Posts Tagged ‘India’

call for universal pensions in India

Thursday, August 25th, 2016

India’s trade unions are calling for a general strike on September 2nd, demanding a minimum pension of about 45 US dollars a month for all workers, formal and informal. The proposed pension is not fully universal, however, as it excludes unpaid workers, such as mothers, housewives and the self-employed.

Demanding universal pension of Rs 3000 [USD 45] per month to every worker, including those engaged in unorganised sector and proper application of labour laws for safe guarding interests of the working class, various trade unions will observe general strike in the country on September 2. In a bid to garner support for the stir, CPM General Secretary Sitaram Yechury has posted a series of tweets on his official page last night … stressing for Rs 3000 pension to all workers, organised and unorganised.

Unions to go on strike on Sept 2 demanding Rs 3000 pension to every worker“, webindia, 25 August 2016.

India Pension



“digital colonialists” in India

Saturday, March 19th, 2016

FT journalist Hannah Kuchler explains the challenges that Facebook and Google face in the Indian market. Here is a small sample of her long, informative column.

Silicon Valley companies, led by Google and Facebook, are arriving with the key to a vital resource of the 21st century: connectivity. Wary of some of their tactics and rhetoric, Indian critics have dubbed the US companies “digital colonialists”. ….

Executives from both Google and Facebook talk with missionary zeal about bringing internet access to India’s masses as a way of alleviating poverty, improving education and creating jobs. Yet their motives are complex. Internet companies have the power to shape lives, governments and economies in ways that purveyors of more straightforward consumer goods do not. They often operate in what economists call “winner-takes-all” markets, meaning that, once established, companies benefit from a network effect: the more people who use an app, the more attractive it becomes, leaving little room for local competition. The fate of Facebook’s “Free Basics” app, which was effectively banned by India’s regulator last month, offers a glimpse of the broader battles that could lie ahead, across the developing world, as companies tussle to win the loyalty of billions of future internet users. ….

Facebook’s most high-profile project has been “Free Basics”, a mobile app that is part of the social network’s initiative. Facebook uses the app to offer the customers of partner telecoms networks free access to Facebook and a basic selection of other sites such as Wikipedia, BBC News, AccuWeather and health sites. Since its launch in Zambia in 2014, Free Basics has been introduced to 38 countries including India (with Reliance Communications), Kenya (with Bharti Airtel) and Indonesia (with Indosat). The company is also working with telecoms groups to connect more villages to wifi, selling time online through neighbourhood entrepreneurs. It, too, has an aerial project: building solar-powered drones to connect remote areas. ….

The activists [opposing “Free Basics”] argued that telecoms companies should not be able to provide some sites or apps for free while charging for all other internet use, because by doing so they would create a two-tier system of access to the internet.

Hannah Kuchler, “Facebook, Google and the race to sign up India“, Financial Times, 19 March 2016 (metered paywall).

See also Ms Kuchler’s three-minute FT video “The race to get India online” (not metered, but free registration is required).

San Francisco-based Hannah Kuchler covers social media and cyber security for the Financial Times. Her Facebook user name is HKucher.

private vs government schools in India

Monday, October 7th, 2013

Researchers find further evidence that private schools in India produce equal or better results at vastly lower costs compared to government schools.

We present experimental evidence on the impact of a school choice program in the Indian state of Andhra Pradesh (AP) that featured a unique two-stage lottery-based allocation of school vouchers that created both a student-level and a market-level experiment. This design allows us to study both the individual and the aggregate effects of school choice (including spillovers). We find that private-school teachers have lower levels of formal education and training than public-school teachers, and are paid much lower salaries. On the other hand, private schools have a longer school day, a longer school year, smaller class sizes, lower teacher absence, higher teaching activity, and better school hygiene. After two and four years of the program, we find no difference between the test scores of lottery winners and losers on math and Telugu (native language). However, private schools spend significantly less instructional time on these subjects, and use the extra time to teach more English, Science, Social Studies, and Hindi. Averaged across all subjects, lottery winners score 0.13s higher, and students who attend private schools score 0.23s higher. We find no evidence of spillovers on public-school students who do not apply for the voucher, or on students who start out in private schools to begin with, suggesting that the program had no adverse effects on these groups. Finally, the mean cost per student in the private schools in our sample is less than a third of the cost in public schools. Our results suggest that private schools in this setting deliver (slightly) better test score gains than their public counterparts, and do so at substantially lower costs per student. [Emphasis added.]

Karthik Muralidharan and Venkatesh Sundararaman, “The Aggregate Effect of School Choice: Evidence from a two-stage experiment in India“, NBER Working Paper No. 19441 (October 2013).

That is from the abstract. An ungated copy of the full paper can be downloaded here.

Indian economist Karthik Muralidharan (PhD Harvard, 2007) teaches at the University of California-San Diego. Venkatesh Sundararaman is a Senior Economist with the World Bank.

cultural preferences and malnutrition

Tuesday, September 10th, 2013

Malnutrition continues to be a serious problem in India. Yale economist David Atkin shows that internal migration contributes to this because migrants have strong cultural preferences for foods of their place of origin, foods that are typically more expensive than local foods in their new place of residence.

This paper sets out to answer a simple question: do food cultures matter in an economic sense, and in particular, can culture constrain caloric intake and contribute to malnutrition? I address this question by exploiting the fact that migrants and non-migrants face the same relative prices, yet possess very different preferences. Drawing on detailed household survey data from India, I find that inter-state migrants consume fewer calories per Rupee of food expenditure compared to their non-migrant neighbors. This caloric tax on migrants corresponds to 1.6 percent of caloric intake and is evident even for households on the edge of malnutrition. I then provide a chain of evidence in support of an explanation based on culture: that migrants make nutritionally-suboptimal food choices due to strong preferences for the favored foods of their origin states. First, I document that migrants bring their origin-state food preferences with them when they migrate and that these preferences are stronger when there are more migrants in the household. Second, I show that the heterogeneity in the size of the migrant caloric tax is related to the suitability and intensity of these origin-state food preferences. The most adversely affected migrants (households in which both husband and wife migrated to a village where their origin-state preferences are unsuited to the local price vector) would consume 7 percent more calories if they possessed the same preferences as their neighbors

David Atkin, “The Caloric Costs of Culture: Evidence from Indian Migrants“, Economic Growth Center Discussion Paper No. 1028, Yale University, June 2013.


wider coverage of social pensions in India

Monday, November 19th, 2012

The government of India is moving toward universal age pensions, by extending coverage of social pensions to all who are not specifically excluded through pre-determined criteria, but much remains to be done. And the pension is tiny, even by the standards of India.

The Government is all set to take its first step towards universalisation of pension for aged, widows and disabled as it would remove the distinction of BPL [below poverty line] and APL [above poverty line] for selection of beneficiaries in the 12th Five Year Plan.

The proposal which has huge financial implications has been pushed by activists Aruna Roy and Baba Adhav alongwith many grassroot organisations.

Rural Development Minister Jairam Ramesh today said that pensions would now be given on the basis of some exclusion critieria in the Socio Economic Census that is going on. ….

It may include now people who may be having single storeyed concrete houses, or a vehicle and so on. The schemes under the Rural Development Ministry now provide a pension of just Rs 200 [US$3.63] a month while the states complement this with more funds.

Sreelatha Menon, “Govt takes first step to universal pension“, Business Standard, 18 October 2012.

elder abuse in India

Sunday, October 7th, 2012

A large percentage of India’s elderly face abuse from their sons, rather than daughters-in-law, with financial dependence being one of the main reasons for neglect and abuse. While the government gives a paltry monthly pension of Rs.200 [US$3.80] to those over 60 years in BPL [Below Poverty Line] families, social activists are fighting for raising this to Rs.2,000 [US$38] a month for all the elderly, irrespective of economic background. A survey conducted by HelpAge India on elder abuse indicates that the elderly suffer abuse silently – mostly at the hands of their sons.

“There is a common belief that only daughters-in-law abuse elders. On the contrary, 56 percent of those surveyed felt it was their sons who abuse them; daughters-in-law scored as low as 23 percent,” Mathew Cherian, chief executive of HelpAge India, told IANS. …. The report is based on a survey across 20 major cities, with a sample size of 5,600 and 280 elders per city. ….

“Nearly 33 percent of them are living without their children. Around 22 million widows, a fairly large group, have no form of subsistence. The widow’s pension reaches only about 10 percent of the widows,” said Cherian. ”Overall, the situation of the elderly in the country is very bleak,” he added. Financial burden is one of the main reasons for the neglect and abuse. Experts say universal old age pension would help the elders in a big way.

56% elderly abused by their sons“, Health.India.Com, 1 October 2012.

The full “Report on Elder Abuse in India” can be downloaded here.

demanding old age pensions in India

Friday, September 28th, 2012


An elderly man attended a protest to demand universal old age pension in New Delhi, Wednesday [29 August]. The protestors demanded a pension amount of $36 per month as opposed to the government’s proposal of $9 per month.

Asia in Pictures“, Wall Street Journal online, 30 August 2012.

toward universal pensions in India

Thursday, August 30th, 2012

A movement for universal pensions is gathering momentum in India. Pension Parishad, a non-governmental movement to secure a universal pension for all workers, was born on 24th and 25th February 2012 in Pune, ‘cultural capital’ of the state of Maharashtra. From May 7th to May 11th 2012 Pension Parishad launched its campaign with a dharna (protest) by more than 5,000 elderly persons at Jantar Mantar, New Delhi. Prabhat Patnaik, a well-known Indian economist, describes the movement and its demands.

[T]he demand for a non-contributory scheme is derivable from the rights-based approach, as indeed is the demand for universality. Of course the “old” are not the only deprived section in our population; poverty, deprivation and hunger are rampant in our country, but that is an argument for extending the right to adequate means of livelihood to all, not for denying it to the “old.” ….

[T]he Pension Parishad, which organised the Jantar Mantar dharna [protest], sees pensioners as “workers” and hence entitled to a proportion of the wage income as pension. Based on this, the Parishad has demanded half the monthly minimum wage rate, or (in view of the differing minimum wage rates across States) a flat amount of Rs.2,000 [US$40] at the current price, whichever is higher. … [T]he point to note is that … the monthly pension payment should be far higher than the current measly sum of Rs.200 [US$4].

The Pension Parishad estimates that [those older than 60 years number about 100 million people] …. With some exclusions, e.g. those who pay income tax, or those belonging to the organised sector whose pensions already exceed the stipulated amount, …, that would still be around eight crore [80 million] people to provide for. At the rate of Rs.2,000 [US$40] per person per month, the total would come to Rs.192,000 crore [US$34.5 billion] which, in round figures, is two per cent of the GDP.

Questions will be immediately raised on how such resources can be found. But the required resources can be put in perspective as follows: the growth rate of the economy, as the Union government never tires of repeating, has been around eight per cent, or, in per capita terms just over six per cent. The resources required will be only one third of the increase in per capita income, i.e. a third of one year’s increase in the per capita income collected from the “average” Indian will be adequate to finance a universal pension scheme. …. This surely is affordable, especially when the Centre [central government?] has given away Rs.500,000 crore [US$90 billion] per annum, i.e. more than double the amount needed for a pension scheme, in the form of corporate and other tax reliefs in recent budgets.

Prabhat Patnaik, “For a universal old-age pension plan“, The Hindu, 10 May 2012.

This ‘universal pension’ leaves 20% of the age-qualified without benefits. The pension, then, is not universal. It promises a Universal Minimum Pension, but adds an income test by excluding those who have taxable income in old age. It is a pity that the movement chose to demand a less-than-universal pension, since ending tax relief on retirement saving alone would almost certainly cover the cost of extending a two thousand rupee pension to the entire 60+ population, with money left over.

The proposed ‘pension test plus income tax test’ nonetheless is a huge improvement over current means tests. The tests are simple, non-intrusive, and cost almost nothing to administer. Anyone over the age of 60 without a pension who pays income tax forfeits her right to a ‘universal’ pension for the year or years of her income tax returns. The question is, why deny pensions to taxpayers, when government provides these same people with subsidies (tax relief) for retirement savings? Wouldn’t a flat, universal pension be more attractive than tax relief for those on the lower rungs of the taxpayer ladder? And a portion of the pension could be recovered from higher-income pensioners simply by taxing the benefit as income. As for those who receive employment-based pensions, taxable or not, including them can increase support for a universal pension, at a relatively small fiscal cost.

Economist Prabhat Patnaik (born 1945) was a member of the Faculty of Economics and Politics of Cambridge University (UK) from 1969-1974. He taught from 1974 to 2010 at the Centre for Economic Studies and Planning in the School of Social Sciences at Jawaharlal Nehru University (New Delhi) and is now Emeritus Fellow at the same institution.

For more information on Pension Parishad, including videos with interviews of an activist and TV coverage of the May protest, go to HelpAge’s Pension Watch.

absent teachers

Sunday, June 17th, 2012

Teacher absenteeism is a problem in many low-income countries. Timothy Taylor discusses an experimental attempt to improve teacher attendance in the tribal villages of Udaipur, India. Teachers at 60 ‘treated’ schools were asked to take time-stamped photos of their class at the beginning and end of each school day. Compliance (and non-compliance) was linked to pay. The researchers then compared absenteeism in the treated schools with absenteeism in 60 otherwise similar untreated schools.

The experiment was successful. Teachers responded to incentives, and absenteeism fell sharply: down from two of every five days to one of every five days. This is still a high rate of absenteeism, but the saddest part is that

the entire … study was carried out in “nonformal education centers,” rather than schools, and using “para-teachers,” rather than regular teachers. The reason is that in India, as in many other low- and middle-income countries, teachers are a highly organized labor group that politicians don’t dare to cross, and so proposals to increase the dismally low levels of teacher attendance don’t even happen in the regular school sector.

Timothy Taylor, “Teacher Attendance and Digital Cameras: An Experiment“, Conversable Economist, 15 June 2012.

Read the entire post, which is very informative. The main study, by Esther Duflo, Rema Hanna, and Stephen P. Ryan, was published in the June 2012 issue of the American Economic Review. An ungated version can be downloaded here.


India’s “right to work” scheme

Thursday, April 19th, 2012

A 12-year old scheme is supposed to guarantee full employment for unskilled workers in rural India. Four World Bank researchers evaluate its performance, and find it wanting.

In 2006, India embarked on an ambitious attempt to fight rural poverty. The National Rural Employment Guarantee Act of 2005 created a justiciable “right to work” for all households in rural India through the National Rural Employment Guarantee Scheme, renamed the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in 2009. This promises 100 days of work per year to all rural households whose adults are willing to do unskilled manual labor at the statutory minimum wage notified for the program. Work is to be made available to anyone who asks for it within 15 days of receiving an application to work, failing which the state government is liable to pay an unemployment allowance. ….

[So, how is the scheme working? We find that] actual participation rates in the scheme are not (as a rule) any higher in poorer states where it is needed the most. The reason for this paradox lies in the differences in the extent to which the employment guarantee is honored. The answer to the question posed in our title is clearly “no.”

Puja Dutta, Rinku Murgai, Martin Ravallion and Dominique P. Van de Walle, “Does India’s Employment Guarantee Scheme Guarantee Employment?“, World Bank Policy Research Working Paper 6003 (March 2012).

States are responsible for paying 100% of unemployment allowances, whereas the central government picks up 100% of the tab for wages, three-quarters of the non-wage component of MGNREGS projects, plus an additional 6% to defray administration costs.

How much, precisely, is the unemployment allowance? This is not reported, but can be found online. According to this site, “The rate of employment allowance shall be one forth [sic] of the wage rate for the  first thirty days and not less than one half of the wage rate for the remaining period.” That should encourage states to provide MGNREGS jobs for all who seek them. It doesn’t because governments are not following the spirit or the letter of the law. This reason “virtually no un-met demand for work on MGNREGS” is recorded is simply that “state and local governments have an incentive not to report un-met demand given that this implies they should pay unemployment allowances.” These same governments also have an incentive to see that local job-seekers are kept in the dark, ignorant of their legal rights.