at the same time also wrong. [emphasis mine]
ficials were booked for not providing information (Pioneer Information is still considered a privilege by the state admi-
2008). Even higher officials were not spared. For instance, in nistration, and one comes across bizarre incidents of alleged
April 2007, a deputy secretary and an undersecretary from the denial of information. In one such instance, in 2009, a farmer
Department of Agriculture were fined for not providing who had filed an application asking about the distribution of
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 49
SPECIAL ARTICLE

kerosene through RTI was asked to pay `1 crore to get the These users are technical experts on legal provisions, and seek
relevant documents, towards the cost of photocopying, etc. information regularly from public authorities on a range of
This reluctance demonstrates that institutional changes have issues. The quantum of RTI applications filed by this category
only partially resulted in institutional progression in terms of is large compared to that of one-off users or organisational
norms at the informal level.16 users.18 The core’s RTI use has resulted in the emergence of a
category of “accountability”-seeking intermediaries who I call
New Space for Accountability “agents of accountability” (popularly known as RTI activists).
A tumultuous narrative emerges between the supply (informa- Scholars have identified the role of elite agency in the local
tion-givers) and the demand side (information-seekers). The politics. For instance, Rosenthal (1977) has discussed the role
PIOs in the state capital, and at the district and the block levels, of “expansive elite,” who have used the political and institu-
questioned the motives of information-seekers, especially tional opportunity structures to their own advantage. In a
those who habitually seek information from public authorities. similar vein, Subrata Kumar Mitra (1991), in his seminal study
According to them, a new category of “middlemen” or “contra- of Gujarat and Odisha, shows a significant role of local village
ctors” use RTI as a tool to “blackmail,” “extort money,” or “set- leaders situated at a critical “interface of modern state and
tle personal scores” in cases of disputes. “Frivolous and vague traditional society” in what he terms as the gaon ka neta
applications” and “additional workload” were also thought to (village leader). These netas are usually the local elite who en-
be hurdles in the operationalisation of the law. gage with the state through various forms of protest and par-
The views of the administration are symptomatic of the ticipation, such as “brokers in national, regional and local elec-
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

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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,

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of the RTI regime. the state widens its social base, which in turn provides legiti-
macy to the state and its policy actions. Anirudh Krishna

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Agents of Accountability (2006) has identified an emerging category of village-level
Who are these “habitual” users of RTI, whom the administra- leaders termed as naya netas (new leaders), who act as media-
tion views so unfavourably? Is the motive in reality blackmail tors between the villagers, the politicians, and the bureaucra-

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or troubling officials? Are they really contractors or middle- cy. Villagers rely upon these netas “for diverse purposes re-
men? I probed these issues further and systematically tried to quiring mediation with the state” (Krishna 2006: 143). Yet an-

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unravel the categories of users. On the basis of my field visit to other category of local agency is the intermediaries at the local
the district and blocks of Darbhanga and Supaul, I identified level who operate as “political fixers” (Manor 2000) or local
the following three categories of information-seekers. pyraveekars (Reddy and Hargopal 1985).
The agents of accountability introduced in this article are

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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-
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-
puller from Machdi village in Jhanjharpur district used RTI to ability from the state. By seeking accountability, the agents of
get the benefits to which he was entitled (as an unintended accountability often question the state. Further, I have identi-
outcome of his RTI query).17 It has also been used to draw fied two sub-types to this category: Type A (Non-political), and
attention to decisions made in panchayats and irregularities in Type B (Political).
the implementation of development programmes.
Type A: Non-political
Institutional users: The second category is the institutional RTI applications from this category primarily seek information
users of RTI, such as non-governmental organisations (NGOs) or regarding the local development programmes, to stop mal-
research organisations that seek information on specific issues practices and corruption at the local level. This category has
and schemes. For example, an NGO working on water conserva- the following three characteristics: (i) a large volume of RTI
tion in the district of Darbhanga uses RTI regularly to get informa- applications are filed by these activists, which puts a constant
tion on water issues. Similarly, another NGO working on the Kosi pressure on public authorities; (ii) their RTI applications are
river project seeks information from the government regularly related to multiple issues, in the larger public interest;
regarding budgetary allocations, expenditure, and progress made. (iii) as a result of their technical knowledge regarding the RTI
law and also their familiarity with government departments,
Core users: The third category of users, I term as the “core” of the activists provide advice and guidance to people on filing
the RTI regime. This category engages regularly with the law. RTI applications.
50 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
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Almost every district in Bihar has this kind of information- development projects related to the block; (ii) he uses RTI as a
seekers who act as “whistle-blowers” and have exposed scams tool to rattle his political competition; (iii) he establishes his
and irregularities in the locality. For instance, Nand Kishore power within the local administration through RTI applica-
Sharma of Kakarhat panchayat in Saran district exposed tions, which furthers his political ambitions.
financial irregularities in the installation of solar lights under A closer examination of Singh’s RTI applications demonstrates
the Akshay Urja Scheme. Similarly, in Khagaria district, an RTI that he has sought information about specific panchayat offic-
application by Amit Kumar revealed that the village mukhiya ers. In one of the applications, for example, he has sought
(village head) was installing substandard batteries and solar details about how a panchayat secretary had got his job and
lights, and embezzling the funds. Similar RTI applications about irregularities during the official’s tenure.25 In another
were filed all over Bihar, exposing a scam of over `2,600 crore, RTI application, Singh sought specific and rather personal
where substandard batteries and solar panels were installed, information such as the property details and income of the
instead of government-approved components, without due mukhiya of Metuniya panchayat (SIC, Bihar).
diligence by inviting tenders for such a purchase. RTIs revealed We find yet another variant of the politics–RTI interface in
that the solar lights had stopped working a few months after Darbhanga district. Umadhar Prasad Singh was a politician
the installation (Hindu 2014).19 Subsequently, in 2014, a peti- and activist who regularly used RTI to raise public issues.26
tion was filed by a group of RTI activists in the Patna High Umadhar Singh was the sitting MLA of the Bihar assembly, who
Court against the corrupt nexus of mukhiyas and bureaucrats had thrice represented the Hayaghat constituency in Darbhanga
(Nagrik Adhikar Manch v State of Bihar and Ors 2016). district. Previously, Singh had been closely associated with the
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

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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

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(BRIM)20 and Nagrik Adhikar Manch (Citizens Rights Platform).21 development programmes, and agriculture. Umadhar’s case
Apart from addressing the harassment and murder of RTI activ- reveals the use of RTI as a tool to achieve social good by expos-

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ists, this platform also investigates the corruption revealed ing corruption, irregularities, and anomalies in development
through RTIs. work at the grass-roots level.
Another variety of the “political” users stands out on at least

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Type B: Political three counts. First, these RTI users harbour a profound desire
This category uses RTI extensively to further social and politi- to establish an NGO or become civil society leaders. Second,

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cal activities, and primarily to do social and public good. RTI is from interviews, I deduced that their RTI Act activity was often
also used by this category to exert power over the local admin- motivated by the desire to establish their varchaswa or visibili-
istration and increase one’s social and political presence. This ty in the locality. Third, their regular use of RTI enhances their
second subtype of the core has the following characteristics: ability to access the local administration. In addition, this cat-

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(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;
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.
(iv) these RTI users engage in RTI activity to establish connections For example, let us consider Ashok Singh,27 a lawyer who
with the administration due to their abundant RTI use, and to practises in the local court. Before his legal practice, he had
enhance their local presence socially and politically. spent time in Delhi and had tried his luck in journalism. Singh
Take, for instance, the case of Premnath Singh, whose name was keen to start an organisation that would work on local
invariably came up (always in a negative light) in relation to governance issues. He has played an instrumental role in
RTI. According to an official estimate, almost 75% of RTI appli- mobilising groups around RTI to seek accountability and trans-
cations at Baheri block in Darbhanga district were filed by parency from the local administration and, in turn, he has
Singh. His name was also mentioned at the district level, as a boosted his own local visibility. Similarly, in Supaul district, I
“habitual” information-seeker.22 It was clear that Premnath interviewed Durga Prasad Choudhary, who owns an atta
Singh is a politically active individual and harbours political chakki (flour mill) in Raghopur block,28 and, before settling
ambitions.23 He is affiliated to the Congress party formally, down in his native village, had spent a few years in Delhi help-
and was president of the Prakhand Congress Committee. I ing his uncle, an electrician. He has filed several RTI applica-
could not detect any monetary vested interests, but he himself tions on issues that are both local and national.
admitted that he has helped people in the block through the The extensive use of RTI by these users enables them to put
use of RTI, which in turn has helped him build his political pressure on the local administration and also helps them
base.24 Singh’s engagement with RTI is threefold: (i) he uses establish linkages within the administration at the local level.
RTI to build his political base by seeking accountability in Due to the corruption and anomalies exposed through RTI in
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 51
SPECIAL ARTICLE

the local development work, their social power also potentially 2000, while backward-caste representation increased from
increases manifold. 24.2% in 1967 to 36.4% in 2000. The political ascendancy of
Three significant points emerge from the use of RTI by both backward castes reached its zenith in the 1995 elections with
the categories discussed above. First, RTI has opened up a new 45% members of the legislative assembly belonging to the
space for accountability between the state and society. If inno- backward caste and only 17.1% were from the upper castes
vations in the administration facilitate the RTI regime and its (Kumar 2004: 266).
use at one end, the involvement of information-seekers stren- This is true of village politics in Bihar as well. Formerly
gthens the RTI at the other end. Second, an RTI application filed dominant social groups belonging to the upper castes have
in one district sparked a chain of RTI applications across districts, given way to new dominant groups belonging to the backward
revealing a statewide nexus of information-seekers who are castes. Power equations have changed as the emergent groups
connected to each other, as can be seen in the case of the solar have found not only political power, but economic power as
light scam. This is evident from the self-organisation of RTI acti- well, for landownership has changed hands from the upper
vists, who have come together to form informal platforms. Third, castes to the lower castes. This has created pulls and pressures
the use of RTI by agents of accountability created “trigger points” in villages, and RTI has become a tool in this power struggle.
within the state. The SIC’s instructions to the district magis- Analysis of solved RTI applications from the districts of
trates to form enquiry committees at the district level were trig- Darbhanga and Supaul corroborates this trend. In Darbhanga,
gered by RTI applications from this category of information- 52% of information-seekers and 42% in Supaul belong to the
seekers. In a sense, concerted RTI use by information-seekers upper castes. In Darbhanga, 19% of RTI applications were filed
puts pressure on information-givers, deepening the RTI regime
further. In this case, state and society constitute each other.

The Varchaswa Factor

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

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I argue that RTI use has led to a new form of politics, which I In the above context I will examine the cases of two villages,
term as “accountability politics.” Francine Frankel (1989: 2) Ujan and Nanour.

Z
defines dominance as the “exercise of authority” by the social
groups to achieve “politico-economic superiority,” or new Ujan
forms of social domination by closely aligning with the state Ujan village is located in Manigacchi block, Darbhanga dis-

G
(Rao 1989: 39–41). The politics of accountability has led to the trict.30 Traditionally, as it holds true for this area, the village
new pattern of social and political domination, which does not has been a stronghold of the Shrotriya Brahmins, or the upper-

A
engage with the state but questions and seeks accountability most category of Brahmins. Interestingly, the power struggle in
from the state. I propose that the political shift that took place this region has been historically both “intra” and “inter” caste.
in Bihar historically lead to the emergence of new forms of so- Over the years, land has been transferred on a large scale to
cial and political power. This is made evident through the use other categories of Brahmins, locally termed as “lower Brah-

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.
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.
The caste dimensions of RTI applications have not been Elections to the village panchayat were held every five years
examined in other studies on RTI implementation. However, and were the main fulcrum around which this socio-economic
caste is an important variable in a state where caste divides and political dynamics was organised. The ascendancy of new
run deep, especially in rural areas. One striking feature that caste groups in terms of land and power resulted in a power
surfaced in villages is the close intertwining of RTI with local struggle in villages as traditional strongholds did not easily
politics and actors. Varchaswa is often a factor that emerges as accept the newly ascendant caste groups. In Ujan, the last two
a result of this close intertwining. Displaced castes who were decades have seen alternations in power between the Brahmins
previously socially and politically dominant have found in RTI and the OBCs, but the OBC candidate has been in power for the
a tool to reclaim their power. Seeking accountability is often a last decade. In retaliation, the Brahmin candidate (or his group)
proxy for their assertion of power at the social, political, and has filed a series of RTI applications against the OBC mukhiya.
the administrative levels. The case of Ujan demonstrates that opposition politics is an
A long history of the socialist movement in the state and the instrumental driver of RTI and the new accountability regime.
political establishment’s focus on the empowerment of the During my field trips in Bihar’s villages, this phenomenon was
backward castes has challenged, and to some extent changed, the repeatedly mentioned, often clearly and at times tangentially.
sociopolitical equilibrium. This is evident in the caste repre- While it is true that RTI is being used as a tool in local politics,
sentation in the Bihar legislative assembly over the years. Upper- it has in general enhanced awareness and acts as an empower-
caste representation declined from 41.8% in 1967 to 29.9% by ing tool to question authorities and to ensure transparency
52 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
SPECIAL ARTICLE

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

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

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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

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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.

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The mukhiya had been the elected representative for the A new variant of local politics has emerged in the form of
last decade and wielded considerable social and political power. accountability politics. Findings from the field study show that
The RTI filed by Shahbuddin, and the resulting investigation, formerly powerful social groups use RTI applications to seek
challenged the mukhiya’s power. In a sense, Shahbuddin’s use 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
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.
her decisions.” Shahbuddin recounts that the subsequent BDOs However, the institutional progression is partial and still
received him with much mann-samman or respect. Nanour is evolving. The culture of secrecy still prevails within the local
an example of how RTI is used as a tool to gain power in local bureaucracy, and is evident in their hesitancy to share infor-
politics and enhance one’s local visibility and identity. mation. Information-seekers are regarded unfavourably, and
the RTI Act is seen as only adding to their workload. Indeed,
Conclusions scepticism regarding the RTI Act’s potential to deepen democ-
This article shows that the institutional progression of the RTI racy and development still persists, more than a decade after
regime in Bihar is inextricably linked to the governance agenda its promulgation.

notes caused a change in the related “informal 2 The Bihar State Information Commission has
1 The act was passed centrally at the union gov- norms.” I examine the implementation of the published annual reports only until 2011–12. I
ernment level, but its power extends to both RTI Act at two levels. One level is the change in have used the latest published figures (2011–12).
central and state public authorities. State gov- bureaucratic behaviour and attitude towards 3 Annual reports of state information commis-
ernments need to actualise the act and enact sharing official information. The second level sions (SICs) of various states, 2012. Also, see
their own statutory rules to provide implemen- concerns RTI users, of whom I ask the follow- CHRI (2013).
tation architecture. This necessitates both hor- ing questions: Who are the users? Why do they 4 To do so, I selected Darbhanga and Supaul, two
izontal and vertical implementation of the law. use it? What is the nature of RTI use? The two districts in north Bihar, for their similarities
The sub-national level probe would reveal levels would tell us about the RTI regime and and dissimilarities. The districts are of the
whether the change in “formal norms” has about the givers and seekers of information. 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, 17 Interview with Mazloom Nadaf, Machdi, Jhan- Eckstein, Harry (1975): “Case Study and Theory in
and have a similar literacy level. However, jarpur Block, December 2014. Political Science,” The Handbook of Political
Darbhanga is more prosperous, has better 18 The negative image of the RTI users within the Science, F I Greenstein (ed), Reading: Addison-
health indicators and a rich history of social administration was specifically directed towards Wesley, pp 79–138.
and political movements, and receives more this category of RTI users. Frankel, Francine (1989): “Introduction,” Dominance
RTI applications than Supaul. I visited these 19 Interview with Shiv Prakash Rai (Nagrik Adhikar and State Power in Modern India: Decline of
districts in 2014. I conducted open-ended inter- Manch), RTI activist, Patna, Bihar, March 2014. Social Order, Francine R Frankel and M S A Rao
views with bureaucrats, RTI users, serving and 20 Parveen Amanullah, who had filed approxi- (eds), Vol I, India: Oxford University Press.
non-serving state information commissioners mately 600 applications between 2007 and Governance Now (2010): “Panel 1: Inclusion: The Pro-
in Patna, and public information officers in the 2010, provided the leadership for this platform, gress and Challenges for Bihar,” http://event.
two selected districts, blocks, and villages. which had members from all over Bihar. governancenow.com/panel1.php.
5 In 2010, during his second term, the political in- 21 Interview with Shiv Prakash Rai, Patna, Bihar, Hindu (2014): “Many Heads to Set Roll in Bihar
tention and policy priorities of the government in February 2014. Solar Light Scam,” 31 October.
were reiterated by laying out a detailed pro- 22 Visits to Baheri block, Darbhanga district, King, Gary, Robert O Keohane and Sidney Verba
gramme on governance (sushasan, in Hindi) pub- December 2014 and January 2015. (1994): Designing Social Inquiry: Scientific
lished in the Bihar Gazette on 16 December 2010. 23 Interview with Premnath Singh, Baheri block, Inference in Qualitative Research, New Jersey:
Also see Mukherji and Mukerji (2015: 206–07). Darbhanga district, Bihar, January 2015. Princeton University Press.
6 Nitish Kumar handpicked some of his close as- 24 For example, the information he procured Krishna, Anirudh (2006): “Politics in the Middle:
sociates, such as the 1975 batch India Adminis- through RTI revealed corruption regarding the Mediating Relationships between the Citizens
trative Services (IAS) officer of the Bihar cad- building of the block hospital. As a result, a and the State in Rural North India,” Patrons,
re, R C P Singh, as his principal secretary, and a senior block health official was suspended and Clients and Policies Patterns of Democratic
the new public health centre (PHC) was built in Accountability and Political Competition, Her-
young IAS officer of the 1991 batch, Chanchal
the block. bert Kitschelt and Steven I Wilkinson (eds),
Kumar, as his secretary.
Cambridge: Cambridge University Press.
7 This was usually held every Monday at the 25 In yet another application, Singh sought similar

R
Kumar, Sanjay (2004): “New Phase in Backward
chief minister’s residence, where he listened to information regarding a panchayat assistant
Caste Politics in Bihar, 1990–2000,” Caste and
people’s grievances from 9 am to 5 pm. Each (panchayat sahayak).
Democratic Politics in India, Ghanshyam Shah
Monday would be allotted to a specific set of 26 Umadhar Prasad Singh died in June 2014.

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(ed), London: Anthem Press.
departments. 27 Interviews with Ashok Singh during number of Manor, James (2000): “Small-Time Political Fixers
8 There were multiple objectives to this call centre. visits to Jhanjharpur block, Madhubani dis- in India’s States: ‘Towel over Armpit,’” Asian
On the one hand, it enabled the chief minister trict, December 2014–January 2015.

T
Survey, Vol 40, pp 816 –35.
to be directly in touch with the implementation 28 Interview with Durga Prasad Choudhary, Rag- Mathew, Santosh and Mick Moore (2011): “State
and monitoring of development programmes hopur block, Supaul district, January 2015. Incapacity by Design: Understanding the Bihar
at the grass-roots level and, on the other, it reg- 29 Apart from the field interviews, I examined Story,” IDS Working Paper, pp 19–21.

Z
istered people’s grievances directly with the RTI applications filed in the districts of Darb- Mitra, Subrata Kumar (1991): “Room to Maneuver
chief minister’s secretariat. Feedback received hanga and Supaul. These applications from in the Middle: Local Elites, Political Action,
through the call centre was scanned and directly 2007 to 2013 could be accessed from the SIC and the State in India,” World Politics, Vol 43,
forwarded to the secretary of the concerned database (the database is also an indication of

G
No 3, pp 390–413.
department. The process was reviewed and the robust RTI system which was created with-
Mukherji, Rahul (2013): “Ideas, Interests, and the
monitored personally by the chief minister. in the state; http://www.biharonline.gov.in/
Tipping Point: Economic Change in India,”
9 Interview with Chanchal Kumar, former secre- sic/common/pio_district.aspx). I used the “sys- Review of International Political Economy, Vol 20,

A
tary to the chief minister of Bihar, March 2014; tematic random sampling method” to select No 2.
visit to Jankari call centre in March 2014. 10% of the applications that were appealed at
Mukherji, Arnab and Anjan Mukherji (2015): “Part
the State Information Commission (SIC), with
10 Interview, Principal Secretary, Department of II Bihar,” The Making of Miracles in Indian States:
Patna, as the “representative sample.” I dis-
Rural Development, Government of Bihar, Andhra Pradesh, Bihar and Gujarat, Arvind
cerned the caste patterns from the representa-
Panagariya and M Govinda Rao (eds), India:

M
March 2014. tive sample of RTI applications. Even though
11 Visit to Darbhanga Collectorate in December Oxford University Press.
caste is not mentioned in the RTI application, I
2014. ascertained the caste from the surnames or Nagrik Adhikar Manch v State of Bihar and Ors (2016):
12 Visits to BIPARD, Patna, in March 2014. Various family names of the applicants. Obvious sur- Civil Writ Jurisdiction Case No 292 of 2015,
interviews with former Director of BIPARD, names related to the upper castes and the mi- Patna High Court judgment dated 21 October.
Sudhir K Rakesh. nority could definitely be weeded out from the Pierson, Paul (2000): “The Limits of Design: Explain-
RTI applications. For instance, family names ing Institutional Origins and Change,” Govern-
13 Jankari was previously located in the state
like Jha, Mishra, Singh, etc, were definitely ance: An international Journal of Policy and
government’s software technology park. There
from the upper castes. Similarly, Mohammad, Administration, Vol 13, pp 475–99.
was a reduction in the staff at the call centre.
Yaqub, etc, were surely from minority commu- Pioneer (2008): “Bihar Govt RTI Plea Over Phone
14 The current state of the SIC website is a symp-
nities. It was, however, impossible to identify Proves to Be a Non-Starter,” 31 January.
tom of shifting policy priorities of the top lead-
the backward castes and SC or ST groups ac- Rao, M S A (1989): “Introduction,” Dominance and
ership. During the peak period of governance
cording to surnames, as they can often be mis- State Power in Modern India: Decline of Social
initiatives, the SIC website served as a rich re-
leading or surnames could be dropped. Hence, Order (Volume I), Francine R Frankel and M S
pository of RTI-related information, such as A Rao (eds), Delhi: Oxford University Press.
the rest of the applicants were put together in
the district-wise database of solved RTI appli-
the “other” category. For the upper castes and Reddy, G Ram and G Haragopal (1985): “The
cations with an option of tracking the applica-
minority communities, only those applicants Pyraveekar: ‘The Fixer’ in Rural India,” Asian
tions under review. When last checked in Feb- Survey, Vol 25, No 1, pp 1148–62.
were selected for the respective category
ruary 2018, this potent website was inoperative whose surnames unambiguously represented Roberts, Alasdair (2010): “A Great and Revolutionary
for the past eight months, demonstrating the their caste; any ambiguity would put them in Law? The First Four Years of India’s Right to
lack of interest and political will of the top the other category. Information Act,” Public Administration Review,
leadership. Vol 70, No 6, pp 925–33.
30 Visits to Ujan, Manigacchi block, district Darb-
15 Interview with the BDO, Baheri block, Darb- hanga, Bihar, December 2014–January 2015. Rosenthal, Donald (1977): The Expansive Elite: Dis-
hanga district, December 2014. 31 Visits to Nanour, Jhanjharpur block, Madhubani trict Politics and State Policy-Making in India,
16 I was exposed to this during my fieldwork. It district, December 2014. Berkeley: University of California Press.
was ironical that the Jankari officials were TAG and RIB (2015): Empowerment through Infor-
reluctant to share basic information with me mation: The Evolution of Transparency Regimes
(contrary to the name Jankari) regarding the in South Asia, Vols 1 and 2, Transparency Advi-
number of calls received, when I visited the References sory Group and Research Initiatives, Bangladesh.
Jankari office in 2013. I experienced a similar CHRI (2013): “The Use of Right to Information World Bank (2005): “Bihar: Towards a Development
reluctance at the district level. Though, I could Laws in India: A Rapid Survey,” Common- Strategy,” http://siteresources.worldbank.org/
procure necessary information after interven- wealth Human Rights Initiative, New Delhi, INTINDIA/Resources/Bihar_report_final_ Ju-
tions from higher officials. October. ne2005.pdf.

54 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
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Levelised Cost of Electricity for Nuclear Power


Using Light Water Reactor Technology in India

Anoop Singh, Saurabh Sharma, M S Kalra

T
The development of nuclear power generation in India is he Indian power sector has witnessed a series of reform
proposed to be enhanced with international cooperation, and restructuring measures since the mid-1990s. These
include sectoral unbundling and the setting up of inde-
for sourcing fuel and setting up commercial nuclear
pendent regulatory commissions.1 However, the sector continues
power plants. The cost of power produced at such plants to face challenges in terms of power shortages, requiring large
is examined. The levelised cost of electricity for light capacity addition in a context of poorly performing state-
water reactor technology in India is estimated for owned electric utilities. Bottlenecks in enhancing the supply
of domestic coal, concerns about large hydroelectric projects,
once-through cycle and twice-through cycle options.
and the limited availability of cleaner fuels such as natural gas
A reference point for international cost comparisons is call for exploring the possibilities of a greater role for renewa-
provided, and a sensitivity analysis for key input ble energy and nuclear energy.
parameters is carried out. The base case, levelised cost of While renewable energy sources hold promise for augmenting
electricity supply given their declining costs, their dependence on
electricity is estimated to be 13.93 cents per kilowatt-hour
nature remains a challenge.2 Renewable energy still needs to be
and 14.13 cents per kilowatt-hour for once-through cycle supported with financial incentives for certain applications like
and twice-through cycle options, respectively. 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-
Anoop Singh (anoops@iitk.ac.in) is with the Department of Industrial
and Management Engineering, Indian Institute of Technology Kanpur. ment, one of access to civilian nuclear technology.
Saurabh Sharma (saurabh.sharma.2010@iitkalumni.org) is with the India’s nuclear power generation capacity is dominated by
CHINO Innovation Center, Itabashi-ku, Japan. M S Kalra (msk@iitk. pressurised heavy water reactors (PHWRs). Worldwide develop-
ac.in) is with the Nuclear Engineering and Technology Programme, ments in light water reactor (LWR) technology hold promise
Indian Institute of Technology Kanpur.
for its adoption in new nuclear power plants in India through
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 55
SPECIAL ARTICLE

international cooperation. A LWR-based nuclear power plant uncertainty for investors and buyers of electricity. Using data
has been built at Koodankulam in Tamil Nadu through an available in IEA and OECD (2010), we estimate that the shares
agreement with Russia. In order to achieve a nuclear power of the cost of fuel in the LCOE for coal- and gas-based power
generation capacity target of 20,000 MW by 2020, a more lib- plants are 30.19% (23.95%) and 70.03% (64.20%), as compared
eralised access to LWR technology and fuel would be desirable. to 18.19% (11.62%) for nuclear power for a 5% (10%) discount
In this direction, a major role is being played by the Nuclear rate. About one-third of the fuel cost is due to the cost of
Suppliers Group (NSG) and leading countries in nuclear tech- uranium. Uranium fuel, its enrichment, the waste fund, fuel
nologies. The Department of Energy (DAE) has signed memo- fabrication, and uranium conversion costs account for 35%,
randums of understanding with the United States (US), France, 35%, 17%, 9%, and 4% of the total fuel cost respectively
Britain, Kazakhstan, and other countries to develop nuclear (ERI 2008, quoted in Kidd 2012). Thus, a variation in price of
power plants in India. The 123 Agreement in 2007 between the uranium would not have a significant impact on the price of
US and India paved the way for furthering this cooperation. power, thus lowering the risks associated with the same, as
These steps are expected to address constraints regarding compared with other thermal power technologies.
access to nuclear fuel and civilian nuclear technology in the The economics of electricity generation from a technology
future. The large-scale deployment of civilian nuclear techno- can be assessed in terms of the LCOE. We construct a financial
logy for electricity generation would also be influenced by its model to evaluate the LCOE for a 1,000 MW nuclear power plant
economics, when compared with other sources. in India using LWR technology for once-through cycle (OTC)
In this context, it is important to evaluate the economics of and twice-through cycle (TTC) options.3 Based on a literature
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

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
parameters have a significant influence on the estimation of cost of insurance, disposal cost, inflation, cost of debt, return
the levelised cost of electricity (LCOE). The LCOE represents the on equity, depreciation, and interest during construction. We

Z
average unit cost of electricity over the life cycle of a power also construct scenarios for ascertaining the impact of change
plant, including all elements of cost during its construction, on the major input parameters.
operation, and decommissioning.

G
A number of studies on the economics of nuclear power have Levelised Cost of Electricity
been conducted in the context of developed countries. These The LCOE represents the average unit cost of electricity over

A
include MIT (2003, 2009), Du and Parsons (2009), de Roo and the life cycle of a plant. It is defined as the net present value
Parsons (2009, 2011), and EMWG (2004). In the Indian context, (NPV) of the total life cycle costs of the project divided by the
Bharadwaj, Tongia and Arunachalam (2006) and Bharadwaj, discounted quantity of electricity produced over the plant’s
Krishnan and Rajgopal (2008) discuss various fuel options for lifetime (Equation 1).

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
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 previous studies. In this article, we consider a construction phase of five years


This article considers India-specific parametric values for and an operational life of 60 years for a commercial nuclear power
taxes, depreciation, and return on equity. We also develop alter- plant.4 At the end of the operational life of a power plant, there
native scenarios over a range of parametric values for key inputs is a plant decommissioning phase. During the phase of con-
such as overnight costs, fuel costs, operation and maintenance struction, the main costs are capital costs and interest during
(O&M) costs, cost of debt, discount rate, and return on equity. construction. In the operational phase, the major costs5 pertain to
The model results are compared with MIT (2003, 2009), Du O&M, fuel, insurance, depreciation, and interest. Finally, during
and Parsons (2009), de Roo and Parsons (2009), Bharadwaj, the decommissioning phase, costs associated with decommis-
Tongia and Arunachalam (2006), Bharadwaj, Krishnan and sioning of the nuclear power plant are incurred in order to
Rajgopal (2008), and EMWG (2004). The methodology and the safely process, store, and dispose off the plant’s facilities.
financial model for LCOE are discussed in the next section. We analyse two options for fuel cycles, OTC and TTC. In the
TTC option, additional costs are incurred because of the repro-
Economics of Nuclear Power Generation cessing plant. Its elements include capital costs, the O&M cost of
Due to the long construction period and high capital costs, the the reprocessing plant and storage facility, as well as their decom-
cost of setting up a nuclear power plant is expected to be higher missioning. These are also considered. It is argued that the fuel
than conventional power plants. Concerns about availability, recycle option would impose an insignificant additional cost
and the rising prices of coal and natural gas give rise to some on nuclear power (MIT 2009). This essentially indicates that the
56 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 Reprocessing plant cost: For a TTC nuclear power plant, we
decom_Rt = Decommissioning cost of reprocessing plant; t = 76 assume that the spent fuel produced by uranium-fuelled LWRs
Ut = Total quantity of electricity produced;  t = 6–65 will be reprocessed. We further assume that the construction
r = Discount rate. of the first reprocessing plant and related interim storage
The fuel cost (Ft) differs across the OTC (FtOTC) and TTC facilities begins in 2010. The estimated construction time of
(FtTTC) options as a smaller amount of fresh nuclear fuel is a reprocessing facility is about 10 years. The overall cost of
required in the case of the latter. In Equations (2) and (3), it is reprocessing spent fuel generated includes the capital cost
important to note the time associated with each cost component of the reprocessing plants, Table 2: Cost of Reprocessing
as they appear during the lifetime of a project. The range of O&M costs of the reprocessing Phase Cost
(mills/kWh)
values for various input parameters that go into determining plants, capital cost of the in- Reprocessing plant—
the LCOE as per Equations (1) and (2) are discussed in the next terim spent fuel storage facil- construction 0.664
section, and also the input parameters based on a literature ities, O&M cost of the interim Reprocessing plant—O&M 1.136
review. The LCOE is estimated in terms of the 2010 dollar.6 storage facilities, and cost of Storage capacity—
construction 0.174
decommissioning of the re-
Input Parameters for the LCOE Storage—O&M 0.096
processing and related facili-
Reprocessing plant—
The LCOE is significantly influenced by input values for key ties. The discounted unit costs decommissioning 0.033
parameters in Equations 2 and 3. Based on a detailed review for these elements are shown Total 2.103
of the literature, we choose appropriate values of these in Table 2.8 Due to the lack of Source: Schneider et al (2009).
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 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
debt, rate of depreciation, and discount rate. The following fuel costs as compared to coal-, oil-, and gas-fuelled power
subsections present a discussion on values for key input plants. Nuclear energy is considered a clean energy option as

Z
parameters for evaluating the LCOE. far as carbon emissions are concerned. The important issues in
the analysis of the nuclear fuel cycle are waste management
Overnight costs: The capital costs—or overnight costs—are in- of the spent fuel and its safe disposal. For our analysis, fuel

G
curred during the construction of various facilities of a plant.7 bundle cost is taken as $2,300/kg which is close to $2,346/kg
The overnight costs include the cost of equipment as well as for 2007 given by WNA (2009). The fuel cycle cost is then esti-

A
construction of the plant and associated facilities. Other than mated assuming a fuel requirement of 2.77 kg/gigawatt-hour
the cost of engineering, procurement and construction, there are (gWh). An escalation of 0.5% is assumed between 2007 and
additional costs, such as interest during construction (IDC), which 2010. Table 1 presents a comparative analysis of per unit fuel
are not part of overnight costs, and are considered separately. cost according to various studies.9

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,
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
Krishnan and Rajgopal (2008). While capital costs are expected to later sections.
reduce due to learning benefits and innovative designs of reactors,
an increase in material cost and additional safety measures may Tax benefits of depreciation: This article explicitly uses capi-
lead to their increase. We assume a base case overnight cost to tal cost, including IDC in the analysis. Hence, a separate treat-
be $3,000/kW at 2008 prices. Given a range of cost estimates ment of depreciation is not required. However, the fact is that
and the concerns about cost increases, we construct alterna- depreciation provides a tax shield; it must be explicitly consid-
tive scenarios for a range of capital costs between $1,950/kW ered in the financial modelling. To estimate the LCOE, capital
and $4,050/kW with an increment of $150/kW. The overnight assets are depreciated as per the applicable tax accounting
cost is appropriately adjusted with a 3% per annum rate of in- laws in that country. MIT (2003, 2009), Du and Parsons (2009),
flation to express these in 2010 prices. The costs of construc- and de Roo and Parsons (2009) use a 15-year Modified Acceler-
tion are distributed over a five-year construction phase. ated Cost Recovery System (MACRS) depreciation schedule.
Table 1 provides a year-wise investment schedule during the Comparatively, some of these studies use a 20-year MACRS
construction period. Our assumptions for the same are largely depreciation schedule for coal power plants, even though
in line with the literature. A delay in construction would fur- both coal and nuclear power plants are assumed to have a
ther increase the cost of generation. A change in exchange rate plant life of 40 years each. In the present study, we assume that
on capital costs would imply a change in overnight cost. This is the regulatory environment for commercial nuclear facilities
further discussed with the results of a sensitivity analysis. in the future may allow a reasonable return and appropriate
58 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
SPECIAL ARTICLE

depreciation in a manner similar to that laid out by the Central escalation in fuel for the analysis. We adopt the same in
Electricity Regulatory Commission (CERC). Depreciation is the present work.
calculated annually based on a straight-line method using a
rate of depreciation of 5.28% per annum as specified by CERC Discount rate: The present value of costs across the years is
(2009). This is applied for a period of 12 years and, after that, estimated by discounting these at an appropriate discount rate.
90% of the remaining value is spread over the remaining use- The discount rate chosen for the analysis depends on the capital
ful life of the plant. Previous studies in the Indian context cost of the project, its risk profile, and that of the country of
(Bharadwaj, Tongia and Arunachalam 2006; Bharadwaj, investment. Du and Parsons (2009) and de Roo and Parsons
Krishnan and Rajgopal 2008) do not elaborate treatment of (2009) use a 7% and 10% rate of discount respectively. MIT
depreciation or the tax benefit thereof. (2003, 2009) uses a 7.8% weighted average cost of capital (WACC)
to evaluate the present value of unlevered after-tax cash flows.
Cost of decommissioning: There is a wide variability across EMWG (2004) uses a 5% discount rate in the study of generation IV
countries, utilities, and reactor sites on various aspects of reactor systems. Previous studies in the Indian context consider
decommissioning. Although some of the differences are phys- a 10% WACC as the rate of discount. In the Indian context, the
ical (like the type and size of reactor), others relate to decom- CERC specifies a 10.19% rate of discount to be used for evaluation
missioning strategies and the way decommissioning costs are of price bids received for new plants. This rate would be an ap-
estimated and financed. Table 1 reports decommissioning propriate one to be used for discounting in our analysis.
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.
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
Interest during construction: The IDC is the interest that ac- ally allowed by power sector regulators on a normative basis.
crues on the amount borrowed to finance capital costs during EMWG (2004) considers a 7.4% cost of debt. Previous Indian

Z
the period of construction. As there is no operational income studies (Bharadwaj, Tongia and Arunachalam 2006; Bharad-
during construction, this amount is included in the cost of cap- waj, Krishnan and Rajgopal 2008) also assume a 70:30 debt-
ital, thereby raising the final debt, equity contributions, and to-equity ratio. However, these studies do not clearly specify

G
total capital cost. For a nuclear power plant having a construc- the cost of debt used in the analysis. Long-term cost of debt is
tion period of five to seven years, this cost could be substantial assumed to be 8% in this study, as prescribed by CERC regula-

A
and needs to be accounted for. Based on the CERC estimates, we tions. Due to high capital costs, the repayment of loans often
calculated the IDC to be $324.05 million as per a loan disbursal extends for a long period. We assume an annual loan repay-
schedule during the construction phase. EMWG (2004) considered ment over 12 years, starting with the first year of operation.
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
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
year of operations. This policy is expected to be available for in the power sector (CERC 2009). Given the varying risk assess-
new investment in nuclear power generation as well. MIT ment by investors, we develop alternate scenarios for a range
(2003) and Du and Parsons (2009) use a tax rate of 37%. A tax of returns on equity. MIT (2003, 2009), Du and Parsons (2009),
rate of 38.9% is considered in EMWG (2004). In our analysis, a and de Roo and Parsons (2009) use a 15% nominal ROE, whereas
tax rate of 33.99% (including surcharge) is considered as per EMWG (2004) is based on a 12% ROE. Bharadwaj, Tongia and
CERC (2009). Previous studies in the Indian context do not Arunachalam (2006) and Bharadwaj, Krishnan and Rajgopal
elaborate on the tax rate used, if any. (2008) use a 10% nominal WACC.11

Inflation and escalation rates: Inflation influences project Base Case LCOE Estimates
costs due to the long period of construction over which capital The value of key input parameters in Equations (2) and (3)
costs are incurred. As per MIT (2003), the overnight cost is have a significant influence on the estimation of the LCOE for a
estimated to be $2,000/kW at 2002 prices, and $4,000/kW at LWR-based nuclear power plant in India. The base values of all
2007 prices, a twofold rise during the period. A part of the input parameters arrived at after the above literature review
increase in the cost of the plant may be attributed to inflation are summarised in Table 3. The expected plant load factor
while a part can be attributed to improvements in design and (PLF) of 85% determines the amount of electricity produced
specification. MIT (2003) and Du and Parsons (2009) assume a and sold to the grid. The cost of fuel duly accounts for fuel
3% inflation rate, 1% real escalation in O&M, and 0.5% real reprocessing, if any. The estimation of the fuel cost takes into
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 59
SPECIAL ARTICLE

account the cost of fabricated fuel assemblies, burn-up rate, the present value of total costs for each year of the life of the
and cost of refuelling. Cost escalation and inflation are also plant, a discount rate of 10.19% is used. We use a 3% rate of
duly accounted for various cost elements across time. inflation and 1% escalation rate during the project’s lifetime.
It is assumed that the capital cost of a plant is financed Based on the above base values of input parameters, the
through investors’ equity, and borrowings from banks and LCOE for OTC and TTC were estimated as per Equations 1 and 2
financial institutions. The interest cost during construction is respectively. Table 4 provides the estimated base values of
calculated on the amount of loan disbursed. Banks and finan- LCOE along with those estimated by previous studies.
cial institutions often charge up to 2% of the loan amount as The base case, estimated values of the LCOE are 13.93 cents/
financing fees, which include commitment fees, legal fees, etc. kWh and 14.13 cents/kWh for the OTC and TTC options respec-
We assume that such costs are built into the interest cost on tively. These estimates are higher than those reported in the
the loan given by the lenders. Investors seek returns on the literature. The reasons for the higher estimates by this study
equity invested in the project. We assume that in the near are highlighted below.12 One should also note that the current
future, the regulatory approach for tariff determination for estimates are in 2010 prices and hence, take into account infla-
nuclear power plants may follow the rate of return regulation tion and escalation over historical estimates, both of which
approach adopted by power sector regulators like the CERC. result in an increase in capital costs and, hence, also lead to
Accordingly, the financial approach and values of some of the higher interest burden on debt raised to finance the project.
key parameters are based on the CERC’s “Terms and Conditions Given the increase in the cost of key inputs such as steel
of Tariff Regulations, 2009” (CERC 2009). The cost of insurance is and cement, one would expect such escalation in the cost of
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 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 hydro- and open-cycle gas turbines. The falling cost of solar
on imported uranium. The low share of fuel cost in the case of power is showing encouraging results with grid-connected
nuclear power provides some comfort. Renewable energy, solar PV capacity reaching 16,070 MW by the end of December
which neither leads to direct carbon emissions nor entails fuel 2017 (MNRE 2018). Given the targets under the JNNSM, the
imports, clearly seems to score over nuclear power. The cost of share of solar energy generation may soon surpass that of
electricity production from renewable sources is competitive nuclear energy.
when compared with the one estimated for nuclear power in While the economics of nuclear energy seems to be fast los-
this article. A conducive policy and regulatory environment ing ground to solar PV, the ability of the former to meet the
has led to a growth in renewable energy capacity. This is ex- baseload requirements of a grid remains its only technical ad-
pected to grow further in future and dwarf the share of nucle- vantage over the latter until cost-effective and environment-
ar power. While a host of fiscal incentives lower the cost of re- friendly storage solutions are in place. Further, worries about
newable energy, the Electricity Act, 2003 mandates the pro- nuclear safety, especially after the Fukushima accident of
curement of electricity by distribution utilities from such March 2011, raises additional concerns for nuclear power in
sources (Singh 2009, 2010b). Consequently, the electricity pro- the short run. Concerns regarding the high cost of nuclear
duced from renewable energy sources is procured at rates power are accentuated by the expected cost of damages arising
higher than conventional power. from low-probability catastrophes. From an investor’s point of
Table 6: Nuclear Power Tariffs in India 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- agreement between the governments of the US and India were
phes, governments often provide direct or indirect subsidies aimed at increasing private and public investments to establish
for nuclear power development. Koplow (2011) identifies and LWR nuclear power plants on a commercial basis. The com-
discusses various subsidies in the nuclear industry for investor- mercial attractiveness and the ability of the power sector to
owned utilities (IOUs) and publicly owned utilities (POUs) in the absorb LWR-based nuclear power would be guided by the
US. The study estimates that subsidies for existing reactors economics of the same.
are 0.74–4.16 cents/kWh and 1.53–5.77 cents/kWh for IOUs This article develops a model to estimate the levelised cost of
and POUs respectively. The subsidies for new reactors are electricity for the OTC and TTC options using LWR technology.
estimated to be 5.01–11.42 cents/kWh and 4.20–8.68 cents/kWh It considers all the major cost components, including fuel cycle
respectively. In the Indian context, Ramana (2007) identifies cost, reprocessing costs, and decommissioning. In doing so, we
subsidies to the heavy water used in PHWR. Such indirect also consider financial components such as interest during
subsidies are often part of the government support to the construction, financing costs, the tax benefits of depreciation,
sector. He mentions subsidies to the extent of `12,000/kg being and return on equity. Assumptions for various input parameters
offered. The high estimated cost of nuclear power generation are supported with a review of the literature. The base case
would dissuade investors and buyers of electricity in the LCOE is estimated to be 13.93 cents/kWh and 14.13 cents/kWh
absence of adequate financial subsidies or incentives. Fiscal for OTC and TTC respectively. A sensitivity analysis allows for a
incentives and custom duty waivers have often been used to range of values around the base values of key input para-
make investment attractive in the power sector. Given that the meters. We find that the LCOE is significantly affected by 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-

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

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denominated in dollars. It is also likely that a

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

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

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

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

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

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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

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

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March 2016, https://www.iaea.org/pris/Coun- in the Indian Power Sector,” Renewable and
tryStatistics/CountryDetails.aspx?current=IN. Sustainable Energy Reviews, Vol 13, pp 643–52.
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Technical Report, Center for Study of Science, tion and Development, Paris. — (2010b): “Economics, Regulation and Imple-
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Bharadwaj, A, R Tongia and V S Arunachalam presentation to the World Nuclear Association, Certificates in India,” India Infrastructure
(2006): “Whither Nuclear Power?” Economic & London. Report 2010, 3i Network (eds), New Delhi:
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CEA (2015): “Executive Summary: Power Sector,” of California Central Station Electricity Gener- Sipöcz, N and F A Tobiesen (2012): “Natural Gas
Central Electricity Authority, New Delhi. ation Technologies,” California Energy Com- Combined Cycle Power Plants with CO2 Cap-
CERC (2009): “CERC (Terms and Conditions of mission, Draft Staff Report, CEC-200-2007- ture: Opportunities to Reduce Cost,” Interna-
Tariff) Regulations, 2009: Statement of Objects 011-SD. tional Journal of Greenhouse Gas Control, Vol 7,
and Reasons,” Central Electricity Regulatory Koplow, D (2011): “Nuclear Power: Still Not Viable pp 98–106.
Commission, New Delhi, viewed in May 2010, without Subsidies,” UCS Publications, Cambridge WNA (2009): “The Economics of Nuclear Power,”
http://www.cercind.gov.in/2009/February09/ MA. World Nuclear Association, London.

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

T
There has been little investigation into whether the he publication of the Black report (Black et al 1980)
“social gradient to health”—whereby people belonging spawned a number of studies that examined the social
factors underlying health outcomes in industrialised
to groups higher up the social ladder have better health
countries. The fundamental finding from these studies, par-
outcomes than those belonging to groups further ticularly with respect to mortality and life expectancy, was the
down—exists in developing countries like India. The existence of “a social gradient” in mortality, “wherever you
relative strengths of economic and social status in stand on the social ladder, your chances of an earlier death are
higher than it is for your betters” (Epstein 1998). The social
determining the health status of persons in India is
gradient in mortality was observed for most of the major
evaluated using the National Sample Survey Office data causes of death: for example, Marmot (2000) showed that, for
set for 2004 and 2014. This is evaluated with respect to every one of 12 diseases, the ratio of deaths (from the disease)
two health outcomes: the age at death and the to numbers in a civil service grade rose steadily as one moved
down the hierarchy.
self-assessed health status of elderly persons.
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
Vani Kant Borooah (vkborooah@gmail.com) teaches at the University of whether, in developing countries as well, people’s state of
Ulster, Northern Ireland, United Kingdom.
health is dependent on their social status. For example, in
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 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.

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

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 quality of the drains. The variable “drain” was assigned the
social groups with each person in the estimation sample being value 1 if the drains associated with the deceased’s home were
placed in one, and only one, of these groups. The NSSO catego- underground or were covered; and 0 otherwise.
rised persons by four social groups [Scheduled Tribes (ST), (iii) The third component of living conditions related to the
Scheduled Castes (SC), Other Backward Classes (OBC), and quality of the source of drinking water used by the deceased.
“Others,” and simultaneously by eight religion groups (Hinduism, The variable “water source” was assigned the value 1 if the
Islam, Christianity, Sikhism, Jainism, Buddhism, Zoroastrianism, source of drinking water was from a tap; and 0 otherwise.
“Other”)]. Combining the NSSO “social group” and “religion” (iv) The fourth component of living conditions related to the
categories, we subdivided households into the following nature of the cooking fuel used by the deceased’s household.
groups that are used as the basis for analysis in this paper:5 The variable “cooking fuel” was assigned the value 1 if the cooking
(i) Scheduled Tribes (ST): These comprised 13% of the 65,786 fuel was gas, gobar gas, kerosene, or electricity; and 0 otherwise.
households in the 71st NSSO round. Approximately 56% of The primary aim of this paper is to examine whether, after
these households were Hindu, and 33% were Christian.6 controlling for several non-group factors, (i) the health out-
(ii) Scheduled Castes (SC): These comprised 17% of the 65,786 comes of household members varied systematically according
households in the 71st NSSO round, and 93% of the 10,994 to the social group to which people belonged; (ii) health
households in this category were Hindu.7 outcomes had significantly altered in the 10-year interval
(iii) Non-Muslim Other Backward Classes (NMOBC): These between the 60th and 71st NSSO rounds.
comprised 33% of the 65,786 households in the 71st NSSO Two health outcomes were considered: (i) the age at death
round, and 97% of the 21,455 households in the NMOBC category of household members, and (ii) the self-perceived health
were Hindu. status of household members, 60 years or older.
(iv) Muslim Other Backward Classes (MOBC): These comprised
7% of the 65,786 households in the 71st NSSO round.8 Deaths in Households
(v) Muslims who were not from the OBCs: They are, hereafter, Each household was asked if there had been a death (or
referred to as Muslin upper classes (MUC) and comprised 6% deaths) in the household in the previous 365 days, and if yes,
of the 65,786 households in the 71st NSSO round, and 7% of the particulars of these deaths.9 The specific information that this
73,640 households in the 60th NSSO round. study was interested in was the “age at death” of the person
66 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 5.8 years in the 71st round and by 7.2 years in the 60th round.
group (ST, SC, NMOBC, MOBC, MUC, and NMUC), differences be- Compared to living in a rural area, living in an urban area
tween these six predicted AAD were entirely the result of dif- significantly reduced the AAD by 3.6 years in the 60th round
ferences in the households’ social group. but, in the 71st round, there was no difference between the
The marginal AAD, shown in column 3 of Table 1, are the dif- AAD in rural and urban locations.
ferences between the predicted AAD of the ST, SC, NMOBC, It is seen that between the 10 years of the 60th and the 71st NSSO
MOBC, and MUC households and that of (the reference) NMUC rounds, the predicted AAD increased for all the groups, except for
households. Dividing these marginal probabilities by their ST for which it fell from 47.5 years to 46.6 years. For SC, it increased
standard errors (column 4 of Table 1) yields the z-values from 42.7 years to 49.5 years; for NMOBC from 48.7 years to
(column 5 of Table 1). These show that all the marginal proba- 51.8 years; for MOBC 44.3 years to 50.7 years; for MUC from 44.3
bilities, for both the 71st and the 60th rounds, were signifi- years to 48.5 years; and for NMUC from 51.4 years to 56.6 years.
cantly different from zero. In other words, the predicted AAD However, from a policy perspective, the relevant issue is
for households from the five social groups (ST, SC, NMOBC, whether these improvements were statistically significant or
MOBC, and MUC) were all significantly lower than for NMUC whether they could be accommodated within a “no change”
households in 2014 and 2004. 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
SPECIAL ARTICLE
Figure 3: Perception of Being in Poor Health by Social Group and Gender following variables were also considered in the perception of
Percentage of persons, 60 years or over, in the relevant group who perceived themselves as health equation: (i) The quintile of monthly household per
being in poor health
capita expenditure (HPCE) to which the person’s household be-
70 longed where Q5 is the highest quintile of HPCE and Q1 is the
2014 (71st round)
60 lowest quintile of HPCE. (ii) The general education level of the
2004 (60th round)
50 35 35 person: illiterate, literate without formal schooling, primary
40 27 28 and middle school, secondary and higher secondary (includ-
26 25 24 24 ing higher secondary equivalent diplomas), graduate (includ-
30 24
ing graduate equivalent diplomas) and above. (iii) The gen-
20 der, age, and marital status of the person.12 (iv) The number
28 32 31 27
10 25 25 23 23 of living sons and daughters of the person.
19
0 The results from estimating the health perception equation
are shown, for the 71st and 60th NSSO rounds in Tables 3 and 4
OBC non-Muslim
All Respondents

OBC Muslim

Men

Women
Scheduled Tribe

Scheduled Caste

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)
Source: NSSO.

T
and persons from ST had the lowest (20.8%).
there was no significant difference between the predicted AAD These predicted PPH were computed by assuming that all
from the two rounds (54 years versus 52.4 years). the 24,210 persons in the 71st round were from a particular

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
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
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
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
in poor health, then this perception varied by social group and social group to which the persons belonged.
by gender. Figure 3 shows Muslims, both OBC and upper class, The marginal probabilities, shown in column 3 of Tables 3
had the highest perception of being in poor health (over 30% and 4, under the social group rubric, are the differences
in both rounds). STs had the lowest perception of being in poor between the predicted probabilities of the ST, SC, NMOBC,
health, with less than one-fourth declaring that they were in MOBC, and MUC households and that of (the reference) NMUC
poor health. There was also a gender divide in terms of poor households. Dividing these marginal probabilities by their
health: 23%–24% of men and 27%–28% of women declared standard errors (column 4) yields the z-values (column 5). These
themselves to be in poor health. show that the marginal probabilities for Muslims and ST in
We explore the factors that influence people’s perception of the 71st NSSO round were significantly different from zero. In
their current state of health (in particular, their perception of other words, in 2014, the predicted PPH for Muslims was
being in poor health) and whether there have been significant significantly higher, and the predicted PPH for the ST was
changes to this perception between the 60th (2004) and the significantly lower, than for NMUC persons. There was, how-
71st (2014) NSSO rounds. In order to do so, we estimate an ever, no significant difference between the predicted PPH of
ordered logit model, estimated on observations over persons NMOBC persons, and the predicted PPH of SC persons, and that
who answered the “health perception” question. The dependent of NMUC persons.
variable takes the value 1, 2 and 3 if a person reported their The results of Tables 3 and 4 show that the predicted PPH
health as “excellent/very good,” “fair,” or “poor” respectively. was significantly higher for persons in “wage labour” house-
The ordered logit model is described in the Appendix (p 73); holds than for persons in self-employed/regular salaried
here we focus on the variables that determined the values households for both the NSSO rounds. In the 71st round
assumed by the dependent variable. (though not in the 60th), the predicted PPH of persons in
Some of the variables used in the ordered logit “perception urban areas was significantly higher than that of those living
of health” equation were also used in the “age at death” in rural areas, and in both rounds, the predicted PPH of persons in
equation described earlier. These variables are social group, “forward states” was significantly lower than that of those in
“casual labourer” household, rural/urban household, forward/ “backward” states.
backward state, and the quality of the latrine and cooking The economic circumstances of a person’s household also
facilities in a household. In addition to these variables, the played a significant role in determining the predicted PPH. In
Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 69
SPECIAL ARTICLE

both rounds, persons living in households in the lowest two In addition to these household-level factors, personal attributes
quintiles of HPCE were significantly more likely to have a higher of a person were also important in determining his/her predict-
predicted PPH than persons in the highest quintile of HPCE. ed PPH. Prominent among these was gender: for both the 71st
Environmental factors played a significant role in determining and the 60th rounds, the predicted PPH was significantly higher
the predicted PPH. Evidence from both the 71st and 60th NSSO for women than for men. The predicted PPH was also signifi-
rounds shows that having a flush or septic tank latrine, com- cantly affected by a person’s marital status. Married persons had
pared to latrines of other types or having no latrine in the a lower predicted PPH than persons who were single, widowed,
house, significantly reduced the predicted PPH. Similarly, or divorced. Lastly, a person’s educational level also had a sig-
cooking with gas or electricity, compared to cooking with nificant effect on their predicted PPH. For both rounds, com-
other fuel types, significantly reduced the predicted PPH. pared to the reference category of persons who were graduates
Table 3: Predicted Probability of Being in Poor Health from the Estimated Table 4: Predicted Probability of Being in Poor Health from the Estimated
Ordered Logit Equations, NSSO 71st Round Ordered Logit Equations, NSSO 60th Round
Conditioning Variable Probability Marginal SE z value Pr>|z| Conditioning Variable Probability Marginal SE z value Pr>|z|
of Being in Probability of Being in Probability
Poor Health Poor Health
1 2 3 4 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 the health perception equation, specified in Table 3, jointly
higher predicted PPH. For example, Table 3 shows that the pre- over all the relevant observations for both the rounds (a total
dicted PPH of illiterate persons was 27.9% and this was signifi- of 52,040 observations on persons, aged 60 years or more,
cantly higher than the predicted PPH of 18.3% for graduates. who reported their health perception), and then tested whether
Figure 3 shows the proportion of all persons aged 60 years the predicted PPH was significantly different between the two
or more who regarded their health as “poor” increased from rounds. These results are reported in Table 5.
25% in 2004 to 26% in 2014. Furthermore, save for persons Columns 2 and 3 of Table 5 show the predicted PPH for the
from SC households for whom there was a small decrease, 71st and 60th NSSO rounds respectively, while column 4 records
there was a rise in this proportion for persons in every category the difference. The standard error of the difference is shown in
(Figure 3). Were these increases of statistical significance or column 5 and dividing the difference by its standard error
could they be accommodated within a “no change” null yields the z value, shown in column 6. The p value in column 7
hypothesis? In order to answer this question we re-estimated shows the probability of obtaining this z value under the null
Table 5: Difference between the 71st and 60th Rounds in the Predicted hypothesis that there was no difference between the predicted
Probability of Being in Poor Health PPH of the 71st and 60th rounds.
Predicted Probability of Being in Poor Health
Conditioning Variable 71st 60th Difference Standard z value Pr>|z| 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 and Muslim upper class, were—after imposing all the controls—
non-labourer households, the predicted PPH was significantly significantly more likely to be in poor health by 5.3, 7.2, and
higher in 2014. Similarly, the predicted PPH was significantly 9.5 points, respectively. It is true that in the decade between
higher for persons in urban and rural areas in 2014. Lastly, the 2004 and 2014, the predicted age at death has risen for all
predicted PPH was significantly higher for “backward” state groups, but as a counter, the predicted probability of elderly
households in 2014 compared to 2004, but for “forward” state persons being in poor health has also risen for both groups.
households, there was no significant difference between the However, underlying both findings, is the fact that inter-group
predicted PPH of the two rounds. disparities in health outcomes have continued to flourish.
It is important to note that there are several deficiencies
Conclusions inherent in this study. First, there are important health-related
This paper investigated if there was a social gradient to health attributes of individuals (smoking, diet, exercise, nature of
in India with respect to two health outcomes: the age at death and work) which are not—and, indeed, given the limitations of the
the self-assessed health status of elderly persons. The evidence data, cannot be—taken into account. All these factors are
suggested that living in a forward state (compared to living in included in the “unobservable.” If these unobservable factors
a backward state) and belonging to a relatively affluent house- were randomly distributed among the population, this in

R
hold significantly improved all four health outcomes. In addition, itself, would not pose a problem. However, there is evidence
the age at death and the self-assessed health status of elderly that there may be a group bias with respect to at least some of

E
persons was significantly affected by their living conditions. these factors. For example, if hard physical work is more inimi-
However, even after controlling for these “group independent” cal to health than more sedentary jobs, then of the males aged

T
factors, the social group to which people in India belonged had 25–44 years, 42% of ST and 47% of SC, compared to only 10%
a significant effect on their health outcomes. Compared to of persons from the non-Muslim upper class, worked as casual
households from the non-Muslim upper class, the average age labourers (Borooah et al 2007).
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
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

A
Similarly, compared to elderly persons from non-Muslim
upper class households, elderly persons from the ST, Muslim OBC,
control. Inequity reflects that part of inequality that is gener-
ated by factors outside a person’s control. In a fundamental

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

sense, therefore, while inequality may not be seen as “unfair,” the ST, the SC, or being Muslim in India seriously impaired the
inequity is properly regarded as being unfair. “capabilities” of persons to function in society. This is be-
The point about group membership is that while it may cause, as this study has shown, if you stand at the bottom of
not be the primary factor behind health inequality, it is the the social ladder in India, your risk of suffering premature
main cause of health inequity. This paper’s central message, death, poor health, and lack of access to treatment and care is
conditional on the caveats noted earlier, is that belonging to substantially higher.

notes References “fairly good health”; and Yi=3 if the person


1 Psychologists distinguish between stress caused Birdi, K, P Warr and A Oswald (1995): “Age Differ- answered was in “poor health.” Since these
by a high demand on one’s capacities, for exam- ences in Three Components of Employee Well- outcomes are inherently ordered—in the sense
ple, tight deadlines, and stress engendered by a Being,” Applied Psychology, Vol 44, pp 345–73. that the outcome associated with a higher
low sense of control over one’s life. Black D et al (1980): Inequalities in Health: A Report
value of Yi is less desirable than that associated
2 There are about 85 million Indians classified of a Research Working Group, London: Depart-
as belonging to the Scheduled Tribes. Of ment of Health and Social Security. with a lower value—the appropriate method of
these, Adivasis refer to the 70 million who live Borooah, V K (2002): Logit and Probit: Ordered and estimation is that of ordered logit.
in the heart of India, in a relatively contiguous Multinomial Models, Sage Publications (Series: The idea behind this model (Borooah 2002) is
hill and forest belt extending across the states Quantitative Applications in Social Sciences): that the health of a person may be represented by

R
of Gujarat, Rajasthan, Maharashtra, Madhya Thousand Oaks, California.
the value of the latent variable, Hi, with higher
Pradesh, Chhattisgargh, Jharkhand, Andhra Borooah, V K et al (2007): “The Effectiveness of Jobs
Pradesh, Odisha, Bihar, and West Bengal Reservation: Caste, Religion, and Economic values of Hi representing poorer health. One

E
(Guha 2007). Status in India,” Development & Change, Vol 38, may consider this latent variable to be a linear
3 Dalits, who number about 18 million, refer to pp 423–55. function of K health-determining factors whose
those who belong India’s Scheduled Castes. Brunner, E and M Marmot (1999): “Social Organisa- values for an individual i are: Xik, k=1...K. Con-

T
4 See Tendulkar (2007). tion, Stress and Health,” The Social Determinants
sequently,
5 The fact that Muslims, too, have their “back- of Health, M Marmot and R Wilkinson (eds),
ward” classes and “forward” classes, with a New York: Oxford University Press, pp 17–43. K
Hi = ∑Xikβk + εi = Zi + εi

Z
conspicuous lack of intermarriage between the Epstein, H (1998): “Life and Death on the Social ...(1)
Ladder,” New York Review of Books, Vol 15, k=1
two groups, meant that it was sensible to sepa-
rate Muslims into two groups: Muslims from pp 26–30. where: k is the coefficient associated with the
the OBC (MOBC) and Muslims from the “upper Griffen, J et al (2002): “The Importance of Low kth variable and Zi=X ikk . An increase in the

G
classes” (MUC). Control at Work and Home on Depression and k
Anxiety: Do These Effects Vary by Gender and value of the kth factor will cause the health of
6 Figures relate to the 71st round. The 60th a person to improve if k<0 and to deteriorate
Social Class?” Social Science and Medicine, Vol 54,
round figures are similar and not shown. This
pp 783–98. if k>0.

A
category also included 264 Muslim households.
Since Muslim ST persons are entitled to reser- Guha, R (2007): “Adivasis, Naxalites, and Indian Since the values of Hi are, in principle and in
Democracy,” Economic & Political Weekly, Vol 42,
vation benefits, these households have been practice, unobservable, equation (1) represents
No 32, pp 3305–12.
retained in the ST category. a latent regression which, as it stands, cannot
Karasek, R, and M Michael (1996): “Refining Social
7 This category also included 74 Muslim be estimated. However, what is observable is a
Class: Psychosocial Job Factors,” paper presented

M
households. Since Muslims from the SC are not
at the Fourth International Congress of Behav- person’s health status (in this study: good, fair-
entitled to SC reservation benefits, these Mus-
ioural Medicine, Washington DC, 13–16 March. ly good, poor) and the categorisation of persons
lim SC households were moved to the Muslim
Long, J S and J Fresse (2014): Regression Models for in the sample in terms of health status is implic-
OBC category.
Categorical Dependent Variables Using Stata,
8 Including Muslim SC households (note 7). College Station, TX: Stata Press. itly based on the values of the latent variable Hi
9 Of the 1,716 households in the 60th NSSO round, Marmot, M (1986): “Does Stress Cause Heart Attack?,” in conjunction with “threshold values,” 1 and
reporting deaths in the previous year, 1,634 Postgraduate Medical Journal, Vol 62, pp 683–86. 2 (1< 2) such that:
households reported a single death, 70 house-
— (2000): “Multilevel Approaches to Understand-
holds reported two deaths, and 12 households ing Social Determinants,” Social Epidemiology, Yi=1, if Hi < 1
reported three deaths. Of the 1,716 households L Berkman and I Kawachi (eds), New York: Yi=2, if 1 <Hi < 2 ...(2)
in the 71st round reporting deaths in the previ-
ous year, 2,310 households reported a single
Oxford University Press, pp 349–67. Yi=3, if Hi > 2
— (2004): Status Syndrome: How Our Position on
death, 82 households reported two deaths, and
the Social Gradient Affects Longevity and Health, The 1, 2 of equation (2) are unknown
three households reported three deaths. London: Bloomsbury Publishing. parameters to be estimated along with the k
10 For the 71st NSSO round: “forward” states were Sen, G et al (2007): “Systematic Hierarchies and of equation (1).
Himachal Pradesh, Punjab, Chandigarh, Hary- Systemic Failures: Gender and Health Inequal-
ana, Delhi, West Bengal, Gujarat, Daman and A person’s classification in terms of his/her
ities in Koppal District,” Economic & Political
Diu, Dadra and Nagar Haveli, Maharashtra, Weekly, Vol 42, No 8, pp 682–90. health status depends on whether the value of
Andhra Pradesh, Karnataka, Goa, Kerala, Tamil Sengupta, J and D Sarkar (2007): “Discrimination Hi crosses a threshold and the probabilities of a
Nadu, Puducherry, and Telangana. “Backward” in Ethnically Fragmented Localities,” Economic person being in a particular health status are:
states were Uttarakhand, Rajasthan, Uttar & Political Weekly, Vol 42, No 32, pp 3313–22.
Pradesh, Bihar, Sikkim, Arunachal Pradesh,
Tendulkar, S (2007): “National Sample Surveys,”
Pr(Yi=1)=Pr(1 <1–Zi)
Nagaland, Manipur, Mizoram, Tripura, Megha- Pr(Yi=2)=Pr(1 –Zi < 1 <2–Zi) ...(3)
The Oxford Companion to Economics in India,
laya, Assam, Jharkhand, Odisha, Chhattisgarh, K Basu (ed), New Delhi: Oxford University
Lakshadweep, Andaman and Nicobar Islands. Pr(Yi=3)=Pr(1 <1–Zi)
Press, pp 367–70.
11 For example, if living in a “forward” state raises Wilkinson, R G and M Marmot (1998): Social If it is assumed that the error term i, in equa-
the average age at death and if ST households Determinants of Health: The Solid Facts, Copen- tion (1), follows a logistic distribution then
are disproportionately concentrated in “back- hagen: World Health Organization.
ward” states, then this will show up in the raw equations (1) and (2) collectively constitute
data as a low age at death for ST households; an ordered logit model (the assumption that i
however, this age will be raised when the state Appendix on Ordered Logit Models are normally distributed results in an ordered
of residence is controlled for. Suppose there are N persons (indexed i=1…N). probit model). The estimates from this model
12 As mentioned before, the age of the persons, to Let the values taken by the variable Yi repre- permit, through equation (3), the various prob-
whom the health perception question was
addressed, were 60 years and above. Marital sent the health status of these persons such abilities to be computed for every person in
status was defined as married, or single, that: Yi=1, if the person answered “excellent/ the sample, conditional upon the values of the
widowed, divorced. very good health”; Yi=2 if the person answered health-determining factors for each person.

Economic & Political Weekly EPW MARCH 10, 2018 vol lIiI no 10 73
NOTES

Fourteenth Finance Commission of the CSS schemes were also on subjects


in the state and concurrent lists of the
Indian Constitution, and an expansion
Impact of Its Recommendations of these schemes have led to an increase
in the union government’s expenditure
on subjects other than those on the union
Mita Choudhury, Ranjan Kumar Mohanty, Jay Dev Dubey list (Chakraborty 2015). The increased
tax devolution, therefore, was not only

T
Preliminary evidence on the he recommendations of the Four- expected to provide states with a greater
impact of the recommendations teenth Finance Commission (FFC) degree of expenditure autonomy, but
have important implications for also allow the union government to fo-
of the Fourteenth Finance
revenues and expenditures of state govern- cus more on areas that are constitution-
Commission suggests that there ments. The share of states in divisible pool ally enlisted in the union list.
has been an increase in central of taxes has increased from 32% to 42% The net gain or loss of resources in states
transfers and social sector following the FFC recommendations: an will be determined by the relative increase
increase much higher than the levels rec- or decrease of untied and tied funds in

R
expenditures in a number of
ommended by the previous finance com- the states. Transfers are also affected by
states in 2015–16. This evidence is missions.1 To accommodate this increase, changes introduced by FFC with respect
biased upwards due to two factors.
First, much of the gains have been
measured with respect to a low
base year. Second, the inferences
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 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-

Z
tax devolution.2 The reduction in grants, tion, grants and the criteria for horizontal
are affected by systematic however, has been an issue of concern as distribution of resources among states.3
differences between actuals, much of the grants relate to centrally spon-

G
sored schemes (CSS), initiated to support Net Gain in Resources?
revised estimates, and budget
expenditures in the social sector and the Preliminary evidence on receipts of central
estimates. Using a modified base

A
development of infrastructure. Although transfers in states almost unanimously
and comparable estimates for 15 increased tax devolution has provided the suggested a net gain in resources follow-
major states, it is seen that these states with untied resources to compen- ing the FFC recommendations. Studies on
sate the loss in grants, questions on what Bihar and Odisha have shown that the

M
are much smaller. Besides, in
has been the net gain in resources at the estimated gain from increased tax devo-
most states, social services have state-level, and how have individual states lution is likely to be more than adequate
received a lower priority over used the increased untied resources to to compensate for the loss of grants
economic services in 2015–16. meet their fiscal priorities have remained (Chakraborty 2016; OBAC 2015). In Ma-
matters of empirical investigation. harashtra too, the increased tax devolu-
The FFC recommendation for increas- tion is likely to have expanded the fiscal
ing tax devolution to states was primarily space (Shetty 2016). A broader study of
intended to bring about a shift in the com- 19 states for the first year of the award
position of central transfers to states. With period of FFC had also shown that there
increased tax devolution, it was expected had been a substantial increase in re-
that the states would receive a larger vol- sources in almost every state in the first
ume of untied funds relative to tied funds. year of the FFC award period (Accounta-
This will enhance the states’ autonomy bility Initiative 2016).
in deciding their expenditure priorities. Similarly, a World Bank study for 20
The authors are thankful to Diwan Chand for
Much of the tied transfers to states were states showed that in almost all the states,
providing excellent support with data and
understanding of the related issues. They are towards CSS, which were initiated by there was a net gain in resources follow-
also grateful to Rathin Roy and Tapas Sen for the central government, but required a ing the FFC recommendations (World
selected insights. “matching contribution” of funds from the Bank 2016). The only contrasting evi-
Mita Choudhury (mita.choudhury@nipfp.org.in), states. It has been pointed out by various dence was provided by an early study in
Ranjan Kumar Mohanty (ranjan.mohanty@nipfp. state governments that the requirement Karnataka, which showed that the gain in
org.in) and Jay Dev Dubey (jaydev.dubey@ of matching contribution in most CSS share of taxes in the state was unlikely
nipfp.org.in) are with the National Institute of schemes had squeezed the fiscal space of to compensate for the loss in grants in
Public Finance and Policy, New Delhi.
states (Finance Commission 2015). Many the first year of the FFC award period
74 MARCH 10, 2018 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.

M
estimates between 2014–15 and 2015–16. References
Accountability Initiative (2016): “State of Social
This paper makes two contributions. Notes Sector Expenditure in 2015–16: Summary,”
First, using union and state budgets, we 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
show that the increase in central transfers teenth Finance Commission (TFC) was for Transfers Right,” Hindu, 8 May.
seems higher if one uses 2014–15 as the 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
base year for comparison rather than meant for meeting expenditure needs of the & Political Weekly, Vol 51, No 6, pp 15–19.
other years of the TFC. Second, we revisit revenue account of states (which includes both
plan and non-plan). Even if one uses compara- Finance Commission (2015): Report of the Four-
questions on the net gain in central trans- ble figures, the increase in aggregate transfers teenth Finance Commission, Volume 1, Finance
to states is likely to be of the order of 3%–4%. Commission, India.
fers in states and how social sector expen- Kotasthane, Pranay and Varun K Ramachandra
2 The limited fiscal space with the union govern-
ditures have fared in states in the first ment for increasing the share of aggregate trans- (2015): “Impact of Fourteenth Finance Com-
fers to states has been pointed out in Finance mission: Karnataka Budget 2015–16,” Economic
year (2015–16) following the FFC recom- & Political Weekly, Vol 50, Nos 46–47, pp 16–20.
Commission (2015, Vol 1, p 90).
mendations. In doing so, we use the aver- 3 The term “horizontal distribution” refers to the — (2016): “Karnataka’s Changing Fiscal Landscape:
inter se distribution of funds among states. This Finances after FFC,” Economic & Political Week-
age of the period 2011–15 as the base for ly, Vol 51, No 33, pp 20–24.
distribution is done based on a formulae recom-
comparison with 2015–16, the first year mended by the Finance Commission. The formu- OBAC (2015): “Implication of Fourteenth Finance
after the implementation of FFC recom- lae determines the share of each state in the total Commission on Social Sector Budgeting in
pie of resources for states out of the divisible pool. Odisha,” Odisha Budget and Accountability
mendations. We also examine the relative 4 These grants were being released directly to Centre, http://www.obac.in/Implication%20%20
priority that the states have given to the implementing agencies. of%2014%20Finance%20Commission%20on%20
5 It may be noted that revised estimates are based Social%20Sector%20Budgeting%20in%20Od-
social services and the economic services on actual figures for at least three quarters of the isha.pdf.
in the first year of the FFC award period. financial year, and estimates for the fourth quarter. Shetty, S L (2016): “Underutilized Fiscal Space:
6 The 2015–16 figures for West Bengal are an excep- Maharashtra’s Budget post Fourteenth Finance
Our analysis suggests that the magni- tion. As Finance Accounts 2015–16 for West Bengal Commission,” Economic & Political Weekly,
tude of gains from central transfers at the is not yet released, actual figures used for that year Vol 51, No 21, pp 66–69.
for West Bengal are as reported in the state budget. World Bank (2016): “India Development Update:
state-level is much lower than what is Telangana was carved out of Andhra Pradesh Financing Double-digit Growth,” World Bank
reported in earlier studies. Despite a in June 2014. The accounts of these states are Group, June.

78 MARCH 10, 2018 vol lIiI no 10 EPW Economic & Political Weekly
ECONOMIC NOTES EPW Research Foundation

Misguided Priorities also been a decrease in the revenue from


other communication services such as the
collection of licence fees from telecom
Union Budget 2018–19 operators and spectrum usage charges. In
particular, the government expects to
realise licence fees and spectrum charges
J Dennis Rajakumar to the tune of `30,737 crore in 2017–18
against budget estimates of `44,342 crore

I
A close examination of the recent f the size of government is measured by and actual collection of `70,241 crore in
trends in government finances expressing total government receipts 2016–17. Revenue target from communi-
and expenditure as a percentage of cation service is pegged at `48,661 crore
suggests that the expenditure
gross domestic product (GDP) at market in 2018–19.
pattern of the government does price, we would see that it has been reduc- It is not clear why such vast reduction
not provide any assurance for the ing in recent times. Receipts and expendi- in revenue from communication services
future in terms of building 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
adequate social capital. The
2014–15. It remained nearly at that level, services. As for capital receipts, they are
regressive nature of taxation policy thereafter (Table 1). This is budgeted to mostly accounted by borrowing and
in recent years along with reduced go down to 25.8% of GDP in 2018–19. other liabilities representing gross fiscal
government spending has put Except in 2014–15, total receipts generally deficit. The proceeds from disinvestment
remained higher than Table 1: Trends in Government Finances
additional burden on out-of-pocket
total expenditure. Accor- SlNo Major Heads 2011– 2012– 2013– 2014– 2015– 2016– 2017– 2018–
12 13 14 15 16 17 18RE 19BE
expenditure of individuals. 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
J Dennis Rajakumar (dennisraja@epwrf.in) is 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.
Director, EPW Research Foundation, Mumbai.
alised banks. There has Source: Author's estimates based on data extracted from Union Budget 2018–19.
Economic & Political Weekly EPW march 10, 2018 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

R
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