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 LETTERS
Issn 0012-9976
Ever since the first issue in 1966,
EPW has been India’s premier journal for C R Rao (1920–2023) Guy Medal in Gold from the Royal Sta-
comment on current affairs
and research in the social sciences.
tistical Society (2011). At the age of 102,
It succeeded Economic Weekly (1949–1965),
which was launched and shepherded
by Sachin Chaudhuri,
who was also the founder-editor of EPW.
T he death of Calyampudi Radhakrishna
Rao on 22 August 2023 in Buffalo,
New York is a great loss to the world of
he received the International Statistics
Prize at the World Statistical Congress in
July 2023, the most prestigious statistics
As editor for 35 years (1969–2004)
Krishna Raj statistics. Rao both adored and adorned prize in the world created by several
gave EPW the reputation it now enjoys. statistics. He is one of the two great cen- leading international professional statis-
Editor tenarians in statistics, the other being tical associations.
S Mahendra Dev D J Finney, both being students of Ron- Rao also served as president of five
Deputy Editor ald A Fisher, the founder of modern sta- statistical societies: the Indian Econo-
Pyaralal Raghavan
tistics. He remained the top statistician metric Society (1971–76); the Interna-
SENIOR Assistant editors in the two centuries he lived in. tional Biometric Society (1973–75); the
INDU K
Nachiket kulkarni Rao was an American of Indian origin. Institute of Mathematical Statistics
Assistant editor
He was born in India. After receiving his (1976–77); the International Statistical
Sahba Fatima postgraduate training in mathematics and Institute (1977–79), and the Forum for
editorIAL Assistant statistics, he went to the University of Interdisciplinary Mathematics (1982–84).
Ankit Kawade Cambridge to receive his PhD in 1948 Rao was the head and director of the Re-
Editorial Coordinator under the supervision of Fisher. He was search and Training School of the
Shilpa Sawant
awarded an honorary DSc degree by Indian Statistical Institute which pro-
copy editor Cambridge in 1965. He was elected a duced several eminent statisticians,
jyoti shetty
Fellow of the Royal Society in 1967 and a most of whom were his students. Nota-
production
suneethi nair Fellow of the Econometric Society in 1972. ble among his students are S R S Varad-
He received several other prestigious hon- han, a US National Medal of Science
Chief Administrative and Finance Officer
J DENNIS RAJAKUMAR ours, including being elected as a fellow Laureate, and K R S Parthasarathy. He
Advertisement Manager
of King’s College, University of Cam- taught and held top leadership roles in
Kamal G Fanibanda bridge. He also received the S S Bhatna- statistics at the Indian Statistical Insti-
General Manager & Publisher gar Prize from the Indian Council of Sci- tute until he retired at the age of 60.
Gauraang Pradhan entific and Industrial Research in 1963, Then, he moved to the US and served as
editorial: edit@epw.in and the Guy Medal in Silver from the Roy- a University Professor at the University
Circulation: circulation@epw.in al Statistical Society in 1965. He was con- of Pittsburgh (1979–88), an Eberly Profes-
Advertising: advertisement@epw.in ferred the title of Padma Bhushan by the sor at Penn State University (1988–2001),
union government in 1968. He also re- and a University Research Professor at
Economic & Political Weekly
320–322, A to Z Industrial Estate ceived the Meghnad Saha Medal from the the University of Buffalo (2001–23).
Ganpatrao Kadam Marg, Lower Parel Indian National Science Academy in 1969 Rao was dearly loved by all for his
Mumbai 400 013
Phone: (022) 4063 8282 and the Jagdish Chandra Bose Gold Med- brilliant advice, warmth, and charac-
al from the Bose Institute in 1979. He was teristic wit with a twinkle in his eye and
EPW Research Foundation then elected as a fellow of the National a twist of his lip. He was an all-round-
EPW Research Foundation, established in 1993, conducts
research on fi nancial and macro-economic issues in India. Academy of Sciences, United States (US) er—a handyman at home, a cook, a
Director in 1995. He was awarded the Padma Vib- photographer, a musicologist, and a
J DENNIS RAJAKUMAR hushan by the union government in 2001. choreographer to manage the dance
C 212, Akurli Industrial Estate
Kandivali (East), Mumbai 400 101
He also received the National Medal of performances of his daughter and her
Phones: (022) 2887 3038/41 Science by President George W Bush on students. He was once the president of
epwrf@epwrf.in 12 June 2002 at a ceremony in the White the Kuchipudi Dance Academy in New
Sameeksha TrusT House “for his pioneering contributions to Delhi. He was highly skilled in organis-
(Publishers of Economic & Political Weekly) the foundations of statistical theory and ing and creating institutions. He in-
Board of Trustees
Deepak Nayyar, Chairman multivariate statistical methodology and spired people through his life and work.
Shyam Menon, Managing Trustee their applications, enriching the physical, Rao’s statistical contributions cover a
André Béteille, biological, mathematical, economic, and wide canvas—from theoretical statistics
Deepak Parekh, Romila Thapar,
Dipankar Gupta, N Jayaram, engineering sciences.” to various applications in science, engi-
SUDIPTO MUNDLE His other awards include the neering, social sciences, and linguistics.
Printed and published by Gauraang Pradhan, for and Ramanujan Medal from the Indian Nation- His contributions include the Cramer–
on behalf of Sameeksha Trust and printed at
Modern Arts and Industries, 151, A–Z Industrial Estate, al Science Academy (2003), the Interna- Rao Inequality, Rao–Blackwellization,
Ganpatrao Kadam Marg, Lower Parel, Mumbai–400 013
and published at 320–322, A–Z Industrial Estate, tional Mahalanobis Prize from the Inter- information geometry, Rao score test,
Ganpatrao Kadam Marg, Lower Parel, Mumbai–400 013
national Statistical Institute (2003), the factor analysis, etc. These contributions
Editor: S Mahendra Dev (Editor responsible for
selection of news under the PRB Act) Indian Science Award (2010), and the left an indelible mark in the field of
4 november 25, 2023 vol lViii no 47 EPW Economic & Political Weekly

statistics. The best tribute the statisti-
cians could pay him is to perpetuate his
memory by exploring the evergrowing
applications of his ideas and results.
May his soul rest in eternal peace and
may the statisticians all over the world
join me and his family in celebrating
Rao and his path-breaking contributions
to statistics.
T Krishna Kumar
Rockville
Russia’s Invasion of
Ukraine: A Response
I am much obliged to Anuradha
M Chenoy for her detailed response
(EPW, 4 November 2023) to my com-
ments (EPW, 28 October 2023) on
her article (EPW, 9 September 2023) on
Russia’s invasion of Ukraine. I address
her points in the reverse order.
Chenoy briefly attempts to show that
Russia’s security concerns were not
merely “imagined,” by asking a ques-
tion: Why should “a nuclear-powered US
[need] to continuously” (p 5) enlarge the
North Atlantic Treaty Organization
(NATO) to reach Russia’s borders? One
obvious distinction is that NATO acces-
sion is voluntary, but invasion is typically
not. Mexico has the right to seek admis-
sion to Russia’s Collective Security Treaty
Organization (CSTO); Ukraine has the
right to seek admission to NATO; and
nobody has the right to invade on such a
basis. Moreover, I hardly claim that, for
example, the admission of Estonia was
essential to United States (US) security;
at most, following Estonia’s accession
to NATO, the US credibility relies on
coming to its defence, if necessary. Un-
less Chenoy disagrees, it is she, not I,
who risks inconsistency.
The principal dispute concerns the
origins of Russia’s 2022 invasion. Ac-
cording to Chenoy, some sort of Banderite
Western-organised coup led to the sup-
pression of Crimean demands for auton-
omy and secession, restrictions on the
usage of Russian language, and the sev-
erance of ties with the Russian state,
with a view to “punishing the citizens
of the east” (p 5). I, instead, emphasise
Russia’s inflated fears of a security threat
from Ukraine and the hardening of its
Economic & Political Weekly EPW june 17, 2023
november
position following the Ukrainian backlash
to its 2014 invasion.
Chenoy accuses my argument of in-
completeness (though not, I take it, inac-
curacy) of failing to mention the history
of Banderite nationalism. The historical
argument generally omits potentially rel-
evant facts and focuses on others; that I
do so is not to make the absurd claim
that “differences between Ukraine and
Russia started [only] after 2014” (p 5). Our
omissions should be compared by their
explanatory deficiencies. Chenoy does
not allege any such deficiencies in mine;
as I explain in my first letter and below,
her omissions do. Seventy percent of a
previously pro-Yanukovych Parliament
voted to remove him after he disap-
peared, following a European Union (EU)-
brokered agreement for fresh elections.
Chenoy sees a Western-backed Banderite
coup here. There is no doubt that his re-
moval was the West’s preferred outcome,
but it is more plausible that Ukrainian
choices were decisive. Relatedly, the US
Congress repeatedly banned assistance
of any kind to the Azov Brigade. Chenoy
alleges the US support for ultra-rightist
forces; how does she explain the ban?
The supposed golpistas lost the 2019
elections to Volodymyr Zelenskyy, and
Banderites remained numerically insig-
nificant in state institutions. Why
would notorious antisemites and ultra-
nationalists allow the election of a lib-
eral Jew favouring negotiations? Why
give up such power? Who are these
“disproportionate[ly] influen[tial]” (p 5)
Banderites in the Rada and the executive?
My answer is simple: Ukraine remained a
competitive democracy; Banderites had
little power and no veto.
Many policies Chenoy cites as evidence
of Banderism post-date the 2014 inva-
sion, including the severance of ties with
Russia and restrictions on the non-official
use of the Russian language. Given Ban-
derism’s long history, what changed?
On my account, Russia’s 2014 invasion
alienated the Ukrainian electorate—peo-
ple do not like being bombed, and often
EPW Engage
The following article has been published in the past week in the EPW Engage section (www.epw.in/engage).
(1) Ramanuja’s Battle for Bhaktas — R Srivatsan
25, 2023
vol lViii
volnolViii
24 no 47
LETTERS
sever ties with those responsible. Such
sentiment is natural, not Banderite.
I suspect that Chenoy overstates other
policies. When was a Ukrainian ban on
Russian-language conversation instituted?
It is true that Ukrainian began to replace
Russian in official use in 1989, but Ban-
derism is an implausible explanation for
a process initiated by communist officials.
What autonomy was Crimea denied?
After voting to join Ukraine in 1991, it was
made an autonomous republic. To Chenoy,
Banderite policy ultimately clashed with
“the resolve for secession and the search
for autonomy” by Russophone regions
“embedded in Russian cultural [sic] tra-
ditions” (p 5). That explanation is com-
patible with my claim that Russia had no
reasonable argument for its security
needs, given its vast size and nuclear ar-
senal. It hardly justifies blaming NATO.
And it ignores the difficulty that Russia’s
war was obviously counterproductive.
Ukrainians displayed that peculiar trait of
objecting to being murdered and invaded
in 2014; there was no reason to think
otherwise in 2022. Russia’s invasion
not only disproportionately kills Russo-
phones (how many Banderites are there
in Kharkiv?) but, like all wars, empow-
ers reactionary forces (so far to a merci-
fully limited extent).
Chenoy rightly concludes that “there
were ways out if both sides used diplo-
macy” (p 5). The same naïve positivism
that obliges me to deny that concord-
ance with what “Putin said” or discord-
ance with “NATO/Western media
narrative[s]” are truth conditions that
oblige me to remind her that Zelenskyy
sought such negotiations; Putin rejected
the olive branch.
J P Loo
Oxford
Corrigendum
In the book review titled “The Historical
Trajectory of Modern Assam” (EPW, 11 and 18
November 2023) by Madhumita Sengupta,
“pp 852” on p 36 should have read as “pp 896.”
The error has been corrected on the EPW website.
5
LETTERS

6 november
june 25,
17, 2023 vol lViii no 24
47 EPW Economic & Political Weekly
 NOVEMBER 25, 2023
Free Ration for Five More Years
Foodgrains alone will not help tackle the problems of undernourishment.
T
he Prime Minister’s announcement to extend the supply
of free foodgrains to around 80 crore people for another
five years from January 2024 is a welcome step. It marks
a major inflexion point in the drive towards food security, which
has gained growing prominence since the enactment of the
National Food Security Act (NFSA) in 2013. It also indicates a
significant turnaround in the government’s open hostility to-
wards welfare measures, often derogatorily termed freebies,
perhaps motivated by the coming general elections. Whatever
the reasons, the continuation of the free rations is also an ex-
plicit recognition of the plight of the vast majority of people who
continue to be deprived of the basic necessities of life, including
access to minimum levels of nutrition.
In the initial years of the NFSA, the focus was on delivering
subsidised food. While households covered under the Antyodaya
Anna Yojana were provided 35 kg of grains per month, each per-
son in priority households received 5 kg of grains per month.
The subsidised food was provided at `1, `2 and `3 for coarse
grains, rice and wheat, respectively. This subsidised food supply
continued till the outbreak of the pandemic when the gov-
ernment announced the Pradhan Mantri Garib Kalyan Anna
Yojana (PMGKAY) which almost doubled the grain entitlements
by providing an additional 5 kg of free grains per person per
month from April 2020.
But even during the pandemic, the government was rather
hesitant in supplying free foodgrains. It was initially provided for
the three months between April and June 2020 and then extended
till November 2020 after which it was discontinued for the next
five months till April 2021. Then it was later extended, for a few
months at a time, in another five phases till December 2022. It is
estimated that the PMGKAY distributed 1,015 lakh tonnes of
foodgrains in 28 months over seven phases, which cost the gov-
ernment around `3.42 lakh crore. The scheme was later extended
for another year till December 2023 by providing free food for
all the NFSA beneficiaries through the targeted public distribution
system. The Prime Minister’s recent announcement will now
extend this free food benefit for another five years.
However, despite the sizeable allocations, the PMGKAY has
failed to make any substantial dent in the levels of undernour-
ishment. In fact, the trends show that the gains have in fact
even been reversed. The Food and Agriculture Organization
(FAO) data shows that between 2016–18 (three-year average)
and 2020–22, the number of undernourished people shot
up from 176.3 million to 233.9 million, an increase of around
Economic & Political Weekly EPW november 25, 2023 vol lViii no 47
58 million. Consequently, the prevalence of undernourishment
in the total population moved up from 13.2% to 16.6% during
the period. This is a major setback as the prevalence of under-
nourishment had been steadily decreasing from 38% in 1979–81
to 13.2% in 2016–18.
In fact, the FAO statistics on the levels of food deprivation in
India are very damning. Numbers show that women in the 15–49
child-bearing age group affected by anaemia increased from
171.5 million in 2004–06 to 187.3 million in 2020–22 and their
percentage share remained constant at an extremely high 53%
during this period. Similarly, the number of children with low
birth weight decreased from 7.7 million to 6.3 million over
almost two decades, with their share declining marginally from
29.5% to 27.4% during the period.
Equally or even more disturbing is the inordinately large
number of people who are unable to afford a healthy meal.
Though their numbers had declined from 1,067 million (78.8%)
in 2017 to 987 million (71.4%) in 2019, the trends have been
reversed since then. The number of people unable to afford a
healthy meal was 1,064 million (76.2%) in 2020 and 1,043 million
(74.1%) in 2021. The pandemic and the exclusion of millions
from the NFSA, as food entitlements are restricted to around 67%
of the population in the previous census (2011), has certainly
deprived them of adequate nutrition.
Another study of the trends in extreme food deprivation in
infants and young children between 1993 and 2021 in 36 states
and union territories throws up more shocking numbers. It esti-
mates that the number of children who do not get any food of
calorific significance for an entire day, termed zero-food chil-
dren, has only declined marginally from 20% in 1993 to 17.8%
in 2021. The highest share of zero-food children was in Uttar
Pradesh (27.4%), Chhattisgarh (24.6%), and Jharkhand (21%).
More disturbingly, the share of zero-food children increased in
states like Chhattisgarh, Mizoram, and Jammu and Kashmir
during the period.
Such a dismal scenario calls for a radical rehaul of food poli-
cies to improve both the quantity and quality of affordable food
accessible to the people. The last 50 years have seen a healthy
improvement in the quality of food produced in the country.
While the share of cereals in total agriculture output has re-
duced by more than half to 16.7%, that of vegetables and fruits
has gone up by around half to around one-fifth of the total out-
put. Similarly, the share of other nutrient-rich items like meat
products has increased fivefold to close to one-tenth, while that
7
COMMENT

of eggs and milk products has more than doubled. However, as government must shift from simply providing free foodgrains to
the nutrition numbers indicate, the disadvantaged groups re- ensuring that the excluded population has access to affordable
main excluded from these gains. Clearly, the policy focus of the and nutritious food.

8 november 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
COMMENT
Xi–Biden Meeting: A Temporary Thaw
The movement from an uncontrolled confrontation to managed competition is a welcome sign.
Atul Bhardwaj writes:
X
i Jinping, the President of China, embarked on his first
visit to the United States (US) in six years with the prima-
ry goal not being the resolution of all the challenges in the
US–China relationship. During a working lunch in California, Xi
and his US counterpart, Joe Biden, aimed to refresh and stabilise
bilateral ties while mitigating escalating tensions. The outcome
of the meeting included limited agreements such as China agree-
ing to reopen military-to-military dialogues (discontinued after
the then US House Speaker Nancy Pelosi visited Taiwan in
August 2022) and making a commitment to prohibit the export of
chemicals used in the production of fentanyl, a synthetic opioid
drug. The fentanyl agreement holds significance for Biden as he
prepares for an upcoming presidential election in 2024.
The four-hour-long discussions between the two leaders in San
Francisco have revived a sense of hope in a world grappling with
conflicts, indicating that the two superpowers are inclined to
avoid direct confrontation. This message is particularly crucial
given that the two nations were previously on a collision course
with minimal prospects of diplomatic resolution. The movement
from an uncontrolled confrontation to managed competition is a
welcome sign as both the US and China are struggling to revive
their economies in the midst of a global economic downturn.
What has been achieved in California is only a temporary sta-
bilisation. The fragility persists in the relationship between the
US and China as Beijing remains troubled by US backing for the
Taiwanese government and its imposition of advanced technolo-
gy export controls. Conversely, Washington is concerned about
China’s military build-up in the Taiwan Straits and the South
China Sea. Various risks, such as the increasing dangerous en-
counters between the two navies in the Western Pacific and the
ensuing presidential elections in both Taiwan and the US, pose
potential destabilisation factors. Strategic competition will con-
tinue to dominate bilateral ties mainly because, economically,
the two cannot completely disentangle from each other.
“Trust, but verify” is the phrase Biden is using to save the
sinking relationship with China. Xi thinks that Washington need
not distrust his country because “Planet Earth is big enough for
the two countries to succeed.” In California, the Chinese President
also addressed the American business, including Elon Musk of
Tesla, Tim Cook of Apple, and Albert Bourla of Pfizer, reiterating
that China is a big market and a friend.
Stabilisation with Beijing is crucial for Washington which is
plagued with political polarisation and declining fiscal strength.
The two rating agencies, Fitch and Moody’s, have downgraded
the US credit rating from “stable” to “negative.” In addition, the
8 november 25, 2023
US’s indulgence in wars in both Ukraine and West Asia has made
it imperative for them to lower the temperatures on the Indo-
Pacific front. Despite relentless US campaigns against Chinese
companies, they continue to dominate the global markets. Till a
few years ago, the American concern was Huawei’s 5G technology.
And now BYD, the Chinese car company, is giving sleepless
nights to the American and European car makers in the electric
vehicles segment. In the first quarter of 2023, China replaced
Japan as the world’s leading auto exporter. BYD’s sales target for
2023 is 2,50,000 vehicles, compared with 55,916 in 2022.
The US faces another challenge as China holds a dominant po-
sition in the global production of critical minerals, which are non-
fuel minerals crucial for economic and national security. China
accounts for approximately 60% of worldwide production and
85% of processing capacity for these minerals. These critical min-
erals play an indispensable role in the shift towards low-carbon
energy sources and are integral to the production of various ad-
vanced technology-based products. For instance, gallium, a vital
metal used in the manufacturing of specialised semiconductors
crucial for cutting-edge defence equipment, is almost entirely
produced by China, with the country supplying nearly 98% of the
world’s raw gallium. In July 2023, China disrupted supply chains
by imposing new restrictions on the export of gallium.
While the US grapples with a substantial debt burden, China is
also facing challenges of dwindling economic growth, rising lo-
cal debt, a faltering property market, and plummeting foreign
direct investment. Beijing needs to bring investors back as it en-
deavours to support post-pandemic recovery. China may be
willing to offer more concessions to the US in order to garner
increased investments from American companies.
China, like the US, cannot bear the consequences of a direct
military confrontation, especially considering the US’s significant
lead in the global deployment of both hard and soft power. The
complex relationship, characterised by a mix of cooperation
and rivalry between the two is likely to endure, as the economic
disentanglement between the world’s two largest economies re-
mains a formidable task in the current circumstances. However,
on the geopolitical front, the relationship is likely to experience
roadblocks as China continues to make inroads into regions that
the US has dominated since the end of World War II.
Take for example West Asia, where the Chinese efforts to make
inroads have picked up momentum, especially after the launch of
the Israeli war on hapless inhabitants of Gaza. Beijing’s equation
with Iran is strong. It has been instrumental in introducing
Egypt, Iran, Saudi Arabia, and the United Arab Emirates to the
vol lViii no 47 EPW Economic & Political Weekly

BRICS grouping of emerging nations. Arab leaders have visited
China as part of their diplomatic effort to step up the pressure on
Israel to accept a ceasefire. China has been critical of Israel, earn-
ing it some crucial points with the leaders of the global South, a
group that the US also intends to woo. The geopolitical tussle is
likely to intensify as the US does not like Chinese association with
Russia and Iran. It intends to break the transcontinental linkages
that the three are developing together to connect Eurasia through
new supply lines, financial structures and optic fibres.
More importantly, the two are involved in a comprehensive
competition to establish dominance in the field of generative
artificial intelligence (AI). Though the US is still the world
leader in terms of AI, China is quickly moving to take its place.
It has abundant computing power and capital, two important
ingredients for the development of AI. While Ernie, a Chinese
Economic & Political Weekly EPW november 25, 2023 vol lViii no 47
COMMENT
counterpart of ChatGPT developed by Baidu, may be less effective
and efficient, China is a global leader in AI research, evidenced
by its numerous publications and patents. China established a
local regulatory framework for AI, including generative AI ser-
vices, prior to the emergence of ChatGPT. Western regulators
could learn valuable lessons from China’s experience in this
regard. However, one cannot be sanguine about their collabora-
tion in the realm of AI. To remain ahead in the geopolitical com-
petition of the 21st century, the US will prevent China from
gaining a significant advantage in economic and military fields
through the use of generative AI and China is not likely to relin-
quish its right to climb up the technology ladder.
Atul Bhardwaj (atul.beret@gmail.com) is a fellow at the Nehru Memorial
Museum and Library, New Delhi.
9

From 25 Years Ago
Vol XXXIII, No 47 NOVEMBER 21, 1998
Human Rights: Dealing with
Torture
Over the years, however, it has become clear
that care and rehabilitation of victims is too
insufficient an intervention and if torture
and the inflicting of violence on dissenters
and on the powerless and the underprivi-
leged is to be curtailed, there has to be a
more broad-based movement which locates
medical approaches to care and support in a
political perspective.
This recognition has led to the evolution of
such organisations as the Physicians for Hu-
man Rights and the UN Fund for Victims of
Torture. Professional associations like the
British Medical Association (BMA) have be-
gun to actively participate in the documenta-
tion of torture. This first initiative of the BMA
Economic & Political Weekly EPW november 25, 2023
in the form of a widely distributed book, Med-
icine Betrayed, has led to a new project which
acknowledges torture and violence as public
health issues. More recently the World Health
Organisation has launched a project on Vio-
lence on Women which is not only document-
ing the nature and extent of violence that
women are subjected to, but has also directed
efforts at sensitising medical professionals to
the issue. This is a difficult task, however.
By its nature and evolution, the medical
profession in post-colonial countries has
tended to ally with ruling regimes and au-
thority structures. Often the medical system
and health professionals are the first to know
about torture or violence. When state authori-
ties subject people to torture a doctor is often
present. Whether coerced or otherwise, it is
the doctor who certifies to the victims’ contin-
ued state of good health to undergo more tor-
ture. The medical system is also approached
in the first instance for care in cases of, say,
rape or assault. And yet, whether due to igno-
rance or because of a reluctance to oppose
authority, the medical professional generally
vol lViii no 47
COMMENT
refuses to both treat the victim and document
evidence which would help in the conviction
of the perpetrators of torture. It is only re-
cently that local medical associations have
begun to address the issue. The Indian Medi-
cal Association, for instance, in collaboration
with the International Council for Rehabilita-
tion of Torture Victims has instituted a dis-
tance education programme aimed at sensi-
tising doctors on all aspects of caring for vic-
tims of violence and imparting new skills.
The issue of violence has of course been a
live concern, even an everyday concern, for
people’s organisations and movements. At
that level they have learnt to deal with the
consequences of violence, but have often
been handicapped by the lack of medical in-
sights and skills. It is this gap that needs to be
urgently filled. […] Medical models of care,
although inadequate, are a first step in the
process of rehabilitating the survivors. More
importantly, because methods of violence in-
flicted by the state or those in power are so
universal, it is possible to coalesce responses
in terms of care and rehabilitation.
9

From 50 Years Ago
Vol VIII, No 47 NOVEMBER 24, 1973
Computers on the
Indian Railways
B V Rama Rao
On account of the large volume of transactions
on the Indian Railways which emanate from
7,000 stations and involve about 600 commod-
ity groups, and to deal with a daily loading of
30,000 wagons, the Indian Railways had re-
sorted to mechanisation for producing operat-
ing and commercial statistics through the use
of punched cards and unit record equipment
even prior to Independence, and these were in
use for nearly four decades. By 1964, the bulk
of the unit record equipment was over-aged
and due for replacement. This was, therefore,
Economic & Political Weekly EPW november 25, 2023
opportune for switching over to computers.
The enormous growth of rail traffic after Inde-
pendence also required that the traffic statis-
tics should be made available much faster to
the management for decision-making. The ex-
isting procedures of Traffic Accounts and
Stores Accounts involved far too many cross-
checks and duplication of reporting at differ-
ent points and entailed heavy paper-work. A
Senior Officer was therefore placed on special
duty for simplifying the Codes and Manuals
and streamlining the administrative proce-
dures. By his recommendation, an integrated
Systems approach was required in which the
various sub-systems could be fitted to obtain a
comprehensive Management Information Sys-
tem geared to the long-term needs of the Indian
Railways. It was therefore decided that each of
the nine Zonal Railways would have an elec-
tronic computer. Likewise, the two production
units, namely, Chittaranjan Locomotive Works
and the Integral Coach Factory, which had
vol lViii no 47
COMMENT
installed unit record machines earlier, changed
over tocomputers during 1966. The third pro-
duction unit, Diesel Locomotive Works at Vara-
nasi, was planned even initially on the basis of
installing a computer for its accounting, inven-
tory control, and production control work. A
computer was also installed in the Moghal-
sarai Marshalling Yard, and a Central Comput-
er Centre was established in the Railway
Board’s Office for Wagon Control.
Thus the Indian Railways have at present
14 computers in all, one each in the nine Zon-
al Railways, one each in the three production
units, one at Moghalsarai Marshalling yard,
and one in the Railway Board’s Office. The
Railways as a result are the biggest computer-
using organisation in the country. All the 14
computers are of the IBM 1401 Series. The
volume of data-processing handled by these
14 computer centres can be gauged from the
fact that the work-load at these centres varies
between 350 and 420 meter-hours per month.
9
LAW & SOCIETY
The Folly of Re-criminalising
Adultery
Alok Prasanna Kumar
Notwithstanding the Supreme
Court of India’s judgment
decriminalising the offence of
adultery in the Indian Penal Code,
1860, the Parliamentary Standing
Committee examining the
Bharatiya Nyaya Sanhita Bill, 2023
has demanded its reintroduction
as a criminal offence. Not only is
the move regressive, but it also
completely misunderstands the
reason why the Supreme Court
deemed the criminalisation of
adultery unconstitutional.
Alok Prasanna Kumar (alok.prasanna@
vidhilegalpolicy.in) is a senior resident fellow at
Vidhi Centre for Legal Policy, and is based in
Bengaluru.
10
I
n its 246th report, the Parliament
Standing Committee on Home Affairs
has suggested that the proposed
Bharatiya Nyaya Sanhita Bill (BNS), 2023
be amended to make adultery a criminal
offence again (Joy 2023). The committee
notes that the Supreme Court has struck
down Section 497 of the Indian Penal
Code (IPC), 1860 as being a violation of
Articles 14, 15, and 21 (in Joseph Shine v
Union of India1) but still bafflingly sug-
gests that adultery be re-criminalised
but in a “gender neutral” manner. Such
re-criminalisation, it argues, is neces-
sary to “safeguard” the “sanctity” of the
institution of marriage.
The committee’s suggestion comes out
of nowhere and there is little serious dis-
cussion as to the basis of making such a
recommendation beyond a vague refer-
ence to the opinions of certain members
and “experts” that the committee chose
to hear. On the other hand, one of the
dissenting notes by one of the members
of Parliament on the committee, Derek
O’Brien, argues that adultery should not
be decriminalised (Rajya Sabha 2023).
In this column, I will explain why the
Supreme Court held that adultery cannot
be made a criminal offence and why
simply making it a “gender-neutral”
criminal offence will not overturn the
judgment. Other commentators have also
pointed out this issue (Venkatesan 2023;
Khan 2023). However, in this column, I
will explore this in some detail outlin-
ing the jurisprudence that informs the
Joseph Shine case. The committee’s sug-
gestion, I argue, should be discarded by
the ministry in making any further
changes to the BNS.
The Joseph Shine Judgment
In the Joseph Shine case, the Court was
hearing a challenge to Section 497 of
the IPC and Section 198 of the Code of
november 25, 2023
Criminal Procedure (CrPC), 1973. Section
497 made adultery a criminal offence,
but only the man who committed adul-
tery with a married woman could be
punished with jail term or a fine. The
woman who committed adultery cannot
be punished as an abettor or an accom-
plice in the crime. Section 198 of the
CrPC prescribed who could make a com-
plaint related to an offence of adultery
(as an offence against marriage in gen-
eral) and limited it only to the husband
of a wife who had been in an adulterous
relationship with another man.
Given that three previous judgments
by the Supreme Court had upheld the
constitutional validity of Section 497, a
constitution bench of the Supreme Court
was set up to test the correctness of the
previous judgments in the Joseph Shine
case. Four judgments were delivered (i) by
Chief Justice of India (CJI) Dipak Misra
for himself and Justice A M Khanwilkar,
(ii) Justice Rohinton Nariman, (iii) Justice
D Y Chandrachud, and (iv) Justice Indu
Malhotra. There is considerable overlap
in the approach of the judges to the
question, and there is no dispute on the
eventual conclusion of striking down
Section 497 IPC and reading down Sec-
tion 198 CrPC.
To understand the real impact of the
Joseph Shine case, one needs to under-
stand the limitations of the approaches
adopted by the previous judges who had
upheld the constitutional validity of Sec-
tion 497 of the IPC. The first judgment
which upheld the validity of Section 497
was Yusuf Abdul Aziz v State of Bombay2
where a constitution bench of the Supreme
Court held that Section 497, by exclud-
ing women from punishment for the
offence of adultery, was not discrimina-
tory towards men. The justification offered
is that not penalising a woman who com-
mits adultery is protected by Article 15(3)
which provides for laws that make
“special provision” for women. Similarly,
another challenge made to Section 497
in the 1980s, Sowmithri Vishnu v Union of
India,3 had no success. Here, the challenge
was made on the grounds that a married
woman not being able to prosecute her
husband for adultery was unconstitutional.
vol lViII no 47 EPW Economic & Political Weekly
 LAW & SOCIETY

In V Revathi v Union of India,4 a chal-
lenge was made to Section 198 of the
CrPC alone on similar grounds but found
no success.
In all of these cases, Article 21 was not
raised in the arguments and the courts
turned down the equality challenges on
the grounds ranging from the need to
protect the marital sanctity to this being
a “beneficial provision” for women.
Acknowledging the evolution of equality
jurisprudence, in the Joseph Shine case,
the Supreme Court found these three
judgments to be out of tune with the
constitutional imperative of equality. In
the Joseph Shine case, there is a careful
historical analysis of how adultery came
to be a crime in India even when it was
not a crime in the United Kingdom itself
and how even Lord Macaulay was not in
favour of criminalising it in India. All
the judgments unearth the underlying
presumptions behind the criminalisation
of adultery—that a married woman is
treated as the mere property of a man
and therefore a man who has sex with her
is causing “harm” to her husband as a con-
sequence. This is also why marital infi-
delity by the husband is not punishable.
Unearthing this also allows the Court to
get around the previous judgments finding
that Article 15(3) protected Section 497.
Justice Nariman finds that Article 15(3)
cannot be applied to pre-constitutional
laws (such as the IPC), while Justice
Malhotra finds that the scope of Article
15(3) only relates to social welfare laws.
Nevertheless, discriminatory treatment of
both men and women (but for different
reasons) was not the only basis for strik-
ing down Section 497 of the IPC.
What was new about the Joseph Shine
case judgment was the application of the
principles relating to the right to privacy
laid down in Justice K S Puttaswamy
(Retd) and Anr v Union of India and Ors.5
By locating the right to privacy in Article
21 of the Constitution and placing con-
sent at the centre of this right, the
Supreme Court undertook perhaps the
most important conceptual leap in the
understanding of fundamental rights in
the past four decades (Kumar 2017). This
means that not only was Section 497
found to offend Articles 14 and 15 of the
Constitution but also Article 21. In effect,
not only did criminalising adultery involve
discriminatory treatment of men and
women, but also offended the basic right
of life and liberty guaranteed under
the Constitution.
Each of the different judges uses a
slightly different aspect of the Puttaswamy
judgment to hold Section 497 unconsti-
tutional. CJI Misra lays emphasis on the
aspect of “dignity” of an individual. Apart
from Puttaswamy, he relies on several
other judgments which talk about the
dignity of women to highlight the point
that criminalising adultery (as encapsu-
lated in Section 497) offends a married
woman’s right to be treated as an indi-
vidual in her own right. Nariman, like-
wise, in the Joseph Shine case,6 links
privacy and dignity to hold that
A statutory provision belonging to the hoary
past which demeans or degrades the status
of a woman obviously falls foul of modern
constitutional doctrine and must be struck
down on this ground.
Justice Chandrachud and Justice
Malhotra, on the other hand, separately
look at the threefold test in the Putta-
swamy judgment and find that Section
497 of the IPC is a violation of Article 21.
They find that Section 497 criminalises a
purely consensual act, for no compelling

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Economic & Political Weekly EPW november 25, 2023 vol lViII no 47 11
LAW & SOCIETY
public interest and even if maintaining
the sanctity of marriage was such a rea-
son, it is far too disproportionate to that
end. The reasoning of Chandrachud and
Malhotra in their respective judgments
in the Joseph Shine case has also been
described as an example of feminist con-
stitutionalism (Atrey 2022).
On this last aspect, Justice Chandra-
chud, in the Joseph Shine case,7 says,
In criminalising certain types of wrongdo-
ing against women, the state intervenes to
protect the fundamental rights of every woman
to live with dignity. Consequently, it is impor-
tant to underscore that this judgment does
not question the authority and even the
duty of the state to protect the fundamental
rights of women from being trampled upon
in unequal societal structures. Adultery as
an offence does not fit that paradigm.
This element is the key to understand-
ing why the Court held that criminalising
adultery was unconstitutional—that it was
not a harm done to the public at large.
Whatever harm it may cause is purely pri-
vate, and existing remedies under family
law are a proportionate way of addressing
any harm that may arise out of this action.
A call to re-criminalise adultery misunder-
stands or ignores this important aspect
of the Joseph Shine judgment.
In Conclusion
The three new criminal code bills, on
their own, contain little to no trace of
the supposed “decolonisation” that was
claimed as the need for their introduc-
tion. As has been pointed out elsewhere
(Ahmad and Sharma 2023), they are a
poor repackaging of existing criminal
laws and procedures, with no rigorous
approach. The process followed in the
drafting, passing, and discussion of the
bills has been marked by contempt for
the legislative process and public partici-
pation. The committee’s report blithely
calling for a re-criminalising of adultery
only compounds this.
It is unlikely that in whatever form
adultery is re-criminalised, it will survive
judicial scrutiny. This is not only as long
as the Joseph Shine judgment is good law,
but this is something that comes, as I have
pointed out earlier in this column, from the
Puttaswamy judgment. While the promise
of creating a new charter has still not
been fully realised, a judgment, such as
12
Joseph Shine, was only possible due to the opinion/a-lost-opportunity-to-find-and-erase-
the-colonial-in-the-penal-code-2666907.
radical possibilities opened up by placing
Atrey, Shreya (2022): “Feminist Constitutionalism:
consent at the heart of privacy. As all Mapping a Discourse of Contestation,” ICON,
judges in the Joseph Shine case judgment Vol 20, No 2, pp 611–638, https://academic.
oup.com/icon/article/20/2/611/6611796.
make it clear, criminalising consensual Joy, Shemin (2023): “Gender Neutral Provision to
sexual relations between adults is a non- Criminalise Adultery among Recommenda-
tions by Panel on New Criminal Laws,” Deccan
starter under the new framework of con- Herald, 10 November, https://www.deccanher-
stitutional rights. One hopes that better ald.com/india/gender-neutral-provision-to-
criminalise-adultery-among-recommenda-
sense prevails in the Ministry of Home tions-by-panel-on-new-criminal-laws-2766274.
Affairs, and notwithstanding the com- Khan, Khadija (2023): “Why Adultery Was Struck
mittee’s suggestion, adultery remains Off IPC, and Why a House Panel Wants to Make
it a Crime Again,” Indian Express, 17 November,
decriminalised in any future penal code. https://indianexpress.com/article/explained/
explained-law/adultery-ipc-bns-house-9027529/.
Notes Kumar, Alok Prasanna (2017): “The Puttaswamy
Judgement: Exploring Privacy within and
1 Joseph Shine v Union of India 2018:INSC:898 Without,” Economic & Political Weekly, Vol 52,
2 1954 SCR 930. No 51, p 34.
3 (1985) Supp SCC 137 Rajya Sabha (2023): “Two Hundred and Forty Sixth
4 1988 SC (3) 73. Report on the Bharatiya Nyaya Sanhita, 2023,”
5 (2017) 10 SCC 1. 10 November, p 134, https://prsindia.org/files/
6 Joseph Shine, page 101, para 23 of Justice Nari- bills_acts/bills_parliament/2023/SC_Report_
man’s judgment. Bharatiya_Nyaya_Sanhita_2023.pdf.
7 Joseph Shine, page 175, para 61 of Justice Chan- Venkatesan, V (2023): “Parliamentary Panel’s Draft
drachud’s judgment. Proposal to Make Adultery a Crime Contradicts
Landmark SC Judgment,” Frontline, 28 October,
https://frontline.thehindu.com/columns/legal-
References acumen-parliamentary-panels-draft-proposal-
to-make-adultery-a-crime-contradicts-landmark-
Ahmad, Naveed Mehmood and Ayushi Sharma
(2023): “A Lost Opportunity to Find and Erase
supreme-court-judgment/article67469419.ece.
the ‘Colonial’ in the Penal Code,” Deccan Herald,
31 August, https://www.deccanherald.com/ [All URLs viewed on 21 November 2023.]
N EPWRF India Time Series
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november 25, 2023 vol lViII no 47 EPW Economic & Political Weekly
HT PAREKH FINANCE COLUMN
India’s Inclusion in
the JP Morgan GBI-EM Indices
A Path to Eden or Just Another Sin?
Güney Düzçay, T Sabri Öncü
T
he concept of “original sin” was
introduced by Eichengreen and
Hausmann (1999), defining it as
“a situation in which the domestic cur-
rency cannot be used to borrow abroad
or to borrow long term, even domestically.”
Subsequently, Eichengreen et al (2003)
redefined the concept as a country’s ina-
bility to borrow abroad in its own cur-
rency, suggesting the term “domestic
original sin” for the country’s inability to
borrow in its own currency long-term
domestically. We adopt the Eichengreen
et al (2003) definition of original sin.
Armed with this information, let us
now delve into India’s inclusion in JP
Morgan’s Government Bond Index-Emerg-
ing Markets (GBI-EM) of local currency
government bonds (LCGBs) and note that
JP Morgan offers six distinct related
indices. They are GBI-EM, GBI-EM Broad,
GBI-EM Global, and their diversified
counterparts, each varying in the coun-
tries included and the assigned weights.
On 23 September 2023, JP Morgan
announced its decision to include Indian
LCGBs in its GBI-EM suite of indices. India
is scheduled to be included in the GBI-EM
Global Index suite starting 28 June 2024,
and is expected to reach the maximum
weight of 10% in the GBI-EM Global
Diversified Index, according to JP Mor-
gan. Presently, 23 Indian government
bonds, with a combined notional value
of $330 billion, meet the index eligibility
criteria. The inclusion of these bonds
will be phased in over 10 months, con-
cluding on 31 March 2025, with an incre-
mental addition of 1% weight each month.
Given that the total size of foreign funds
benchmarked to JP Morgan GBI-EM indices
is nearly $240 billion, analysts estimate
that this decision could potentially attract
around $24 billion into the country.
Economic & Political Weekly EPW November 25, 2023
India initiated the process of includ-
ing its government bonds in global indi-
ces in 2019. As part of these efforts, in
2020, a portion of government bonds was
deemed investable by foreigners without
restrictions under the newly introduced
“fully accessible route.” Despite delays
attributed to the government’s stance on
capital gains taxes and local settlement,
the government’s core policy remained
unchanged. Although JP Morgan’s deci-
sion heightened expectations regarding
other index providers, such as Bloomberg-
Barclays and FTSE Russell, the latter
announced that India would be retained
on its watchlist for a potential upgrade,
signalling the need for reforms in the
government bond market as expected by
international investors. While negotia-
tions will likely persist, the precedent set
by JP Morgan suggests that more bench-
mark indices may include Indian local
currency government and corporate
bonds, potentially attracting a substan-
tial influx of funds into the country.
Great Expectations
Several commentators have noted that
this development is poised to assist in
financing current account and fiscal def-
icits. This expectation is based on the
anticipation of a lower cost of borrowing
and the engagement of a “sticky” institu-
tional investor base with a long-term
investment horizon. Moreover, there is
an anticipation that this development
will catalyse increased investments
through private lending, facilitated by
the relieved balance sheets of domestic
financial institutions holding LCGBs.
V Anantha Nageswaran, the chief eco-
nomic advisor to the government, high-
lighted the widening investor base and
the relief of balance sheets for domestic
vol lViii no 47
financial institutions as the main benefits
of the move. He emphasised that
naturally the financing of the current
account deficit becomes that much easier
because it is by-and-large believed that these
investors are long term and patient investors
and they are not fickle or hot-money flows.1
In October 2022, the Reserve Bank of
India (RBI) published a document outlin-
ing the internationalisation efforts for
the rupee. In a section titled “Inclusion
of Indian Government Bonds in Global
Bond Indices” (RBI 2022: 35), the docu-
ment highlights key benefits and empha-
sises the reduction of reliance on domestic
financial institutions for public finance
needs by tapping into large international
resources. Echoing Nageswaran, the RBI
also notes a growing trend in passive
investment philosophy that tracks bench-
marks, stating that “funds following the
indices are generally stable flows and
tend to be more stable than other FPI
flows” (RBI 2022: 36), where FPI stands
for foreign portfolio investments.
While underscoring these advantages,
the document also addresses potential
risks, including the
increased sensitivity of domestic policy to
external spillovers; fiscal and monetary policies
need to be more cognizant of global percep-
tion and sensitivities, and the potential cost
for sterilisation and associated market oper-
ations owing to large inflows.(RBI 2022: 36)
Despite these concerns, however, Indian
monetary authorities appear to believe
that the potential benefits will far out-
weigh the risks. In the following sec-
tions, we critically examine the validity
of this stance.
Some Conceptual Issues
Let us correct some misconceptions
regarding current account financing.
India has consistently maintained a cur-
rent account deficit since the 1980s, with
only two brief episodes in 2001–04 and
2020. Historically, with the exception of
the 1991 balance-of-payments crisis, India
has successfully financed its deficits
without relying on foreign inflows to
LCGBs, and it is entirely capable of con-
tinuing to do so without additional fund-
ing. Furthermore, there is no “domestic
13
HT PAREKH FINANCE COLUMN
original sin” in India, as former RBI
Governor Y V Reddy (2023) attests in
his recent article.
According to the balance of payments
accounting, any potential additional
portfolio inflows will be matched by a
combination of increased current account
deficits and/or additional reserve accu-
mulation, and/or heightened financial
outflows by residents in India. Conse-
quently, these additional funds will not
directly finance “the current account
deficit” but will instead contribute to a
potential increase in it. It is also highly
likely that they will become part of the
accumulated reserves of the country,
which will, in turn, be reinvested in
hard currency reserve assets.
Various factors will determine the
ultimate fate of these funds. On the one
hand, they may catalyse infrastructure
development and stimulate productive
investments with significant multiplier
effects, as expected. On the other, they
could lead to increased local consump-
tion of imported goods, potentially
crowding out local investments. These
funds have the potential to bolster eco-
nomic growth through various chan-
nels—reducing overall borrowing costs,
appreciating the currency (thus trigger-
ing more imports), and freeing up the
balance sheets of domestic financial
institutions, enhancing their capacity to
lend. However, whether these inflows
will contribute to long-term growth
prospects or exacerbate business cycles
remains uncertain. If the latter effect
dominates, it is crucial to acknowledge
the downside of portfolio flows and the
potential pain they might bring.
The Sad Story of Türkiye
In his influential work, “Playing with Fire:
Deepened Financial Integration and
Changing Vulnerabilities of the Global
South,” published in 2017, Yılmaz Akyüz
raised critical concerns about the poten-
tial repercussions of intense global inte-
gration of bond markets in emerging
and developing economies (EDEs). He
highlighted that the true test of the pru-
dence behind this integration could
emerge during the normalisation of the
United States (US) monetary policy.
Akyüz cautioned against overlooking the
14
possibility that governmental actions Turkish and Indian benchmark govern-
addressing the aftermath of the 2007–09 ment bond interest rates reported daily,
global financial crisis might inadvertently highlighting that while the Turkish
become new sources of instability, poten- LCBM has been fully accessible to foreign
tially triggering the next crisis. He spe- investors since 1989, the Indian LCBM
cifically pointed out that the internation- has been restricted throughout.2 The
alisation of local currency bond markets Turkish benchmark interest rate has
(LCBMs) in EDEs might not necessarily exhibited notably higher volatility com-
represent a path towards improvement pared to its Indian counterpart. Further-
but rather echo the errors of the past, more, following the onset of the August
suggesting that it might be “a significant 2018 currency crisis (Cömert and Öncü
mistake as the original one, rather than 2023b) during the April–October 2018
a path back to Eden” (Akyüz 2017: 148). EDE bond market sell-off, its volatility
Once a star in the emerging market skyrocketed. This surge coincided with a
global bond indices, Türkiye is now on a significant exodus of foreign investors
quest to reintroduce its LCBM to foreign from the Turkish LCBM, as observed
investors. If nothing else, this sad story in Figure 1.
of Türkiye that we nar- Figure 1: The Rise and Fall of the Turkish Local Currency Bond
rate proves Akyüz right Market—I
and stands as an exam- 30% 24%
10%
8%
ple for discussing the 18% 6%
risk-reward implications 12% 4%
6% 2%
of foreign investor parti- 0% 0%
cipation in LCBMs. It
December 2006
December 2007
December 2008
December 2009
December 2010
December 2011
December 2012
December 2013
December 2014
December 2015
December 2016
December 2017
December 2018
December 2019
December 2020
December 2021
December 2022
December 2023
prompts areconsideration
of the aforementioned
great expectations. Foreign Ownership of Indian LCBs (LHS)
Türkiye’s journey to-
Foreign Ownership of Turkish LCBs (LHS)
wards capital account lib-
Türkiye's Weight in JPM GBI-EM Global Index (Market Value Based Quarterly
eralisation commenced in Average - RHS)
the late 1980s, persisted 4.5%
through what is often 4.0%
referred to as “an almost 3.5%3.0%
lost decade” in the 1990s, 2.5%
2.0%
and gained momentum 1.5%
following the reforms 1.0%
0.5%
implemented in the after- 0.0%
December 2006
December 2007
December 2008
December 2009
December 2010
December 2011
December 2012
December 2013
December 2014
December 2015
December 2016
December 2017
December 2018
December 2019
December 2020
December 2021
December 2022
December 2023
math of the 2001 financial
crisis (Cömert and Öncü
2023a, 2023b). The Turkish
LCBM has been fully open Volatility of the Indian Benchmark Bond (10
Year)

to non-residents since Volatility of the Turkish Benchmark Bond (2
Year)
1989, and at its peak in Source: IMF, CBRT, Bloomberg, investing.com, authors’ calculations.
3
April 2013, the local currency bond stock Figure 1 also illustrates that increased
held by non-resident investors reached a foreign involvement in the LCBM did not
staggering $70 billion. Fast forward to remedy the original sin, at least in Tür-
2023, and the value of that stock now kiye. Numerous studies, including those
hovers around $1 billion. by Carstens and Shin (2019), Hofmann
Türkiye has been included in the JP et al (2020), and the Hong Kong Mone-
Morgan GBI-EM Global Index since its tary Authority (2020), echo similar find-
launch in November 2006. Figure 1 illus- ings in other EDEs.
trates the quarterly evolution of its GBI- Carstens and Shin (2019) note that the
EM Global Index weight, encompassing original sin phenomenon did not disap-
foreign ownership of Turkish and Indian pear but rather shifted from borrowers
local currency bonds for comparison. to lenders. In EDEs, foreign holders of
We also compare the volatilities of the local currency bonds mainly consist of
November 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
 HT PAREKH FINANCE COLUMN
Figure 2: Original Sin Redux
  8%
  7%
 
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%FDFNCFS

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%FDFNCFS

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%FDFNCFS

%FDFNCFS

%FDFNCFS

%FDFNCFS

%FDFNCFS

%FDFNCFS

1%

December 2006
December 2007
December 2008
December 2009
December 2010
December 2011
December 2012
December 2013
December 2014
December 2015
December 2016
December 2017
December 2018
December 2019
December 2020
December 2021
December 2022
December 2023
5VSLJTI
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&VSPCPOET Current Coupon Spread of the 8% Coupon, February 2034 Maturity Turkish Eurobond
90% 90%
80% 80%
70% 70%
60% 60%
50% 50%
40% 40%
30% 30%
20% 20%
10% 10%
0%
0%
December 2006
December 2007
December 2008
December 2009
December 2010
December 2011
December 2012
December 2013
December 2014
December 2015
December 2016
December 2017
December 2018
December 2019
December 2020
December 2021
December 2022
December 2023
December 2006
December 2007
December 2008
December 2009
December 2010
December 2011
December 2012
December 2013
December 2014
December 2015
December 2016
December 2017
December 2018
December 2019
December 2020
December 2021
December 2022
December 2023

Turkish Goreign Durrency Cond Jssuance (Eomestic) Turkish Goreign Durrency Cond Jssuance (Uotal)
Source: CBRT, Börse Frankfurt, FRED, authors’ calculations.4

money managers from advanced econo- reinstated domestic foreign currency international reserve that erodes confi-
mies—such as pension funds, hedge borrowing due to challenges in issuing dence in financial stability.
funds, and life insurance companies— bonds to non-residents. While policy choices often dictate the
holding liabilities in their home curren- budget balance, it is also influenced by
cies. This shift effectively moved the Great Expectations—Revisited growth patterns, partially driven by
original sin from borrowers to lenders, Figure 3 (p 16) illustrates the local cur- inflows to the LCBM. However, the behav-
creating a new form of original sin. rency bond stock since 2006, encom- iour of the budget balance post Decem-
Consequently, when the value of local passing not only local currency sovereign ber 2020 does not seem to be directly
currency bonds declines in EDEs, often bonds but also a small amount of corpo- driven by these inflows. The REER sheds
due to currency depreciation and exacer- rate bonds, along with valuation effects. light on the self-perpetuating mecha-
bated by the absence of developed The comparison includes the current nisms driving Türkiye’s current/capital
derivatives markets for currency risk account balance, budget balance, inter- account imbalances. An appreciating REER
hedging, these lenders tend to offload national reserves and the real effective trend attracts more capital inflows, relaxes
these bonds in substantial volumes. This exchange rate ([REER] gauging the balance sheet constraints on domestic net
practice exacerbates the challenges exchange rate concerning inflation), borrowers of foreign currency, fosters
faced by EDEs. with quadratic trend lines imposed on increased imports, and vice versa. Persis-
Examining both Figures 1 and 2, where them. While both the current account tent fluctuations in Türkiye’s REER indicate
Figure 2 illustrates different facets of and international reserves are influ- that short-term challenges stemming from
the Turkish foreign currency bond mar- enced by various factors, the aforemen- LCBM inflow effects, as highlighted by
kets and tracks the evolution of the tioned balance of payments mechanics various commentators discussing risks,
current coupon interest rate spread of is evident. It is clear that the increasing might morph into enduring, structural
the 8% coupon, 14 February 2034 matu- participation of foreign investors in the economic issues.
rity Turkish Eurobond issued on 14 Jan- LCBM of Türkiye was associated with a In addition, there is a misconception,
uary 2004 against the identical remain- widening current account deficit and if not misdirection, among advocates that
ing maturity US government bond cou- increasing international reserves. On the foreign portfolio inflows into LCBMs are
pon interest rate, we observe that the downside, the gradual departure of foreign stable, long-term foreign funding sources.
emergence of the new original sin did investors was linked to a shrinking cur- However, as the saying goes, everyone is
not eradicate the old one in Türkiye. rent account deficit (associated with low a long-term investor until they realise
Notably, following the August 2018 cur- and unstable economic growth patterns the end is near. When concerns arise
rency crisis, the Government of Türkiye not shown in the figure) and a declining about short-term capital losses, whether
Economic & Political Weekly EPW November 25, 2023 vol lViii no 47 15
HT PAREKH FINANCE COLUMN

Figure 3: The Rise and Fall of the Turkish Local Currency Bond Market—II
30% 7.5% 30% 0%
25% 2.5% 25%
20% -2.5% 20% -12%
15% -7.5% 15%
10% -24%
10% -12.5%
5%
5% -17.5%
0% -36%
0% -22.5%

December 2006
December 2007
December 2008
December 2009
December 2010
December 2011
December 2012
December 2013
December 2014
December 2015
December 2016
December 2017
December 2018
December 2019
December 2020
December 2021
December 2022
December 2023
December 2006
December 2007
December 2008
December 2009
December 2010
December 2011
December 2012
December 2013
December 2014
December 2015
December 2016
December 2017
December 2018
December 2019
December 2020
December 2021
December 2022
December 2023
LC Cond Ttock Ield by Oon-Sesidents (LHS)

LC Cond Ttock Ield by Oon-Sesidents (LHS)

Budget Calance (RHS)
Current Bccount Calance (RHS)
Poly (LC Cond Ttock Ield by Oon-Sesidents (LHS))
Poly
(LC Cond Ttock Ield by Oon-Sesidents (LHS))

Poly (Current Bccount Calance (RHS)) Poly
(Cudget Calance (RHS))

30% 30% 30% 120%

20% 20% 20% 100%

10% 10% 10% 80%

0% 0% 0% 60%
December 2006
December 2007
December 2008
December 2009
December 2010
December 2011
December 2012
December 2013
December 2014
December 2015
December 2016
December 2017
December 2018
December 2019
December 2020
December 2021
December 2022
December 2023

December 2006
December 2007
December 2008
December 2009
December 2010
December 2011
December 2012
December 2013
December 2014
December 2015
December 2016
December 2017
December 2018
December 2019
December 2020
December 2021
December 2022
December 2023
LC Cond Ttock Ield by Oon-Sesidents (LHS)
LC Cond Ttock Ield by Oon-Sesidents (LHS)
International Seserves (RHS) Reel Fffective Fxchange Sate (PPI based - RHS)

Poly
(LC Cond Ttock Ield by Oon-Sesidents (LHS))
Poly
(LC Cond Ttock Ield by Oon-Sesidents (LHS))

Poly
(Jnternational Seserves (RHS)) Poly
(Seel Fffective Fxchange Sate (PPI based - RHS))
Source: CBRT, authors’ calculations.5

due to upward-shifting interest rates, Figure 4: Foreign Direct Investment and Portfolio Inflows to Türkiye
depreciation of the local currency, or both, 45
40
stability flies out of the window.
35
Figure 4 illustrates Türkiye’s experience 30
with foreign portfolio inflows, including
Billions of dollars

25
foreign direct investment (FDI) inflows, 20
which consistently hovered around 15
10
$10–$15 billion annually, serving as a
5
benchmark. The figure highlights that, 0
when assessed annually, bond inflows have -5
proven to be significantly more unstable -10
than equity inflows. Additionally, by -15
December 2006

December 2007

December 2008

December 2009

December 2010

December 2011

December 2012

December 2013

December 2014

December 2015

December 2016

December 2017

December 2018

December 2019

December 2020

December 2021

December 2022

December 2023
comparing total bond inflows with local
currency bond inflows in Figure 4, we
observe that while LC bond inflows have
dwindled since 2013—since the need for
LC Conds Jnflows Bond Jnflows
borrowing abroad has persisted—foreign Equity Jnflows Foreign Eirect Jnvestment
currency bond borrowing from abroad Sources: CBRT, authors’ calculations.
has increased, exacerbating the original
sin, as we mentioned. highest credit rating in May 2013, just Overall, the decline of the Turkish
The October 2022 RBI document one month after the peak in the value of LCBM can be attributed to various factors,
makes a somewhat naïve comment about the stock of local currency bonds held including external shocks that led to
the potential risks linked to foreign by foreign investors. Even more ironic local currency depreciation and other
participation in the LCBM: “such risks is that this almost coincided with the contractionary forces, causing discom-
generally materialise when concerns Federal Reserve’s announcement of fort for the government. As financial and
emerge about the fiscal health of the tapering in the same month, marked by economic instabilities resulting from
country with potential rating downgrades the infamous taper tantrum and the these pressures weakened the govern-
or de-platforming from the index” (RBI accompanying exodus of foreign investors ment’s ability to preserve its rule, it
2022: 36). Ironically, Türkiye received its from the emerging markets. responded with unorthodox monetary and
16 November 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
 HT PAREKH FINANCE COLUMN

fiscal policies (Cömert and Öncü 2023b),
influenced also by election cycles and
other related considerations. However,
these measures were not well-received by
mainstream economists, both foreign and
domestic investors, domestic capitalists,
and the international community. Coupled
with fluctuating global financial condi-
tions, these policies contributed to dimin-
ished cycles of local currency bond
inflows to Turkey, marking a secular
downtrend that eventually led to almost
zero participation.
In Conclusion
While foreign access to its LCBM is crucial
for any country aiming to internationalise
its currency, as emphasised by Reddy
(2023) in his insightful article, the rupee
is yet to be regarded as an international
currency. As he pointed out,
[i]nternationalisation of the rupee is likely
to be more an outcome of sustained develop-
ment of the financial system and improved
economic performance.
As Reddy wrote:
The experience of other countries highlights
that currency internationalisation cannot be
decided in one day and pursued the next. It
comes about after a long evolutionary process,
when all the building blocks are in place.
We agree with Reddy that the “inter-
nationalisation of the rupee is inevitable
as the Indian economy grows bigger,
but there are associated problems.” It is
crucial to carefully consider the down-
sides of portfolio flows in and out of
LCBMs, especially in light of the potential
risks we discussed. Furthermore, the
cautionary tale we drew from the expe-
rience of Türkiye compels us to recom-
mend to India prudence when consider-
ing the relaxation of foreign portfolio
investors’ access to its LCBM.
Güney Düzçay (guneyduzcay@gmail.com) and
T Sabri Öncü (sabri.oncu@gmail.com) are
economists based in Türkiye.
notes
1 https://indianexpress.com/article/business/
economy/jp-morgan-india-emerging-markets-
bond-index-8951000/.
2 Volatilities are 21 days running standard
deviations.
3 The IMF data come from the 30 August 2023
version of its Sovereign Debt Investor Base for
Emerging Markets and Developing Econonomies.
4 We calculated the corresponding identical matu-
rity US government coupon interest rate through
linear interpolation between the 10-year and
30-year constant maturity coupon rates (par
yields) available from the FRED database of
the Federal Reserve Bank of St Louis.
5 All series except non-resident ownership of local
currency bonds are 12-month rolling sums;
while the current account balance and interna-
tional reserves are normalised by the absolute
sum of current account items, the budget bal-
ance is normalised by the sum of government
revenues. Official reserves are adjusted for
cross-country flows between monetary author-
ities. Trend lines are second order polynomials.
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● Combined Expenditure: Total Expenditure (Developmental, Non-developmental, Loans and Advances, etc.)
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Economic & Political Weekly EPW November 25, 2023 vol lViii no 47 17
COMMENTARY
Climate in Free (Market) Fall
Sunil Tamminaina
Throwing light on the complex
and technical negotiations, the
key issues under discussion at
COP27 that would shape the
future international
carbon-trading regime are
analysed. By allowing for
unrestrained confidentiality and
doing little to resolve accounting
issues, such as double counting,
COP27 worsens the inherent
problems associated with carbon
markets and allows for secretive
carbon deals with little regulation
and accountability.
The author is thankful to the anonymous
reviewer for their valuable comments and
suggestions.
Sunil Tamminaina (thisisforsunil@gmail.com)
is a PhD scholar at the Centre for International
Politics, Organization and Disarmament,
Jawaharlal Nehru University, New Delhi.
Economic & Political Weekly EPW NOVEMBER 25, 2023
T
he latest iteration of the annual
Climate Change Conference con-
cluded in November 2022 at the
Egyptian resort town of Sharm el-Sheikh
with the approval for setting up the
“Loss and Damage” Fund. While this is
indeed a creditable outcome, the 27th
Conference of the Parties (COP27) to the
United Nations Framework Convention
on Climate Change (UNFCCC) also sym-
bolised the continued faith in market-
based mechanisms as a central element
in the international response to the cli-
mate crisis. By adopting rules related to
several aspects of international carbon
trading that could lead to the worsening
of the problems that are intrinsic to car-
bon markets, the conference further
strengthens the arguments of climate
justice advocates that these dubious
market instruments would only contrib-
ute to exacerbating the climate crisis.
Article 6 Market Mechanisms
The Paris Agreement, adopted in 2015,
brought in a new international carbon
trading regime, replacing the one under
the Kyoto Protocol. The agreement’s
Article 6 introduced two market-based
mechanisms for “voluntary coopera-
tion” to fulfil countries’ climate targets.
The first mechanism, enshrined in Arti-
cle 6.2, concerns with inter-country
trading in mitigation outcomes1 such as
emission reductions or renewable ener-
gy capacity creation that countries in-
cluded in their respective climate goals
under the Paris Agreement. The second
mechanism, under Article 6.4, establish-
es a new international carbon market
overseen by a body under the authority
of the COP—later came to be called the
“Supervisory Body”—for trading in em-
ission mitigation outcomes that are cre-
ated by either public or private entities.
Simply put, the former allows for any
country to trade any over-achievement
of its Paris climate goals with another
vol lVIII no 47
country, while the latter generally in-
volves project-based carbon offsets cre-
ated with the support of governments or
private players.
While the Paris Agreement provided a
skeletal framework for both the mecha-
nisms, the rulebook for Article 6 mecha-
nisms has been adopted after several
years of negotiations at the COP26 in
Glasgow in 2021. However, the opera-
tionalisation of these mechanisms still
required firming up the governance in-
frastructure, laying out reporting proce-
dures, and clarifying definitions—tasks
taken up in the run-up to and at the
COP27. These, often highly complex and
technical, Article 6 negotiations and the
relevant decisions adopted at COP27 could
lead to a carbon-trading regime that is
highly secretive, filled with lacunae,
which promote accounting tricks in-
stead of actual emission reductions, and
has little social and environmental safe-
guards or human rights considerations.
Alarming Portends
Let us take up the key issues concerning
carbon markets that came up at COP27
one by one. Under the Article 6.2 trading
mechanism, countries are mandated to
report to a technical expert review team
which then makes the reported informa-
tion public (UNFCCC 2021a: 8–12). At
COP27, it has been decided that countries
can mark any portion of such informa-
tion as confidential during reporting,
and such information would not be
made public (UNFCCC 2022a: 16–17). It is
not made mandatory for countries to
provide any justification for labelling
any portion of the information confiden-
tial, essentially paving way for a system
characterised by unrestrained confiden-
tiality. Such provisions could allow coun-
tries to undertake secret carbon-trading
deals and hide the nature and source of
carbon credits that are being traded,
with any oversight mechanism being
rendered ineffective. While the confer-
ence decision suggested parties to take
up the issue of confidentiality again next
year, the scope of that process is very
narrow (UNFCCC 2022a: 3), indicating
that the serious concerns related to
19
COMMENTARY
transparency with regard to trading un-
der the Article 6.2 mechanism are here
to stay.
Accounting Issues
Further, while carbon markets have al-
ways been bogged down with account-
ing issues, such as when both the buyer
and seller of a carbon credit modify their
inventory of emissions to claim the
emission reductions equivalent to that
credit, resulting in double counting of
emission reductions, the conference has
left room for more such practices. The
Article 6.4 rules adopted in Glasgow re-
quire countries to apply “corresponding
adjustments” to their emissions invento-
ries to avoid double counting (UNFCCC
2021b: 11). But this is applicable only for
credits that are authorised as per the
Article 6 rules, leaving a vast network of
voluntary carbon markets that are out-
side the UNFCCC framework and with a
lax regulation still being susceptible to
double counting. For instance, in a situa-
tion where a company buys a credit in a
voluntary carbon market, there is little
to stop double counting when both the
company as well as the country hosting
the project could claim emission reduc-
tions for the same activity—the former,
say, for its net-zero pledge while the lat-
ter for its Paris climate goals. COP27 cre-
ated a new tier of credits for those that are
not authorised—to be called “mitigation
contribution” units (UNFCCC 2022b: 9)—
so as to distinguish them from offset
credits and in the hope of discouraging
potential buyers from using them to-
wards claiming emission reductions. But
the conference failed to create any rules
within the Article 6.4 mechanism that
could ensure that this kind of double
counting does not happen. Thus, the pro-
liferation of junk credits created through
such practices could deepen corporate
greenwashing efforts.
Carbon credits generated from emis-
sion avoidance and removal activities, as
distinct from emission reductions, have
long been sought to be brought under
the scope of these market mechanisms.
But there is little clarity on what kind of
activities would count as helping in emis-
sion avoidance and removal. The Super-
visory Body, a 12-member body composed
20
of “experts” who are either nominated
or elected from different UN country
groupings2 (UNFCCC 2021b: 5–6), re-
sponsible for overseeing the Article 6.4
mechanism (UNFCCC 2021b: 2–4) and
tasked with framing various governance
and technical aspects to roll out and ad-
minister the Paris Agreement’s interna-
tional carbon market, formulated a set
of recommendations (UNFCCC 2022c) on
the activities that could be counted as
legitimate removal activities for the pur-
pose of Article 6.4. These recommenda-
tions, which came out just prior to the
start of the COP27, contained a very
broad range of activities from which car-
bon credits could be generated. These
included techniques based on controver-
sial technologies like carbon capture
and storage (CCS), carbon capture and
utilisation, ocean-based geoengineering
and other such methods. While some of
these technologies are speculative and
are unproven, especially with regards to
the scale of deployment that is required,
some others go against the precaution-
ary principle and even potentially vio-
late international law obligations.3 Many
of them have adverse social and ecologi-
cal consequences too, but the Superviso-
ry Body’s suggestion of leaving the en-
forcement of any social and environ-
mental safeguards to the whims of the
host country inspires little confidence
(UNFCCC 2022c: 4). Also, the imperative
of ensuring the permanence of emission
removals from these activities is hardly
reflected in the recommendations of the
Supervisory Body, leading to serious
questions on the nature of the offset
credits that such short-lived emission re-
moval activities generate, if included in
the trading regime.
After these recommendations were
forwarded to COP27, significant pressure
from civil society could succeed in defer-
ring the decision on finalising the defini-
tion of removals to next year’s Climate
Change Conference (UNFCCC 2022b: 3).
The conference decision also asked the
Supervisory Body to further work on the
recommendations. However, the guid-
ance by the conference to the Supervi-
sory Body with regards to this future
work (UNFCCC 2022b: 3) does not have
any reference to human rights, nor any
NOVEMBER 25, 2023
strengthened language related to social
and environmental safeguards. This leaves
little hope that the recommendations
from the Supervisory Body would be sig-
nificantly improved, also considering
that it is the same body that made the
alarming set of recommendations in
2022 as well. Significantly, neither the
COP27 nor the Supervisory Body seem to
take into account how the reliance on re-
moval technologies would only serve to
delay the real emission reductions that
are urgently needed.
Even though the Article 6.4 mecha-
nism is not yet fully operational, the fact
that the Supervisory Body is already
making recommendations and taking
decisions that potentially have far-reaching
implications for communities across the
world, especially for the rights of indige-
nous populations, necessitates the imme-
diate setting up of an independent griev-
ance mechanism and a system of appeals.
Despite the official recognition of the need
for such systems (UNFCCC 2021b: 3) and
voicing of such demands from civil soci-
ety, they remain unfulfilled at COP27,
giving a further setback to the objective
of ensuring accountability within these
dodgy market mechanisms. The confer-
ence did not even frame a clear timeline
for setting up these systems, suggesting
how these issues occupied the lower
rungs of the priority ladder at COP27.
Another crucial development that
happened during COP27 related to car-
bon markets, albeit outside the official
UNFCCC process, is the announcement
by the United States (US) of a major plan
involving the setting up of a new volun-
tary carbon market for the ostensible
purpose of mobilising climate finance for
the developing countries (Milman and
Lakhani 2022). As per this plan, the
money raised from the sale of credits
from offset projects in developing coun-
tries to private companies would count
as climate finance, while the companies
are incentivised by the fact that they
can use the purchased credits towards
fulfilling their emission reduction goals,
including net-zero pledges. This sleight-
of-hand proposal from the largest his-
torical emitter strikes at principles of
climate justice at several levels. While
the developed countries have failed to
vol lVIII no 47 EPW Economic & Political Weekly

fulfil the pledge of mobilising $100 billion
annually4 towards climate finance by
2020, the US intends to make up for the
shortfall by resorting to these market
mechanisms. Climate finance, as climate
justice advocates argue, should be raised
through unconditional grants from pub-
lic sources, as against the current trend
of loans and private sector funding dom-
inating the already meagre climate fi-
nance that is available. The US proposal
would further this trend and push in the
direction of tying up the provision of cli-
mate finance with the success of dubious
carbon markets. It allows for double
counting of private companies’ climate
contributions, first, towards climate fi-
nance, and second, towards claiming
their own emission reductions through
these credits. In addition, the role of
these credits in actually helping in re-
ducing the emissions in the country
hosting these offset projects is itself
highly disputable.
United in Support
for Carbon Markets
While international climate negotiations
are generally seen as a terrain of contes-
tations between developed countries
and developing countries, when it comes
to framing the rules for carbon trading,
these traditional binaries do not hold.
There exists broad support for such mar-
ket-based instruments among govern-
ments of both developed and developing
countries, including India. Such support
has a long history within the UNFCCC
process, going back to the early years
following the adoption of the Kyoto
Protocol in 1997 (Sengupta 2012: 108).
Essentially, the precise design of these
instruments and the associated question
of who gets the larger share of the mar-
ket pie have been the key contentious is-
sues since then, not necessarily whether
these mechanisms help address the cli-
mate crisis in any manner.
For instance, India, which has been a
leading voice of the developing world at
the UNFCCC negotiations, has been an ac-
tive supporter of these market instruments,
and has, in the past, pushed for schemes
such as the REDD+5 that help bring the
country’s forests into the ambit of inter-
national carbon-trading mechanisms
Economic & Political Weekly EPW NOVEMBER 25, 2023
(Dubash et al 2018: 406). Also, in 2022,
the Indian government announced moves
to set up a national carbon market for
the country and Parliament has passed
legislation approving the same (Nath
2022). All these measures are taken de-
spite the well-known problems associat-
ed with carbon markets. The problems
range from the near impossibility of de-
termining the baseline scenarios to calcu-
late the emission reductions that any
offset project purportedly brings in, to
the difficulty in ensuring that any emis-
sion reductions would not have hap-
pened without the finance from the car-
bon markets (commonly referred to as
the “additionality” criteria), as well as
whether any emission reduction would
actually last long enough (the “perma-
nence” criteria). More fundamentally, reli-
ance on carbon markets only serves to
postpone the structural changes neces-
sary to reduce emissions at source and
address climate change far into the future
and allows the rich countries to get away
without fulfilling their mitigation obli-
gations. With decisions that allow for
unhindered secrecy and weak account-
ability, COP27 is only letting these prob-
lems be amplified in the future.
The Egyptian host government has
branded the Sharm el-Sheikh conference
as the “implementation COP,” which would
set the tone for full implementation of
the Paris Agreement and the realisation
of the pledges made under it. If one con-
siders Paris Agreement’s market mecha-
nisms as designed primarily for profit-
making in the name of climate action,
the COP27 indeed made significant strides
towards their full implementation.
Notes
1 Unlike the earlier climate regime under the
Kyoto Protocol where targets were in the form
of quantified reductions in emissions, Paris
Agreement allowed countries to set their cli-
mate targets in any form, and hence these are
being referred to as mitigation outcomes.
2 Two members each from the five regional
groupings of the UN and one each from the
least developed countries (LDCs) and the small
island developing states (SIDS) blocs, with a
usual term of two years each and serving in
their individual capacities.
3 For instance, the Conference of Parties to the
Convention on Biodiversity (CBD) has taken
several decisions that establish a moratorium
on many geoengineering and ocean fertilisa-
tion activities.
vol lVIII no 47
COMMENTARY
4 This pledge, which falls far short of what is
needed, was first made at the Copenhagen
climate summit in 2009.
5 REDD+ is the expanded version of REDD (Re-
ducing Emissions from Deforestation and For-
est Degradation) to include “sustainable man-
agement” and “conservation and enhancement
of forest carbon stocks” for the purpose of mar-
ket-based payments. Since REDD in itself
would not have given India much economic
benefits as the rate of deforestation was much
lower in the country when compared to other
countries like Brazil and Indonesia, India
argued for REDD+.
References
Dubash, Navroz K, R Khosla, U Kelkar and S Lele
(2018): “India and Climate Change: Evolving
Ideas and Increasing Policy Engagement,”
Annual Review of Environment and Resources,
Vol 43, No 1, pp 395–424.
Milman, Oliver and Nina Lakhani (2022): “US
Introduces New Carbon Trading Scheme to
Boost Investment in Developing Countries,”
Guardian, 9 November, viewed on 29 November
2022, https://www.theguardian.com/environ-
ment/2022/nov/09/cop27-us-carbon-trading-
scheme.
Nath, Damini (2022): “Rajya Sabha Passes Bill to
Set Up Carbon Credit Trading Scheme,” Indian
Express, 13 December, viewed on 13 December
2022, https://indianexpress.com/article/india/
rajya-sabha-passes-bill-to-set-up-carbon-credit-
trading-scheme-8320773/.
Sengupta, Sandeep (2012): “International Climate
Negotiations and India’s Role,” Handbook of
Climate Change and India: Development, Poli-
tics and Governance, Navroz K Dubash (ed),
Oxon: Earthscan, pp 101–17.
UNFCCC (2021a): Guidance on Cooperative Approach-
es Referred to in Article 6, Paragraph 2, of the
Paris Agreement, https://unfccc.int/sites/de-
fault/files/resource/cma2021_L18E.pdf.
— (2021b): Rules, Modalities and Procedures for the
Mechansims Established by Article 6, Paragraph 4,
of the Paris Agreement, https://unfccc.int/sites/
default/files/resource/cma2021_L19E.pdf.
— (2022a): Guidance on Cooperative Approaches
Referred to in Article 6, Paragraph 2, of the Paris
Agreement and in Decision 2/CMA.3, https://
unfccc.int/sites/default/files/resource/cma-
2022_L15E.pdf.
— (2022b): Rules, Modalities and Procedures for
the Mechanism Established by Article 6, Para-
graph 4, of the Paris Agreement, https://unfccc.
int/sites/default/files/resource/cma2022_L14E.
pdf.
— (2022c): Recommendation: Activities Involving
Removals under the Article 6.4 Mechanism, htt-
ps://unfccc.int/sites/default/files/resource/
a64-sb003-a03.pdf.
available at
Gyan Deep
Near Firayalal Chowk,
Ranchi 834 001
Jharkhand
Ph: 09470564686
21
COMMENTARY
The Political Economy of
Curricula in Higher Education
Institutions
Sudhanshu Bhushan
Three years of the
implementation of the National
Education Policy 2020 have
witnessed several regulations
and guidelines by the University
Grants Commission regarding
changes in the curriculum. It
is important to examine the
implications of these curricular
changes. It is noted that the
curriculum, instead of evolving
through scientific inquiry, is
influenced by the ideology of the
state and the market.
Sudhanshu Bhushan (sudhanshu@niepa.ac.in)
teaches at the Department of Higher and
Professional Education, National Institute of
Educational Planning and Administration,
New Delhi.
22
B
y the “political economy” of the
curriculum, I mean the curiosity-
based scientific basis of determin-
ing or designing the curriculum for stu-
dents. It is decided through a critical ex-
amination of knowledge for the benefit of
the general public at large, reflecting the
aims of public education. The curricu-
lum is determined by subject experts
and the state plays a role in providing
legitimacy to the whole process of cur-
riculum design and its delivery to the
students. However, if the influence of
political power dominates curriculum
design instead of scientific inquiry, it
leads to a curriculum that is corrupted by
ideology. It is important to understand
the directions of change in curriculum
design which are influenced by market
forces rather than the interests of the
people and the nation. Curriculum design
is also shaped by the extent of academic
freedom. If academic freedom is com-
promised, then the process of know-
ledge generation itself gets mutilated.
The curriculum shapes the young minds
of children. They should inculcate values
which are considered important for the
progress of a nation. However, there is a
certain degree of indeterminateness re-
garding the choice of values to be nur-
tured among children. Values related to
equal citizenship, scientific temperament,
composite culture, values about one’s civic
responsibilities, etc, are important to
pass on to the students through the ap-
propriate choice of the curriculum. How-
ever, there are conflicts among these val-
ues as well, and the choice of values that
need to be protected is decided through
the political process, in particular, and
by the ideology of dominant interests, in
general. For instance, there are debates
at the level of school curricula that high-
light the validity of these value conflicts
(Bhattacharya 2009). Moreover, value
NOVEMBER 25, 2023
conflicts over the choice of materials in
the curricula of higher education institu-
tions have also been noted in the recent
past.1 The objective of this article is to
examine the ideology and politics of the
curriculum in higher education institu-
tions as presented in the National Educa-
tion Policy (NEP) 2020 and carried for-
ward by the University Grants Commis-
sion (UGC) in the last three years of the
implementation of NEP.
Ideology and Politics of Curricula
Ideology is the weapon of the dominant
group to impose certain sets of ideas
and beliefs on others. Politics is the pro-
cess of glorification of those ideas and
beliefs by the use of power. One of the
most important ideological apparatuses
is the curriculum in schools and colleges
which can directly influence and domi-
nate the minds of all and can then be used
to mobilise the people. Hence, knowledge
and power can act and interact with each
other. Wherever knowledge is scientific
and is backed by reason, knowledge
undergoes a process of transformation
through negation and confirmation. Hence,
knowledge acquires a dynamism which
makes the process of the development
of a student dynamic in turn. For exam-
ple, slavery was considered to be appro-
priate in ancient Greek society and is no
longer justifiable today. Similarly, many
women’s rights that are granted today
were denied in the past, accompanied
by the realisation that there cannot be
any discrimination on the grounds of
sex, caste, and/or ethnicity.
Hence, knowledge should go through
the process of a critical appraisal. It is for
this reason that any scientific knowledge
should find a place in the curricula.
Besides, the curricula should always be
dynamic, that is, subject to the processes
of negation and confirmation. The cur-
riculum should always remain “young”
by discarding the knowledge that does
not stand the test of time.
The NEP 2020 and the recent regula-
tions and guidelines of the UGC point to a
number of ways in which attempts are
being made to influence the curricula in
higher education institutions. First, there
is a mandate to teach Indian Knowledge
Systems (IKS) and “value-based” education.
vol lVIII no 47 EPW Economic & Political Weekly

Second, the autonomy of institutions is
being granted to support market-based
curricula. Third, four-year undergradu-
ate education with multidisciplinary
education and multiple entry and exit
options is prescribed, which requires
fundamental changes in the curricula.
Fourth, outcome-based education draws
attention to a learner-centred curriculum.
Fifth, global citizenship education, social
responsibility, community engagement,
and promotion of physical fitness are
other prescriptions influencing curriculum
design in higher education institutions.
It is important to note that such top-
down prescriptions amount to imposing
ideologies that restrict university auton-
omy in shaping the curricula based on
scientific inquiry. Let me discuss the
varying manner in which higher education
curricula are currently being influenced
by dominant ideologies.
IKS and Value-based Curricula
The UGC issued a guideline on the train-
ing of university faculty regarding IKS in
February 2023. The guidelines do not
define IKS in terms of principles. However,
it mentions field visits to “Temples, Guru-
kuls, Historical sites, Arts & Crafts com-
munities, Ayurvedic Healing Centers, As-
tronomical Observatories” (UGC 2023a: 4).
It also notes revising the UGC syllabus to
include IKS. Various examples of IKS in a
multidisciplinary framework have been
suggested by the UGC, such as “the an-
cient technique of memorization,” ses-
sions on yoga, meditation, ayurveda,
classical music, etc (UGC 2023a: 6).
No knowledge is scientific unless it is
verified and critically appraised. Hence,
any mandate on curriculum design com-
ing from the top should be followed
with scientific rigour. Besides, the syllabus
smells of the tradition of knowledge
belonging to particular communities and
religions in India. Knowledge, that is, the
search for truth, has to be universal, rather
than particular. Unscientific knowledge,
based on dominant interests, shall create
divisions in society.
The UGC issued the Mulya Pravah 2.0
in May 2023, under which a curriculum
for inculcating human values and pro-
fessional ethics has been suggested. The
very first objective reads: “Reinstate India’s
Economic & Political Weekly EPW NOVEMBER 25, 2023
rich cultural legacy and human values”
(UGC 2023b: 8). This goes along with the
objectives relating to professional ethics,
constitutional values, holistic education,
etc. Chapter 2 of the guidelines notes
values from Ishopanishad, the Buddha,
Vedas, Upanishads, Sri Aurobindo, etc.
The document also refers to the five
vows of the Amrit Kaal, that is, the con-
temporary period, thus sanctifying the
present as a nectar consisting of all an-
cient values. The document freely refers
to Sanskrit texts. The course structure
suggested in the guidelines also gives
primacy to IKS rather than constitution-
al values. The independence of scientific
values is not stated. Instead, it mentions
“integrating the two methodologies: in-
teriorization process for self-explora-
tion, and exterior scientific pursuit for
the prosperity of world” (UGC 2023b: 27).
When it comes to IKS, it is important
to understand what are its basic princi-
ples. Any knowledge that is considered
“ancient” should not qualify as being a
part of IKS. The very nature of knowledge
demands that it should be scrutinised.
Knowledge, to become a part of the cur-
riculum, has to be tested with the de-
mands of the time. This is what is denied
when it comes to IKS. It is treated as sacro-
sanct using a certain belief system, which
might come under threat if it is subject
to critical scrutiny. IKS, without proper
scrutiny, is then not knowledge. It is an
ideology based on a certain set of ideas
that is believed to be “true.” Whenever
there is an attempt to establish IKS not as
knowledge but as an ideology, there is
the danger of corrupting the curriculum
and, thereby, the minds of the people.
Ideology and Politics of Autonomy
Academic freedom has been a cardinal
principle of publicly funded higher ed-
ucation institutions since the late 18th
century Europe. State funding of univer-
sities was universally accepted in the
19th and 20th centuries. The postcolonial
development is also marked by the state
generously supporting the universities.
The rationale of academic freedom under
state-funded universities was based on
the principle of academic freedom, which,
in turn, will generate scientific knowledge
for the good of the people. In practice,
vol lVIII no 47
COMMENTARY
however, academic freedom was grant-
ed in varying degrees depending upon
the trust built between the state and the
university. During the prevalent ideology
of state welfarism, the politics of the state
favoured the discourse on the public
funding of education with varying de-
grees of control of university governance
and a relatively higher degree of aca-
demic freedom. However, a new dis-
course of “accountability” was started
amid this long period of academic free-
dom that led the state to enforce stricter
controls on teaching, research, and service
functions expected of a teacher.
Hence, a new form of autonomy was
granted to the universities with invisible
ways of ensuring accountability from
the teachers. The freedom to start a
programme, decide the curricula, hire
teachers or foreign faculty, fi x fees,
determine procedures of assessment and
declaration of results was granted to the
institutions. However, such autonomy also
goes along with raising the internal re-
sources to run particular programmes. It
implies a new concept of autonomy, that
is devoid of public funding. Besides, the
invisible ways of accounting through
ranking and accreditation of programmes
and institutions and academic perform-
ance indicators for the recruitment and
promotion of teachers were introduced.
Curricula, teaching, and assessment
are supposed to follow the principles of
an “outcomes-based” education. Trans-
parency in governance using public self-
disclosure of information is sought to be
achieved. It is interesting to note that a
new discourse of autonomy carries an ap-
peal to academic freedom which seem-
ingly may find a favour in academia, and
hence, it may not face strong resistance.
The state can withdraw the funding or
peg the funding to the conditionalities of
performance indicators. The discourse is
based on the ideology of efficiency in
governance, teaching, research, and
service functions of the university. The
ideology is further imposed through the
powers vested in the UGC.
What is important is to underline the
point that the new forms of autonomy acts
through the curricular process. If public
funding is withdrawn, the institutions have
to charge a user fee from its students,
23
COMMENTARY
which means that institutions are direct-
ly accountable to the “user” or “consum-
er” of education. In such a scenario, the
choice of programmes to be delivered
shall have to be guided by the prefer-
ences of the users or consumers of the
programme. This preference is often
guided by the market demand for jobs.
Hence, the choice of a programme to be
started is influenced by market forces.
Besides, employability also becomes
an important factor here, both in the
choice of the curriculum as well as
teaching, learning, and assessment.
The marketability and employability of
a programme demand that its curricular
structure is well-designed. It should ca-
ter to the choice of learners. It should
also have attractive content such as
videos, animations, and shorter modules.
The curricula should be adapted to skill-
building and experiential learning. It
finally amounts to the fact that the cur-
ricula support the commodification of
higher education. Needless to say, such a
curriculum shall majorly serve the inter-
ests of the corporate sector only. The
new ideology of autonomy drives higher
education curricula to serve the market.
Curricula for the FYUP
The NEP 2020 and subsequent UGC noti-
fications in December 2022 suggested
a four-year undergraduate programme
(FYUP) with multiple entry and exit op-
tions for the students, allowing certifi-
cates, diplomas, and degrees at the end
of the first, second, and third years, re-
spectively. It is important to note that
the rigid structure of the curricula im-
posed above results in the reduction of
specialised knowledge-based curricula
to vocational skill-based curricula, em-
phasising skill-building, internships, and
value-based education. Such a curricu-
lar structure creates a hierarchy of grad-
uates (certificate, diploma, and degree
holders) and suffers from the danger of
creating a reserve army of dropouts and
the unemployed. There is also the chal-
lenge of delivering multidisciplinary
courses in institutions which are suffering
from a deficit of teachers. To overcome
the difficulty of the delivery of courses in
a face-to-face mode due to the shortage of
teachers, online preparation of courses
24
is being suggested under the FYUP
(Bhushan 2022).
The idea of the FYUP and multiple en-
try and exit raises many questions about
specialised versus vocational education,
disciplinary versus multidisciplinary
education, face-to-face versus online de-
livery of courses, and the periodisation
of the course structure. These are diffi-
cult questions that can be deliberated
upon based on their merits.
A scientific curricular structure evolves
over a period of time to suit the needs of
society. The fixing of the curriculum to
cater to the sudden changes introduced by
a new ideology of vocational education
under the rubric of multidisciplinarity will
be too complex a task to deal with, given
the prevailing architecture of institu-
tions—the prevalence of single disciplines2
and the small size of the institutions3
with a severe shortage of teachers.4
Curricular Restructuring and
Outcomes-based Education
The UGC issued the learning and out-
comes-based curriculum framework
for undergraduate education in 2020
and guidelines for innovative pedagog-
ical approaches and evaluation reforms
in response to the implementation of
the NEP 2020. Both guidelines aim at
learner-centred approaches in higher
education. The former led to the learn-
ing outcome-based curriculum frame-
work (LOCF). The latter guidelines talk
about innovative pedagogic approaches,
namely, behaviourist, constructivist, and
liberationist. How these approaches can
be applied in online or blended modes of
teaching is not explained. Even if each
concept is based on some scientific rea-
soning, its practical validity has to be
ascertained by every teacher.
It is important to understand that us-
ing such a curricular restructuring, a
teacher is directed through these guide-
lines to model pedagogical approaches
in teaching and meeting learning out-
comes on their own. In an attempt to in-
troduce the standard model framework,
a teacher loses academic freedom to
deal with diverse learners in terms of
their own experience. The rationalisa-
tion implicit in introducing a model cur-
ricular framework leads to the loss of
NOVEMBER 25, 2023
any creativity and innovation to be prac-
tised by the teachers. This finally leads
to disenchantment and disempower-
ment among teachers. In this process,
teachers become passive agents, while
regulators become active agents. An ex-
ternally-directed curriculum has this ef-
fect of power over teachers.
Curricular and Extracurricular
Changes
In the last three years of the implemen-
tation of the NEP 2020, the UGC has
issued guidelines on global citizenship
education, fostering social responsibility
and community engagement, and the
promotion of physical fitness. There are
guidelines for a curricular framework
for environmental education as well.
The UGC has been writing numerous let-
ters to the universities to celebrate im-
portant days, events, and programmes.
Recent announcements include events
and campaigns like Har Ghar Tiranga,
Meri Maati Mera Desh, the Partition
Horrors Remembrance Day, the Tomato
Grand Challenge, the Festival of Librar-
ies, the Akhil Bharatiya Shiksha Samag-
am, etc. These curricular and extracur-
ricular activities added to the tasks of
teachers and students. Many such cele-
brations were earlier decided by the uni-
versities. Now there is a new trend to di-
rect universities to celebrate these events.
This is why universities are often forced
to perform these activities without any
rationale and free discussion.
Conclusions
I hold the view that the political economy
of the curricula should have a firm basis
in scientific inquiry in the processes of
knowledge production and dissemina-
tion. However, if the curricula are cor-
rupted by an ideology prescribed above,
the degree of autonomy of a university
to decide the curricula on scientific
terms is diminished. Its implications are
far-reaching. Knowledge is then subordi-
nated to the influence of power. It also
loses its universality and appeal to all
sections of society, thus becoming divi-
sive. Knowledge also becomes static and
loses its dynamism towards progress in
the absence of scientific inquiry. Given
the presence of the models of curricula
vol lVIII no 47 EPW Economic & Political Weekly
 COMMENTARY

designed from above, teachers become
passive agents, and realising the loss of
academic freedom, they become disen-
chanted and disempowered.
It has been noted and discussed that
in the three years of the implementa-
tion of the NEP 2020 through the active
agency of a regulatory body such as the
UGC, the curricula in higher education
institutions were not necessarily sub-
jected to scientific scrutiny. Rather, the
curriculum has been affected by domi-
nant ideology and politics in the follow-
ing ways: (i) there is an imposition of
IKS and values which reflect dominant
interests, culture, language, traditions,
and beliefs resulting in a fragmented
understanding of social values and
practices; (ii) a newer ideology of auto-
nomy goes along with the introduction
of self-financing courses, which have im-
plications for a marketable curricular
structure and the commodification of
higher education; (iii) the FYUP and
multiple entry and exit mandate of the
NEP 2020 and the UGC guidelines lead to a
rigid curricular structure to support vo-
cational higher education; (iv) guidelines
for an outcomes-based education and
innovative pedagogy often leads to the
deprivation of the autonomy of the
teachers; and (v) there are numerous di-
rections from the UGC to celebrate days,
events, and programmes which add to the
curricular and extracurricular tasks to
be undertaken by teachers and students.
The political economy of curricula in
higher education institutions has been
guided by ideological shifts in favour
of the state and the market. Ideological
shifts have weakened the agency of
teachers due to the lack of academic
freedom to determine their curricula.
As a result, university curricula have
not been serving the interests of the
people and the nation. The academic
community must rise to restructure the
curricula based on the principles of
scientific temperament and inquiry.
Scientific knowledge must find its place
in the curricula.
notes
1 Note the removal of A K Ramanujan’s
essay “Three Hundred Ramayanas” and
Rohinton Mistry’s novel, Such a Long Journey,
from the history syllabus of the University
of Delhi and the English syllabus of the
University of Mumbai respectively.
2 According to the All India Survey of Higher
Education (AISHE), there are 11,926 stan-
dalone institutions of higher education in India
as per the reported data of 2020–21 (Ministry
of Education 2021).
3 The average size of enrolment in colleges
is 1,097 as per the reported data for 2020–21
in the AISHE. Almost 65% of colleges have
less than 500 enrolled students (Ministry of
Education 2021).
4 The AISHE reports that the average pupil–
teacher ratio is 27, which is often very high in
some colleges (Ministry of Education 2021).
References
Bhattacharya, N (2009): “Teaching History in
Schools: The Politics of Textbooks in India,”
History Workshop Journal, No 67, pp 99–110.
Bhushan, S (2023): “Four-year Undergraduate
Programme: Boon or Bane of the NEP 2020,”
Economic & Political Weekly, Vol 58, No 8,
pp 14–17.
Ministry of Education (2021): All India Survey of
Higher Education 2020–21, Department of
Higher Education, New Delhi.
UGC (2023a): “Guidelines for Training/Orientation
of Faculty on Indian Knowledge System,”
https://www.ugc.gov.in/pdfnews/3746302_
Guidelines-for-TrainingOrientation-of-Faculty-
on-Indian-Knowledge-System-(IKS).pdf.
— (2023b): “Mulya Pravah 2.0: Inculcation of
Human Values and Professional Ethics in Higher
Education Institutions,” https://www.ugc.gov.in/
pdfnews/8799370_Mulya-Parvah_Guideline.pdf.

ON EPWRF India Time Series

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For more details, visit www.epwrfits.in or e-mail to: its@epwrf.in

Economic & Political Weekly EPW NOVEMBER 25, 2023 vol lVIII no 47 25
COMMENTARY
Gender Gap in Credit in India
Is Credit Risk a Concern?
Saibal Ghosh
Are women less risky in terms
of loan repayment as compared
with men? Using data on public
sector Indian banks, we present
evidence to this effect. The key
insights emanating from the
analysis are the following. First,
non-performing loans arising
out of credit extended to women
decline by 7.5% on average, after
controlling for bank-level and
macroeconomic factors. Second,
the decline in NPLs out of the
credit extended is primarily with
regard to priority sector credit
and less so with respect to
non-priority credit. We view this
as one of the early exercises in
the Indian context to examine the
linkage between gender credit
gap and the resultant NPLs.
The views expressed and the approach
pursued are strictly personal.
Saibal Ghosh (emailsaibal@ gmail.com) is with
the Qatar Central Bank, Doha, Qatar.
26
D
o women present less credit risk?
This question has, in recent times,
occupied the minds of both aca-
demia and policymakers. While there is
a lot of analysis and documentation re-
garding discrimination against women
in terms of access to credit, both for ad-
vanced (Alesina et al 2013; Ongena and
Popov 2016) and emerging (Armendariz
and Morduch 2005) economies, it is not
altogether obvious whether this could
be because of differences in their repay-
ment behaviour. Both within-country
(Khandker et al 1995; Sharma and Zeller
1997) and cross-country (D’Espallier et al
2011) evidence affirms that when it comes
to loan repayment rates, women typi-
cally outweigh their counterparts. Most
recent international evidence for Eastern
Europe and Central Asia also affirm that
default rates of women borrowers are on
average 7.4% lower as compared with
men (Mia et al 2022). This is corro-
borated in previous World Bank (2007:
124) studies wherein it observed that
“repayment is higher among female bor-
rowers, mostly due to more conservative
investments and lower moral hazard risk.”
This global evidence has its echo in the
Indian context. According to a TransUnion
CIBIL report, women retail borrowers on
average have a lower delinquency rate
on consumer loans (5.2%) as compared
with men at 6.9% (Transunion CIBIL
2022). Other related evidence also points
to a gender credit bias. Maurya and Mo-
hanty (2019), for example, report a gen-
der gap in credit with regard to informal
sector loans. Chavan (2020) notes that
although there has been a steady rise in
women’s credit share, they still lag well
behind the comparable figures for BRICS
economies. Ghosh (2023) provides evi-
dence that women borrowers are more
likely to be discouraged in loan applica-
tion, but does not assess its implications
for banks’ credit quality. Anecdotal evi-
dence proffered by CreditMate, a digital
NOVEMBER 25, 2023
debt-collection platform backed by Paytm,
suggests that late repayments by male
borrowers at 82% was nearly five times
higher as compared with women at 18%.
Notwithstanding this evidence, there
is limited systematic research as to
whether gender matters for credit repay-
ment, especially in the Indian context.
Most of the evidence highlighted earlier
pertains to microfinance institutions,
but does not dwell on commercial banks.
To inform this debate, we collate data on
public sector banks for a long time peri-
od to address two questions. First, does
gender matter for loan repayments? And
second, which two categories of loans—
priority versus non-priority—drive this
repayment behaviour? We view this as
one of the earliest exercise in the Indian
context to examine the issue within an
empirical framework.
The database comprises annual infor-
mation on banks’ balance sheet covering
2005–20 sourced from the Statistical
Tables Relating to Banks in India. We in-
tegrate this information with bank-wise
credit by gender reported by the Indian
Ministry of Finance. In particular, this
data contains credit to women extended
by public sector banks, disaggregated
further by priority and non-priority sec-
tors. Additional details such as the bank-
wise quantum of non-performing loans
(NPLs) emanating from the loan exten-
sion to women are also provided.1
From a regulatory standpoint, in order
to enable women to overcome the hur-
dles in access to bank credit, in 2000,
the Government of India had drawn up
an action for implementation by public
sector banks. As per the guidelines,
these banks were advised to earmark 5%
of their Adjusted Net Bank Credit (ANBC)
for lending to women. Accordingly, the
total credit to women extended by these
banks increased from `411 billion at end-
March 2005 to `5,770 billion at end-
March 2020, registering a compound
growth of close to 20%. For compari-
son, the end-2020 figure was 10.8% of
total private credit by public banks as
compared with 6% in 2005. Although
not strictly comparable, evidence sug-
gests that women obtained 7% of formal
credit in Kenya (Ellis et al 2007) and
much lower in Bangladesh (IMF 2016).
vol lVIII no 47 EPW Economic & Political Weekly
 COMMENTARY

Figure 1: Credit to Women and NPLs from Credit to Women (Wellalage and Thrikawala 2021), and
100% 0.075 relatedly, peer pressure in credit groups
and sensitivity to external intervention
80% 0.065 make women more inclined to repay
60% 0.055 loans on time (D’Espallier et al 2011;
Shahriar et al 2020). As a consequence,
40% 0.045 women would be more reluctant to face
20% 0.035 the costs associated with loan defaults
than men.
0% 0.025 In spite of this mounting evidence, the
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2020
hypothesis as to whether a lower gender
PCW/TCW
PCW/ TCW NPCW/ TCW
NPCW/TCW NPL,right
NPL, rightscale
scale gap in credit impacts financial stability
has not been investigated in the Indian
Table 1: Variable Definition and Summary Statistics
context. In this regard, we make two
Variable Definition Obs Mean (SD)
Dependent useful contributions. First, we augment
NPL Non-performing loans on credit to women/ 326 0.045 (0.032) the nascent literature on the relevance
Total credit to women of the gender gap in credit for loan
Independent
TCGAP Credit to women/ 328 0.076 (0.035) repayment. And second, we speak to the
(Total credit–credit to women–credit to public sector and banks) broader literature on financial inclusion
PCGAP Priority sector credit to women/ 328 0.146 (0.074) by intersecting the nexus between gen-
(Total priority credit–Priority sector credit to women)
NPCGAP Non-priority sector credit to women/ 328 0.036 (0.021)
der differences in credit and its conse-
(Total non-priority credit–non-priority sector credit quences for financial stability. Several
to women–credit to public sector and banks) studies explore related issues such as the
Size Ln (Asset) 373 16.43 (0.794)
Equity Total equity/Total asset 373 0.056 (0.011)
role of political institutions (Ahsraf
Fee Fee income/Total asset 373 0.009 (0.003) 2017) or policy uncertainties (Phan et al
Cost-income Operating expense/(Total income–interest expense) 373 0.459 (0.080) 2021) or, even for that matter, the finan-
Recap Dummy = 1 if a bank has been recapitalised in a given year 367 0.403 (0.491)
cial inclusion debate (Demirguc-Kunt et
Merger Dummy = 1 for the acquirer bank in the year of merger 366 0.033 (0.178)
EPU Economic policy uncertainty index for India 383 0.108 (0.068) al 2022). Recent evidence in the Indian
GDP Real GDP growth during the year 383 0.058 (0.039) context examines the behaviour of
women depositors in response to a regu-
Prior Evidence that women choose to emphasise less on latory shock (Das et al 2023). How the
Why would women exhibit better loan human capital accumulation, such gender credit gap impacts bank credit
performance relative to men? The first as education and on-the-job training, quality, especially in the Indian context,
explanation focuses on risk aversion. In which in turn translates into differential remains an explored issue.
particular, it has been argued that employment prospects and their ability
women are typically more risk averse to accumulate wealth. That being the case, Estimation and Results
when it comes to financial decision women tend to invest more into low-risk In Figure 1, we present the share of pri-
making. Contextualised to the current activities, where the probability of de- ority and non-priority credit to women
setting, it can be argued that women fault is lower (Charness and Gneezy 2012). by year. The right-hand side of the chart
obtaining loans would be less inclined A third explanation for better repay- plots the NPLs emanating from credit to
to default, since they are likely to invest ment probability by women is premised women. Two points from the figure are
more in less risk-oriented businesses on the social pressure argument. In fact, of note. First, the share of priority credit
(Agier and Szafarz 2011). This is also the rich literature on microfinance notes to women is higher as compared with their
supported by recent research which that women-owned and women-managed share of non-priority credit, averaging
observes that female entrepreneurs firms face higher loan discrimination 70% for the period as a whole. And second,
are less likely to default on loans (Delis
et al 2022). Evidence from the United EPW Index
States (US) also indicates that banks
An author-title index for EPW has been prepared for the years from 1968 to 2012. The PDFs of the
with female CEOs exhibit 60–80 basis
Index have been uploaded, year-wise, on the EPW website. Visitors can download the Index for
points lower default risk on real estate
loans as compared to banks with male all the years from the site. (The Index for a few years is yet to be prepared and will be uploaded
CEOs (Palvia et al 2020). when ready.)
A second explanation for gender dif- EPW would like to acknowledge the help of the staff of the library of the Indira Gandhi Institute
ferences in risk aversion and repayment of Development Research, Mumbai, in preparing the index under a project supported by the
behaviour stems from the human capital
RD Tata Trust.
theory. In particular, the argument posits
Economic & Political Weekly EPW NOVEMBER 25, 2023 vol lVIII no 47 27
COMMENTARY
after a decline and an increase post the
global financial crisis, NPLs have re-
mained range-bound and, in any case,
much lower than the numbers prevail-
ing at the beginning of the period.
Next, we provide the summary statis-
tics in Table 1 (p 27). In this regard, we
utilise three useful variables. The first is
the share of NPLs arising out of credit ex-
tended to women. For the period as a
whole, this averaged 4.5%.
The second set of variables are the
gender gap in credit, both at the aggregate
level as well as disaggregated by sectors.
To exemplify, TCGAP is the aggregate
gender credit gap, the average value of
which equals 7.6. A higher ratio indi-
cates a lower gender credit gap. Disag-
gregatedly, this ratio is higher for priority
credit (PCGAP) at 14.6 as compared with
non-priority credit (NPCGAP) at 3.6; in
other words, the gender gap in priority
credit is a quarter as compared with
non-priority credit. This accords with
regulatory requirements highlighted
earlier wherein a minimum proportion
of priority credit needs to be provided
to women.
The remaining variables are standard
controls in the banking literature such
as total asset (to control for economies of
scale), equity ratio (to account for fund-
ing differences), fee income to asset
(to account for differences in business
models) and finally, cost-to-income ratio
(to account for differences in manage-
ment quality). In addition, we control
for mergers (to account for inorganic
growth in banks’ balance sheet) and for
exogenous developments by using the
economic policy uncertainty index for
India and real GDP growth as a control
for the economic environment.
Table 2: Gender Credit Gap and Financial Stability
(1) (2)
TCGAP -0.119 (0.083) -0.075* (0.046)
PCGAP
NPCGAP
Controls N Y
Merger N Y
EPU Y Y
GDP Y Y
Bank FE Y Y
N Obs 326 305
Adj R-sq 0.1498 0.2009
Standard errors (clustered by bank) in brackets.
***, ** and * denote statistical significance at the 1, 5 and 10%, respectively.
28
To understand the link between finan-
cial stability and gender credit gap, we
employ the following regression for
bank b at time t:
NPLbt=ηb+α CGAPbt+γ Controlsbt+
θ Macrot+ λOtherbt+εbt … (1)
In equation (1), y is the dependent var-
iable, Controls include bank-specific
controls, Others include other controls
(for example, merger, recapitalisation)
and Macro are the macroeconomic con-
trols (for example, EPU, GDP growth).
The key coefficient of focus is α: it shows
how the credit gap (CGAP = TCGAP, PCGAP
and NPCGAP) influences the NPLs arising
from lending to women.
Table 2 presents the results.2 We first
include only the macroeconomic controls
(column 1) and thereafter incorporate
the bank-specific variables (column 2).
This helps us to isolate the effects of
these two variable sets. In column 1, the
coefficient on TRG is -0.12 and is statisti-
cally insignificant. Inclusive of the bank-
ing sector controls, the coefficient drops
to -0.075 and is marginally significant.
Therefore, a lower gender gap in credit
lowers non-performing credit for women.
Based on the point estimates, we can
infer that a one standard deviation de-
cline in the overall credit gap lowers
NPLs by 0.3%.
The more interesting evidence is
regarding the disaggregated components
of credit. In column 4, which incorpo-
rates both bank-level and macroeco-
nomic controls, the coefficient on PRG is
negative and statistically significant
with a point estimate of 0.092. In other
words, a lower credit gender gap with
respect to priority loans lowers non-per-
forming credit for women. This finding
(3) (4) (5) (6)
-0.118*** -0.092**
(0.035) (0.042)
0.184 0.209*
(0.121) (0.121)
N Y N Y
N Y N Y
Y Y Y Y
Y Y Y Y
Y Y Y N
326 305 326 305
0.1758 0.2127 0.1504 0.2067
NOVEMBER 25, 2023
can be interpreted to indicate that women
outperform men in terms of loan repay-
ment when it comes to priority credit,
and therefore lowering this gap favours
financial stability. Based on the point
estimates, we can infer that a one stand-
ard deviation decline in priority credit
gap lowers NPLs by 0.7% (or, 15% rela-
tive to the sample mean). Our findings
resonate with the recent research which
observes an improvement in financial
stability (proxied by bank’s insolvency
score) consequent upon improved credit
access to women (Perrin and Weill
2022). The dependent variable in our
framework is bank’s credit risk (unlike,
Z-score, in their study) and relatedly, the
key independent variable is the gender
gap in credit extended, as opposed to
gender gap in credit access in that study.
We repeat the exercise with non-
priority credit gap as the variable of
interest. The preferred specification in
column 6 shows that this coefficient is
positive with a point estimate of 0.21
and therefore, lowering the gender gap
in non-priority credit is not beneficial to
financial stability.
One potential concern is that while
the gender gap in credit could affect
credit risk, banks could also be inclined
to lower credit risk by lending more to
women. We address this endogeneity
challenge by employing an instrumental
variable (IV) approach, using the share
of bank’s core (that is, savings and time)
deposit in total deposit as an instrument.
Following Roberts and Whited (2013),
this instrument satisfies the twin criteria
of relevance (that is, core deposits in-
crease banks’ lendable resources, with
implications for gender credit gap) and
exclusion (that is, the impact on NPLs is
only via the impact on the gender gap).
Even after accounting for this fact, the
results (not reported for brevity) hold.
In Conclusion
A significant volume of research exam-
ines the effect of the gender credit gap.
Not much is known about this aspect in
the Indian context and, in particular, its
manifestation on banks’ credit risk. We
assemble data on Indian public banks and
find that the salutary impact of higher
credit to women on non-performing
vol lVIII no 47 EPW Economic & Political Weekly
 COMMENTARY

loans is manifest in case of priority loans,
although it is much less so in case of non-
priority credit to women.
A couple of policy ideas warrant atten-
tion. First, there is a need for a proper
database which can provide the details
regarding the flow of credit to women
across states and regions. Second, it is
important to look at credit not in isola-
tion, but as part of a comprehensive
ecosystem that promotes convenience
and facilitates gender-appropriate modes
of engagement (Klapper and Arora 2022).
Third, capturing and leveraging the
credit histories of self-help groups (SHGs)
would be an important step forward.
The over-10 million with 80-plus million
women participants provide an impor-
tant fulcrum which can be analysed as
alternate data for lending institutions to
tap into. Relatedly, Women’s World Bank-
ing has devised a simple and analytically
tractable scorecard for financial service
providers that can capture uninten-
tional biases that creep into lending to
women. Credit registries that capture
repayment histories in a comprehen-
sive manner, including for microfi-
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Notes
1 The gender-related credit data is not reported NATIONAL INSTITUTE OF PUBLIC FINANCE AND POLICY
for 2018 and 2019. 18/2 Satsang Vihar Marg, Special Institutional Area, Near JNU, New Delhi-110 067
2 We also estimated the model within a Tobit re- Tel. 26961829, 26569303 Fax 26852548
gression framework (because the dependent
variable is truncated at zero), and found broad- Ref. No.: NIPFP/Estt./Rect./Faculty/2023 Dated: 09/11/2023
ly similar coefficients on the key independent ADVERTISEMENT FOR RECRUITMENT OF FACULTY POSITIONS
variable(s).
National Institute of Public Finance and Policy, New Delhi an autonomous research
Institution under the aegis of the Ministry of Finance, Government of India, invites
References
applications from Indian Nationals for the following positions on contract basis:
Agier, I and A Szafarz (2011): “Credit to Women
Entrepreneurs: The Curse of the Trustworthier S. No. Name of the post No. of posts Pay Level as per 7th CPC
Sex,” Working Paper No 5, Universite Libre de 1. Professor (RBI Chair) 01 At Academic Level-14,
Bruxelles, Belgium. Entry pay Rs.1,44,200/-
Alesina, A F, F Lotti and P E Mistrulli (2013): “Do
Women Pay More for Credit? Evidence from 2. Associate Professor 01 At Academic level 13A,
Italy,” Journal of European Economic Association Entry pay Rs.1,31,400/-
11, pp 45–66. 3. Assistant Professor 02 At Academic Level -11,
Armendariz, B and J Morduch (2005): The Economics Entry pay Rs.68,900/-
of Microfinance, MIT Press, Cambridge: MA.
4. Economist 01 (reserved for At Academic Level -10,
Ashraf, B N (2017): “Political Institutions and Bank
ST) Entry pay Rs.57,700/-
Risk-taking Behavior,” Journal of Financial
Stability, 29, pp 13–35. The details regarding educational qualifications, experience and general terms
Charness, G and U Gneezy (2012): “Strong Evi-
dence of Gender Differences in Risk-taking,”
and conditions are available at NIPFP website: www.nipfp.org.in
Journal of Economic Behaviour and Organiza- Secretary
tion, 83, pp 50–58.

Economic & Political Weekly EPW NOVEMBER 25, 2023 vol lVIII no 47 29
COMMENTARY
A Remarkable Life
Dhruba Narayan Ghosh (1928–2023)
Deepak Nayyar
D
hruba Narayan Ghosh, a distin-
guished citizen of India, passed
away on 7 November 2023, in
Kolkata, at the age of 95. At the time of
independence, in 1947, he was just about
19 years old. The next 75 years turned
out to be a remarkable life in our times
of an extraordinary person who contrib-
uted so much to the public domain in
economy and society. It is sad news and
an irreparable loss for his family, friends,
colleagues and admirers, who span a
wide spectrum of age and straddle the
vast geographical spread of India. He
was held in great esteem by his peers
and much admired by the young. Dhruba
Ghosh was a man of many parts—a su-
perb civil servant, a distinguished cor-
porate leader, an innovative banker, a
builder of institutions, a natural leader,
a scholar, a columnist—with a razor-
sharp mind—and, most importantly, a
concerned citizen. For me, he was a
close friend for more than four decades.
And I have not quite come to terms with
the reality that he has left us.
Dhruba Ghosh was born on 6 August
1928 in Cooch Behar, in the foothills of
the Eastern Himalayas, where he spent
his childhood and went to school. He
spent his formative years in Presidency
College, Calcutta, studying for his BA
and MA in economics. Ghosh was select-
ed for the Indian Audit and Accounts
Service in 1952. Over the next 33 years,
his career in government was stellar,
though in a somewhat different way
from the usual. He served in the bank-
ing division of the Ministry of Finance as
deputy secretary and joint secretary. As
a deputy secretary, he was handpicked
by P N Haksar, secretary to Prime Minis-
ter Indira Gandhi, to draft the ordinance
for the nationalisation of 14 private sec-
tor banks which turned out to be impec-
cable, for it withstood the formidable
challenges mounted by private banks
represented by Nani Palkhivala in the
30
Supreme Court. On completion of his
tenure with the union government, he
spent two years (1975–77) on study leave
in the School of Social Sciences, Jawaha-
rlal Nehru University (JNU), New Delhi,
with his former teacher at Presidency
College, Calcutta—Tapas Majumdar—to
work on a book about the nationalisation
of banks. This book, titled Banking Policy
in India: An Evaluation, was published
in 1979.
In late 1977, Chief Minister Jyoti Basu
and Finance Minister Ashok Mitra per-
suaded Ghosh to join the newly elected
Government of West Bengal on deputa-
tion as secretary of Institutional Fi-
nance, which was most unusual for a
central services officer. He served there
for more than three years until the end
of 1980. Following that, in 1981, he
moved to Indian Institute of Manage-
ment (IIM) Calcutta, where he spent one
year as visiting professor of Economics.
There is an interesting story about this
time in Calcutta. Chief Minister Jyoti
Basu tasked him to persuade Ratan Tata
to set up a new Taj Group hotel in the city.
Ghosh brought Ratan Tata to Calcutta
and showed him possible sites where the
hotel could be built. Ratan Tata liked the
spot opposite the zoo in Alipore. There
were some procedural hurdles that were
overcome and the land was allotted to
the Tatas. The Taj Bengal, Calcutta, was
inaugurated on 10 October 1989.
In 1982, he returned to the Government
of India (GoI) as additional secretary,
Ministry of Steel and Mines. In February
1985, he was appointed secretary, defence
production, in the Ministry of Defence.
The story of the next stage in his career
is particularly worth narrating. Less
than two months after his appointment
as secretary to the GoI—an aspiration
for most civil servants—the then cabinet
secretary, Pratap Kaul, who had not
only researched Ghosh’s past in the
Ministry of Finance but also recognised
NOVEMBER 25, 2023
his attributes of ability and integrity,
sent for Dhruba. Kaul, who had served
as finance secretary earlier, was always
brief and to the point. In a brief meeting,
the cabinet secretary said to him: “Given
your talent and experience, I think you
are the ideal person to be the next Chair-
man of the State Bank of India.” Dhruba
was surprised and hesitant in his re-
sponse. Kaul simply said: “I realise that
you have only recently been appointed
Secretary to the Government of India,
but you will retire in one year and four
months. What I am suggesting will give
you four years. The choice is obvious.”
Dhruba dropped into my office at Udyog
Bhawan and repeated what transpired
in the meeting. My advice was that he
must accept. A month later, Pratap Kaul,
whom I knew well, narrated the same
story to me. In May 1985, Ghosh was ap-
pointed Chairman of State Bank of India
(SBI), for a term of four years. This was
almost four decades ago. Such an appoint-
ment based on merit alone, without any
intervention from the political process,
would simply not be possible now.
After retiring from the public sector,
he reinvented his life in the private cor-
porate sector. He served as the Chairman
of Phillips India (1989–99), Founder
Chairman of ICRA (1991–2013), Chairman
of Larsen & Toubro (1990–91), and
Chairman of Peerless Group (1996–2006).
In addition, he served as an independent
director on several boards, including HDFC
and Birla Corporation. He was a trustee
in the Sameeksha Trust (1992–2023),
which publishes Economic & Political
Weekly (EPW) and has established the
EPW Research Foundation, where he
served as the managing trustee from
1993 to 2019. He was also associated with
management education. He was the first
chairman of the board for IIM Lucknow
(1986–91) and was subsequently Chair-
man of Management Development Insti-
tute, Gurgaon.
I first met Dhruba Ghosh in 1977 when
I was teaching in England but was on a
sabbatical leave as visiting professor at
the Indian Statistical Institute, New Delhi.
It was the beginning of a lifelong friend-
ship. As it turned out, the intersections
in our professional lives were almost
continuous thereafter. I returned to India
vol lVIII no 47 EPW Economic & Political Weekly

in July 1980, accepting an appointment
as professor of economics at the IIM,
Calcutta. Six months later, in 1981, Dhruba
Ghosh spent a sabbatical year as a visit-
ing professor at IIM Calcutta. Our offices
were adjacent to each other. As we got to
know each other better, we had engag-
ing conversations on macroeconomics
and international finance. I moved to
Delhi in July 1983, when I was appointed
Economic Adviser to the GoI in the Min-
istry of Commerce. Our interaction and
association continued as he was also in
Delhi with the government at the time.
I left the government and moved to
JNU in January 1986. Soon after, I was
appointed as an Independent Director
on the Board of the SBI, at the time the
only one from outside the government
and Reserve Bank of India (RBI), in ac-
cordance with the stipulation in the SBI
Act. As member of the Executive Com-
mittee of the Board, I worked very closely
with Dhruba Ghosh as Chairman. It was
a transformative period. Computerisa-
tion was introduced, despite the resist-
ance, through persuasion. For senior
management positions, the selection pro-
cess was reformed, moving from consid-
eration of one batch every year, to con-
sidering three batches at one time, en-
larging the pool of choice, and grooming
those selected for leadership roles. The
SBI sought and obtained a credit rating
through Standard and Poor’s for interna-
tional financial markets. SBI Capital
Markets was created as a separate entity,
entering the mutual funds business to
challenge the UTI monopoly, and lay the
foundations for investment banking. Such
change and reform in the public sector
were the beginnings of a renaissance way
ahead of the curve. As one observer wrote:
“Ghosh made SBI, the elephant, dance.”
Ghosh’s engagement with the financial
sector continued. In September 1990,
when I was Chief Economic Adviser in
the Ministry of Finance and Secretary to
the GoI, Dhruba came to see me and said
that he was thinking about establishing
a credit rating agency in India. He be-
lieved that there was no reason why this
business should be a prerogative of the
West, dominated by the big three—
Moody’s, Standard and Poor’s and
Fitch—from the United States. In this
Economic & Political Weekly EPW NOVEMBER 25, 2023
quest, he was a pioneer in the develop-
ing world. It was an original and ambi-
tious idea. I encouraged him and said
that he should not hesitate to reach out
to me for any help that might be needed.
A year later, ICRA was born. Ghosh was
its founder Chairman. He was not content
with being a mentor. He was hands-on,
finding time not only for discussion with
his analysts but also for chairing the
Ratings Committee from 1991 until
2005. By then, ICRA was established. In
2002, he persuaded me to join the ICRA
Board as an Independent Director.
Moody’s recognised ICRA’s potential and
acquired around 5% of its equity in 1996
and raised that to 20% in 2006. In 2007,
following an initial public offering (IPO),
ICRA was listed on the Bombay Stock Ex-
change, which was a source of joy and
pride for Ghosh. ICRA’s growth spread its
footprint. Soon, it matched CRISIL as the
market leader. Moody’s attempted to ac-
quire a majority share in the market but
failed. Ghosh decided to step down as
Chairman in 2013 but urged me to con-
tinue on the board. His dream of build-
ing a world-class rating agency in India
had been transformed into reality. Alas,
in 2014, Moody’s succeeded in acquiring
a majority by a tiny margin. And I re-
signed from the Board soon thereafter.
The continuing engagement of Ghosh
with the financial sector had one more
chapter. At the behest of Jyoti Basu, who
was keen to save a fading relic of enter-
prise and capitalism in Bengal, he accep-
ted the challenge to serve as Chairman
of the Peerless Group. It was a very diffi-
cult task with acute liquidity problems
and multiple regulatory hurdles. Yet,
over a decade, from 1996 to 2006, he
turned it around.
My longest association with Dhruba
Ghosh, for the good cause of EPW, spanned
three decades. In January 1992, soon after
I returned from the Ministry of Finance
to JNU, the Sameeksha Trust invited both
D N Ghosh and me to join as trustees. At
the time, the Trust comprised M N Srinivas
(Chairman), H T Parekh, Ashok Mitra,
K N Raj, S R Sen, K S Krishnaswamy,
André Beteille and Krishna Raj (Trustees).
The Managing Trustee, Hiten Chaudhuri,
had passed away a few months earlier.
D N Ghosh was elected as the Managing
vol lVIII no 47
COMMENTARY
trustee in 1992 and I was elected as the
Chairman in 2005.
Through these decades, we worked
together very closely, and rarely, if ever,
missed a meeting of the Sameeksha
Trust, despite the hectic professional
lives both of us led. When we joined, the
financial situation of EPW was fragile as
it lived a hand-to-mouth existence, and
there was almost no corpus. Together,
we mobilised resources, in which the de-
velopment finance institutions were par-
ticularly helpful at the beginning, to cre-
ate a modest corpus. At the same time,
we launched a campaign for advertise-
ments, where Ghosh was almost a magi-
cian given his networks in the corporate
sector. We purchased office space in
Kandivali in 1992. The EPW Research
Foundation was established in 1993. The
need to mobilise resources surfaced
once again in the early 2000s, when we
were asked to vacate the rented EPW
premises near the RBI. We succeeded
largely because of the enormous good-
will of two donors from the private
sector and our efforts at raising match-
ing contributions from the corporate
and financial sectors. This enabled us to
buy office space at Borivali in 2002, an
apartment for the editor in 2006, and
new office space for EPW at Lower Parel
in 2007. Production processes were
streamlined and modernised. Subscrip-
tion rates and advertisement rates were
revised regularly. The efforts at financial
resource mobilisation were sustained to
help build a corpus.
The EPW entered the digital age,
beyond the digital version of its print
edition, with generous support from the
Independent and Public-Spirited Media
Foundation (IPSMF). Ghosh was always
most enthusiastic about this idea be-
cause he was convinced that it must be
the future of EPW. As the Managing
Trustee, Ghosh was an integral, indeed
crucial, part of this entire process of
transformation. In addition, as he was
in Mumbai frequently for meetings of
Corporate Boards as a Director, he spent
time with the staff at the EPW office and
helped in every way he could. The EPW
and EPWRF staff had high regard and
much affection for him. He had wanted
to step down as managing trustee for
31
COMMENTARY

some time but continued at my request
and persuasion until 2019. Even there-
after, he continued as a Trustee, so
that we had the benefit of his wisdom
and experience. He will be sorely
missed by the Sameeksha Trust and the
EPW family.
There were two other dimensions in
our association with each other that de-
serve a mention. First, I read draft chap-
ters of his memoirs as they were being
written in 2009 and 2010, providing
comments and suggestions. In doing so,
I learnt much about his life that I was not
aware of. Dhruba was a perfectionist. He
continued to work on and revise the
manuscript for some time. No Regrets,
was published in 2015, when he was 87,
and received splendid reviews. Second,
he persuaded me to join the Board of
Birla Corporation Limited in 2010, which
he had joined three years earlier. His most
powerful argument, which clinched the
matter, was that much like ICRA, there
were only independent directors on this
board which had no promoter or share-
holder directors. This revived my old
connection with Kolkata, renamed in
2001, and provided us with an opportu-
nity to meet at least four times a year.
Ghosh continued to be active even after
he turned 90. In 2006, he succeeded the
then Speaker of the Lok Sabha, Somnath
Chatterjee, as President of the Satyajit
Ray Society. Its objective was to dissemi-
nate Ray’s works, establish film archives
and set up a Ray Heritage Centre in Kol-
kata. He stepped down from this role in
2021. He was also closely associated
with the launch of Bangla Worldwide, a
dynamic and interactive online platform
to connect Bengali people in India and
the world who had an interest in the lit-
erature and culture of Bengal. The por-
tal is connected to 116 countries and
2,040 cities. The story would not be
complete without noting that he was
very active on Twitter in his 90s.
There were some attributes of Dhruba
Ghosh that deserve a special mention.
He had remarkable leadership qualities
embedded in delegation, trust and loy-
alty. If things went well, he gave credit
to those who worked for him. If things
went wrong, he accepted the responsi-
bility. He searched for and nurtured
talented young people, just as he was
egalitarian in his relationships. He was
constructive in criticism and sought to
find solutions to problems, drawing
upon his experience, sagacity and wis-
dom. He had the courage of conviction,
which enabled him to speak truth to
power. People like Ghosh are a vanish-
ing breed if not an endangered species.
We will miss him. Even so, we must
celebrate his life.
Deepak Nayyar (nayyar.deepak@gmail.com)
is Chairman of Sameeksha Trust and Emeritus
Professor of Economics, Jawaharlal Nehru
University, New Delhi.

EPWRF India Time Series

(www.epwrfits.in)
Module on Finances of State Governments
This module contains data on state governments’ receipts and expenditures, tax and non-tax revenue, outstanding liabilities, and
their budgetary surplus/deficit positions, both annual and monthly series.
State Government Finances (Annual Data)
● State Government Finances at a Glance: Aggregate Receipts, Expenditures and Excess/Deficit
● Revenue Receipts: Tax Revenue (State’s Own Tax Revenue and Share in Central Taxes) and Non-tax revenue (State’s Own
Non-tax Revenue, Grants from the Centre, etc.)
● Capital Receipts: Internal Debt, Loans and Advances from the Centre, etc.
● Revenue Expenditure: Developmental Expenditure (Social Services, Economic Services and General Services) and Non-
developmental (Organs of State, Fiscal Services, etc.)
● Capital Expenditure: Capital Outlay (Developmental Economic Services and Social Services and Non-developmental (General
Services) such as Discharge of Internal Debt
● Deficit Indicators: Primary Deficit, Revenue Deficit and Fiscal Deficit
● Liabilities: Total Internal Debt, Loans from Banks and FIs, Loans and Advances from the Centre, etc.
State Government Receipts and Expenditure (CAG Monthly Data)
● Receipts: Revenue Receipts (Tax and Non-Tax Revenue) and Capital Receipts (Recovery of Loans and Advances, Borrowing
& Liabilities, and Other Receipts)
● Expenditures: By Heads of Account (Revenue and Capital Account), By Sector (General, Social and Economic Sector)
 By Plan and Non-Plan (Up to 2016-17)
● Loans and Advances Disbursed
● Deficit Indicators: Primary Deficit, Revenue Deficit and Fiscal Deficit
This series is available monthly and progressive from April 2008 onwards. It also presents quarterly and annual series based on
monthly data. The data-sets are sourced from the publications of Comptroller and Auditor General of India (CAG).
Occasional Series (RBI Data)
● Financial Accommodation availed under various facilities
● Investments
● Market Borrowings
This series is based on the publication of Reserve Bank of India, available on monthly basis from 2017 onwards.
Finances of State Governments module is one of the 32 modules of EPWRF ITS, which covers a wide range of macroeconomic,
financial and social sector indicators for India.
For subscription details, visit www.epwrf its.in or write to us at its@epwrf.in
EPWRF India Time Series is an e-ShodhSindhu consortium approved online database.

32 NOVEMBER 25, 2023 vol lVIII no 47 EPW Economic & Political Weekly
Making Higher Education Digital
Edtech and Capital’s Search for New Sites
of Profit
Manu V Mathew
D
uring 2020–21, online learning
had become the normal mode of
operation at all levels of educa-
tional operations. For educationists, this
meant that it had become all the more
necessary to engage with the content and
organisation of online mode of educational
conduct. While this content was not to
be reduced to the notes, books, images,
PowerPoint presentations or answer/
evaluation sheets, its organisation was
similarly not to be reduced to one sector
(education) using the advances made
by another sector (software industry) to
manage the emerging situation of crisis.
It appeared for a while as if educational
institutions and practitioners were using
a digital infrastructure when the physical
mode of organising education had hit a
standstill during the pandemic, thus shar-
ing an external relationship between them.
But in the concrete practice of organ-
ising virtual classrooms, we realised
that what we used to understand as both
educational practice and digital tech-
nology had both undergone tremendous
changes—both in our subjective registers
and objectively in the political economy
of their organisation. Tanner Mirrlees and
Shahid Alvi’s (2020) EdTech Inc: Selling,
Automating and Globalizing Higher Edu-
cation in the Digital Age, though written
before the pandemic and specific in its
focus on the United States’s higher educa-
tion, provided a critical lens to look into
the political-economical aspect of digital
technology’s entry into higher education.
Its insights into the changing character of
higher education through the normalisa-
tion of online classes and virtual learning
spaces were prophetic to say the least.
The book is about digital technology’s
entry into higher education—edtech—
and is organised into six chapters. The
Economic & Political Weekly EPW november 25, 2023
book reviewS
EdTech Inc: Selling, Automating and Globalizing
Higher Education in the Digital Age
by Tanner Mirrlees and Shahid Alvi, New York: Routledge,
2020; pp 175, £36.99 GBP (E-book).
authors begin with a cautionary note
on the claims made by college adminis-
trators and edtech corporations that ed-
tech would usher in a progressively
higher order of educational practice
which is facing immense crisis following
the neo-liberal turn. Higher education’s
“promise of a better life is under siege”
(p vi) in a system characterised by crisis,
and capital’s instrumentalisation of edtech
is aimed at turning higher education into
another site for profit, they propose. This
is the running theme of the book and the
six chapters deal with each aspect of
this capitalisation process within higher
education institutions.
Digital, Higher Education
and Capitalism
The book begins with an overview of the
crisis in higher education in the US and
traces this crisis to the ebbs and flows of
capitalist economy. By beginning with a
working framework for edtech—“[W]hen
digital technology is adapted, applied or
used by teachers and learners to impart
or gain knowledge or skills in educational
settings, it is edtech” (p 3)—Chapter 1
soon points out the difficulties that open
up with this framework. Digital technology
is built on an international division of
labour produced within a specific capi-
talist mode of production characterised
by private ownership of means of pro-
duction, structural divides between the
owning and working class, the compul-
sory nature of waged work, production
vol lViii no 47
for the sake of profit, class conflict,
inequality and unfreedom. “Education”
adds its own set of challenges. While the
crisis in higher education is structural
and no easy solution is possible within the
present mode of its organisation, the
administrators and state propose to over-
come this crisis through the use of digital
technology—edtech. Edtech, for the
state, is meant to revolutionise education
and correct all the flaws inbuilt in its
present mode of operation. But does a
marriage of digital technology and edu-
cation automatically transform higher
education, and if it does not, what
exactly is edtech doing to both digital and
educational sectors? To answer these ques-
tions, the authors begin their inquiry into
the political economy of both digital tech-
nology and education in neo-liberalism.
Massive open online courses (MOOCs)
are their site of choice for this inquiry.
Developed by academic practitioners to
reach the masses, MOOCs have been
hijacked by the corporations such that
Edtech corporations turn classrooms into
platforms for capital accumulation while
blurring the boundaries between education
and exploitation, learning and labor, students
and workers. (p 10)
Chapter 2 examines the capitalist charac-
ter of higher education by showing how
its crisis-ridden and profit-seeking actions
are breaking higher education down.
State and publicly provided goods like
education are now treated as commodi-
ties such that
[s]tate and many public education institu-
tions now rely upon market mechanisms for
allocating scarce resources, increasingly de-
pend upon corporations for the production
and delivery of public “services” and treat
citizens as consumer-clients and social goods
and commodities. (p 34)
Public education was one of the hall-
marks of the Keynesian consensus be-
tween capital and workers and meant
“something common to us all and uni-
versally accessible to all, regardless of
our ability to pay” (p 29). The critical
role it could play in “building a good and
better world, strengthening democracy,
protecting and promoting culture, as
well as solving urgent human and social
33
BOOK REVIEW
problems” (p x) now has taken a back-
seat following the commodification of this
public system. Through structural adjust-
ment measures, academic workers are
de-professionalised and made precarious
and those programmes and measures
which directly aid capitalist accumulation
are preferred over the likes of critical
citizenship education. Increased corporate
interest in science, technology, engineer-
ing, and mathematics (STEM)-like disci-
plines and emergence of MOOCs are ex-
amples of this qualitative shift, the au-
thors explicate.
Chapters 3 and 4 deal with profiting
and automation in higher education,
respectively. The introduction of infor-
mation and communication technologies
and MOOCs into higher education is
argued from both these themes. They
provide an opportunity for policymakers
to look away from the structural problems
of limited access to public higher educa-
tion and massive fund-cutting in public
education. At the same time, MOOCs,
due to their high production cost and
technical expertise required in produc-
tion, are monopolised by elite universities
in the West, which in turn ushers a new
form of imperialism. This model is in turn
built on the labour of various levels of
national/international division of labour
and often with public money in the case
of public universities, and are then sold
by private companies who market and
sell them for a huge profit. When capital
takes over higher education, there is a
push towards efficiency-based organisa-
tion of production within higher educa-
tion and the necessity to expel labour
from concrete production processes. Like
the way technology is meant to address
labour rebellion and increase profit in
factories, in higher education, too, tech-
nology is in fact brought in as a fix for
addressing these issues. The concentra-
tion of edtech industries in the US is also
providing for a new form of imperial-
ism—platform imperialism—which is
dealt in Chapter 5. This chapter also ap-
proaches platform imperialism in terms
of the “digital divide” and the difference
between the haves and have-nots and how
the turn towards new accumulation re-
gimes will intensify regional inequalities.
Thus, the marriage of digital and higher
34
education is already subsumed in the
capitalist social relations based on exploi-
tation and pursuit for relentless profit.
Against this “business takeover of
[education]” (Rikowski 2003b) and the
fundamental neo-liberal character of
edtech, the conclusion calls for defending
public education “through broad public
participation in democratic deliberation”
(p 129). The authors reiterate the neces-
sity to “rigorously and vigorously” practise
“citizenship and ‘technological citizen-
ship’ in higher education” (p 131) and call
likeminded academicians to follow suit.
Pandemic and Indian Context
COVID-19, in a sense, following the book,
had done what the edtech corporations
had been pushing educational adminis-
trators to do in the last couple of years.
Online mode of learning did become the
norm and students and teachers were
forced to use corporate tools to conduct
their day-to-day academic matters. The
concern that the authors raised about
the lack of democratic deliberations in-
volved in edtech’s entry into education
had been bypassed and edtech became
education in those times. In fact, edtech
in India entered the homes too, parallel
to its entry in formal institutions, in the
form of tuition apps and even apps teach-
ing computer language coding. And the
deep inequality and segregations within
education have not been solved by
edtech; in fact, they were aggravated by
digital education, as we saw then.
At the same time, it is imperative to
re-theorise higher education and its aims
and rethink whether defending its existing
organisational form is indeed the way
forward. Higher education in India is
now a direct site for controlling, regulat-
ing and regimenting the population
(Citynotesinquiry 2020), which is increas-
ingly becoming surplus on a mass level.
And taking from the reference of Negri
and the theories of post-Fordism that the
book itself uses (p 45), neo-liberalism is
the end of education and is an era of
learning such that the organisational form
of higher education exists as a spectacle,
increasing becoming devoid of content and
irrelevant for production. The National
Education Policy that came out during
the pandemic also emphasised learning
november 25, 2023
outcome as its organising principle and
called for facilitating “support and foster
[systems for] learning” (Government of
India 2020: 3). The call that the authors
make for a defence of “face-to-face” edu-
cation (p 70), if contextualised in India,
should necessarily involve a negative
component such that a critique of the ex-
isting organisation of educational pro-
duction is within this defence. To begin
with, when the authors ask to “put hu-
mans, and not edtech at the centre of
[HE]” (p 138), the response in our “post-
digital condition” (Jandrić et al 2018;
Taffel 2016) is to propose that the cate-
gory “human” was already a capitalist
category (Rikowski 2003a). There is a
fundamental crisis of labour–capital dia-
lectic such that the post-Fordist condition
is marked by precarity. The existential
question that higher education faces—in
terms of its role in research, training, de-
mocracy or being the strategic heart of all
education (Mamdani 2008)—in India
now directly appears as a political ques-
tion, which demands us to rethink the
aims of education itself.
The largest section of students and
teachers in India experienced education
even before the pandemic-induced digital
turn as exclusionary and precarious.
While edtech for a while appeared as
sharing an external relation with the
educational field, this experience of ex-
clusion and precarity—both in educational
settings and in the production of digital
technology—revealed to us that there
was in fact an internal relation between
various seemingly disparate sectors, a
social relation mediated by money and
capital. More than what edtech offered
us in terms of tools is what it revealed
about the underlying structures of ine-
quality and exclusion embedded within
higher education organisation and how
available at
Vidhi News Agency
Rustom Ali Dhal, B/H KB Comm Centre
Near Gujarat Samachar, Kanpur
Ahmedabad 380 001
Ph: 2530064, 2530024
vol lViii no 47 EPW Economic & Political Weekly

these can be called upon by the powers
that be in the moment of crisis, so that
existing practices can continue unhinged,
albeit at a higher order of irrationality.
Also, as practitioners engaged in teaching
in higher education, we are faced with
engaging with a generation of students
for whom education revealed itself to be
a tool for regimenting and regulation.
Now, how do we convince them that
there is indeed some merit in what we
do in educational institutions when,
objectively, educational policies are calling
for the end of education and industry is
asking us to deliver generic skills in-
stead of any domain specific skills? The
Economic & Political Weekly EPW november 25, 2023
response to this can be formulated only
if we begin by rethinking what we used
to practise as education in light of the
emergence of the ‘‘era of learning.’’ For
educationists, the relevance of edtech
and learning lies in this introspection
and not necessarily in what it promises
to deliver.
[The book was reviewed and submitted when the
COVID-19-induced pandemic restrictions were
in place during 2020–21. The arguments made
here thus were contemporary to that time.]
Manu V Mathew (manu.v.matthew@gmail.com)
teaches at the School of Liberal Studies,
BML Munjal University.
vol lViii no 47
BOOK REVIEW
References
Citynotesinquiry (2020): “NEP 2020: Neoliberal
Education-Learning (Labour) Policy 2020—From
Disciplinary Factory-Society to Multidiscipli-
nary (Flexibally-Controlled) SocialFactory.”
Government of India (2020): “National Education
Policy 2020,” New Delhi, https://www.educa-
tion.gov.in/sites/upload_files/mhrd/files/
NEP_Final_English_0.pdf.
Jandrić, Petar et al (2018): “Postdigital Science and
Education,” Educational Philosophy and Theory,
Vol 50, No 10, pp 893–99.
Mamdani, Mahmood (2008): “Higher Education, the
State and the Marketplace,” Journal of Higher
Education in Africa, Vol 6, No 1, pp 1–10.
Rikowski, Glenn (2003a): “Alien Life: Marx and the
Future of the Human,” Historical Materialism,
Vol 11, No 2, pp 121–64.
— (2003b): “The Business Takeover of Schools,”
Mediactive, Vol 1, pp 91–109.
Taffel, Sy (2016): “Perspectives on the Postdigital:
Beyond Rhetorics of Progress and Novelty,”
Convergence, Vol 22, No 3, pp 324–38.
35

Women’s Affective Rebellions in
Digital India
Kunhammad K K
To produce a new discourse, new know-
ledge, a new politics, one must traverse an
unnamable point, a point of absolute non-
narrative, non-culture, and non-knowledge.
—Maurizio Lazzarato
I
n his fascinating book After Method:
Mess in Social Science Research, John
Law locates a central flaw at the heart
of current academic research methods
in social science: their utter inability to
capture those phenomena of the world
that are “vague, diffuse or unspecific,
slippery, emotional, ephemeral, elusive or
indistinct” (Law 2004: 2). He goes on to
argue that our academic obsession with
clarity and coherence enslaves us to a
metaphor of “knowing” that discounts
aporias and “unpredictabilities,” thereby
missing out on a huge chunk of reality that
is textured in ways that are fundamen-
tally opaque to reasoning and rigorous
logic. Perhaps the key achievement of
Meena T Pillai’s book Affective Feminisms
in Digital India: Intimate Rebels is that
it successfully delineates certain “dif-
fuse, slippery, emotional and elusive”
forms of digital dissent and transforms
this mess of affective phenomena into
“soft structures of feelings” and evolving
modes of “intimate” rebellion.
Economic & Political Weekly EPW november 25, 2023
Affective Feminisms in Digital India:
Intimate Rebels by Meena T Pillai, London and
New York: Routledge, 2023; pp 248, `1,295.
According to the author,
[T]he term “feminist” appears too constrict-
ing for what seem to be larger assemblages
that are more fluid, tentative, and coalitional
than rooted in the solidarity that earlier
feminist movements demanded. (p 12)
Despite the fluid, tentative and elusive
forms the flows of digital feminist dis-
sent take, the book captures how these
“intimate rebels” successfully mobilise
“possibilities of transnational impulses
… into networked feminist politics,”
engendering in the process “a popular
mode of gendered dissent marking a
watershed moment for feminisms in
India” (p 5). Drawing on theorists like
Baruch Spinoza, Giles Deleuze, Felix
Guattari and Brian Massumi who iden-
tify the fault lines in the represent-
ational paradigm and acknowledge the
relevance of researching phenomena
located at the intersection of sensation,
affective intensity, and materiality, the
author accomplishes a crucial break-
through in feminist cultural studies: her
monograph is simultaneously a “messy
vol lViii no 47
BOOK REVIEW
multiplicity of feminist activism” and “a
useful way to think about intersectional
identities and transnational feminist
coalitions online” (p 14). The book is an
authentic cultural studies event that
marks a crucial intervention in today’s
ethico-political debates about the affec-
tive turn in women’s struggles in India
as a whole and in the state of Kerala,
in particular.
The ‘Episteme of the Affect’ and
the ‘Gender Precariat’
The affective turn in cultural studies, pro-
pelled largely by Eve Sedgwick’s brilliant
reading of the “formidable phenome-
nology of emotion” (Sedgwick and Frank
1995: 12) in the work of the American
psychologist Silvan Tomkins (1911–91)
who had identified nine primary “affects,”
introduced a novel pedagogy of reading
based on the assumption, now funda-
mental to affective aesthetics, that the
“line between words and things or be-
tween linguistic and nonlinguistic phe-
nomena is endlessly changing, permea-
ble, and entirely unsusceptible to defini-
tive articulation” (Sedgwick 2002: 6).
While Tomkins’ interest lay primarily in
steering people away from situations
that produced negative affects, cultural
studies theorists and literary critics like
Eve Sedgewick and Adam Frank were
actuated by a much more ambitious
orientation: for them it was “a project to
explore promising tools and techniques
for non-dualistic thought and pedagogy”
(Sedgwick and Frank 1995: 519).
35
BOOK REVIEW
Instead of trying to squeeze out every
possible drop of meaning from a literary
work, these critics focused on how non-
linguistic aspects such as mood, atmos-
phere and feelings possess “the ability to
create affective resonances, independent
of content or meaning” (Shouse 2005: 1).
The affective turn has since been under-
stood in a multiplicity of ways: as “a
structured formation … at the edge of
semantic availability;” as “weapons of war
[that] transpierce the body like arrows”
(Deleuze and Guattari 1987: 356); as an
assault on the linguistic turn, stressing
feeling as a non-representational mode of
knowing (Massumi 2001: 35); as a pre-
subjective, pre-personal configuration, not
located in an interior core of the self, but
straddling selves and holding a position
of “in-betweenness” (Terada 2003: 24); as
an agent that erodes the “boundedness”
of bodies (Probyn 2009: 74); as “a bodily
capacity, a bodily readiness, a trigger to
action” (Clough 2012: 245); as “inherently
political: bodies are part of an ecosocial
matrix of other bodies, affecting them and
being affected by them” (Protevi 2009:
50); as a form of feeling outside conscious
knowing, or intention (Ibbet 2017: 245);
as “a fugitive presence attached to or
hovering in the vicinity of words” (Ngai
2005: 46); as “mattering maps” that
“direct people’s investments in and into
the world” (Grossberg 1997: 81); as a
rekindling of interest in “problematics
of embodiment and materiality in the
wake of twentieth-century Western
theory” (Brinkema 2014: xi); and as “the
grounds for forging new collectivities”
(Love 2007: 13).
By the second decade of the 21st century,
affect theory not only provided social
scientists and literary scholars with a
powerful heuristic for understanding an
immense range of diverse social and
literary phenomena, but also helped to
forge interdisciplinary alliances across
a multiplicity of disciplines. It is this
ubiquitous interest in theories of affect
and affective assemblages across a wide
range of disciplinary formations that
provokes Brinkema (2014) to open her
book on affect with the rhetorical question:
“Is there any remaining doubt that we
are now fully within the Episteme of
the Affect?” In her conceptualisation of
36
the protean form of affective feminisms
at work in Indian digital platforms, the
author has creatively mobilised almost
the entire repertoire of resonances im-
plied in the varying definitions of affect
referenced above.
Though affect has always been integral
to feminist movements, in tracing the
turn to affect in feminist studies, the
author follows a novel trajectory. Con-
ceiving the recent feminist upsurge in
digital India as personal and collective
attempts to address interlocking systems
of masculine domination and oppression,
these “affective feminisms” effectively
deploy “post feminist vocabularies of
individual choice and agency, actualis-
ing politics through fluid social networks
enabling connective action” (p 18). The
author locates the genealogical routes
of the affective turn in feminism in India
in certain crucial events: the story of
Nangeli who bled to death after protest-
ing against the “breast tax” by cutting
off one of her breasts, and offering it on
a plantain leaf to the feudal lord’s tax
collector, the open letter written by four
law professors to the Chief Justice of
India on 16 September 1979 requesting
the repeal of a controversial judgment
that acquitted two constables who raped
a minor tribal girl inside their police
station on 26 March 1972, the 2014 Kiss
of Love movement in Kerala, the 2014
Why Loiter campaign in Mumbai, the 2014
Take Back the Night movement in Kolkata,
and the 2015 Pinjra Tod [Break the Cage]
movement against sexist curfew rules in
student hostels in Delhi. Through such
instances of what Donna Haraway
(1988: 596) calls “situated knowledges,”
the author produces a novel genealogy of
feminist activism in India, explores the
“texture and politics of contemporary
women’s lives, their dissent and the as-
semblages it brings into being” and ad-
dresses the “gendered insecurities and the
politics of resistance” by “gendering pre-
carity,” that is, by using a creatively altered
version of the concept of precarity as her
key theoretical framework.
Pillai presents a rather exhaustive re-
view of scholarship on the ideas of affect
and precarity and their mutual imbrica-
tions with a view to placing the new
modalities of feminist dissent across
november 25, 2023
Indian digital platforms in a proper theo-
retical framework. The author traces the
history of Indian feminist activism from
the “evolution of a distinct feminist sensi-
bility in the subcontinent and its negoti-
ations with the larger thought structures
of the region” (p 4) to “its multiple tra-
jectories” and its “complexly shaping as-
semblages,” zeroing in on “the modalities
and politics of their affective counter-
hegemonic articulations and engagements
on digital terrains” (p 14) in contemporary
India. The author situates her definition of
affective feminism within contemporary
scholarship through an adequately
detailed and incisively critical review
of the works of Guy Standing, Judith
Butler, Michael Hardt, Antonio Negri,
Zizi Papacharissi, Barbara Tomlinson,
Ann Cvetkovich, and Sara Ahmed.
Drawing heavily on Standing’s concept
of the precariat “as a social class-in-the-
making” and combining Standing’s in-
sights with Papacharissi’s idea of “affec-
tive publics”—publics that “materialize
through affect and discursive mediality”
(p 25), the author explains how at the
present historical juncture where “an
increasingly nationalist state in illicit
relations with a neo-liberal market inflicts
new kinds of surveillances and neo-
governmentalities that make patriarchies
perpetuate themselves in and through the
very language, kinship relations, cultural
paradigms, stereotypes, and religion”
(p 26), the notion of gender precarity
acquires a new dimension of relevance
because “constant erasures and micro-
aggressions perpetuated by a cis-gender-
friendly, hetero normative system push
alternatively gendered/sexed people in
India towards a precarious marginali-
zation” (p 26). In the author’s creative
re-rendering, the term “precariat” refers
to a heterogeneous multiplicity of women’s
groups; in fact, she debunks the very
notion of a homogeneous class of op-
pressed women.
The degree of precarity varies across a
diversity of groups such as unorganised
sex workers, sales girls working under
unregulated working conditions, migrant
women, girl students caught in the dichot-
omy between academic discourses and
their actual living conditions, educated
housewives who have been sabotaged by
vol lViii no 47 EPW Economic & Political Weekly

the feminine mystique, domestic labour-
ers, women in the unorganised sectors,
and LGBT communities who feel more and
more precariat even as they have begun
making themselves visible, among others.
This would critically destabilise any no-
tions of a homogeneous class and perti-
nently address those whom the hegem-
onic class discriminated against, with
domination structuring the very patterns
of their lives, their everyday living (p 27).
The examples of precarious life cited
in the book are quite incisive in their
quotidian banality, like the one about the
author’s friend, an academic who had to
hide an iPad and a MacBook under her
clothes or in the kitchen so that he does
not find out she is using them for the
purpose of work. A female employee
returning late from work has to bear the
“double burden” of facing “prying ques-
tions and gazes” and protecting herself
against hostile public spaces. Such ex-
amples speak to an invisibilised and si-
lenced constituency of upper-class wom-
en who are “constantly living under fear
and threat that [their] academic endeav-
ours are dangerously oppositional to
[their] choreographed role as a ‘model’
homemaker” (p 27). The author goes on
to argue that forces such as religion and
caste produce a “religious precariat” of
women who are doubly disadvantaged
by the fact that their lives are structured
and regulated by patriarchal religious
institutions. She cites the case of Kerala
where a debate raged on for months about
the putative “impurity” of menstrual
blood and the religious taboo on men-
struating women’s entry into temples.
The author further explores how despite
the apparent diversity of this “gendered
precariat”—“an amalgam of material his-
tories, socio-economic statuses, and hier-
archies that, more often than not, refute
and contradict each other” (p 30), they
are actively engaged in the common task
of using cyber networks to “talk about
[their] fragile, fluid, and affective en-
gagements” and forging dispersed com-
munities of digital dissent across India.
Since, in a country like India, precarity
is quite diverse, and unevenly distributed
amongst women belonging to varying
classes, castes, and labour sectors, we
must resist the temptation to homogenise
Economic & Political Weekly EPW november 25, 2023
BOOK REVIEW
these groups as a classless sisterhood raged on digital platforms shook the
engaged in affective rebellions. country to its very foundations. The author
claims that these cyber publics produced
Feminist Counterpublics: Affect, myriad opportunities for “the mobilisa-
Embodiment and Technology tion of a collective rage to discursively
The book successfully creates a dialogue summon gendered counter publics into
between two seemingly heterogeneous being” (p 54). In pursuing this line of in-
fields of research: cultural studies of affect quiry, the author subjects the question of
and the politics of emotion, on the one technology and its implications for wom-
hand, and scholarship on embodiment and en’s body to a rigorous analysis which
new media technologies, on the other. she grounds in a series of detailed case
Through a nuanced exploration of the studies such as the #Nirbhaya Movement,
interactions between feminist politics the #MeToo Movement, and the Women
and cyberspace which gives rise to emerg- in Cinema Collective, a direct result of the
ing modalities of agency quite distinct actor assault case in Kerala. One of the
from previous feminist mobilisations, the chief merits of the book lies in the excel-
author explains how, despite the alarming lent analyses of these case studies that
rise in toxic masculinity and misogyny, explain their crucial role in shaping na-
women in India have successfully mobi- tional debates about gendered violence
lised political affect and emerged as and producing a novel multiplicity of
powerful feminist counter publics through feminist discourses that threaten hegem-
the carefully orchestrated deployment onic structures of patriarchy, displace tra-
of digital resources such as social media ditional feminist imaginaries and intro-
posts and hashtags. duce a new “articulative sensibility.”
Feminist counter publics emerge in The author also examines the rise of
response to situations of extreme vio- affective counter publics in Kerala and
lence against women. The book docu- delineates how digital platforms and the
ments a few horrific instances of rape affordances of social media facilitate feel-
and gender violence in India and shows ings of engagement and belonging and
how the storms of affective dissent that propel the forces of social transformation
Review of Urban Affairs
February 25, 2023
Incomplete Visions and Riven Realities in the Indian City —Ashima Sood
‘We Must Persevere and Persuade, Not Lose Our Tempers and Shout’: —Lalitha Kamath,
How Women Corporators Experience and Shape the Kanak Rajadhyaksha
Gendered State under Conditions of Urban Transformation
Participation through WhatsApp in Urban Waste Management:
Citizen–Government Relations and Outcomes in
Mumbai’s Participatory Waste Management Policies —Jennifer Spencer
Planning the Informal: Locating Street Vending in Master Plans Post 2014 —Aravind Unni
Invisible Custodians: A Critical Inquiry into the Continuing Obscurity
of Women Waste Pickers at Dhapa Landfill of Kolkata —Shreyasee Dasgupta
Cultural Ecologies of Urban Lakes: The Bathukamma Festival, —Pullanna Vidyapogu,
Caste Associations and Resource Claims in Hyderabad Indivar Jonnalagadda
Community Capital: Socio-spatial Relations in
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vol lViii no 47 37
 BOOK REVIEW
among women. She presents a stimulating
discussion of news events and scandals
that have occupied an enormous amount
of postmillennial Kerala media space
such as the misogynist YouTube video of
a Malayali priest, the Bishop Franko
Mulakkal sex scandal, cyber harassment
of Rana Ayub, the physical assault of the
misogynist YouTuber Vijay P Nair by three
women social activists, the Fish Fry Debate
ignited by Rima Kallingal, the Thasni Banu
case of 2012, the Kiss of Love campaign of
2014, and the SIFK scandal in Karnataka
and concludes that each of these scandals
and news events have opened up innova-
tive trajectories of popular feminisms in
Kerala. Weaving together heart-rending
tales of women’s affective rebellion against
hegemonic patriarchy, toxic masculinity
and rampant misogyny, the author lays
the groundwork for the emergence of a
novel agency of “affective interpellation”
on the digital terrains of India and the
formulation of what she calls “the af-
fective illocutionary.”
In Conclusion
While the book persuasively builds on
and develops Lawrence Grossberg’s bold
thesis that “the political intellectual has
no choice but to enter into the struggle
over affect in order to articulate new ways
of caring” (p 23), a politics of affect is
not without its limitations. The criticism
that “affect itself has been overinvested
by theory” (Gregg and Seigworth 1997)
would, in a rather restricted sense, be a
valid critique of the present book too.
Even while acknowledging the power of
affective cyber publics, it has been argued
that the unpredictable and unstable
nature of digital networks can weaken
their potential for political transformation.
As Ian Reilly (2016: 2378) has remarked:
“Even in the best-case scenarios, networks
function as unpredictable environments
and ecologies, not as deterministic forces
that incite protest or bring about change.”
Ruth Leys (2011: 471) has also presented a
vigorous critique of affect both as “the
alleged disjunction between emotion
and cognition” and as “sources of moti-
vation not integrated into the system of
beliefs or desires.” Nevertheless, one of
the triumphs of Affective Feminisms in
Digital India: Intimate Rebels is that it
38
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has successfully navigated around this
conundrum by embracing a politics of
intimacy and by contextualising, with
remarkable acuity and intensity, the ex-
periences of women’s intimate rebellions
on Indian digital networks.
At the heart of this book lies the
crucial insight that affects produce a
non-narrative structure of pre-personal
intimacy and belonging with profound
political consequences. As intimacy sprouts
in trying to speak of the unspeakable,
communicative barriers disappear en-
gendering “ideologically open,” intimate
alliances. And this regime of intimacy
emerges at the intersection of “an unnam-
able point of absolute non-narrative, non-
culture, and non-knowledge,” birthing in
the process “a new discourse, new know-
ledge, a new politics” (Lazzarato 2014: 18).
The desire for intimate connections initi-
ates a politics that is fundamentally non-
identitarian. Crucial to this politics of
intimate rebellion is a subject who oper-
ates through affect at a pre-subjective
level; a political subject-in-process whose
identity is still an emergent property of
the political situation and whose affec-
tive fidelity to the truth of an event is
capable of producing specific bodily in-
tensities, sensations and tonalities that
enable a spontaneous mode of embod-
ied dissent. Out of the affective interac-
tion of “intimate rebels” on digital ter-
rains, the author contends, emerges a
form of sisterhood and solidarity which
cannot be reduced to that interaction,
but is experienced by those involved as
a substantial agency capable of catalys-
ing social transformations.
This book is a powerful intervention,
a boldly political act and would likely
remain a seminal force in future ethno-
graphies of feminist dissent. In her
meticulous exploration of the myriad
forms of injustice against women and
her poignant tales of women’s affective
rebellions from India, the author’s simmer-
ing anger and her sharp sense of moral
outrage show through, in subtle ways,
urging us to join the digital counter pub-
lics in the hope of guaranteeing a more
just, equitable and dignified public life to
all women in India. To read this book is
not only to grapple with a powerful vision
of the bright future of affective feminisms
november 25, 2023
in India and abroad, but also to tune
into, to borrow George Elliot’s words,
“the squirrel’s heartbeat” and “the roar
which lies on the other side of silence.”
Kunhammad K K (kunhammad1997@gmail.com)
is with the Faculty of Language and Literature,
Kannur University, Kerala.
REFERENCES
Brinkema, Eugenie (2014): The Forms of the Affects,
Durham: Duke University Press.
Clough, Patricia Ticineto (2012): “War by Other
Means: What Difference Do(es) the Graphic(s)
Make?” Digital Cultures and the Politics of Emo-
tion: Feelings, Affect and Technological Change,
A Karatzogianni and A Kuntman (eds), UK:
Palgrave Macmillan.
Deleuze, Gilles and Felix Guattari (1987): A Thousand
Plateaus: Capitalism and Schizophrenia, Minne-
apolis: University of Minnesota Press.
Gregg, Melissa and Gregory J Seigworth (1997):
The Affect Theory Reader, Durham: Duke Uni-
versity Press.
Grossberg, Lawrence (1997): Dancing in Spite of
Myself: Essays in Popular Culture, Durham:
Duke University Press.
Hardt, Michael (1999): “Affective Labour,” Boundary,
Vol 26, No 2, pp 89–100.
Haraway, Dona (1988): “Situated Knowledges: The
Science Question in Feminism and the Privilege
of Partial Perspective,” Feminist Studies, Vol 14,
No 3 (Autumn 1988), pp 575–99, https://doi.
org/10.2307/3178066•https://www.jstor.org/
stable/3178066.
Ibbet, Katherine (2017): “When I Do, I Call It Af-
fect,” Paragraph, Vol 40, No 2, pp 244–53.
Krause, Ralf and Marc Rolli (2008): “Micropolitical
Association,” Deleuze and Politics, Ian Buchanan
and Nicholas Thoburn (eds), Edinburgh: Edin-
burgh University Press.
Law, John (2004): After Method: Mess in Social
Science Research, Routledge.
Lazzarato, Maurizio (2014): Signs and Machines:
Capitalism and the Production of Subjectivity,
New York: The MIT Press.
Leys, Ruth (2011): “The Turn to Affect: A Critique,”
Critical Inquiry, Vol 37, No 3, pp 434–72.
Love, Heather (2007): Feeling Backward: Loss and
the Politics of Queer History, Cambridge: Harvard
University Press.
Massumi, Brian (2001): Parables for the Virtual:
Movement, Affect, Sensation, Durham: Duke
University Press.
Ngai, Sianne (2005): Ugly Feelings, Cambridge:
Harvard University Press.
Probyn, Elspeth (2009): “Writing Shame,” The Affect
Theory Reader, Melissa Gregg and Gregory J
Seigworth (eds), Durham: Duke University Press,
pp 71–90.
Protevi, John (2009): Political Affect: Connecting
the Social and the Somatic, London: University
of Minnesota Press.
Reilly, Ian (2016): “Affective Publics: Sentiment,
Technology, and Politics,” International Journal
of Communication, pp 2377–80.
Sedgwick, Eve Kosofsky and Adam Frank (1995):
“Shame in the Cybernetic Fold: Reading Silvan
Tomkins,” Critical Inquiry, Vol 21, No 2, pp 496–522.
Sedgwick, Eve Kosofsky (2002): Touching Feeling:
Affect, Pedagogy, Performativity, Durham: Duke
University Press.
Shouse, E (2005): “Feeling, Emotion, Affect,” M/C
Journal, Vol 8, No 6, https://doi.org/10.5204/
mcj.2443.
Terada, Rei (2003): Feeling in Theory: Emotion after
the ‘Death of the Subject,’ Cambridge: Harvard
University Press.
vol lViii no 47 EPW Economic & Political Weekly
 PERSPECTIVES
Rythu Bharosa Kendras
of Andhra Pradesh
A Note on the Ground Realities
B Guruva Reddy, V Ratna Reddy, T Chiranjeevi, M Srinivasa Reddy
The Government of Andhra
Pradesh has established Rythu
Bharosa Kendras (Farmer
Assurance Centres) at the village
level to take the agriculture-related
services to the doorsteps of the
farmers. Within three years of
their advent, RBKs have found a
place in the list of national best
practices and NITI Aayog is
proposing to replicate the model in
other states. While decentralised
service delivery is a positive
development, the long list of
its mandated services is
proving to be a bottleneck for
effective service delivery.
This article examines the
functioning of RBKs at the village
level to evaluate the merits
of the programme.
The authors are thankful to the anonymous
reviewer of EPW for constructive comments
and suggestions. However, the usual
disclaimers apply.
B Guruva Reddy (grbonthu@gmail.com) is a
freelance activist in Hyderabad. V Ratna Reddy
(profvratnareddy@lnrmi.ac.in) and T Chiranjeevi
(jeevs1962@yahoo.com) are with the Livelihoods
and Natural Resource Management Institute,
Hyderabad. M Srinivasa Reddy (ms.srinivasa@
gmail.com) is with the Centre for Economic
and Social Studies, Hyderabad.
Economic & Political Weekly EPW November 25, 2023
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I
n 2020, the Government of Andhra
Pradesh (GoAP) established Rythu
Bharosa Kendras (RBKs) (Farmer
Assurance Centres) in all the panchayat
villages (10,778, covering 70 lakh farmers)
of the state to address all the problems,
except that of credit, of farmers at one
place. RBKs, established at a cost of `21.80
lakh per unit, are termed as “one-stop
shops” that provide solutions to farmers
from “seed to sale.” The services of RBKs
include soil testing and advisories, seed
certification and supply, quality input
supplies (chemical as well as organic) at
fair prices; crop and climate advisories,
e-crop registration, promotion of modern
technologies and crop practices, supply
of farm machinery, livestock and fishery
services, and procurement of produce at
the minimum support price (MSP). Most
of the RBKs operate from their own
buildings, though some of them also op-
erate from village panchayat buildings.
RBKs have found a place in the list of
best practices compiled by the NITI Aayog
in 2023. The NITI Aayog proposes to rep-
licate the model in other states. RBKs
have completed three years of opera-
tions and it is time for a critical review to
provide mid-course guidance for improv-
ing the delivery of services. Since there
are no publicly available third-party
evaluations, this note examines the
functioning of RBKs at the village level to
evaluate the merits of the programme
for a nationwide roll-out. This assess-
ment is based on our first-hand informa-
tion and observations from 15 RBKs in
the Kollipara mandal of Guntur district,1
including 15 office bearers (one from
each RBK) and about 60 farmers (five
from each RBK). Besides this, officials
and farmers from other districts were
interviewed over the phone.
vol lViii no 47
Kollipara mandal is located in one of
the most fertile regions of the state, that is,
Krishna delta, with nearly 100% irriga-
tion. More than 90% of the farmers are
marginal and smallholders (<2 ha). Pad-
dy is the dominant irrigated crop fol-
lowed by turmeric and banana, grown
under irrigated-dry conditions. Of late,
maize and jowar have replaced black gram
and green gram during the rabi season.
Given the intensive nature of crop prac-
tices coupled with the combination of
subsistence and commercial crops, RBKs
are expected to help the farmers in
improving farm practices (extension),
access to quality inputs, and marketing
of their produce. This region is socially
dynamic and politically active.
Institutional Structure
The four pillars or main activities of
RBKs include (i) delivery of services;
(ii) supply of quality inputs; (iii) capacity
building and knowledge dissemination;
and (iv) procurement operations. RBKs
function under four advisory boards at
the state, district, mandal, and village
(RBK) levels. These advisory boards pro-
vide inputs on crop planning and mar-
keting, given the climatic conditions at
the village level, steps to meet farmers’
requirements, and how to involve farm-
ers in decision-making. RBKs are provid-
ed with infrastructure like soil testing
kit, seed testing kit, moisture meter,
smart TV, touchscreen kiosk along with
other office infrastructure. The centres
are operated by village agriculture assis-
tant (VAA)/horticulture assistant (HA)/
sericulture assistant (SA), and veterinary
assistant surgeon (VAS)/village fisheries
assistant (VFA). RBKs have several stake-
holders, including all the relevant de-
partments, all the banks and agricultural/
horticulture/veterinary universities. The
M S Swaminathan Research Foundation
(MSSRF) along with a number of national
institutions have become knowledge
partners in the initiative.2
While the institutional structure of
RBKs is more decentralised, the activities
or objectives are not very different from
some of the existing institutions like
primary agricultural cooperative credit
39
 PERSPECTIVES
societies (PACS) and the farmer producer
organisations (FPOs). PACS and FPOs also
directly serve the agriculture sector.
While PACS provide farm credit and
inputs (mainly fertilisers), FPOs aim to
provide quality inputs at reasonable
prices, crop advisories, custom hiring
services and marketing of the farm pro-
duce at remunerative prices. The main
difference is that RBKs are located in all
the villages (some big villages have more
than one RBK), while PACs and FPOs are
located only at the main village. While
the FPOs are designed as profitable busi-
ness models with farmers as partners,
RBKs are more service-oriented. The ca-
pacity building and knowledge dissemi-
nation services component is directly
taken from the MSSRFs village knowledge
centres (VKCs) initiative.
Financing RBKs
Apart from investing in the construction
of the RBK and infrastructure amount-
ing to `21.80 lakh, no substantive finan-
cial provisions are made for carrying out
the day-to-day activities and services
listed in the objectives. It is estimated
that each FPO requires at least `15– `20
lakh to start their operations on a limited
scale (Reddy and Reddy 2022). RBKs have
a much longer list of activities and services
ranging from soil testing to procuring all
the produce farmers bring to them. The
cash flow requirement of RBKs can be
estimated using per acre non-labour
input costs in a crop season. It is assessed
that farmers spend about `7,000 per
acre during the rabi season (mainly on
maize and jowar in the sample RBKs).
Assuming that non-labour inputs account
for 50% of these costs, the per acre cost
of paid inputs would be `3,500. A total
of 16,000 acres are cultivated during the
rabi season under these 15 RBKs. The
capital requirement is estimated at
`37 lakh per RBK (`3,500*16000/15) for
supplying all the inputs as mandated. At
the state level, the required capital infusion
would be in the range of `4,000 crore.
This is a conservative estimate as low-
cost rabi crops are considered here and
RBKs get back the money from the sale of
inputs regularly. These estimates do not
include the capital required for procur-
ing the produce. Given the mandate of
40
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procuring the produce when the market
rates are lower than MSP, RBKs and the
state nodal agencies (AP Seeds; AP
Agros; Markfed and Civil Supplies) need
financial support to overcome the losses
in certain crops every year. This calls for
substantial budgetary allocations for
sustaining the operations in the long
run. Till date, no such allocations have
been made leaving RBKs ineffective in
delivering the services, which is no dif-
ferent from the FPOs.
Functioning and Impacts
RBKs are the one-stop solution to farmers
of AP. It is hyped as a silver bullet for ad-
dressing the maladies of agriculture and
allied sectors and would serve as a model
for addressing farmers’ issues at the na-
tional and international levels. How far
this hype has translated into a reality is a
moot point. While the initial promotional
activities and the new buildings could
create awareness among the village peo-
ple, one needs to assess how far farmers
are participating and benefiting from
the RBKs. Here, we focus on the func-
tioning of RBKs, activities, service deliv-
ery, and perceptions of the farmers in
improving their conditions.
Extension services: Soil testing is the
starting point of extension services. It
has been taken up on a large scale at the
national level with the objective of pro-
viding soil health cards to every farmer
in the country. RBKs are expected to
strengthen the initiative further in close
collaboration with the farmers at the vil-
lage level. RBKs were provided with soil
testing kits coupled with some demon-
strations in the farmer fields at the start
of the initiative. It was observed during
our recent visits that none of the RBKs
had soil testing equipment and those in
charge were not aware of soil samples
collection or testing.
Farmers perceive that soil testing is
critical for crop planning and are not
satisfied with these services in any of the
regions. They feel that soil-based crop
guidance or input guidance is never pro-
vided. Farmers in the tail-end command
areas have complained that they suffer
from waterlogging and soil salinity.
None of the RBKs provide or sell the
November 25, 2023
micronutrients like zinc for addressing
salinity. Farmers expect RBKs to help
them prevent these problems. These could
be in the form of agronomic practices and/
or water management, which is under the
purview of the irrigation department.
Awareness about RBKs has not trans-
lated into improved footfalls of farmers
to the centres, either watch the RBK TV
channel or use the information kiosk.
Hardly three to four farmers make visits
in a day during normal times, though more
farmers visit during fertiliser shortages.
It was observed that RBK in-charges visit
farmers’ houses, bring them on bikes to
the centres and arrange for tea/snacks
to make them view state-designated pro-
grammes. Less than 3% of the farmers, as
verified from field records (available at the
sample RBK offices), have utilised other
extension services like the RBK channel,
field school, mini kits, subsidised legume
crop seeds, advice on farmers’ field prob-
lems, etc. On the contrary, extension
services have diluted after the establish-
ment of RBKs, as the extension staff time
is mostly spent on e-crop registration,
electronic know your customer (e-KYC)
and other record-keeping works. The
disconnect between awareness and utili-
sation of RBK services is observed in an-
other empirical study, which observed
the non-availability of various inputs
(seeds, fertilisers, machinery, etc) and
extension services as the main reasons
(Babu 2023).
Similar is the fate of veterinary ser-
vices. Though Gopal Amitra is attached
to RBKs, they continue to provide limited
services as mandated by the local veteri-
nary institutions rather than associating
themselves with the RBKs. And services
pertaining to natural farming, and fish-
eries/prawn culture (feed, seed, crop
care services, storage structures, har-
vesting platforms) are yet to start or are
discontinued, as RBKs are not equipped
or competent to extend such services.
Climate information: In the context of
increasing climate risks, accurate and
timely climate information at the appro-
priate scale is vital for sustaining farm
productivity. The RBK kiosks provide
weather information on rain forecasts,
dry spells, flood information, the effect
vol lViii no 47 EPW Economic & Political Weekly

of climate on crops, etc, which is already
available through media (TV and news-
papers) regularly. In fact, the agricul-
ture university is already sending this
information through mobile messages
twice a week. This information is gener-
ated at a scale (mandal level) that is not
appropriate at the village level, and
hence, credibility is low. This, in a way,
is an outdated approach when compared
to that of climate information centres
(CLICs) established in some of the water-
shed villages of the erstwhile AP. CLICs
generate climate information at the vil-
lage level along with that on groundwa-
ter resources and provide trajectories
regularly. This process is carried out by
farmers themselves and they discuss
and plan sowing time, crop selection in
the kharif and rabi seasons and harvest-
ing schedules (Nidumolu 2020). The
state should investigate the possibilities
of implementing such initiatives through
RBKs and generate climate information
at the village level.
E-crop registration: Under e-crop reg-
istration, farmers are expected to regis-
ter their crops in kharif and rabi seasons.
E-crop registration is necessary for avail-
ing the services of RBKs. Among the 15
RBKs, nearly 19,000 acres in kharif sea-
son (6,800 farmers) and 16,000 acres in
rabi season (5,800 farmers) have been
registered with the e-crop system, that
is, 95% coverage. But, how it is being
done and what real purpose it is serving
needs to be understood. In fact, e-crop is
not new, as it has been in existence for
the last eight to nine years through PACS,
which is done manually. RBKs can do
e-crop registration only after the central
team opens the window. As gathered from
the field, the e-crop dates given by the
central team and real sowing dates often
do not match resulting in a last-minute
rush and leading to erroneous registra-
tions. For example, banana plantations
were started in these 15 RBKs in early
May, but e-crop registrations were not
started even in the second week of June.
For e-crop registration, tenant farmers
need to provide their Aadhaar, mobile
number, landowner Aadhaar, mobile
number, land passbook, two photos and
crop cultivator rights cards (CCRC). This
Economic & Political Weekly EPW November 25, 2023
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must be repeated twice a year and it
is becoming practically impossible for
tenant farmers. CCRC is also mandatory
to receive the Rythu Bharosa amount of
`13,500 per year for SC, ST, BC and
minority tenant farmers. As e-crop-linked
services are becoming a hurdle for tenant
farmers, its basic purpose of inclusive
development in the primary sector is
defeated. In the districts where 65% are
tenant farmers, e-crop registration by
and large excludes them. For a cultivator
to register under e-crop, they must fur-
nish the CCRC. However, only less than
10% of the cultivators could get CCRC
(based on the information provided by
the mandal agriculture office, Kollipara).
Hence, most tenant farmers are out of
reach of e-crop registration and sub-
sequent services such as the sale of
produce, flood loss compensation, crop
insurance, zero-interest loans, etc. The ex-
clusion of tenant farmers is also observed
in another study of RBKs (Masiero and
Buddha 2021). Though village revenue
assistants (VRA s) are empowered to
provide the CCRC, they are reluctant
fearing the wrath of landlords. Since
delivery of all the services is linked to
e-registration, landlords refuse to for-
malise the tenancy arrangements.
Initially, it was proposed that a photo-
graph of each land parcel with fixed co-
ordinates would be taken and provided
for e-crop registration. As it was not suc-
cessful, a general picture of the crop is
enclosed which will not serve any moni-
toring purpose. RBK in-charges are ex-
pected to visit fields, but seldom do they
go for field visits. Instead, registrations are
based on farmers’ inputs and secondary
data. In this regard, the available tech-
nology like google maps, etc, can be used
with superimposition of survey numbers
(much faster with fewer resources).
Input supply services: The aim of pro-
viding input supply services through
RBKs is to ensure the timely supply of
quality inputs. And RBKs could address
this issue effectively as they operate at
the village level.
(i) Seeds: Spurious seeds and pesticides
are prevalent in the open markets resulting
in crop losses. RBKs are expected to supply
vol lViii no 47
PERSPECTIVES
quality seeds in required quantities, as
they are mandated with seed certifica-
tion. But the reality is far from this. There
is no seed testing equipment or pretested
reports displayed in RBKs to gain farmers’
confidence about the quality check as
promised. In fact, farmers and even the
RBK in-charges are not aware of such
certification. Farmers do not even prefer
to buy paddy seeds supplied by AP seeds,
as they perceive that its quality is poor.
In the case of maize seed, farmers de-
pend 100% on market supplies, as it is a
cross-pollinated crop. Very few farmers
bought from the 15 RBKs, we visited, as
RBKs also supply the branded seeds
available in the market at a higher price
(maize 4 kg bag RBK rate `1,600 as
against the market rate of `1,400 and
jowar seed `1,000 against `900). And
the unsold seeds were returned. The
reasons for this markup pricing are best
known to them. This sends wrong sig-
nals to farmers (open market is better
than RBKs) and defeats the objective.
Given the presence of RBKs in all villages
and the volume of seeds required for
different crops, RBKs could establish its
own brand or negotiate deals with pri-
vate agencies to supply quality seeds at
reasonable prices. The same is the case
with other seeds like cotton, chillies, etc.
Surprisingly, the entire state infrastruc-
ture, intellectual inputs from higher offi-
cials and world-class consulting agencies
like KPMG could not provide quality and
price assurance in seed supply.
(ii) Fertilisers: The 15 RBKs cover about
16,000 acres of rabi crops (maize, jowar,
banana, and vegetables) and the fertiliser
requirement is 8,000 MT. Against this,
the 15 RBKs sold only 1,340 MT, which is
about 17% of the requirement. More im-
portantly, of the 1340 MT fertilisers sold,
89% were urea, while 11% were DAP and
complex fertilisers. As per the norms,
the composition should be 70 (complex
fertiliser):30 (urea). This indicates the
inadequate and imbalanced promotion
of chemical fertiliser use. For, farmers
tend to apply more urea due to its lower
price, that is, subsidised urea costs `266.50
per 50 kg as against `1,370 per 50 kg of
DAP. And the prices are marginally lower
for urea at RBKs (`266.50 as against `270
41
 PERSPECTIVES
in the market). The imbalanced use of
fertilisers is a matter of concern, as an
application of urea, particularly for
maize/jowar, will increase foliage and
not the grain, apart from adversely af-
fecting the soil quality. RBKs are sup-
posed to promote sustainable agricultural
practices through awareness-building
among farmers. But they are neither
equipped nor concerned about sustaina-
ble agriculture, even though the promo-
tion of natural and organic farming is
one of the objectives. And AP is one of the
leading states promoting natural farming
on a large scale. In fact, there is no link-
age between Andhra Pradesh Rithu
Sadhikarika Samastha (APRSS) and RBKs
in promoting natural farming.
Pesticides/herbicides/organic inputs:
Another important aspect of crop man-
agement is pest and weed control. As
observed during our field visits, only a
few RBKs provide these inputs or services
to farmers. In most cases, stocks were
returned, as the open market prices were
low, apart from better trader services.
The provision of quality pesticides is more
important than fertilisers, as farmers
suffer greater damage due to spurious
products that are flooded in markets. If
RBKs take the responsibility of supplying
quality inputs, they would gain farmers’
trust and confidence. RBKs are least
effective where support for farmers is
most needed. In this particular mandal,
the use of weedicides is quite wide-
spread. This is not sustainable in the
long run. RBKs need to bring awareness
and provide alternatives (tools or natural
solutions) in coordination with APRSS. In
the case of organic inputs also, there are
no traces of such services being extend-
ed at present, though initially few organic
pesticides and natural farming advisory
services were made available. And these
services were completely withdrawn later
for reasons best known to the administra-
tion. There is a need to bring all the line
departments working for the farm sector
under one umbrella and integrate their
services for the betterment of farmers.
Farm implements and machinery:
Farm mechanisation plays an important
role in the context of acute manpower
42
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shortage in the farm sector. Climate
change is pushing farmers towards speedy
completion of activities, as it reduces the
window for operations, be it sowing or
harvesting. In the sample RBKs, there is
a huge demand for Taiwan sprayers, tar-
paulins, and oil engines on an individual
basis. The demand has been accumulat-
ing as they have not supplied the subsi-
dised implements during the last three
years. Implements and machinery are
supplied through group lending or hiring
basis (like custom hiring in FPOs). While
machinery like tractors, rotovators, etc,
are given to groups of a minimum of
four members only with a bank loan
facility (mandatory), the subsidy compo-
nent is given directly to the beneficiaries.
RBKs are expected to facilitate custom
hiring through these groups. For the
first time, 15 tractors, 2 seed drills, and
30 sprayers were given to this mandal
(15 RBKs) recently. Farmers feel that
the numbers are grossly inadequate
and will not serve any purpose. More
importantly, RBKs charge higher prices
when compared to market rates. For
instance, Taiwan sprayers of the same
brand/specifications are available in the
open market for `23,000, whereas the
approved rate in the RBK subsidy pro-
gramme is `25,500. Similarly, seed drills
are sold at `50,000 in the market as
against `58,000 charged by RBKs and ro-
tovator is available at `1,30,000 in the
market as against `1,33,500 in RBKs.
Similar differences are observed in the
case of tarpaulins and other items. The
hiring of implements is also proving to
be difficult for unskilled staff in terms of
fixing rates for services, sequencing of
allocations, etc. RBK staff needs to be
trained in these management skills.
Market intelligence and procure-
ment: Market failure is one of the fun-
damental reasons for the poor perfor-
mance of the agriculture sector in India.
Input market distortions coupled with
risk and uncertainty in output prices are
making farming unviable and pushing
farmers into distress. Given the magni-
tude of the rural sector, political entre-
preneurs and policymakers tend to man-
age or provide temporary measures rather
than solve the problems. Often these
November 25, 2023
measures are populist or knee-jerk at
best rather than a designing of compre-
hensive solutions to address the real is-
sues. The populist measures are often
carried out on a limited scale for propa-
ganda rather than solving the problem,
namely enforcing MSP for all the listed
commodities, price stabilisation, ensur-
ing quality inputs, reducing distress
sale, post-harvest losses, market distor-
tions, etc, across commodities and re-
gions. The snowballing of these knee-
jerk solutions further exacerbates the
distortions and deepens the distress of
the farming communities. While RBKs
are mandated with providing effective
solutions to ameliorate the farm dis-
tress, the actual situation on the ground
points to another political gimmick.
RBKs are expected to provide two impor-
tant services, that is, market informa-
tion and ensuring remunerative prices.
Market information: The AP agriculture
department understood the importance
of marketing information and intelli-
gence as a meaningful input to farmers
and planned to address the same through
kiosks provided at RBKs. Market intelli-
gence includes the provision of informa-
tion related to specific crop market rates
(high, low, average, etc), market arrivals,
historic price and arrivals data with a
graphical presentation, export/import
rates/quantities, etc. Paddy, turmeric,
banana, maize and jowar are the impor-
tant crops in the sample mandal.
For instance, high-value turmeric has
important markets in Duggirala, Nizama-
bad, Erode, and Sangli. When checked
on RBK kiosks, the data was not availa-
ble or not updated, forget about market
analysis and market intelligence. It is
the situation across the state and RBK
teams must seriously investigate and
ensure that farmers get proper market
information and make well-informed
decisions about immediate sales, storing,
selling in other markets, etc. Though the
state had engaged Klynveld Peat Marwick
Goerdeler (KPMG) to do this job, the re-
port was not made public.
Procurement: Jowar and maize are the
major rabi crops in the sample region and
turmeric is the major commercial crop.
vol lViii no 47 EPW Economic & Political Weekly

In the current season, jowar market rate
is higher than MSP and hence RBK inter-
vention was not required. Turmeric and
maize market prices are lower and
hence, the procurement announcement
was made. However, RBKs completely
backslided on turmeric procurement
and no one bothered about farmers de-
spite the hue and cry. In the case of
maize procurement, it was initiated but
moving at a snail’s pace. The targeted
procurement for maize is fixed at 3%
(8,500 quintals) of total production
(2,14,000 quintals) in Kollipara mandal
(data provided by the mandal agriculture
office, Kollipara). Even this minuscule tar-
get is not fulfilled, as the actual procure-
ment was only 6,669 quintals from 90
farmers. The main reason behind this
marginal or no procurement is the lack
of funds to take up procurement of even
the low-cost millets like maize, forget
about the high value crops like turmeric
that require about `40 crore in one
mandal (see Box 1). Besides, RBKs are
not equipped with storage facilities and
Box 1: The Case of Turmeric Procurement
Kollipara mandal in Guntur district is
known for turmeric production. Last season
(2022–23), turmeric was grown in 1,860
acres by about 1,000 farmers. With an
average yield of 30 qtls per acre, at MSP of
`6,850, the value of the produce is about
`40 crore in this mandal alone. Turmeric
harvesting season is during February–April
and most of the farmers sold their produce
on farm itself between the rates `4,500 and
`5,000, which is literally distress sale.
The state governemnt had invited e-crop
registered farmers to register for sale and
announced procurement. But no procurement
was taken up. Again, farmers were asked to
register for sale on 1 June, though the
announcement was not made public. When
a few farmers approached the RBKs for
registration, the app was not open till
afternoon of 3 June. Though farmers were
asked to bring their produce to the RBKs,
not a quintal was procured and were
provided with an excuse of bad quality like
moisture. Ironically, farmers could sell the
same produce in the open market.
These kind of hurdles and off-season
procurement will help only a few large
farmers and traders, who aggregate and
store the produce. And small and marginal
farmers cannot afford to adopt such
practices.
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hence cannot venture into buying large
quantities. Immediate disposal will only
result in huge losses. These realities are
covered up under flimsy reasons like
shortage of gunny bags, stickers, delayed
logistics, etc. The main purpose of state
intervention in procurement is to stabi-
lise the market prices. While it is not feasi-
ble to buy all the produce, buying thresh-
old level quantities (10%–20%) would
influence markets and help farmers get
fair prices.
After e-crop registration at the begin-
ning of the crop season, farmers are
asked to register with RBKs about crop
availability for sale. It is observed that
even when MSP is more than 30% of the
market price, crop sale registrations are
less than 10% of e-crop registrations. Of
this, only 10% has come for final sale
through RBKs. This is mainly due to the
administrative hurdles farmers face at
every level to sell their produce at MSP
(see Box 1). The same is the case with
paddy procurement. This clearly reflects
the failure of RBKs in achieving their most
important objective, that is, ensuring
remunerative prices to farmers.
Reflections
The very basic purpose of RBK is to pro-
vide a range, if not all, of agriculture-
related services to farmers making farm-
ing viable and helping them sustain their
livelihoods. With this grand objective,
the government of AP has established
RBKs to overcome the shortcomings of
PACS, Markfed, and Civil Supplies, that
is, effective service delivery. Instead,
RBKs continue to depend on these agen-
cies and FPOs for procuring agricultural
produce. In the process, the effective-
ness of their operations had diluted rath-
er than improved. Though NITI Aayog
has identified the RBK model as a best
practice and intends to implement it in
other states as well, ground-level reali-
ties provide no basis and rationale for
such recognition and awards.
Our assessment of RBKs provides a
disappointing account of their function-
ing and service delivery to the farmers.
Though our first-hand assessment is lim-
ited to one mandal, discussions with of-
fice bearers and farmers in different dis-
tricts of the state echo our observations.
vol lViii no 47
PERSPECTIVES
Some of the important observations
arising from our assessment include:
(i) Awareness about RBKs at the village
level is quite high due to the construction
of office buildings in every village and
propaganda. But this high awareness
has not translated into active participa-
tion of farmers in utilising their services.
(ii) RBKs could not revive the dwindling
extension services (this is true across the
state), as they failed to provide important
services on soil health and agronomic
practices. On the contrary, the existing
extension staff are burdened with new
administrative activities like bookkeeping
under RBKs, diluting their actual services.
(iii) RBKs failed to take their scale advan-
tage (70 lakh farmers) to negotiate with
input industries for the supply of quality
inputs at competitive prices. As the scale
of operation is huge, logistic and opera-
tional costs could be rationalised and
the benefits could be passed on to farmers.
But, in reality, RBKs are selling inputs at
higher prices. And RBKs do not have finan-
cial resources nor are they equipped to
store fertilisers in required quantities.
On the contrary, they end up selling cheap
urea, defeating the basic purpose of RBKs,
namely promoting sustainable agricul-
ture. Services pertaining to farm mech-
anisation are available at higher prices
when compared to the open market. It is
difficult to understand the purpose and
motive of RBKs. Is it revenue generation?
Even FPOs try to sell inputs to farmers at a
lower rate compared to market rates.
(iv) The kiosk information in the RBKs is
neither up to date nor provides any mar-
ket analysis that helps farmers. Even the
weather information is inadequate for
farmers. Nor does it provide any realistic
village-level information like a list of
beneficiaries under each programme,
area under different crops, etc.
(v) The much-needed procurement of
farm produce is only on paper and not
in practice. Only marginal quantities of
low value produce are being procured.
Given the resource constraints, looking
for procurement from RBKs is too much
of an expectation. RBKs require substan-
tial financial allocations coupled with
infrastructure (storage) to manage pro-
curement at the mandated scale in an
efficient manner.
43
 PERSPECTIVES

Going by ground realities, it is clear
that apart from adding one more layer
to the existing institutions they are not
adding any real value in terms of meet-
ing farmers’ requirements. In fact, RBKs
have more than they can chew on their
plate. The approach of including all the
functions of the existing institutions
(PACS and FAOs) has proved ineffective.
Despite the involvement of world-class
consultants like KPMG in every step of
execution, regular monitoring of senior
administrators and serious engagement
with a series of line departments, RBKs
are not able to deliver even 10% of the
mandated services, let alone the quality
of services.
Instead of strengthening the existing
institutions, putting them on ventilators
and promoting new systems to gain
political propaganda is proving to be
futile and resulting in the wastage of
scarce resources. RBKs with their present
mandate cannot sustain themselves,
either economically or institutionally.
These efforts are not even creating any
political gains, as farmers are not get-
ting any benefits nor are these amelio-
rating their problems. It is surprising
how reputed bodies like the NITI Aayog
can certify RBK s as a model that can
be replicated nationwide without assess-
ing the ground realities.
RBKs can sustain and be effective if
only their mandate is narrowed down.
At present, RBKs are mandated to pro-
vide 20 services with limited human and
financial resources. It is administratively
impossible to provide all the services. It
is difficult to understand the need for
burdening them with all the services
when well-established institutions like
PACS and FPOs are dealing with most of
the services. In fact, FPOs adopting a busi-
ness model are being promoted on a large
scale by the union government in order
to reduce the burden on the govern-
ment. The GoAP is trying to reverse this
by taking the entire burden on itself
with zero or negative impact.
RBKs should keep off from the market
activities entirely, namely supply of in-
puts and procurement of output. Instead,
they should focus on extension services,
which are in a sorry state. RBKs should
strengthen and modernise extension
services. These services include soil and
water-based crop planning; provision of
accurate climate information at the vil-
lage level, promotion of sustainable
farm practices, etc. Market-related oper-
ations may be left to FPOs with necessary
support, especially in adopting MSP with
the support of state agencies. PACS need
to be further strengthened for efficient
delivery of credit services.
notes
1 Kollipara mandal is not only located very close
the administrative and legislative capital of the
state but also a stronghold of the ruling party.
This region is expected to provide the most
positive feedback on the functioning of the
RBKs.
2 Based on the information provided at https://
apagrisnet.gov.in/pdf/RBKs%20a%20
Novel%20Initiative%20of%20AP.pdf.
References
Babu, N Nagendra, M Venkata Ramulu, H D Venu-
prasad, A S R Sharma and M Usha (2023):
“Impact of Rythu Bharosa Kendra’s as Perceived
by the Farmers,” Asian Journal of Agricultural
Extension, Economics & Sociology, Vol 41, No 9.
Masiero, Silvia and Chakradhar Buddha (2021):
“Data Justice in Digital Social Welfare: A Study
of the Rythu Bharosa Scheme,” Proceedings
of the 1st Virtual Conference on Implications
of Information and Digital Technologies for
Development.
Nidumolu, Uday et al (2020): “Enhancing Adaptive
Capacity to Manage Climate Risk in Agricul-
ture through Community-led Climate Infor-
mation Centres,” Climate and Development,
Doi: 10.1080/17565529.2020.1746230.
Reddy, V Ratna and M Srinivasa Reddy (2022):
“Cooperative Spirit with Corporate Strategy:
Can Farmer Producer Organisations Improve
the Viability of Indian Agriculture?” (Jointly)
Paper presented at the seminar on “Farmers’
Organizations and Sustainable Development”
(online), Asian Development Bank Institute,
Tokyo, Japan, 7–9 September.

BUDGET 2023–24
March 25, 2023

An Introduction and Overview —Pinaki Chakraborty

Independent Fiscal Councils: Lapdogs or Watchdogs? —Y V Reddy, Pinaki Chakraborty
Electoral Cycle and the Union Budget 2023–24: Some Departures from the Past? —Ashok K Lahiri
Concerns about Balancing Growth and Stability —M Govinda Rao
Union Budget 2023–24: The Long View —Ashima Goyal
Massive Capital Expenditure, Modest Fiscal Consolidation, and Cut in Pillars of Social Safety Net —Sudipto Mundle, Ajaya Sahu
Balancing Growth with Fiscal Consolidation —D K Srivastava
The Union Budget 2023–24 and the Financial Sector: The Devil May Lie in the Details —Partha Ray
Agriculture and Rural Areas in Budget 2023–24: A Need for Comprehensive Approach for Transformation —S Mahendra Dev

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44 November 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
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 SPECIAL ARTICLE
Innovation Performance of India’s Computer
Software Services and Pharmaceutical
Manufacturing Industries
Sunil Mani
While pharmaceutical and computer software industries
have achieved considerable international acclaim, their
growth performance so far has been primarily thought
of as driven by labour arbitrage than by innovation
efforts. This is especially so in the case of the software
industry, where replication rather than innovation has
been identified as the cause for its fast export growth.
The number of innovations in both industries is rising,
contributed chiefly by domestic firms in the former and
foreign firms in the latter.
The author acknowledges the contribution of IPICT project coordinated
by Kazuyuki Motohashi, University of Tokyo. Excellent research assistance
was provided by S M Mohanakumar. The usual disclaimer applies.
Sunil Mani (mani@cds.edu) is an honorary visiting faculty at
the Centre for Development Studies, Thiruvananthapuram.
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I
ndia is on the path to becoming a host for high-technology
industries—manufacturing or services. High-technology
exports in India’s commodity exports have increased from
virtually zero in the 1990s to almost 11% in 2021 (World Bank
2022). More than 50% of our services exports can now be
considered high-tech (World Bank 2022). The two industries
that can enable the country to be launched into the club of
high-technology are its pharmaceutical manufacturing and
computer software services industries. Mani (2010 and 2014)
has shown that much of the innovation output of the country,
as indicated by patents, has gone towards these industries, es-
pecially when foreign patenting (read as at the United States
Patent and Trademark Office [USPTO]) by Indian inventors is
considered. Changes in the international governance rules
concerning patenting, especially the trade-related intellectual
property rights (TRIPS) compliance requirement, which India
had to implement in 2005, have imposed new challenges to
the pharmaceutical and computer software services industries.
Measuring innovation is an imprecise affair, and it is usually
done using a variety of conventional indicators (research and
development [R&D] expenditure, patents granted, etc) and a
whole host of new indicators such as those thrown up by inno-
vation surveys. The paper will assess how the two industries
have negotiated the challenges imposed by changes in interna-
tional governance rules affecting intellectual property rights
(IPRs). This is accomplished by evaluating the innovative per-
formance of the two industries. The analysis will then distil
out industry policy priorities to improve their respective inno-
vative performance.
Motivation for the Study
Our discussion of the main trends in patenting by Indian in-
ventors in the post-TRIPS phase has given us some vital clues
that India’s innovation performance is dominated by two in-
dustries, pharmaceutical and computer software services. The
pre-eminent position of the two sectors does not change
whether we employ input or output indicators for measuring
the generation of innovation. Further, the two industries have
several traits that mark them as important test cases for under-
standing the generation of innovations by the organised indus-
trial sector in India. They are: (i) The two industries together
constitute about 18% of India’s total exports. Both are highly
export-oriented, with international sales accounting for a
45
SPECIAL ARTICLE
significant share of their total sales. Such high export intensity
has forced both industries to improve innovative efforts as they
face competition from other countries. Both industries have
registered positive trade balances continuously. In fact, for the
sectors, the trade surplus has been increasing over time which
itself is a reflection of the growing technological capability of
the two industries.
(ii) As a corollary of the above, both industries are highly
globalised; both are acclaimed world leaders. The pharmaceu-
tical industry is well known worldwide as a supplier of cheap
but good-quality generic drugs. The computer software indus-
try has been a world leader in software service exports and
has maintained that status since 2005 (Mani 2014; Porto et al
2021). According to the Economist,1
Its big tech-services firms have been growing since the pandemic be-
gan, hiring eagerly and honing their software, which is sold world-
wide. Diaspora links to Silicon Valley help maintain the pace of inno-
vation and support a developing startup culture.
To negotiate the challenges posed by the meteoric rise of artificial
intelligence (AI), India’s information technology (IT) service
firms are on a diversification spree; many are branching off to
new businesses such as accounting and management consult-
ing, as indicated by the growing share of such services in the
total export of software services from India.
(iii) Both sectors are excellent examples of the role that mar-
kets and government play in initiating and nurturing growth
and exports. In the case of the pharmaceutical industry, the
existence of an IPR regime that did not recognise product
patents enabled the domestic pharmaceutical firms to develop
cost-effective processes to make known drugs. They were
aided in this process by a copious supply of good quality
chemistry graduates churned out by the Indian higher educa-
tion system, which for a long time was biased in favour of
natural sciences rather than engineering and technology.
Further, the state provided generous R&D tax incentives, ena-
bling the firms to commit more resources to reverse engineer-
ing activities in developing cheaper processes to form known
molecules. The existence of several domestic pharmaceutical
enterprises with excellent technological leadership and robust
corporate strategies could effectively take advantage of the
enabling ecosystem for innovations put in place by the state. In
the case of computer software services, there exists a debate on
the state’s role vis-à-vis the market in explaining the industry’s
growth (Arora et al 2001; Balakrishnan 2006; Mani 2014). It
is clear from the growth experience that while private sector
computer software firms were responsible for the exports of
software services, they were aided in that process by an eco-
system conducive to their growth process. So, the two sectors
are an excellent example of a very effective sectoral system of
innovation, the main components of which interacted with each
other in numerous ways to generate innovative outcomes.
(iv) Another distinguishing aspect of their growth process is
that both industries are mostly clustered. The clustering of firms
producing seemingly related products and processes results in
more effective knowledge transfer among them so that the indus-
tries in clusters are more innovative than those geographically
46
Figure 1: Trends in Trade Balance of India’s Pharmaceutical Industry (million $)
25,000
20,000
15,000
10,000
5,000
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Exports Imports Trade balance
HS Code 30 has been used.
Source: Computed from UN COMTRADE.
spread. Proximity is conducive to technical personnel move-
ment between firms, transferring best practices to other firms.
Innovation Performance of the Pharmaceutical Industry
India’s pharmaceutical industry has a place of pride in the
world pharmaceutical industry as a low-cost generic drug
producer. The country’s technological capability in this area can
easily be judged from the following facts (UN COMTRADE 2023).
(i) India accounts for about 13% of the world market for phar-
maceuticals and about 60% of the world supply of vaccines:
Over two-thirds of the WHO’s demand of DPT and BCG vaccines,
and 90% of vaccines for measles are sourced from India. All
this meant that the country was the third largest in the world
in terms of volume and the 14th largest in terms of value.
(ii) India has been a global generic medicine supplier for over
200 countries in developed and emerging markets. It is the
largest low-cost generic drugs, vaccines, and affordable HIV
medicines manufacturer.
(iii) Some of the most prominent global pharma players, in-
cluding Pfizer, Bayer, Merck, AstraZeneca, and GSK, have en-
tered joint ventures with some of the largest Indian pharma-
ceutical companies (Gupta 2023).
(iv) Its manufacturing sector boasts nearly 100 United States
Food and Drug Administration (USFDA)-approved manufacturing
plants, making it the second-highest in number in the world
after the United States (US) itself.
(v) It is one of the few manufacturing industries that have a
trade surplus. The trade surplus has consistently been maintained
(Figure 1).
The above scenario provides the setting for our analysis of the
innovation performance of the pharmaceutical sector. To measure
innovation performance, we employ a variety of indicators, such
as R&D expenditure and patents. Since India’s pharmaceutical
industry is essentially a generic drug manufacturer, patents
per se may not be a good measure. To take care of this, we will
also trace the abbreviated new drug applications (ANDAs)
secured by Indian pharmaceutical companies from the USFDA.2
R&D investments by the pharmaceutical industry: According
to the biennial surveys by the Department of Science and
november 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
 SPECIAL ARTICLE
Figure 2: Importance of Pharmaceutical R&D in Total Industrial Sector R&D Figure 3: Ratio of R&D Expenditure to Payments for Technology
in India Collaboration
50,000 34.5 60
45,000 34 48 49
40,000 33.5 50 45
35,000 33 37
40
`in Drore

30,000 32.5

Share (%)
31 31
27

Ratio
25,000 32 30
23
20,000 31.5 21 20 20
1918
19
20 17
15,000 31 14
12 11 15
10,000 30.5 8
10
5,000 30 3 4
0 29.5
0
2018o19 2019o20 2020o21

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Pharma Industry Share
Source: DST (2023). Source: Computed from ProwessIQ, CMIE.

Technology (DST), the pharmaceutical industry tops the R&D model by hiving off their in-house R&D centres into a separate
league table in India (Figure 2). About 350 R&D units are oper- stand-alone business unit, where the R&D unit will develop new
ating in the industry, of which 99% are in the private sector. molecules that will be licensed to multinational corporations
Pharmaceutical firms in India have an average R&D intensity of (MNCs). One of the leading domestic firms, Dr Reddy’s Labora-
about 5.5%, while for the industrial sector, it is just about 0.8%.3 tories, started the trend in R&D spin-offs in 2005. Piramal Life
However, the type of R&D that the domestic firms are engaged Sciences, Piramal Healthcare’s R&D division, was recently
in matters extensively from the innovation point of view, as the demerged from the latter. Sun Pharma Advanced Research and
future is about gene and cell therapy, messenger ribonucleic Ranbaxy Life Science Research have also been demerged from
acid (mRNA), and precision medicine. However, firms always their parent companies, Sun Pharma and Ranbaxy, respectively.
do not publish detailed information on the nature and scope of Some spin-offs have faced difficulties stemming from uncertain
their R&D activity. So, to gain a better picture of the trends in resources and declining private equity interest in research.
R&D, we have sourced the data on the R&D expenditure of all the This has led to a reversal of this spin-off policy. Several compa-
leading pharmaceutical companies in India from the ProwessIQ nies are now seeking a collaborative approach towards drug
database of the Centre for Monitoring Indian Economy (CMIE)4 discovery to mitigate the risk associated with the failure of a
from 2000 to 2021 (Table 1). It is seen that the firms spent, on drug molecule. This collaborative approach has led to royalty
average, 8% of their sales revenue on R&D expenditure, which payments and technical know-how fees being paid to the col-
has shown some increases after TRIPS compliance. Some lead- laborators have shown an increase, and over time the ratio of
ing pharmaceutical firms have transformed their business in-house R&D expenditure to collaboration fees has declined,
implying that firms are relying more on technology collabora-
Table 1: Average R&D Investment and R&D Intensity of Indian
Pharmaceutical Firms tions for innovations (Figure 3).
Average Sales Average R&D Investment R&D Intensity (% of As noted earlier, another aspect of R&D in the pharmaceutical
(million `) (million `) Average Sales per firm)
industry is that the industry is organised into clusters. The
2000 842.0 23.04 2.74
2001 943.7 32.13 3.40
clustering results in considerable knowledge spillovers through
2002 1,018.7 41.96 4.12 people’s movement between the cluster firms and from patent
2003 1,086.5 55.00 5.06 documents which can be inferred through patent citations.
2004 1,127.1 77.90 6.91 The government has been financing R&D by private sector
2005 1,172.1 101.96 8.70 firms through a very generous R&D tax incentive. The union
2006 1,367.1 135.32 9.90
budget for 2023–24 has launched a new programme to pro-
2007 1,636.9 158.08 9.66
2008 1,926.0 175.70 9.12 mote R&D in the sector known as the scheme for “Promotion of
2009 2,135.9 202.25 9.47 Research and Innovation in Pharma MedTech Sector (PRIP)”
2010 2,387.7 221.95 9.30 which includes a component for strengthening the research
2011 2,831.6 252.32 8.91 infrastructure by establishing Centres of Excellences (CoEs) at
2012 3,443.7 274.31 7.97
seven existing National Institutes of Pharmaceutical Educa-
2013 4,000.3 310.45 7.76
2014 4,327.8 379.86 8.78
tion and Research (NIPERs). So apart from the patent policy
2015 4,267.5 440.87 10.33 and the availability of good quality chemistry graduates, fiscal
2016 4,638.9 503.38 10.85 incentives have also acted as a fillip to increase R&D invest-
2017 4,848.0 606.53 12.51 ments in the sector.
2018 4,945.5 572.37 11.57
2019 5,685.4 595.90 10.48
Patenting performance: There are four caveats to be considered
2020 7,001.2 650.40 9.29
2021 12,323.7 1,096.31 8.90
while using patent data for measuring the innovative perfor-
Source: Computed from CMIE ProwessIQ (online). mance of the pharmaceutical industry. First, studies worldwide
Economic & Political Weekly EPW november 25, 2023 vol lViii no 47 47
SPECIAL ARTICLE
Figure 4: Utility Patents Granted to Indian Assignees in Pharmaceutical Figure 5: Time Taken for Granting a Pharmaceutical Patent in IPO, 1992–2015
Technologies in the IPO and USPTO 18
800

Time taken to grant a patent in years

16

712
700 14
600 12

464
420

420
500 10

394
389
/VNCFS

371
349
400 8

302

308

285
284

298

253
114 251

122 243
133 233

300 6

2012 7 106 212

167
153
138

132

4
123
2002 108 118

60 118

200
104
2001 77 79
2000 44 69

100 2

2021 112
2013 6

2018 2
2014 1
2015 1

2017 1

2019 1
2016 0
0
7

1992
2000
2002
2003
2003
2004
2004
2005
2005
2006
2006
2006
2007
2007
2008
2008
2008
2009
2009
2010
2010
2010
2011
2012
2012
2013
2014
2016
2003
2004
2005
2006
2007
2008
2009
2010
2011

2020

2022
Source: Mani (2021).
IPO USPTO
Source: Extracted from Clarivate Analytics (2023). Figure 6: Trends in the Number of Patents Granted to Foreign
Pharmaceutical MNCs Based on R&D Performed in India
have shown that patents are essential for pharma companies; 50
given the high cost of doing R&D, the long gestation period and 46
45 41
the high failure rates, patents become very useful and necessary 40
38 37
36
for protecting their innovations (Cockburn and Long 2015). 35
30
Second, R&D investments need not necessarily result in the Number 30
release of new products and processes, given the 90% plus fail- 25
19
ure rates for R&D projects in this sector. So patents are a better 20 17
13 14 13 14
indicator for measuring the output of innovations. Third, over 15 11
10
70% of India’s pharmaceutical production is in generic drugs: 10
4
the country manufactures 60,000 generic brands across 60 5
therapeutic drugs. Generic drugs are bioequivalent of off-pat- 0
2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018
ented drugs. According to some estimates, the patents for
branded molecules with cumulative global sales of $251 billion Source: Compiled from USPTO through the PatentsView database.

were expected to expire during the 2018–24 period, and this
offers an excellent opportunity to India as it is the lowest-cost
producer of generic drugs. For generic drugs, the innovations
are almost entirely process innovations. The largest market for
it is the US where Indian generic drugs enjoy good reception.
To market the generic drugs in the US market, the firms must
obtain an ANDA; so the counts on ANDAs are a better measure
of the innovation performance of Indian pharma companies
than utility patents per se. Using both metrics to garner a com-
prehensive view of new and incremental inventions is a good
idea. Fourth, firms patent their innovations both in India and
abroad, and for foreign patenting, we analyse the patents
granted to Indian pharmaceutical firms at the USPTO.
The trends in patents granted to Indian assignees in Indian
Patent Office and the USPTO are presented in Figure 4. There
appears to be a problem with the IPO data from 2012 to 2019.
However, the cumulative number of patents granted to Indian
assignees at IPO and the USPTO is roughly equal, at 5,539 and
4,973, respectively. It must be stated that Indian assignees in-
clude domestic Indian pharmaceutical companies and Indian
affiliates of MNCs. However, the latter’s share is likely higher in
the IPO data. One of the problems with the IPO is the considerable
delays between the application and the final grant of the patent,
essentially due to the low density of examiners per application
received (Mani 2021).5 Mani (2021) has done a detailed assess-
ment of the time gap between the application and grant of over
869 pharmaceutical patents applied between 1992 and 2018.
According to this analysis, the average number of years during
48
the pre-TRIPS (1992 through 2004) phase was 6.71, and the
average number during the post-TRIPS period (2005–18) was
6.56. However, in the more recent phase (2014–18), it has
declined to about 4.30 years (Figure 5).
As expected, most of the patents granted to Indian inventors
at the USPTO are to domestic Indian manufacturers (86% cu-
mulatively). However, what is most interesting is that the
number of foreign MNCs doing in-house R&D in India and then
taking out patents, at the USPTO, based on the output of that
R&D, has shown significant increases during the post-TRIPS
phase (Figure 6). This indicates that India has a relatively
more robust patent regime post-TRIPS compliance.
ANDA performance: According to Indian patent law, a generic
drug manufacturer can apply for marketing approval in the
country even if the patent status of the originator reference
product is still in force. However, the approved generic drug can
be marketed only after the expiry of the patent of the innovator
(Acharya 2023). A generic drug manufacturer in India can
market a new drug in the Indian market even if they are not
aware of the patent status of the product. This is because India
has not adopted “patent linkage”6 between the various public
institutions charged with patent issuance and its eventual
marketing. The former is handled by the IPO and the latter by the
Drugs Controller General of India (DCGI). The two institutions
are not linked; unlike in the US, India has no “Approved Drug
Products with Therapeutic Equivalence Evaluations (Orange
Book)” equivalent. However, in the US, which is the primary
november 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
 SPECIAL ARTICLE
Figure 7: India’s Share of US ANDA Approvals (%) dedicated intellectual property departments and are fostering
60 a culture of innovation and technological advancements. This
48
shift has enabled the country to move up the value chain and has
50
made the companies offer cutting-edge solutions in the so-
42
40
39 38 called Industry 4.0 basket of technologies such as AI, blockchain,
33 36 and cloud computing. Although the industry’s real growth
32 32
Number

30
26
rates have declined since 2014–15, it still accounts for about
5% of India’s gross domestic product (GDP). This is quite
20 significant as, according to the Ministry of Electronics and
Information Technology Industry (MeiTY 2022), the total number
10
of persons engaged in the industry is about 5.1 million (of
0 0 0
0 which women employees are 1.8 million or 36%). This means
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 that just 5.1 million people contribute about 5% of India’s GDP,
Data for 2018 to 2020 are not available.
Source: IQVIA (2019); Sharma and Popli (2023).
implying the very high labour productivity of the sector9
(Table 3).
market (in value terms) for generic drugs, unlike before, the
firms must secure an ANDA before a generic drug is marketed. Characteristics of India’s Software Industry
The application for ANDA s does go through a rigorous patent- The industry has several characteristics, such as:
like examination. However, the emphasis here is testing (i) Highly export-oriented—an industry with one of the high-
whether the generic drug is bioequivalent to the off-patent est export intensities—nearly 90% of the total sales are export
innovator drug. So, the number of ANDA s secured by Indian sales. The main export markets are the US and Europe, which
pharmaceutical companies is a good proxy for measuring account for over 80% of the total sales and have been so right
their incremental innovation performance (Figure 7). It is since the beginning. Most of the customers in these markets are
interesting to note that India has the maximum share in large Fortune 500 companies. Being a service-oriented indus-
ANDA approvals (Sharma and Popli 2023). try, the seller merely executes specific IT service requirements
In 2022, of the top 15 ANDA-receiving generic companies in of the buyers. Most of these buyers, as noted earlier, are leading
the US, 10 were from India. India’s pharmaceutical industry firms worldwide in their respective fields. So, this buyer–seller
has done exceedingly well in all new and incremental inven- interaction, which is deeply embedded, has been a great
tion indicators. There is strong support from the government, source of new ideas, technologies, and practices for sellers.
and several domestic companies have firm corporate strategies This has given rise to several small and medium-sized compa-
to take advantage of this supportive sectoral innovation sys- nies, which are leaders in their respective domains and gener-
tem. However, the future growth performance of the industry ally contribute to making the IT service firms more innovative.
will crucially depend on the ability of domestic pharmaceuti- Table 2: Leading Exporters of R&D Services in the World, 2020 ($ billion)
cal companies to align their product portfolio towards chronic Country Exports Annual Average Growth of Exports, 2015–20 (%) Imports
therapies for non-communicable diseases such as cardiovascu- United States 45 4.8 33
lar, anti-diabetes, anti-depressants, and anti-cancers as these Germany 25 1.4 24
United Kingdom 14 8.5 10
are on the rise. It has also been very active in developing vac-
France 11 0 12
cines for various communicable diseases as well as COVID-19 Ireland 10 25.7 -
has shown us. However, there are two areas where the indus- Canada 6 4.8 1
try needs to make massive improvements. First, its import Japan 6 2.4 19
dependence on other countries (primarily China) for its re- Belgium 5 5 7
India 5 32.2 1
quirement of active pharmaceutical ingredients (APIs) and
Sweden 5 6 6
bulk drugs must be reduced.7 Second, it needs to improve the Source: UNCTAD (2023).
quality of its products, especially those emanating from the Table 3: Gross Value Added and Share of India’s Information and Computer-
sector’s small- and medium-sized enterprises (SMEs).8 related Services Industry
Years Value Added in 2011–12 Prices (` crore) Real Growth Rate (%) Share of GDP (%)
Computer Software Services Industry 2011–12 5,53,913 6.34
2012–13 5,93,324 6.64 6.44
The software services industry started its growth performance
2013–14 6,35,375 6.62 6.48
in the 1980s and has achieved considerable international ac- 2014–15 6,64,271 4.35 6.31
claim. Over the years, it has evolved from being a low-cost out- 2015–16 6,80,185 2.34 5.98
sourcing destination to the hub of R&D. India has now become 2016–17 6,97,863 2.53 5.67
one of the world’s largest exporters of R&D services and is the 2017–18 7,16,627 2.62 5.45
only developing country in the top 10 exporters list (Table 2). 2018–19 7,39,352 3.07 5.28
2019–20 7,60,872 2.83 5.23
Indian computer software services companies have started
2020–21 7,61,073 0.03 5.56
investing significantly in R&D. A few leading companies, such 2021–22 7,71,961 1.41 5.17
as Tata Consultancy Services, Wipro and Infosys, have set up Source: Ministry of Statistics and Programme Implementation (2023).

Economic & Political Weekly EPW november 25, 2023 vol lViii no 47 49
SPECIAL ARTICLE
Figure 8: Export Performance of India’s Computer Software Services Industry critical institutional actor now well-recognised in the literature
140 40
is the role played by the Indian diaspora, especially those
35
120 based in Silicon Valley. Saxenian (2007) was one of the first to
30

Growth rate in percent

100 25
emphasise this aspect. Nanda and Khanna (2010) have also ex-
plored the importance of cross-border social networks for en-
Billions of $

80 20
15 trepreneurs in India’s IT services industry to get leads to new
60 10 business and accession finance, especially venture capital.
40 5 Many Indian expatriates have done exceptionally well in some
0 of the world’s leading IT centres, like Silicon Valley. Many of
20
-5 these entrepreneurs have been a source of new ideas and mar-
0 -10 kets for friends and relatives back home. Later, they have also
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
become a source of venture capital. These venture capitalists
Computer Toftware Growth rate (%) have financed several IT-based ventures in India (Mani and
Source: Computed from UN COMTRADE.
Bartzokas 2004). Needless to add, these financiers were also
(ii) The exports have registered high year-on-year growth able to provide the crucial strategic thinking for these new
rates, although they have been declining since the mid-2000s ventures, securing the right kind of markets abroad. Another
(Figure 8). The growth performance also reflects the repercus- institution that plays an important role in the industry association
sions of the global financial crisis of 2008. As far as the COVID-19 is NASSCOM. The NASSCOM was established in 1988. Right through
pandemic was concerned, the industry could bounce back very its inception, the association has been relentlessly working to
quickly and take advantage of the growing demand for digital improve the brand image of the Indian software industry. This,
services fuelled by the requirement for social distancing or perhaps, is its most important contribution. It also serves as a
lockdowns imposed during the pandemic. Regarding comput- broker of ideas and markets by promoting networking, exchange
er software exports, India remains the world leader, a position of best practices, placing buyers and sellers in contact with
it achieved in 2005 and has maintained ever since. each other, etc. No other industry association in India has been
(iii) As noted earlier, the industry is mainly organised as re- NASSCOM-like in being very proactive. It has enabled Indian IT
gional clusters. There are six clusters. Among them, Bengaluru services to secure the necessary quality certifications to im-
still accounts for about a third of total software production prove their interface with potential customers abroad.
and exports and has many foreign IT-service firms and those (vii) The Indian IT service firms have used cross-border mergers
specialising in IT-enabled R&D services. Clustering leads to knowl- and acquisitions (M&A) as a way of enlarging the scope of their
edge spillovers, and that contributes to more innovations. markets abroad, in dealing with protectionist tendencies, espe-
(iv) The industry employs a few highly skilled personnel leading cially in the US, and in acquiring skill sets and knowledge that they
to a very high labour productivity. Many personnel engaged in did not possess and which are difficult to build up in the short run.
the sector are graduate engineers in different domains, bringing The structure of India’s IT services industry has undergone
to the fore domain-specific expertise. many changes. Initially, the industry was almost entirely
(v) Most firms are new (set up after 1991) and started by dominated by Indian private-sector enterprises. According to
technology-based entrepreneurs. New-generation entrepreneurial Table 4: Average R&D Investment and R&D Intensity of Indian IT Service Firms
firms leading the industry are an important factor explaining Average Sales Average R&D Investment R&D Intensity
the leadership position. The entrepreneurs are well trained, (` million) (` million) (%)
2000 495.78 24.17 4.88
having gone to some of the best engineering schools in the 2001 654.34 30.79 4.71
country and therefore have the right skills and ideas to take 2002 646.29 45.23 7.00
the industry along a growth path. This solid internal capacity for 2003 711.39 40.56 5.70
decision-making and strategic vision has been beneficial in 2004 876.27 58.87 6.72
2005 1,180.64 70.48 5.97
achieving the leadership position. The corporate governance 2006 1,412.04 65.46 4.64
of the newer IT service companies is far superior to the legacy 2007 1,808.74 106.11 5.87
firms in other sectors of the country. The most prominent IT 2008 2,182.17 165.50 7.58
services firm, TCS, is part of a legacy conglomerate business 2009 2,509.59 217.56 8.67
2010 2,529.93 360.44 14.25
house, the Tatas. Tatas is, of course, a very dynamic and pro- 2011 2,893.48 353.63 12.22
fessionally managed Indian MNC. 2012 3,676.33 404.28 11.00
(vi) A co-evolving sectoral system of innovation: A sectoral in- 2013 4,151.32 475.19 11.45
novation system’s three key building blocks are: (i) institutions 2014 4,909.43 449.51 9.16
2015 4,843.51 388.13 8.01
supporting technological change in the industry, the interactions 2016 5,403.94 423.66 7.84
between them; (ii) the knowledge domain, its evolution; and 2017 6,150.54 448.95 7.30
(iii) the demand for such innovations from critical customers. 2018 6,607.46 417.53 6.32
The software industry in India is an excellent example where all 2019 7,608.69 459.35 6.04
2020 9,050.87 591.85 6.54
three proceeded harmoniously (relatively speaking) to generate 2021 19,336.18 981.39 5.08
innovations. Apart from the firms and government, another Source: Compiled from CMIE, ProwessIQ.

50 november 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
 SPECIAL ARTICLE
Figure 9: Number of CRI Patents Granted at the IPO since 2016 Figure 10: Number of Computer-implemented Invention Patents Granted
to Indian Inventors at the USPTO
1,400
1,228

2,289
2,500
1,200 1,122

1,887

1,782
1,000 2,000
712
Number

800
1,500

1,082
600

782
400 1,000

665
649
625

589
533
200
0 1 2 1 500

111
78
76
0

39
35
28
24
15
11
10
5
3
1
2016 2017 2018 2019 2020 2021 2022 0

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
CRI patents at the IPO
Source: Extracted from Clarivate Analytics (2023). Source: Extracted from Clarivate Analytics.

Anand (2022), the share of foreign companies in sales was just
15% in 2000, but by 2016 it was about 40%. The competition
from foreign companies has incentivised Indian companies to
improve their innovation performance. We now discuss the in-
novation performance of the industry in terms of R&D expen-
ditures and patents.
R&D Investments by Software Firms
According to the DST (2023), IT services are one of India’s top
R&D spending industries, accounting for about 10% of the
industrial sector. The R&D intensity of the 36 R&D units in the
industry averaged around 2.67% during the three years ending
2020–21. Using the ProwessIQ data, we have constructed the
country’s average R&D expenditure and intensity of IT service
firms (Table 4, p 50).
The R&D investments have grown at an average annual rate
of 21% but showed very high year-on-year variability.10 An
analysis of India’s top 100 R&D spenders (Table 5) showed that
only seven software services companies figured in the league
table. However, some of the leading spenders of R&D are com-
puter software service companies worldwide. Table 4 shows
the higher R&D intensity.
Most software services firms claim that they work on newer
and improved ways of delivering services by reducing the time
spent to complete a project. And they arrive at the most inno-
vative processes by not performing R&D.
There are two caveats to be borne in India while discussing
software patenting in India. First, there is a worldwide heated
debate on the patentability of computer software. However, new
inventions in software had become patentable in several jurisdic-
tions beginning with the USPTO in 1998, when software-related
inventions and mathematical algorithms, in general, began to
Table 5: Leading R&D Spenders among Indian Computer Software Services
Companies, 2021
Name R&D Investment (` million) R&D Intensity (%) Rank among the Top 100
TCS 18,450
Infosys 5,120
HCL Technologies 4,730
Edgeverve Systems* 3,739.70
Wipro 3,703
Aricent 1,456
Sutherland Global Services 1,255
* Is a wholly owned subsidiary of Infosys.
Source: CTIER (2023: 125–26).
Economic & Political Weekly EPW november 25, 2023
be granted patents. Notable exceptions to this recognition are
signatories to the European Patent Convention. This has led to
an explosion of patent grants to computer-implemented inven-
tions in the US. Some of the leading patentees in the world now
are software companies. For instance, IBM, Qualcomm, Alphabet,
Microsoft, etc, are some of the leading patentees in the US.
However, there remain fundamental questions about whether
software should be patentable and, if so, whether specific char-
acteristics of software demand that different rules be applied to
ensure that patenting provides proper incentives for innovation,
allows follow-on or incremental innovation, and facilitates
knowledge diffusion, In Europe, and to some extent in Japan,
they are only patentable if “sufficiently technical” (OECD 2004).
Layne-Farrar and Evans (2004) have briefly surveyed the ar-
guments for and against software patenting. The main argu-
ments are twofold: first, it hinders standard setting in high
technology industries, and second, it leads to “patent thickets”
that slow down or eliminate innovative processes in software.
Second, in India, the Patents Act of 1970, which is the pri-
mary law governing patenting in India, although amended
three times and made TRIPS compliant from 1 January 2005,
still excluded mathematical and business methods, algorithms,
and computer programmes per se from patentability. Guide-
lines for the examination of computer-related inventions (CRIs)
2017 have introduced the possibility of granting patents for
inventions in computer software by relaxing the examination
procedure. According to the guidelines,
the examination procedure of patent applications relating to CRIs is
the same as that for other inventions to the extent of consideration
of novelty, inventive step, industrial applicability, sufficiency of dis-
closure, etc. Determining that the subject matter relates to one of the
excluded categories requires greater skill on the examiner’s part, and
these guidelines focus more on this aspect.
In short, according to the CRI, securing a patent at the IPO is
now possible. Since 2017, the IPO has been granting patents in
CRI. However, these are reported under the category of com-
4.9 4
1.4 20
puter/electronics in the subsequent annual reports of the IPO
1.3 22 (Figure 9). However, the breakout of these trends in terms of
1 29 domestic and foreign is unavailable.
1 31 We argue that the primary market for Indian software ser-
0.40 49 vices is the US. So, the strategy of Indian companies is to apply
0.30 66
for CRI patents there. Patents are also a signalling mechanism—
signalling to the prospective customers in the primary market
vol lViii no 47 51
SPECIAL ARTICLE

about one’s technological capability. So, the number of patents Figure 11: Patents Granted to Leading Indian Software Services Companies
at the USPTO
granted to Indian software inventors in the USPTO is a good
160 147 146
indicator (Figure 10, p 51). Indian inventors include domestic 136 134 133
140 139
Indian software services companies such as TCS, Wipro, and 116
120 104
Infosys and foreign software service companies based in India 92
100
100 95
such as Microsoft, IBM, Cognizant, etc. 75 82

Number
80 70 71 69
Our analysis shows that most of these patents (as much 48
as 85%) have gone towards affiliates of MNCs operating in 60 43 43 49
35
India. However, the share of domestic software services has 40 25 28
9 15 18
been increasing. 20 1 3 2 4 1 7 3
9 4 11 10 8 13 3
2 2 4 3 7
We now discuss the patenting performance of three of the 0

2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
largest computer software companies in the country. Of the
domestic IT companies, TCS, Wipro, and Infosys have been
TCS WJQSP Infosys
active in patenting (Figure 11). Source: Extracted from PatentsView.
TCS has been the leading patentee of the three leading software
service companies. Apart from the USPTO, TCS has also been very much higher number of patents. However, it may be due to a sim-
active in patenting at the IPO. The annual report of TCS shows a ple arithmetic summation of the patents for the same family of
Table 6: Spatial Distribution of Patent Applications of the Three Leading patents that the firm has secured in different jurisdictions.
Software Firms We now discuss three other aspects of patent production by the
(Cumulative Number of Patents Granted during 2001–22)
leading three. First, is the spatial distribution of the patents across
Jurisdiction TCS Jurisdiction Infosys Jurisdiction Wipro
jurisdictions (Table 6). Among the three, TCS has protected its
India 2,150 US 894 US 1,216
US 1,479 India 694 India 1,111 Table 7: Globalisation of Patent Production
(Based on the Cumulative Number of Patents Granted during 2001–22)
Europe 1,052 Korea (South) 248 Europe 337
Location of R&D Centre TCS Wipro Infosys
Japan 313 Europe 51 Germany 138
India 2,257 1,091 945
Australia 251 Germany 15 China 101
US 117 184 20
Germany 221 Singapore 12 Singapore 40 Germany 217 140 1
China 187 Philippines 11 Australia 6 S Korea 129
Canada 107 Australia 8 Canada 3 Japan 52 2
Singapore 64 Vietnam 7 Russia 3 Singapore 33
Mexico 57 Poland 3 Japan 3 Europe 20 15
Brazil 54 Africa 3 UK 2 China 8 5
UK 35 Spain 3 Malaysia 2 UK 7 1
South Africa 32 Luxembourg 3 Denmark 1 Australia 6 1
Denmark 22 UAE 2 France 1 France 5
Spain 19 Croatia 1 Total 2,964 Africa 4
Korea (South) 18 UK 1 Indonesia 3
Canada 2
Indonesia 17 Portugal 1
S Africa 2
Taiwan 13 Turkey 1
Mexico 1
Malaysia 12 Denmark 1
Albania 1
New Zealand 7 Hungary 1 Denmark 1
Hong Kong (SAR) 6 Slovenia 1 Taiwan 1
Philippines 5 Indonesia 1 Total 2,702 1,472 1,097
France 5 Hong Kong (SAR) 1 Source: Clarivate Analytics.
Africa 4 Malaysia 1
Table 8: Profile of Forward Citation of Indian Computer-implemented
Israel 4 Total 1,964 Invention Patents
Portugal 3 (Only Top-citing Companies Are Listed Here)
Hungary 2 Company TCS Company Wipro Company Infosys
Poland 2 IBM 112 IBM 107 IBM 199
Russia 2 Microsoft 39 Microsoft 25 Microsoft 77
Ireland 2 Sap Se 29 Bank of America 18 Qualcomm 32
Iceland 1 Samsung Electronics 18 Intel 17 Oracle 29
Albania 1 Bank of America 17 Accenture 17 Samsung 28
Intel 16 Samsung Electronics 12 Bank of America 23
Serbia 1
Oracle International 15 Oracle International 11 Huawei 23
Colombia 1
Corporation Corporation
Argentina 1
Wipro 13 Sap Se 11 Amazon 22
Slovenia 1 Salesforce.com 12 Amazon 10 Intel 22
Lithuania 1 Technologies Inc
Croatia 1 Chase Bank 12 Bank of New York 10 LG 21
Cyprus 1 Mellon Trust Co
Source: Extracted from Clarivate Analytics (2023). Source: PatentsView.

52 november 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
 SPECIAL ARTICLE
Figure 12: Domain-wise Distribution of AI Patent Applications, 2021–22 Figure 13: Trends in the Number of Pharma Patents vis-à-vis Computer
Implemented Patents Granted at the USPTO
Fintech
IoTbased automation
5%
7% 4,500
3,794 3,865
4,000
3,219
3,500
Edtech 2,851
3,000
9% 2,358

Number
2,500
HealthDare 1,859
41% 2,000
1,500 1,250

1,000 722 866

174 169 166 229 274 320 362 177 162 183 258 285 328 299 330 290
500 56 72 151 139
78 61 99 136 161 192 171 156
0 49

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Transportation
IT Tervices Pharma
13%
Source: PatentsView.

Image Qrocessing
25%
HealthDare Image Qrocessing Transportation
Edtech IoTbased automation
Fintech
Source: Based on Chawla and Singh (2023).
inventions in a much more extensive range of jurisdictions. The
USPTO and IPO are the significant jurisdictions for all three.
Second, is how their patent production is globalised (Table 7, p 52).
TCS is the most globalised, and Infosys the least. Besides India,
the US, Germany, South Korea, and Japan are major R&D centres
for Indian software services companies. The quality of patents
is usually measured by the number of times they are forward
cited and the companies that cite them as a source of knowl-
edge for their incremental inventions. Table 8 (p 52) sum-
marises the forward citation picture of the patents of the three.
Some of the leading companies have cited patents. There is
also at least one instance of an Indian company forward citing
the patent of another Indian company. An area where Indian
patenting in software has been active is in the broad scope of
AI. Unlike in many other jurisdictions, India does not appear
to have a different law for patenting AI. According to Chawla
and Singh (2023),
relative terms. The applications are from start-ups with estab-
lished large software firms and by resident and non-resident
applicants. Chawla and Singh (2023) seem to indicate that resi-
dent patenting in AI has caught up with non-resident patenting,
although this is not very clear from the data they have com-
piled, the source of which is not indicated either. These patents
are in six technology domains: healthcare, image processing,
transportation, edtech, IoT-based automation and Fintech, with
the former two domains dominating in 2021–22 (Figure 12).
In sum, our analysis shows that patenting by Indian IT ser-
vices companies has been improving, although MNC affiliates
still account for a significant number of Indian IT patents. This
sharply contrasts with the pharmaceutical industry, where
domestic manufacturers hold many of the patents granted
(Table 10). But since the mid-2000s, the number of computer-
implemented patents has been significantly higher than phar-
maceutical patents (Figure 13).
Table 10: Relative Shares of Domestic versus MNCs in Patents Granted—the
Pharmaceutical Industry vis-à-vis the Computer Software Services Industry
(Based on the Cumulative Number of Patents Granted at the USPTO) (%)
Domestic MNCs
Pharmaceutical 85 15
Computer software services 25 75
Source: PatentsView.

AI-related inventions are examined based on the subject matter ex-

clusions defined in Section 3(k) of the Indian Patents Act, 1970. Sec-
In Conclusion
tion 3(k) proscribes patentability of mathematical methods, business Our analysis has shown that both industries have performed
methods, computer programs per se, and algorithms. The CRI 2017 well in terms of conventional indicators for measuring innova-
guidelines have provided clarity in respect of what should and should
tion. Private sector enterprises dominate the industries, although
not be allowed in respect of mathematical methods or business meth-
ods or computer programs per se or algorithms.
the state has actively supported their innovation efforts. The
extent of government intervention in the pharmaceutical
Table 9 summarises the record on AI patenting in India. It shows industry has a more extended pedigree. Both industries are
a rising trend and a spike in 2021–22, both in absolute and export-oriented, have the US as the primary export market
Table 9: Trends in AI Patenting in India and operate from various clusters within India. There are, of
(Based on Patent Applications at the IPO) course, significant differences. First, patenting at the IPO for
Applications (Number) Share of All Applications (%) CRIs was possible only in 2017. Second, while patenting in the
2017–18 657 1.3 pharmaceutical industry is dominated by domestic Indian
2018–19 1,100 2.17
companies, India-based foreign companies dominate patent-
2019–20 1,887 3.35
2020–21 2,910 4.9
ing in software patents. Given lower barriers to entry,
2021–22 4,063 6.1 the software industry has attracted the entry of several
Source: Chawla and Singh (2023). innovative start-ups, which is likely to change the patenting
Economic & Political Weekly EPW november 25, 2023 vol lViii no 47 53
SPECIAL ARTICLE

landscape. As far as the future is concerned, both industries
have windows of opportunity. The pharmaceutical industry
has excellent opportunities for incrementally innovating in
new processes, such as mRNA technology and using AI for
drug discovery. Our earlier discussion has pointed to this pos-
sibility. AI is also the linking factor between the two indus-
tries. The windows of opportunities for the software services
industry are tremendous, and they lie in three transitions
that are taking place currently: digital and AI, green energy,
and global sustainable value chain. All these three transitions
are mediated by technology, and software services have a
massive role in contributing to technology developments
that result in these transitions. While the governments at
both the central and state levels have put in place several poli-
cies and institutions to support innovations in both indus-
tries, they must not hesitate to use much more fine-tuned in-
dustrial policy instruments to hasten the process of innova-
tion efforts in these two industries which hold considerable
promise for India to emerge as a significant high technology
producer in the world.

notes
1 See Economist (2023).
2 According to the USFDA, “An abbreviated new
drug application (ANDA) contains data which
is submitted to FDA for the review and potential
approval of a generic drug product. Once app-
roved, an applicant may manufacture and market
the generic drug product to provide a safe, ef-
fective, lower cost alternative to the brand-
name drug it references.” See USFDA, ANDA,
https://www.fda.gov/drugs/types-applications/
abbreviated-new-drug-application-anda#:~:text
=An%20abbreviated%20new%20drug%20
application,brand%2Dname%20drug%20it%20
references.
3 This is for the three-year period ending 2020–21
(NSTMIS 2023).
4 It is the largest and most comprehensive data-
base of India’s corporate sector. The database
has the financial performance data of nearly
500 pharma companies in the country.
5 Although over the years, the number of vacan-
cies for examiners at the IPO has been brought
down, even at present (as of 31 March 2022),
there are 70 vacancies. See Lok Sabha (2023).
6 Patent linkage is the link between the market-
ing approval of the generic product and the
patent status of the originator reference (inno-
vator) product.
7 The union government has put in place three
separate but interlinked policies for hastening
the domestic production of API and bulk drugs.
For details, see Press Information Bureau (2022).
8 The recent cough syrup controversy is a case in
point that has brought the quality issues of
India-made formulations into sharp focus.
9 It is not clear as to how the MEITY has arrived at
these numbers. See https://www.meity.gov.in/
content/software-and-services-sector#:~:text=-
The%20IT/Software%20industry%20has,in%-
20total%20industry%20employee%20base.
viewed on 25 June 2023.
10 The coefficient of variation of the growth rates
works out to around 120.
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54 november 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
SPECIAL ARTICLE
FDI and Red-tapism
A Politico-economy Inquiry of FDI Inflows in India during 2020–23
AMARBAHADUR YADAV
The trend of foreign direct investment inflow in India is
examined, focusing on internal trade, state-by-state
allocation, and country-by-country allocation. It
evaluates the effectiveness of existing FDI regulations
and analyses evidence from authoritative reports like
the Reserve Bank India’s Fact Sheet on FDI, UNCTAD’s
World Investment Report 2018–22, and the COVID-19
period. The analysis aims to examine the success of
government initiatives and the manufacturing sector’s
impact on the economy.
Amarbahadur Yadav (amaryadav9192@gmail.com) is a research scholar
at the Centre for Economic Studies and Planning, Jawaharlal Nehru
University, New Delhi.
Economic & Political Weekly EPW november 25, 2023 vol lViii no 47
F
oreign direct investment (FDI) is the act of investing
money into another country with the goal of creating
“lasting interest.” When a company gains at least 10%
of voting power in another company, it has acquired lasting
interest. This means that the foreign corporation’s goal is to
manage a long-term relationship with the host company by
exerting control over its management or other ways. FDI is a
major non-debt financing mechanism offered to countries
for finance and technology transfer. Like China, FDI has
supported many successful development stories and govern-
ments’ work to promote FDI to grow their local economy and
draw new technology, business expertise, and capital to
their nation.
Developing countries often face a shortage of investable
surplus, which can come from domestic or foreign savings. To
develop faster, it is crucial to seek foreign savings and foreign
investment in various forms. FDI is a long-term investment
that is a significant non-debt financial resource for a nation’s
economic growth. It typically occurs in economies with the
potential for growth and a trained labour force. FDI has
dramatically grown as a significant method of transferring
wealth internationally. Developing nations require FDI be-
cause it enables the transmission of technology that is not pos-
sible through financial investments or trade in products and
services. The domestic input market can become more com-
petitive with FDI, and according to Adam Smith’s concept of
the invisible hand, FDI inflows drive economic growth.
When foreign investors select a country for investment, they
consider labour expenses, location resources, the scope of the
investing sector, demand and availability of all materials, and
how much government support exists in reality aside from the
proclaimed policy. After all the analysis, the investors decides
where they will invest. An investor’s primary goal is to generate
profit, not to help a foreign country’s economic development;
they see themselves as a rational firm but their investment
indirectly helps to develop the destination country’s growth,
employ people, and raise people’s living standards. This devel-
opment is our net gain.
The United Nations Conference on Trade and Development
(UNCTAD) analysis reveals that India experienced a 27% annual
growth in FDI inflows during the COVID-19 crisis in 2020,
totalling $64 billion. The total FDI inflows were $74.3 billion in
FY 2019–20, $81.9 billion in FY 2020–21, $84.8 billion in
FY 2021–22, and 70 billion in FY 2022–23. The World Investment
Report 2021 highlights India’s significant impact on global FDI,
55
SPECIAL ARTICLE

with the country becoming the seventh- Figure 1: Cumulative FDI Inflow in India, April 2000–March 2023 ($ million)
1,00,000
largest recipient of FDI in 2021, globally.
India’s advancements in the informa- 80,000
tion and communications technology 60,000
(ICT) industry, notably in e-commerce,
40,000
healthcare, and related sectors, signifi-
cantly contributed to its overall growth. 20.000
Investors can only approach the govern-
0
ment for FDI through the Department

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

2017–18

2018–19

2019–20

2020–21

2021–22 (P)

2022–23 (P)
for Promotion of Industry and Internal
Trade (DPIIT). The benefits of FDI to the
recipient country include increased Equity through government route/automatic route/acquisition route
employment, economic growth, im- Equity capital of unincorporated bodies^
proved capital flow, human resource Reinvested earnings^
Other capital^
development, advancement of underde-
Total FDI inflow
veloped regions, finance and technology ^ denotes estimates; P denotes provisional estimates.
provisions, exports, exchange rate sta- Source: Quarterly fact sheets, DPIIT, Ministry of Commerce and Industry.
bility, and economic development stimulation. decrease in FDI inflow. However, a notable change occurred in
Karnataka and Maharashtra received the most FDI inflows FY 2022–23, signifying a substantial decrease of 16% in FDI
during FY 2021–22, attributed to investor-friendly regulations, inflow. Interestingly, despite the challenging backdrop of the
supportive administrations, and local organisations’ good COVID-19 period and its immediate aftermath, India experi-
position. FDI inflow was primarily in aerospace and defence enced an increase in FDI inflow, countering the global decline
production, agrotech, fintech, biotech, and electronic system in FDI. The decline observed in FY 2022–23 marks the first
design and manufacturing. Karnataka’s main multinational reduction in FDI inflow in India after a span of nine years.
companies (MNCs) were Toyota and Boeing for automobiles India reached a historic milestone in FY 2021–22, garnering a
and aerospace, respectively. Maharashtra received the highest record FDI influx of over $84.8 billion, despite the government’s
FDI inflow in FY 2022–23 due to brownfield investment. How- restrictions on FDI from neighbours like China. This included
ever, the manufacturing sector’s gross domestic product (GDP) significant FDI equity inflows of $7.1 billion that were concen-
shares are low, around 14%–15%, with no growth through FDI trated in the services sector. However, the continued conflict
inflow or domestic industry. between Russia and Ukraine, changes in the United States’s (US)
monetary policy, and other worldwide uncertainties together
Trends in FDI Inflow had an impact on investor sentiment and choice-making resulting
The FDI typically consists of three parts. The first is the inflow in a drop in FDI inflows in FY 2023.
of equity capital from abroad, also known as greenfield India is expected to experience an upbeat view of an
investment, which increases the nation’s capital stock, com- impending increase in FDI inflows due to various factors.
prising machinery and plants. The undistributed gains of Sectoral production-linked incentive (PLI) programmes, growth
already established foreign firms in the nation that are rein- prospects in tier-2 and tier-3 cities and the National Single
vested is the second element in the FDI firms’ reinvested earn- Window System (NSWS) have, together, contributed to this upbeat
ings. The third element is the so-called “brownfield” invest- view. The rise of high-tech sectors, market size, and digital
ment, which is when investors from other nations buy operat- and technological improvements are also driving India’s growth
ing businesses through mergers or takeovers. As is clear, the trajectory, making it an attractive investment destination. The
final type of FDI does not increase the destination countries’ NSWS promotes an investor-friendly environment, encouraging
economic capacities. innovation and economic development.
Total FDI inflow distribution in equities through government India’s FDI inflows reached their highest levels in FY 2021–22,
route/automatic route/acquisition route, equity capital of un- a noticeable point, despite the global FDI downfall by around
incorporated bodies, reinvested earnings, and other capital is $1 trillion before the COVID-19 crisis. The World Investment
shown in Figure 1. Report ranked India as the eighth-largest recipient of FDI
Compared to the $51.34 billion registered in 2021, India saw inflow in 2022 and the seventh-largest in 2021. The growth
foreign equity inflows of $52.34 billion in 2022 (Fact Sheet on FDI in FDI growth is mainly due to acquisitions in the ICT sector.
Inflow, March 2023). It was less than $64.68 billion reported in The government has made significant modifications to FDI
2020, though. India attracted stock inflows worth $46.03 billion standards and regulations, allowing up to 100% FDI through
in FY 2023. Including stock inflows, reinvested earnings, and an automated procedure. The DPIIT now controls the process
other capital sources, the total amount of FDI inflows in FY 2023 for granting FDI clearance, making it easier to assess the
was $70.97 billion. When compared to the FDI inflows of impact of these policies.
$84.83 billion registered during FY 2022, this reflects a drop. India’s increase in FDI inflow during the COVID-19 crisis was
Between FYs 2012–13 and 2021–22, India did not witness any remarkable, with inflows growing by 27% year-on-year to
56 november 25, 2023 vol lViii no 47 EPW Economic & Political Weekly

Figure 2: Sector-wise Distribution of FDI Equity Inflows in India, FY 2020–23
1,20,000
1,00,000
80,000
60,000
40,000
20,000
0
Computer software and hardware
Services sector
2020–21
(April–March)
Source: Quarterly fact sheets, DPIIT, Ministry of Commerce and Industry.
$64 billion. This growth is largely a result of previous meas-
ures taken by the Indian authorities to reform regulations and
provide opportunities for foreign organisations to set up new
frameworks. India experienced a significant increase in FDI
inflows during 2018–19, primarily due to equity capital. The
rise in equity capital accounts for nearly all the increase in FDI
inflows, including mergers and acquisitions (M&A), share-
holdings greater than 10%, and shareholdings less than 10%.
The Reserve Bank of India (RBI) does not make a distinction
between stock investment and FDI, making it difficult to
determine when stock investment results in FDI. Greenfield
(establishing new ventures in foreign countries) and brownfield
(acquiring existing ventures in foreign countries) ventures
account for a large portion of the FDI.
The pandemic’s impact on global FDI was most palpable in
the first half of 2020, with global project financing arrange-
ments and cross-border M&A, showing significant improve-
ments in the second half. However, greenfield investment,
which would be more important for emerging economies, fell
dramatically during 2020 and the first part of 2021. The FDI
patterns varied primarily by region, with emerging nations
and transition economies being disproportionately affected by
the epidemic’s impact on participation in global value chain
(GVC)-intensive businesses.
M&A accounted for 44% of equity capital in 2020, indicating
an unequal distribution. The e-commerce, health, and ICT in-
dustries accounted for the bulk of investments, with only four
major Indian corporations accounting for 59% of M&A. The re-
maining equity capital might not even be FDI.
Over the last five years, reinvested gains, accounting for
approximately 20% of the total FDI inflows, have shown
Economic & Political Weekly
SPECIAL ARTICLE
consistent growth. However, this growth rate has been notably
($ million)
slower than that of equity capital. The increase in reinvested
profits may signify the operational efficiency of international
firms in India. Additionally, it can be viewed as a positive sig-
nal for capitalists and governmental efforts to facilitate a more
business-friendly environment in the country.
The COVID-19 pandemic significantly decreased worldwide
FDI in 2020, with global flows decreasing by 35% from $1.5
trillion in 2019 to $1 trillion in 2020. The decline was uneven
due to company transactions and oscillations in interorgani-
infrastructure and construction development projects…
sational money movement. Emerging market economies
Metallurgical industries
Construction development: townships, housing, built-up
Trading
Telecommunications
Automobile industry
Construction (infrastructure) activities
Drugs and pharmaceuticals
Chemicals (other than fertiliser)
accounted for two-thirds of all FDI globally, which increased
by just over half in 2019.
The trends in FDI contrast drastically with those of planning
phase creation1 where emerging economies have taken full
advantage of the economic downturn. The proportion of freshly
proposed greenfield projects in emerging economies plummeted
by 42%, while the percentage of global investment arrange-
ments, which are vital for strategising and mapping economic
growth, plummeted by 14%. Greenfield investment in advanced
economies has fallen by about 19%, while international fund-
ing has increased by 8%.
2021–22 2022–23 Cumulative equity inflow The amount of FDI coming into industrialised economies
(April–March) (April–March) (April 2000–March 2023)
like Europe has decreased by 80%, and most of the region’s
main economies experienced considerable reductions. Flows
into North America fell by 42%, while overall flows to other
industrialised countries fell by around 20%. The amount of FDI
in Africa decreased by 16% to $40 billion, the lowest level in
15 years, principally caused by a decline in reinvested earnings.
If things stay calm, money will probably continue to flow to
developing Asian economies, with China seeing a 6% increase
in inflows reaching $149 billion.
Top FDI Recipient Sectors in India, 2020–23
Foreign investors showed considerable interest in numerous
Indian industries during FY 2022–23, with major FDI inflows
seen in the computer software and hardware industries, which
attracted investments totalling $9.39 billion (Figure 2). The
services industry saw a lot of foreign investment as well,
reaching a total of $8.70 billion. This included investments in
financial services, banking, insurance, and business services,
highlighting the attractiveness of these sectors to inter-
national investors.
The FDI equity inflows in various sectors during FY 2023
contributed to India’s economic growth and development.
The trading sector attracted $4.79 billion, while the drugs
and pharmaceuticals industry received $2.05 billion, show-
casing confidence in India’s healthcare and pharmaceutical
sectors. The automobile industry also experienced substantial
FDI equity inflows, with $1.90 billion reaching the automotive
market. The chemicals sector attracted $1.85 billion, show-
casing growth potential in India’s chemical industry. The
construction and infrastructure activities sector received
$1.70 billion, highlighting the importance of infrastructure
development projects in the country. Overall, these sectors
showcase the diverse range of industries that attracted
EPW november 25, 2023 vol lViii no 47 57
SPECIAL ARTICLE
foreign investments, showcasing India’s commitment to eco-
nomic growth and development.
In the COVID-19 pandemic, Indian services and software
industries experienced significant inflows, with 98% of the
money going into the computer software industry. The construc-
tion sector also experienced significant inflows, with company-
level data only accessible until 2019. Financial inflows accounted
for around 35% of total flows, followed by corporate services.
The services sector, which, until recently, received substantial
FDI, declined during 2020–21, with financial inflows account-
ing for around 35% of total inflows. During the National Dem-
ocratic Alliance (NDA) government, FDI inflow increased but
without a substantial effect on economic growth.
A large portion of the FDI equity inflow was attracted to the
service and ICT sectors, which are based on technology and
have low employment-creation capacity compared to the man-
ufacturing sector. The government announced numerous
schemes to promote the manufacturing sector, but no discern-
ible effect has been observed to date. This issue has led to high
unemployment levels and low manufacturing exports compared
to other countries. Further investigation is needed to under-
stand the impact of these inflows on the Indian economy.
The government tried to liberalise and introduce new
policies to attract the interest of investors, including (i) Make
in India: it is a government initiative designed to increase
self-sufficiency, support Indian industry, and fortify the logis-
tical supply chain. (ii) PM GatiShakti: the programme is
powered by seven engines: roads, railways, airports, ports,
mass transit, waterways, and logistics infrastructure, with a
`200 billion investment. (iii) PLI scheme: an incentive of
`1.97 trillion under the PLI scheme has been announced for
14 sectors. It provides substantial benefits and incentives to
foreign manufacturers aiming to operate in India. (iv) Export
promotion: a new piece of legislation will take the place of the
Export Promotion-Special Economic Zones Act to make it
easier for governments to collaborate on the “Development
of Enterprise and Service Hub.” In FY 2023, a new foreign
trade strategy will be unveiled. (v) Liberal FDI norms: several
industries are open to 100% FDI under an automatic route,
thanks to liberal FDI norms. Six preferential trade arrange-
ments (PTA s) and 13 free trade agreements (FTA s) have been
struck with other nations.
Reforms in FDI Norms and Regulations
In recent years, FDI in India has become a primary engine of
economic growth and non-debt investment for development.
The government has aimed to create investor-friendly FDI
norms and regulations, with the DPIIT responsible for chang-
ing these standards. Investors can only approach the govern-
ment for FDI through the government route, which includes
clearing procedures. A new gateway, run by the DPIIT, has
been developed to streamline the process. The government
consistently launches innovative FDI initiatives in industries
such as asset reconstruction firms, broadcasting, pharma-
ceuticals, single-brand retail trading, construction and develop-
ment, civil aviation, power exchanges, e-commerce activities,
58
coal mining, contract manufacturing, digital media, insurance
intermediaries, and ICT.
In 2020 and 2021, the government adopted changes to its
FDI policy to address the COVID-19 pandemic. It prioritised
preventing speculative takeovers and acquisitions of Indian
businesses, as many enterprises were unable to run due to the
COVID-19 effect. The government introduced a new FDI policy
on 17 April 2020, stating that enterprises from nations sharing
land boundaries with India or beneficial shareholders can only
participate through the government route.
The Atmanirbhar Bharat aims to increase FDI in the defence
sector by 74% through an automated route, up from 49% for
businesses obtaining new commercial permits. The Integrated
FDI Policy Manual was published on 15 October 2020, and
the Standard Operating Procedure (SOP) for Processing FDI
Proposals was updated on 17 August 2023, for ease of process-
ing FDI offers. A government clarification issued on 19 March
2021 revealed that NRI shareholders’ investments made on the
basis of a non-repatriation justification are considered to be
just internal investments on an equal footing with all those
made by citizens.
The percentage of FDI inflows into the insurance sector has
been boosted by the government from 49% to 74%. On 14 June
2021, the government announced via a notification that it has
increased the FDI threshold in insurance provider companies
through the automatic route to 74%, as well as ownership
rights that protect FDI investors and shareholders. As in the
pandemic period, the health insurance sector had higher growth
contrary to the vehicle and life insurance sectors. Another im-
pact of increasing the percentage of FDI in the insurance sector
via the automatic route is employment creation. However, the
government policy needs to focus on employment creation for
unorganised sector workers. This highlights the necessity for
government initiatives targeting the needs of unorganised
sector workers.
The government has approved up to 100% of FDI inflows
through an automated process, allowing for 100% foreign par-
ticipation in the petroleum and natural gas industries. How-
ever, FDI in public sector undertakings (PSUs) is only allowed
when the government allows for disinvestment and requires
prior permission for geopolitical investment constraints. The
amendment (as per Note 4/2021), allows for up to a 100% in-
flow of FDI via the automatic route in the telecommunications
industry, which is India’s third-largest FDI inflow recipient.
The Indian telecom sector has seen tremendous expansion,
accounting for 7% of total FDI inflow.
The Indian paper sector, a delicensed industry, accounts for
around 5% of global paper production and has a business
strategy of 900 plants and 532 mills. India is behind China, the
US, Japan, and Germany in terms of paper, paperboard, and
newsprint usage, indicating the potential for growth to catch
up to the global median per capita usage.
Inflows of FDI into India totalled $45.15 billion in 2014–15
and have continued to rise since. Despite the COVID-19 pan-
demic in FY 2020–21, the nation received $81.97 billion in FDI,
the largest amount ever, 10% higher than the previous period,
november 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
 SPECIAL ARTICLE

that is, FY 2019–20 ($74.49 billion). Table 2 gives yearly figures Figure 3: Statewise Cumulative FDI Equity Inflow, October 2019–March 2023
and growth over the previous year. The main objective of FDI is Jharkhand, 2,656 Rajasthan, 2,078 West Bengal,
to promote development in finance, cutting-edge innovation, 1,428
Telangana, 4,745
and business processes to raise productivity. These FDI practices
Haryana, 7,822
ensure India’s standing as a favoured economic hub for inter-
national investors. The overall inflow of FDI in India surged Maharashtra,
Tamil Nadu, 8,502
by 20% in the post-COVID-19 phase (a 19-month difference 53,971
between pre- and post-COVID-19), a significant difference
between the two periods (Table 1).
Table 1: Total FDI Inflows in the Pre- and Post-COVID-19 Periods Delhi, 25,193
Sl No Period (19 months) FDI Inflow ($ billion)
1 Pre-COVID-19 (August 2018 to February 2020) 108.98
2 Post-COVID-19 (March 2020 to September 2021) 131.11
Growth (+)20%
Source: Quarterly fact sheets, DPIIT, Ministry of Commerce and Industry.
Gujarat, 31,901
Table 2: FDI Equity Inflow, FY 2000–01 to 2022–23 Karnataka, 44,461
S No Financial Year (April–March) Amount of FDI Equity Inflow Percentage Growth over Source: Quarterly fact sheets, DPIIT, Ministry of Commerce and Industry.
Previous Year ($)
FY 2000–01 to 2022–23 ($ million) October 2019 to March 2023 (Figure 3). Notably, 29% of the
1 2000–01 2,463 – total investments obtained came from Maharashtra, which
2 2001–02 4,065 (+) 65 amounted to a significant sum of $53.97 billion. Following
3 2002–03 2,705 (-) 33 closely behind, Karnataka secured 24% of the investments,
4 2003–04 2,188 (-) 19 totalling $44.46 billion. Moreover, Gujarat received 17%
5 2004–05 3,219 (+) 47 ($31.90 billion) and Delhi received 13% ($25.19 billion)—
6 2005–06 5,540 (+) 72
which are substantial amounts.
7 2006–07 12,492 (+) 125
8 2007–08 24,575 (+) 97
Why Is There an Unequal FDI Equity Inflow across States?
9 2008–09 31,396 (+) 28
10 2009–10 25,834 (-) 18 FDI equity inflows to Tamil Nadu, Maharashtra, Karnataka,
11 2010–11 21,383 (-) 17 and Gujarat have been relatively consistent over the past five
12 2011–12 35,121 (+) 64 years. However, the success of government initiatives in influ-
13 2012–13 22,423 (-) 36 encing FDI allocation remains uncertain. Tamil Nadu has the
14 2013–14 24,299 (+) 8 most special economic zones (SEZs), while Gujarat has 28. Har-
15 2014–15 29,737 (+) 22 yana has just 20 authorised SEZs, however it is attracting iden-
16 2015–16 40,001 (+) 35
tical FDI as Tamil Nadu.
17 2016–17 43,478 (+) 9
In the FY 2021–22, Karnataka secured the highest FDI equity
18 2017–18 44,857 (+) 3
19 2018–19 44,366 (-) 1
inflow of $22,072 million, while Maharashtra ranked as the
20 2019–20 49,977 (+) 13 second-largest state, attracting inflows of $15,439 million.
21 2020–21 59,636 (+) 19 During FY 2022–23, Maharashtra led in FDI equity inflow, secur-
22 2021–22 58,773 (-) 1 ing $14,806 million, while Karnataka followed as the second-
23 2022–23 46,034 (-) 22 largest state, attracting inflows of $10,429 million (Figure 4).
Total 6,34,562
Source: Quarterly fact sheets, DPIIT, Ministry of Commerce and Industry.
Figure 4: Statewise Distribution of FDI Equity Inflow, April 2020–March 2023
60,000
India’s DPIIT reported a 21.67% decrease in foreign direct
equity investments in FY 2022–23, with Singapore being the 50,000
leading investor. Total FDI inflows contracted 29.6% to $15.49 40,000
billion in the fourth quarter of the fiscal, with Singapore being
the leading investor. Internal trade and FDI inflows were also 30,000
down 41% compared to the previous year. 20,000

Statewise Distribution of FDI Inflow 10,000

(April 2020–March 2023)
0
The FDI equity inflows in FY 2023 were dominated by Maharashtra
Delhi

Telangana
Karnataka

Gujarat

Tamil Nadu
Maharashtra

Haryana

Jharkhand

Rajasthan

West Bengal

and Karnataka, according to DPIIT data. Maharashtra received

$14.80 billion, followed by Karnataka ($10.42 billion), Delhi
($7.53 billion), and Gujarat ($4.71 billion).
2020–21 2021–22 2022–23 Cumulative Equity Inflow
Maharashtra emerged as the best choice for FDI equity (April–March) (April–March) (April–March) (October 2019–March 2023)
inflow in India, according to a thorough analysis covering Source: Quarterly fact sheets, DPIIT, Ministry of Commerce and Industry.

Economic & Political Weekly EPW november 25, 2023 vol lViii no 47 59
SPECIAL ARTICLE
Gujarat, with its large corporate world, attracted the highest
FDI in the last financial year, as the computer hardware and
software industries experienced the largest growth. This indi-
cates that FDI primarily flocked to prosperous states, and the
efforts of local authorities to attract it, such as softening labour
regulations, providing tax benefits, or designating special
areas for production, were ineffective. As a result, FDI cannot
be relied on to alleviate local income disparity, rather it
exacerbates it.
It remains to be explored why Karnataka received the
most FDI equity inflows during the previous financial year,
as some expert analyses suggest that this is due to investor-
friendly regulations, the development of supportive adminis-
tration, and the local organisation’s good position. The FDI
equity inflow was received in aerospace and defence pro-
duction, agrotech, fintech, biotech, and electronic system
design and manufacturing. For Karnataka, the main MNCs
were Toyota and Boeing for automobiles and aerospace.
As we know, Karnataka is the largest software exporter
in India. Currently, it exports 65% of India’s overall
aerospace exports.
India has experienced a significant increase in FDI in recent
years, with a 31% increase from 2018–19 to 2020–21. This
increase can be attributed to various factors, such as ease of
business changes and the automatic clearance method. However,
the US–China trade war has been a significant factor in the
sudden increase in FDI after 2018. Over 85% of the inflows went
to computer software and services industries, with massive
M&A in e-commerce and ICT industries. Amazon recently
committed $2 billion to promoting India’s digitalisation. The
path of FDI activity in India appears to be more influenced by
consumption factors than supply-side factors, such as labour
regulations, tax reforms, or skills.
India’s economic growth cannot be solely attributed to FDI.
States with stronger socio-economic indicators, such as educa-
tion levels, higher learning quality, public health results, and
large marketplaces with high disposable income, can encour-
age industry. However, India still lags behind big emerging
economies like China in attracting FDI inflows. To attract FDI
into the industrial sector, India should increase micro, small
and medium enterprises (MSME) activities and lower the trans-
portation costs, which are extremely high (14% of GDP) com-
pared to major countries.
Top Investing Countries’ FDI Equity Inflow, FY 2020–23
Singapore contributed a sizeable sum of $17.20 billion as the
nation with the biggest inward FDI for India during FY 2023
(Figure 5). The US, about $6.04 billion, and Mauritius, about
$6.13 billion, were not far behind. With $3.35 billion, the
United Arab Emirates (UAE) took fourth place, while FDI
inflows to India from the Netherlands were $2.49 billion.
Other notable nations in terms of equity inflows through FDI
over the initial three quarters of FY 2022–23 included the
United Kingdom (UK), Japan, Cyprus, Cayman Islands, and
Germany in addition to these top contributors. These countries
collectively represented a substantial share of foreign investments
60
Figure 5: Top Investing Countries’ FDI Equity Inflow, FY 2020–23 ($ million)
1,80,000
1,60,000
1,40,000
1,20,000
1,00,000
80,000
60,000
40,000
20,000
0
Mauritius
Singapore
US
The Netherlands
UAE
Cayman Islands
Germany
Cyprus
Japan
United Kingdom
2020–21 2021–22 2022–23 Cumulative Equity Inflow *
(April-March) (April–March) (April–March) (April 2000–March 2023)
Source: Quarterly fact sheets, DPIIT, Ministry of Commerce and Industry.
in India, further reinforcing India’s attractiveness as a destina-
tion for international investors.
From April 2000 to March 2023, India witnessed signifi-
cant FDI equity inflows, with Mauritius leading the way as
the primary source. It accounted for 26% of the total invest-
ments, amounting to an impressive $163.87 billion. The sec-
ond-biggest investor was Singapore, which delivered 23% of
the $148.16 billion in FDI inflow. Among other notable con-
tributors, 9% of the FDI equity inflow came from the US and
the Netherlands came in second place with a 7% share. Japan
and the UK secured 6% and 5% of the investments, respec-
tively. The remaining 2% was distributed among the UAE,
Germany, Cyprus, and the Cayman Islands.
Indian Manufacturing Policies (post 1991)
India’s liberal industrial programme—New Economic Policy
(NEP)—was introduced in 1991 to increase effectiveness and
reliability, as well as reduce manufacturing expenses. The
National Manufacturing Policy (NMP) focuses on the Indian
manufacturing industry and was announced in 2011 with six
major purposes:
(i) The National Manufacturing Policy, 2011 aimed to achieve
a 25% GDP share by 2022 and create 100 million jobs through
rural skill development and sustainable technology; (ii) how-
ever, India’s manufacturing sector has remained at 15%–16% of
the GDP since 1980, falling behind comparable Asian economies
at 25% to 34%; (iii) challenges like inadequate infrastructure,
regulatory complexities, and a shortage of skilled labour hinder
India’s manufacturing growth; (iv) while acknowledging
potential job creation in related sectors, the policy’s goals have
not been entirely met; (v) the policy stresses collaboration be-
tween the central government and states to enhance infra-
structure and provide incentives; and (vi) emphasising sector-
neutral policies and green technology, the policy is nationwide
and promotes self-regulating industry clusters and National
Investment and Manufacturing Zones (NIMZs).
The NDA, led by Prime Minister Narendra Modi, revealed
grandiose programmes, such as MII in 2014, soon after it took
office. The programme aims to develop India into a global
november 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
 SPECIAL ARTICLE

development and production centre by stimulating creativity,
facilitating financing, and constructing powerful industrial
equipment. It plans to increase the production industry’s share
of GDP to 25% by 2022 (later postponed to 2025) and create an
extra 100 new employment opportunities. The MII is a trade
link connecting 25 different production sectors, relying heavily
on external investment.
India’s concentration has progressively switched from
manufacturing to services and later to collaborative consump-
tion over the last few years, particularly post-market globalisa-
tion in 1991. Over the past two decades, the manufacturing
sector has fallen behind, accounting for only 14% to 15% of the
country’s GDP contribution. To revitalise the industry, the MII
was introduced. The initiative did not significantly bolster the
growth of the manufacturing sector or contribute substantially
to economic growth (Rao and Dhar 2011).
The government launched a massive, previously unheard
of revamp of antiquated programmes and procedures, hiring
experienced companies with specialised knowledge to build
brand-new facilities. These services encompassed administrative
authorisation, project execution, and post-execution assistance
to provide comprehensive support to entrepreneurs. The DPIIT
formed a special control committee to manage and expedite
the same as other countries’ announced programmes.
The FDI has been allowed into various areas, including
defence production, railways, space, and single-brand retail.
Governmental regulations have also been eased to make it
easier to do business, allowing for further participation. Al-
though the strategy report for the MII programme states that
the main objective is to strengthen India’s manufacturing sec-
tor via domestic investments as well as FDI, practically every
action taken so far has been created with foreign entrepre-
neurs in mind.
Overall, India’s liberal industrial programme has had
significant impacts on the manufacturing sector, but it is cru-
cial to examine whether any of its aims have been met thus
far and investigate its advantages for the industrial sector. In-
dia experienced an upward pattern in FDI inflows between
2014 and 2018, with a surge from `1,200 billion in 2013 to
around `2,900 billion in 2018. The services industry, led by
ICT and telecom, experienced significant impacts accounting
for over half of India’s overall FDI inflows. From 2019 to 2023,
nearly half of the total FDI inflow was directed into the com-
puter software and hardware industries. The volume of FDI
equity inflow also shifted, indicating that aggregate quantity
has not risen exponentially from the pre-MII programme to
the post-MII programme.
India experienced a decrease in the manufacturing sector’s
contribution to total FDI equity inflows from 31% in 2013 to
19% in 2018. This decline was attributed to the MII era, which
saw the manufacturing industry account for 38.23% of overall
FDI equity inflows between 2000 and 2005. However, this fell to

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Economic & Political Weekly EPW november 25, 2023 vol lViii no 47 61
SPECIAL ARTICLE
19.03% between 2006 and 2009, and increased to 30.03% be-
tween 2010 and 2012. The largest contributions were made by
privately owned companies in building, trade, hydroelectric
generators, banking, and telecom sectors. Automobiles, chemi-
cals, medical devices, and pharmaceuticals were the most
heavily subsidised manufacturing sectors, with the most sig-
nificant funding focused solely on them.
Many large investments went to existing firms in India before
the MII programme’s introduction, with only 1.6% of total
inflows coming from newly established businesses. As these
businesses (automobiles, chemicals, and drugs and pharma-
ceuticals) are doing well in India, only large fresh investments
are likely to have a significant influence. India’s defence
manufacturing industry has not seen significant investment
with reference to MII, which includes upcoming generation
stealth ships, patrol boats, light service helicopters, infantry
fighting vehicles, cargo planes, and military aircraft. The
majority of the MII effect programme material on the MII site
is just statements of potential investment, rather than real
promises. The manufacturing industry’s contribution to
GDP has decreased from 15.06% in 2014 to 14.43% in 2021,
and gross value added (GVA) has not shown growth in the
manufacturing industry’s share since 2014. The purchasing
managers index (PMI) also shows a persistent drop in the
manufacturing industry, signalling concerning trends in
India’s industrial landscape.
Extensive evidence supports the failure of the MII initiative
to achieve its primary objectives. The manufacturing sector’s
GDP and share under manufacturing FDI in total equity arrivals
have not increased due to this policy. Despite expensive
expenditure and existing regulatory easing through the liber-
alisation of industries, like defence production and railway
production, the government has been unable to obtain signifi-
cant international investments. To understand the potential
causes behind MII’s failure, it is crucial to consider various
factors, including the effectiveness of an FDI strategy, labour
regulations, land rules, skilled labour supply, electricity avail-
ability, accessibility, and trade deals with the international
market. By examining these factors, India can better under-
stand the potential impact of MII on its manufacturing industry
and potential investment opportunities.
Discussion and Conclusions
No doubt, after 2014, the FDI inflow in India increased, that
too continuously, except in 2022–23, but the major FDI inflow
was received through brownfield investments. While there is
no growth in the manufacturing sector through FDI inflow
and domestic investments, the sector’s share in GDP is only
around 14%–15% and continuously decreasing, this trend
poses significant challenges for job creation and industrial
development, impacting the overall economic landscape. The
manufacturing sector received 25.53% of India’s FDI inflow in
FY 2021–22 whereas the average FDI inflow for FY 2010–18,
was 32.5% for the sector. The primary advantage of FDI is
fostering innovation by creating new products aligned with
global standards through the utilisation of global technology.
62
It facilitates the transition from outdated technology-based
systems to new ones, introducing innovative machinery and
products with simpler mechanisms. These newer mechanisms
replace the older, more labour-intensive methods, particu-
larly in sectors using assembly-line production processes.
Innovation of new technology in the market brings huge
changes in the process and pattern of the role of intermediaries
in the market.
Despite the technological advancements and increased
productivity brought by FDI in the manufacturing sector, the
emphasis on capital-intensive technologies has somewhat
limited the potential for extensive job opportunities, creating
a scenario where skill-specific employment takes precedence
over broader job creation. There are certain drawbacks due to
MNEs; for instance, while these enterprises bring technological
advancements, resulting in fewer job opportunities, this situation
leads to the economy reaping reduced benefits from FDI inflow.
The paradoxical impact of MNEs on job creation and the over-
all economic advantages generated by FDI become evident.
The technological progress facilitated by MNEs inadvertently
limits job creation, thereby offsetting the broader socio-
economic gains from FDI.
In 2015, the government initiated the MII programme to
promote the manufacturing industry. However, despite these
efforts, the FDI inflow in the sector has been declining, with
India contributing only 2% to the total global manufacturing
exports. Moreover, the low research and development intensity
by the firms that are bringing FDI, is inhibiting the optimum
utilisation of resources. Export intensity is low and import
intensity is high resulting in balance-of-payment deficits.
Royalty payments are increasing showing less transfer of skill
and making us technology-dependent.
Apart from capital-intensive production processes and lack of
employment creation, the MNEs create imperfections in the
market. In the COVID-19 period (2020–21), major FDI inflow
increased in the computer software and hardware sector
followed by the services sector due to high demand and not in
response to the government incentive. Through greenfield
projects, FDI is continuously declining in India whereas equity
and M&A have brought the major share of FDI. Recently, the
Ministry of Commerce and Industry announced that in 2015, FDI
inflow was $45 billion, and in 2022, it was $83.5 billion. Under
the NDA government, while overall FDI inflow increased, there
was a decline specifically observed in the manufacturing sector
and greenfield projects, which is also a major failure of the
government project. Therefore, FDI policy is unable to procure
intangibles such as technology base, managerial expertise, or
access to the world market. To reach 25% of GDP share for the
manufacturing sector and create 100 million jobs, the MII
project was launched in 2014. To attain its goal, the initiative
depended largely on FDI, which has made no meaningful
progress yet.
Examining the National Manufacturing Policy strategy
paper, which was released in 2011, it is obvious that the MII
initiatives included nothing new. It is just a repackaging of
the previous programmes with minor modifications. As per
november 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
 SPECIAL ARTICLE

the report, despite a great deal of attention and a lot of finances,
the government’s major production initiative to convert India
into a huge manufacturing centre even after extending the
target date remains unfulfilled. Being unable to obtain the
required amount of international investment, the government
shifted its focus to local manufacturing, especially in the
government service. It has begun to emphasise raising the
output volume of a number of PSUs. This is simply an extension
of manufacturing, though, by existing facilities, with no effect
on the overall industry. Almost all production industry indices
performed poorly, according to research. The current investi-
gation forms the basis of this theory. This paper aims to evaluate
the MII programme’s effectiveness and scrutinises the elements
that contributed to its collapse. The failure can be attributed to
difficult labour laws, unattractive land acquisition regulations,
lack of suitably qualified workforce, and inadequate supply of
services. The programme’s scope is too broad, and it has
missed its concentration. Various service businesses, such as
healthcare and travel, were incorporated in the plan. As a result,
the camp’s effectiveness was limited by a lack of concentration
and ability to tackle several associated policy issues. It may
have a minor effect on the manufacturing industry though,
after finishing half of its goal duration.
The Indian government has always stated that its FDI policy
is excellent and appealing, and it has been so designed that
foreign investors face no difficulties. Although the foreign
investors are not coming into our country in the quantities
that are required, the government says that FDI should be
promoted into the manufacturing sector too, whereas a large
portion of it goes to the service and information technology
sectors. Although there has been a recent reduction in FDI
inflow, India remains a key player in the world economy,
based on the recent FDI quarterly fact sheets. The drop in
FDI inflow can be ascribed to several issues, including geo-
political ones, especially the dispute between Russia and
Ukraine, the impact of a worldwide recession, the COVID-19
pandemic’s spillover effects, along with additional financial
worries. Nonetheless, as foreign corporations seek to expand
their supply networks beyond China, India maintains a
critical focal point.
note
1 It refers to the critical stage in economic development where new projects,
particularly greenfield investments, are envisioned, devised, and proposed.
References
FDI Statistics (2023): Department for Promotion of Industry and Internal
Trade, Ministry of Commerce and Industry, Government of India, March,
https://dpiit.gov.in/publications/fdi-statistics.
Quarterly Fact Sheets (2023): Fact Seets on Foreign Direct Investment (FDI) In-
flow From April 2000 to March 2023, https://dpiit.gov.in/sites/default/files/
FDI_Factsheet_March_23.pdf.
Rao, K R and B Dhar (2011): “India’s FDI Inflows: Trends and Concepts,”
Research and Information, System for Developing Countries, https://doi.
org/10.2139/ssrn.1770222.

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Economic & Political Weekly EPW november 25, 2023 vol lViii no 47 63
SPECIAL ARTICLE
Privacy, Social Control, and Subversion
CCTV Surveillance and Its Effects in Rural Marathwada
Kalpana Dixit
Based on a qualitative study of a large village in the
Marathwada region of Maharashtra, which witnessed
the gram panchayat installing closed-circuit television
cameras in response to a sudden communal flare-up,
the impact of CCTV surveillance and how people
negotiate with intrusive technology is discussed. The
research suggests a paradoxical situation as people
valued a more secure environment, but it came at the
cost of their freedom and individual agency. CCTV
surveillance led to a reconfiguration of public spaces
into the surveilled and the non-surveilled, leading to
different norms being followed in these spaces.
Kalpana Dixit (dixitkal@gmail.com) teaches political science at the Tata
Institute of Social Sciences, Tuljapur.
64
T
he use of closed-circuit television (CCTV) cameras for
surveillance has given rise to new forms of social con-
trol across societies. CCTV surveillance of public streets,
motivated by concerns of security and crime prevention, be-
gan in the United Kingdom and other European countries in
the late 1990s and then spread across the globe. The idea of
predictive policing, implying the use of algorithms to analyse
data to predict crimes, justified a greater reliance on surveil-
lance technology in the public domain (Lau 2020). In India,
CCTV surveillance began in semi-public spaces, such as banks,
supermarkets, bus depots, and hospitals and then slowly
spread to open-street surveillance, mainly in cities (Norris
et al 2004). More recently, China and India emerged as “the
countries with the highest densities of CCTV surveillance cam-
eras in urban areas” when the 130 most populated cities in
the world were mapped for the prevalence of CCTV cameras
(Hindu 2021). The diffusion of CCTV surveillance has given rise
to debates around privacy, regulation of bodies, and individual
freedom (Taylor 2002). This literature is dominant in the ur-
ban sphere; there are hardly any studies on surveillance prac-
tices in rural areas. This gap is sought to be addressed through
this paper, which contributes to the discussion on surveillance
in general.
The idea of a “smart village” in India emphasises CCTV sur-
veillance for security and public order (Patnaik et al 2020;
Singh and Patel 2018). The Government of India’s (GoI) scheme
of smart villages does not officially include CCTV surveillance.
Although ground-level reports indicate a growing number of
villages installing CCTVs, there is no compiled data at the state
or national level.
This paper focuses on one large village in the Marathwada
region of Maharashtra, which witnessed the installation of 38
CCTV cameras by the gram panchayat—a village representa-
tive body—in 2019 in response to a communal flare-up. It en-
tailed a coverage of all the main lanes and intersections of the
village. The CCTV cameras, installed initially to control trou-
blemakers, were later employed to enforce the COVID-19 lock-
down norms. The gram panchayat installed a microphone on a
mobile tower nearby and began announcing the names of peo-
ple who violated the lockdown norms. Aided by CCTV cameras
and a microphone, the gram panchayat found a novel and
powerful mechanism to exercise control over the people.
It is important to discuss how CCTV surveillance affects the
people and how they negotiate with such an intrusive techno-
logy. We found that the people faced a paradoxical situation
November 25, 2023 vol lViii no 47 EPW Economic & Political Weekly

because of all-pervasive surveillance. They valued a more
secure environment; however, it came at the cost of their free-
dom and individual agency. It led to a reconfiguration of public
spaces into the surveilled and the not-surveilled, leading to
different norms being followed in these spaces. It reinforced
the dominant norms related to caste and gender, and although
people adopted subversive tactics over a period, the internali-
sation of surveillance is unmistakable.
Surveillance and CCTV
Surveillance is defined as “purposeful, routine, systematic,
and focused attention paid to personal details for the sake of con-
trol, entitlement, management, influence, or protection”
(Lyon 2008: 2). CCTV surveillance was motivated by concerns
for security; however, no conclusive evidence exists that CCTV
cameras have reduced crimes in countries like Britain (Stanley
and Steinhardt 2003: 3). The study by Bokil et al (2021) shows
how the lower castes fear increased police harassment with
the introduction of CCTV surveillance. The authors argue that
there is no guarantee that available footage which can prove
suspected people innocent would be used by the police (Bokil
et al 2021: 111). Further, the screening and profiling of people
could be highly misleading, with high error rates of artificial
intelligence technologies and prejudices of human coders
(Bailey et al 2020; News Minute 2023). In the United States (US),
mathematicians have called to boycott cooperating in predic-
tive policing as it can create a “scientific veneer for racism”
(Linder 2020).
Visibility and Disciplining
Many studies have used the concept of the “opanopticon,”
introduced by Jeremy Bentham in 1791 and developed by
Michel Foucault (1977), to study CCTV surveillance in different
contexts (Norris et al 2004; Taylor 2002; Fyfe and Bannister
1996). Bentham’s idea of the panopticon is “a model prison
based on an optical–mechanical technique whereby inmates
in cells on the periphery of a circular building are always,
potentially, under the gaze of an official in a central tower”
(Fyfe and Bannister 1996: 39).
In Bentham’s schema, power should be “visible and unverifi-
able,” where visibility lies in the tall outline of the central tower
in front of the prisoners’ eyes from which they are spied upon.
Unverifiability is ensured as the inmate does not know if “he is
being looked at any one moment, but he must be sure that he
may always be so” (Foucault 1977: 201). The panopticon “auto-
mises and disindividualises power,” as power is not invested in
a person, but in an arrangement that puts prisoners in a field of
visibility (Foucault 1977: 202). The anxious awareness of the
inmate of being observed creates “a real subjection born me-
chanically from a fictitious relation” (Foucault 1977: 202). It
deters deviant behaviour without using force, as visibility ensures
spontaneous acceptance of the required norms by an inmate.
There are also critical appraisals of applying Foucault’s pan-
opticon as a framework to study CCTV surveillance systems
(Yar 2003; Boyne 2000). Yar (2003) questions the assumption
that the surveilled are always “conscious” of the surveillance
Economic & Political Weekly EPW November 25, 2023 vol lViii no 47
SPECIAL ARTICLE
apparatus. According to Yar, seeing is a social process, and
people selectively attend to the specific features of their envi-
ronment while managing their practical activities. Therefore,
CCTV systems may go unattended, “seen but unnoticed”
(Yar 2003). The power of the panopticon depends upon the
subjects’ belief in its authority, which can be more “fragile and
reversible” than is acknowledged, creating the possibility for
subversion and resistance (Yar 2003: 268). Giddens (1983: 172)
also points out that Foucault’s discussion of surveillance does
not acknowledge that “those subject to the power of the domi-
nant groups themselves are knowledgeable agents, who resist,
blunt, or actively alter the conditions of life that others seek to
thrust upon them.”
Foucault underlines permanent visibility as a tool to control
people, which can be applied to CCTV cameras as well. It is
pertinent to study how a vibrant social context shapes this tool.
Public and private space: CCTV surveillance is justified be-
cause it operates in the public domain, implying a certain re-
straint on invading people’s privacy. However, the sociological
inquiry into the distinction between the public and the private
problematises applying these concepts unquestioningly to the
Indian context (Chakrabarty 1992; Kaviraj 1997). According to
Chakrabarty (1992: 541), in Indian cities, “the street presented
a total confusion of the ‘private’ and the ‘public’ … as people
washed, changed, slept, and even urinated and defecated out
in the open.” So, the very idea behind open street surveillance
is questionable.
Chakrabarty also discusses how the perception of the public
space as orderly, clean, and hygienic is a concept linked with
modernity. He traces the conceptual boundary between the in-
side and the outside to explain impeccable cleanliness within
Indian houses but squalor and dirt in the open and public spac-
es. As a result, the state’s action to create clean and healthy
public spaces often takes the form of “a violent, intrusive, ex-
ternal force in India” (Chakrabarty 1992: 544). The recent use
of CCTV cameras in rural areas carries the implicit assumption
that it will help achieve the objective of open-defecation-free
rural areas. The role of CCTV cameras in forcing behavioural
change among the people will also be examined in this paper.
Method
The fieldwork for this study was conducted in Sonkhurd village
in Osmanabad district of the Marathwada region of south-
central Maharashtra between February to April 2022 (prepar-
atory visits), July to September 2022 (pilot study), and February
to May 2023 as part of an ongoing project on CCTV surveillance
in Marathwada. It is a qualitative study, wherein the primary
data collection method was semi-structured, in-depth interviews.
available at
Forum Book House
170/1, Rastreeya Vidyalaya Road
Visveshwarapuram, Bengaluru 560 001
65
SPECIAL ARTICLE
This data was supplemented by non-participant observation
and some questions which elicited quantifiable data.
We selected respondents across castes/communities using a
purposive sampling method. We made multiple visits to some
respondents. We also interviewed government officials and
elected representatives of the gram panchayat. We conducted
84 interviews with 71 respondents.
Field Setting
The Marathwada region was part of the Hyderabad state ruled
by the Nizam in pre-independence India. The dominance of
big landlords and inadequate administrative reforms during
the Nizam’s rule produced a highly unequal feudal economy
and society in Marathwada. Presently, Marathwada represents
a stark regional imbalance in Maharashtra’s development sto-
ry; it substantially lags in economic growth and human devel-
opment as compared to other regions in Maharashtra. Sonkhurd
was an important centre of economic activity during the
Nizam’s rule. Today, it has a total population of about 6,000.
There are 1,150 households, out of which 250 households are
below the poverty line. The Scheduled Castes (SCs) and Other
Backward Classes (OBCs) constitute 29% and 15% of the total
population. The primary occupation of the people is agricul-
ture and allied activities, with many farmers engaged in cash
crops and vegetable production.
The Malis, Marathas, and SCs are the three numerically
dominant groups in the village. The Malis, Marathas, and Mus-
lims are the major landowning communities. The landholding
among the SCs is small, from a few gunthas (0.025 acres) up to
2 acres in most cases. The village is well-connected to a nearby
town and a district place by road, making access to education-
al and market infrastructure easier. Most of the houses in the
village are pukka houses. While the Malis, Marathas, and Lin-
gayats populate the middle of the village, the SCs are situated
on the outskirts. The Muslims are dispersed throughout the
village. Economic diversification has helped in reducing the
dependence of some castes on landowning castes over time.
The political power in the village has been concentrated in
one Mali family for a long time. The accommodative politics by
dominant Mali leadership ensured cordial relations between
Dalits and non-Dalits for a long time and kept Marathas out of
power. There were a few inter-caste conflicts in the past; how-
ever, no major conflict has been reported in the recent dec-
ades. After the death of the veteran Mali leader, Devdutt Malkar,
who was the sarpanch for three terms and was president of a
cooperative sugar factory in the district, political competition
in the village intensified. Malkar owed his allegiance to the
Indian National Congress. More recently, factions close to the
Nationalist Congress Party and the Bharatiya Janata Party
have been competing for political power in the village.
Installation of CCTV Cameras
Although the village has no history of communal conflict, 2018
saw a violent outbreak over the issue of a Muslim flag at the
main intersection, leading to police action. The youngsters in the
village and some religious groups from outside were involved
66
in the fight. People said they were agitated as many youngsters
got implicated without apparent involvement in the conflict.
During the investigation, a policeman exclaimed, “Had there
been CCTVs in the village, we would have known who was in-
volved.” The then gram sevak (or village secretary), who was
already inspired by a model village in Aurangabad district in-
stalling CCTV cameras, took this opportunity to float the idea of a
digital gram panchayat with CCTVs in the village to control the
troublemakers. There was some opposition by the gram panchay-
at members and others who felt that the money should be spent
on more urgent matters, such as drinking water and drainage.
The gram panchayat went ahead with the plan and submit-
ted a proposal to install 20 CCTV cameras at the main road and
intersections, including the panchayat office, temple premises,
and the high school in the village. However, the district-level
bureaucracy opposed the scheme as it did not fit in the existing
budget head. The officials also feared that they must agree to
similar schemes in other villages if they granted it to Sonkhurd.
However, their opposition could not sustain the political clout
of the local leaders. The local leaders contacted the officials in
the Mumbai secretariat, and these officials apparently pres-
sured the district-level bureaucracy, which finally approved this
initiative. So, CCTV cameras were installed at 20 places in the
first phase and 18 in the second phase during 2019–20. The
gram panchayat members claimed that once the first phase was
complete, people demanded cameras in their respective wards,
realising their utility. The then deputy sarpanch, hailing from the
Mahar caste, mentioned that the scheme was implemented in
two phases to avoid administrative delay: “The gram panchayat
can spend up to `3 lakh on its own; however, we need to invite
tenders for higher expenses. So, we divided the scheme into
two parts.” People were sceptical about the use of CCTV camer-
as. Some asked if the gram panchayat wanted to keep an eye on
them. A 50-year-old Muslim political activist said, “I opposed
the installation of cameras in the village. Women frequently use
the space outside their homes. We do not want idle men sitting
in the gram panchayat to watch them. The Sarpanch agreed.
So, no cameras were installed in the Muslim-populated lanes.”
The main road in the village situates a primary school, a
high school with a junior college, a primary health centre, a
bus stop, and several eateries and paan shops. It is the busiest
road during the morning and evening hours, full of men and
vehicles. Schoolchildren and college students pass through
this path in the morning; many youngsters hang around at the
roadside eateries. Men and women catch a bus or a 12-seater to
work from here. Sonkhurd is a bustling place with considera-
ble traffic on roads connecting to a town.
We explored the implications of CCTV cameras almost three
years after they were first installed. The first reaction of the
people is usually to support CCTV surveillance in the village.
People immediately list certain advantages, including reduced
theft and better management of COVID-19. There had been no
communal conflict since the installation of CCTV cameras.
Hindus and Muslims have strained relations in the past few
years. This is reflected in reduced participation in each other’s
festivals. People stated that cameras played an important role
November 25, 2023 vol lViii no 47 EPW Economic & Political Weekly

in preventing outside groups and village youth from engaging
in retaliatory violence after the 2018 incident. They said that
they would never know how many minor provocations went
unattended due to cameras.
People are also quick to mention the routinisation of camer-
as in the village landscape: “they do not even realise that there
are cameras anymore;” “many cameras are not working;” and
“cameras are not of much use now.”
Life after CCTV Surveillance
The reality of CCTV surveillance dawned upon the residents of
Sonkhurd during the COVID-19 pandemic, so much so that
many respondents mentioned that cameras were installed
because of the pandemic. Given the sudden lockdown imposed
by the government and the influx of migrants from cities, the
gram panchayat installed a microphone on a nearby mobile
tower and started announcing the names of the people gather-
ing at public places. Backed by a microphone, CCTV cameras
proved a highly potent tool to control the people. The pandem-
ic-induced panic created legitimacy for such drastic measures
and registered an all-pervasive nature of surveillance in the
people’s minds.
The gram panchayat members converted one of the rooms
in the panchayat office into a “control room” where the CCTV
camera footage from all cameras was live-streamed on a 40-
inch television screen. The gram panchayat members and staff
watched the CCTV footage every day from early morning until
late night to ensure that people did not gather or roam the
streets. Their main job was to decongest the most vibrant pub-
lic spaces—roads, chowks, tea stalls, the community hall, and
temple premises. The announcer used to call out the names of
the people or describe their clothes and ask them to return to
their homes. Different kinds of announcements were made—
to inform about the entry of outsiders into the village and
new regulations by the government, to persuade people to
cooperate with the medical staff, and to appeal to the people
to wear masks.
CCTV surveillance produced the desired effects in success-
fully implementing the lockdown. The village’s boundaries
were barricaded to monitor the entry of outsiders. People from
nearby villages were restricted access to a connecting road to a
town. As a result, the spread of the pandemic was limited, and
the death toll was low as compared to other villages. All our
respondents underlined the utility of CCTV surveillance during
the pandemic. Many people in the village felt that the gram
panchayat was doing something for them. The coverage of
cameras also made the medical and school staff more vigilant
during the pandemic. They had to conduct official surveys and
visit patients’ homes diligently. The gram panchayat converted
the school into a quarantine facility and compelled the return-
ing workers to spend 14 days in isolation.
Initially, people felt amused that someone sitting in the pan-
chayat office could watch them from a camera eye. In the
words of a 27-year-old Muslim woman, “There was excitement
at first. Children used to leave the house to check if their
names got announced. We all used to laugh.” However, once
Economic & Political Weekly EPW November 25, 2023 vol lViii no 47
SPECIAL ARTICLE
people understood the logic, they dreaded hearing their names
announced publicly as violators. When asked how they felt
hearing their names announced publicly, people expressed
shame, insult, fear, and embarrassment. They were worried
about what others might think of them. A 30-year-old Lingayat
man who runs a kiosk for a nationalised bank in the village
said, “I felt an insult when I heard my name announced. I am
known as a good person in the village. The announcements
are audible in the nearby villages also. I felt my good image
was getting tarnished.”
People in Sonkhurd knew each other by name, and the caste
hierarchy, coinciding with class in most cases, shaped the peo-
ple’s behaviour. So, public announcements touched the nerves
of the people. Although they were not convinced of the need to
maintain physical distance, they shared that public announce-
ments deter them from such behaviour.
The people saw utility in using CCTV cameras; however,
they felt that there were excesses over a period of time. Ac-
cording to a Mali shopowner, “The gram panchayat staff used
to call out names for minor transgressions. The announcer of-
ten talked in a crude language, undermining one’s sense of
dignity.” As the pandemic continued to remain uncertain and
the means of transport were compromised, people became
restless. Farmers could not take their produce to the market
and sustained heavy losses. The labouring class suffered to
meet both ends. The people from low-income families stated
that the restrictions on mobility led to overcrowding inside the
house. Over time, people also got tired of remaining indoors
and started neglecting the announcements. As a result, an-
nouncements became constant and shriller. In the words of a
35-year-old Lohar community woman living near the gram
panchayat, “How much they used to shout every day! It was a
nuisance. I had headaches. People were not listening even
when their names were being repeatedly called. How long
could people afford to sit at home?” The people who stayed
near the microphone shared that they had to shout to commu-
nicate with each other inside the house.
Despite the disciplining measures in place, some people nev-
er followed the gram panchayat’s instructions and did not care
when their names were announced. There was apathy and dis-
regard, as people were not entirely convinced of the official
measures, in addition to a sense of familiarity with the gram
panchayat members and staff. The people’s agency can be seen
in their diffused and sporadic responses. According to one
gram panchayat member, “Once we announced that people
sitting in Bheemnagar should go home. But they ignored it.
Then, we declared that a police van was approaching. It pro-
duced no effect. So, we sent someone on a bike to make them
leave.” In yet another incident, “Five-six youngsters gathered
on the street and started staring at a camera. Their names
were announced multiple times, but they did not budge. Then,
a gram panchayat staff member called the police. The police
rounded them up and flogged them before releasing them with
a warning.” Thus, tired of restrictions and faced with existen-
tial crises, people resisted the gram panchayat. The sanctity of
an omnipresent surveillance machinery began to fizzle out.
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SPECIAL ARTICLE
The residents of the village adopted subversive tactics to coun-
ter the disciplining measures pushed by the gram panchayat.
Regular announcements lasted during the two waves of the
COVID-19 pandemic. After the pandemic came under control,
only periodic announcements were made. One significant im-
pact of CCTV surveillance, which most respondents under-
lined, was the reduction in minor theft and crime.
Crime and Disciplining
Village residents attached great value to the reduction in small
thefts; for example, petrol, various tools used for cultivation
which are usually lying around the houses, domesticated ani-
mals like goats or sheep, or two-wheelers. In the past, people
always feared losing their belongings. “Now we can sleep
peacefully, without the fear of thieves”—this was a general
feeling. According to a middle-aged shop owner from the Mali
community, “For poor people, losing a goat or a sheep after
rearing it for six months is a loss of great investment. Such
thefts can never be solved as stolen animals were turned into
meat almost immediately. Similar is the case with petrol theft.
People used to get up at night to check if everything was in
place, but no more.” Similarly, in the hustle of the weekly mar-
ket, some people often lose valuable things; however, now it is
easier to track them using the CCTV footage. There is a greater
sense of safety, as stated by a 45-year-old Mahar woman, “The
camera records everything, and we feel that somebody is
working to protect us.”
Many respondents also shared a decrease in the noisy quar-
rels or violent encounters in the village due to CCTVs. There
used to be drunken fights and scuffles during jayanti (birth
anniversary) celebrations. People maintained that there is
now fear because all actions get recorded on the cameras.
Similarly, women shared that many drunkards used to create
a scene on the road late at night, disturbing the peace in the
village. Also, the ones using the community hall premises used
to drink and litter. It used to be quite noisy till late at night.
After the CCTV installation, residents experienced a consider-
able reduction in such instances.
Many people mentioned a decrease in the instances of eve-
teasing faced by female students. Young school girls pass
through the main road in groups of three or four. After install-
ing the CCTV cameras, young men hanging out on the main
road became anxious. While earlier, boys used to follow girls
around the college on a motorbike, there is a fear now that
they are being observed. However, the young girls we inter-
viewed also mentioned that they had never faced eve-teasing,
and there were instances “where feelings were involved from
both sides.” But young boys corroborated a reduction in har-
assment of female students, especially those who come from
nearby villages.
Women across castes mentioned an overall decline in the
crude forms of domestic violence. Husbands stopped dragging
their wives on the roads to beat them up. Getting caught on
the camera created fear in the minds of the people. In the chill-
ing words of a 35-year-old Mahar woman, “We do not hear in-
cidences of women getting burned and dying anymore. Many
68
such cases happened in the past. Police could never prove the
involvement of in-laws in these cases.”
We accessed the police records and compared the pre- and
post-surveillance scenarios (three years each) to understand if
there is any impact on crimes. The police records revealed that
the number of serious crimes has somewhat reduced after in-
stalling CCTV cameras (Table 1). According to some respond-
ents, residents now fight outside the camera range in the field.
Even then, it is significant that the number of serious crimes
decreased in the post-CCTV surveillance period. The number
of liquor shops increased during the same period due to re-
strictions on movement because of the lockdown. According to
the head constable in Sonkhurd, CCTV cameras are like the
third eye of the police. The footage comes in handy for watch-
ing the movement of vehicles involved in crimes in the district.
Although CCTV cameras proved effective in disciplining the
people, we found a selective use of their footage to deal with
illegality. Often, we observed rampant electricity theft in the
village by tapping the wires. However, the CCTV footage was
not utilised to address this issue. The Maharashtra State Elec-
tricity Distribution Company Limited (MSEDCL) staff regularly
raid the village to control electricity theft, but they never ask
for the camera footage. The police personnel have access to
the camera footage but are not concerned with electricity
theft. When asked about it, the then deputy-sarpanch, an en-
terprising 46-year-old from Mahar caste, retorted, “When 80%
of the people steal, who is going to complain? We live in a de-
mocracy where the majority rules.” Thus, electricity theft, in-
volving very high financial costs, continues unabated despite
the broad coverage of CCTV cameras in the village.
The government functionaries in the village also found
CCTV surveillance quite helpful as it curbed the unruly behav-
iour of some people. The medical staff, teachers, and the gram
panchayat staff mentioned decreased “vandalism and arro-
gant conduct.” The high school principal said, “The instances
of damage to public property have reduced. Students some-
times broke windowpanes, doors, or toilet seats at school.
They often uprooted the newly planted saplings under planta-
tion drives. Some students have a bad tendency.” The peon of
the primary school said that he often collected empty liquor
bottles and used condoms from the school premises. It has
stopped now. According to the then gram sevak, “Cameras
capture a thousand things. However, we have to decide which
of them is important and act sensitively. Otherwise, the people
will feel that they have no freedom. And all our time will be
spent dealing with illegalities.” Thus, what is considered legal
or illegal is subjective; it gets defined and redefined through
social processes and interactions. A 30-year-old political
Table 1: Pre- and Post-surveillance Crime Scenario in Sonkhurd
Sr No Nature of the Crime 2016–18 2019–21
(Pre-CCTV (Post-CCTV
Surveillance) Surveillance)
1 Serious crimes (violent encounters, outraging the 18 13
modesty of women, eve-teasing, harassment)
2 Gambling, illegal drug possession 06 08
3 Illegal possession and sale of liquor 08 22
Source: Information collated by the author from police records for Sonkhurd.
November 25, 2023 vol lViii no 47 EPW Economic & Political Weekly

activist shared a story about a nhavi (barber) getting beaten
up and threatened with a sword by a Maratha person over bor-
rowed money. However, after realising that a camera captured
it, the assailant made the gram panchayat members delete the
footage. “Cameras are of no use,” rued the activist.
Gender, Privacy, and Spatial Reconfiguration
Henri Lefebvre (1991) highlights how space is a social product,
rather than a neutral entity. It is socially produced through the
processes and relationships in society. CCTV surveillance affects
how spaces are perceived, conceived, and lived (Klauser 2016).
Surveillance “affects the qualities of particular spaces, shapes
spatial perceptions, and practices, organises socio-spatial
relations” (Klauser 2016: 36). The changing nature of public
spaces affect the norms of sociability, as observed in Sonkhurd
as well.
While cameras provided a sense of security to many, they
also deprived the people of their privacy and freedoms which
they had taken for granted. Women, among others, became
conscious of their appearance and body while stepping out of
their homes. The practice of covering one’s head reappeared as
announcements made women realise that men were watching
the public spaces through a remote eye. Many women felt an
extreme sense of unease while performing their various daily
chores outside their house, such as washing utensils and
clothes, tending animals, sun-drying various items or just sit-
ting on a threshold and chatting with other women. Since
cameras cover whole houses in many lanes, by casually step-
ping out of the house, one crosses the boundary of the private
and enters the public space. In the words of a 38-year-old
Muslim woman tailor,
My mobility has significantly reduced due to CCTVs. Earlier, women
in our lane used to sit outside and chat about what happened dur-
ing the day, what to cook for the night etc. We used to share our joys
and sorrows. Pan ha dalindar camera basavalyapasoon mee baher jaat
nahee (However, I have not gone out since this wretched camera has
been installed). My husband also told me not to go out. We have to
listen to our husbands only. So, I stay at home.
The situation is more severe for the poorer households in the
village, primarily the SCs and Muslims. In the case of many
other castes, the wada1 structure allows women to perform
household chores inside the house and gather together in the
sitting area, especially in the afternoon. For a 28-year-old
Mahar woman who works on her family farm, a CCTV camera
in front of her home caused great agony.
I cannot freely move around my home. It is disturbing our personal
lives. I feel very uncomfortable even standing at my doorstep. I feel
someone is watching me. I have to be always careful, properly wear
my saree or dupatta, and be in a proper attire. But then, I also think
the camera is beneficial. Thefts have reduced. Earlier, petrol theft was
very common. Now thieves do not dare steal. But it is not good for
women. Women become wary while sitting, walking, or talking as
they know someone is watching. It is not in the interest of women.
When women work in their front yards, it is a semi-private
space for them. In a social milieu with many restrictions
on women’s mobility and freedom, exposure to an intrusive
Economic & Political Weekly EPW November 25, 2023 vol lViii no 47
SPECIAL ARTICLE
surveillance apparatus putting their bodies in a spot is alarm-
ing for them. We asked men about the women’s predicament.
Although women shared their experiences with their hus-
bands, men were emphatic in denying any knowledge of it.
The newly elected Matang sarpanch in his mid-30s did not
consider it very significant either: “Women always carry them-
selves properly, even while washing clothes or doing other
tasks, is it not? So, I do not think cameras matter.” In our sub-
sequent visits, we found the direction of a couple of cameras
turned down, so they no longer captured the houses in ques-
tion. The nearby residents feigned ignorance about this devel-
opment. Since a few cameras stopped working for various rea-
sons after a year, the gram panchayat seemed to have decided
not to take any action in these cases. Thus, the people got rid
of the camera eye, at least those that invaded their privacy di-
rectly and crudely.
CCTV surveillance affected another aspect of the residents’
lives in Sonkhurd—extramarital relationships and love affairs
of youngsters. It became difficult for people to meet their
lovers in the narrow village lanes or at each other’s homes. The
cameras also affected the intermingling of adolescents of dif-
ferent sexes. Many boys and girls mentioned that they no
longer go to school together. They even avoid talking on the
streets for fear that someone would inform their parents. Ac-
cording to a young Muslim woman in her 30s, “Boys act like
gentlemen within the camera range. But they know where
cameras cannot reach, and they woo girls sitting on a tamarind
tree or change spots to meet a girlfriend.”
Youngsters across castes and communities were deeply affect-
ed by the cameras. According to a 17-year-old Muslim college
student, “We must walk properly in front of the cameras. We feel
shy to jump, run, or tease each other on the street.” Young adults
fear smoking cigarettes or eating gutkha at the roadside shop.
The intensity of the unease has apparently decreased over a
period. Many youngsters told us that they have gotten used to
the cameras, and do not feel the same awkwardness anymore.
However, social life is different from what it used to be for men.
Thus, the CCTV cameras further accentuated the exclusion
of women from the public spaces. They intensified the social
pressure to come across as a well-behaved person and led to
spatial restructuring by encroaching upon semi-private spaces.
CCTV Surveillance and Open Defecation
The CCTV cameras came in handy for the gram panchayat
members who were driven to stop open defecation by the dis-
trict administration since 2016. The announcements during
the COVID-19 pandemic gave an effective tool in the hands of
the gram panchayat to pressure the people to stop defecating
in public. The gram panchayat staff started announcing the
names of the people who defecated in the open after viewing
the early morning footage during the COVID-19 pandemic. Many
people had availed of the government subsidy of `12,000 to
build a toilet, but were not using it. Once announcements began,
others confronted them and asked to return the `12,000 be-
fore going out for open defecation. During the pre-pandemic
years, the government sent a “good morning pathak” (Team)
69
SPECIAL ARTICLE
to punish people engaged in open defecation. This team used
to visit open defecation sites early in the morning, click pic-
tures, and sometimes fine the offenders. The CCTV cameras
intensified the drive against open defecation.
The announcements put people in a precarious condition as
many did not have toilets at home. Women from the Dalit
locality pointed out several problems—some houses were tiny,
and there was no space to build a toilet. Many houses were on
encroached land, and they could not avail of the government
subsidy to build toilets. Some lacked access to adequate water,
while others faced an obstacle in the form of hard rocks below
the surface of their houses. So, they went through a very
embarrassing phase as public announcements hurt their
self-esteem, but no immediate solution was feasible. The gram
panchayat members were informed about these problems sev-
eral times; many angry exchanges happened between them as
well. A 45-year-old Mahar woman said, “Women were furious
when they heard their names announced for open defecation.
They hurled abuses at the gram panchayat staff and asked
them to give access to the panchayat office toilet so they could
stop going out.” Sometimes, residents threatened women by
jokingly saying that there might be a camera at their open def-
ecation sites. It created fear in the minds of the women. Sig-
nificantly, there is no sign anywhere in Sonkhurd warning
people that a particular area is under CCTV surveillance.
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70
According to the then gram sevak, 80% of the toilets in the
village were built in the last five years. Some took loans de-
spite their weak financial condition to build these toilets. Over
a period of time, some residents seemed to have changed their
habits, leading to a considerable decrease in the instances of
open defecation in the village. They shared that many stopped
using places near their vasti (locality) for open defecation. An-
nouncements created the fear of visibility among them, so
they avoided nearby areas, which improved hygiene in and
around the localities. All the problems did not vanish, though,
and after a few months, the women from the SC community
turned the camera eye overseeing one open defecation site
down using a bamboo stem and resumed the practice of defe-
cating in public. Given the practical difficulties faced by some
and to avoid acrimonious fights, the gram panchayat chose to
neglect this tampering with the camera. Older people across
castes preferred open defecation, so they found it hard to
change their age-old habits.
Conclusions
CCTV surveillance in Sonkhurd created a panopticon-like situ-
ation during the COVID-19 pandemic, owing to the gram pan-
chayat’s highly effective use of a microphone. The automatic
functioning of power continued after the regular announce-
ments had stopped. Public announcements deeply impacted
¾ Wage Rates in Rural India
¾ Annual Survey of Industries
¾ Banking Statistics
¾ 0LFUR¿QDQFH6WDWLVWLFV
¾ Health Statistics
¾ Educational Statistics
¾ Environment Statistics
¾ Telecom Statistics
November 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
 SPECIAL ARTICLE

some people’s minds as they feared a “loss of honour and re-
spectability” in a close-knit village community. The specter of
visibility made some people abide by social rules and norms,
encroaching on their freedoms and restricting rebellious be-
haviour. The lived experience of surveillance fundamentally
transformed the people’s outlook. They internalised the logic
of surveillance. The selective use of camera footage reflects
“what is permitted and what is forbidden” in the local context.
As discretion by officials overrides evidence produced by
cameras, some blatant illegalities go unpunished. It created a
paradoxical situation where people, wary of minor transgres-
sions, self-censored their actions while authorities overlooked
significant offences.
Although many people feared and loathed cameras, we also
found substantial support for CCTV surveillance across sec-
tions of Sonkhurd. The gram panchayat members and even
common people were fascinated by its ability to discipline oth-
ers. People had to weigh the feeling of safety created by the
cameras with the loss of freedom and the torment of being
watched. Without a real choice, they chose to accept the idea
of surveillance, adjusting to its unease and anxiety. It hegem-
onised the idea of surveillance, putting off any discussion
about its adverse effects and creating an apparent consensus
in favour of the CCTV cameras. This idea’s general acceptance
strengthened the regulative and infrastructural power of the
state, enabling its deeper penetration in the society. Since the
local state primarily consists of local leaders and activists, the
possibility of community dynamics interfering with the
surveillance apparatus became real.
We observed spatial reconfiguration in the village affect-
ing places of casual gatherings. CCTV cameras created a new
division of public spaces: the surveilled and the non-surveil-
led. The following of social norms differed in both spaces.
Over a period, the routinisation of cameras reduced the im-
pact of surveillance. Residents adopted subversive tactics to
undermine the gaze of the camera and regain their agency.
Unlike a highly centralised panopticon, CCTV cameras are
diffused and not outside the reach of the people. Not seeing
cameras hardly seemed to be an option, though. So, people
try hard to ignore or tamper with them where they find them
too intrusive.
The Sonkhurd experiment raises an important question
about the assumption that CCTV cameras surveil “public” spac-
es in India. Since people use spaces outside their homes as
semi-private spaces, subjecting them to CCTV surveillance
severely impinges upon the people’s privacy. In Sonkhurd, a
camera eye capturing such semi-private spaces compromised
the dignity of women by putting their bodies in the arena of
visibility in a patriarchal social milieu. The cluttered land-
scape of Indian villages (and cities) poses a challenge to the
all-pervading CCTV technologies as they effectively capture
the people’s private lives. Its implication is severe in the rural
context because of the lack of anonymity and the prevalence of
stringent caste and gender norms.
The state needs to improve the policy framework regulating
CCTV surveillance to safeguard the people’s privacy and free-
dom. The policy safeguards must consider the dynamics of
community domination and inter-community conflict in Indi-
an society. In the absence of such a framework, the subjuga-
tion of the underclass would assume new dimensions, further
strengthening the power of dominant classes at the local level
and the state in general.

note the State, Berkeley: University of California Identification’,” https://www.thenewsminute.

1 Wadaa is rectangular house, built with stone
bricks, with a courtyard in the centre and
rooms around it.
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Economic & Political Weekly EPW November 25, 2023 vol lViii no 47 71
CURRENT STATISTICS EPW Research Foundation

Wholesale Price Index Foreign Trade

The year-on-year WPI infl ation rate declined to -0.5% in October 2023 from
8.7% registered a year ago and -0.3% a month ago. The index for primary
articles grew by 1.8% compared to 11.2% reported a year ago and 3.7% a
month ago. The rate of inflation for food articles decreased to 2.5% from
8.5% recorded a year ago. The index for fuel and power declined by (-)2.5%
against 25.4% a year ago and that for manufactured products fell by (-)1.1%
compared to 4.4%.
The trade deficit widened to $31.5 bn in October 2023 compared to $26.3 bn a
year ago. Exports increased by 6.2% to $33.6 bn from $31.6 bn and imports by
12.3% to $65.0 bn from $57.9 bn. Oil imports stood higher at $17.7 bn and non-oil
imports at $47.4 bn compared to $16.3 bn and $41.6 bn, respectively, reported a
year ago. During April–October 2023–24, the cumulative exports decreased by
(-)7.0% to $244.9 bn and imports by (-)8.9% to $392.0 bn against their respective
values of $263.3 bn and $430.5 bn reported during the same period last year.

Consumer Price Index Index for Industrial Production

The CPI-inflation rate decreased to 4.9% in October 2023 from 6.8% reported a year
ago and 5.0% a month ago. The consumer food price index grew by 6.6% compared to
7% registered a year ago and 6.6% a month ago. The CPI-rural inflation rate decreased
to 5.1% and the urban inflation rate to 4.6% from 7% and 6.5%, respectively,
reported a year ago. According to Labour Bureau data, the CPI for agricultural
labourers (CPI–AL) stood at 7.1% in October 2023 compared to 7.2% a year ago and
the CPI for industrial workers (CPI–IW) at 4.7% in September 2023 against 6.5%.
The y-o-y growth rate of IIP increased to 5.8% in September 2023 from 3.3% registered
a year ago with growth in manufacturing rising to 4.5% from 2.0%. Production in the
mining segment grew by 11.5% and electricity generation by 9.9% compared to 5.2% and
11.6%, respectively, reported a year ago. As per use-based classification, production of capital
goods grew by 7.4% and infrastructure goods by 7.5% against their respective growth rates
of 11.4% and 8.2% a year ago. Growth rate in the consumer durables segment increased
to 1.0% from -5.5% a year ago and in consumer non-durables to 2.7% from -5.7%.

Movement of WPI Inflation January–October 2022 and 2023 Merchandise Trade October 2023
October 2023 Over Month Over Year April–October
Year-on-year WPI Inflation in %
($ bn) (%) (%) (2023–24 over 2022–23) (%)
20 Exports 33.6 -2.6 6.2 -7.0
2022
Imports 65.0 20.8 12.3 -8.9
15
Trade balance -31.5 62.4 19.6 -12.0
10 Data is provisional. Source: Ministry of Commerce and Industry.
8.7%
5 Components of Trade October 2022 and October 2023
2023 $47.4 billion
0 $41.6 billion
-0.5% Non-oil Imports
40 $31.6 billion
-5 Exports $33.6 billion
Jan Feb Mar Apr May Jun Jul Aug Sep Oct*

* Data is provisional; Base: 2011–12 = 100. $16.3 billion

Oil Imports $17.7 billion

Trends in WPI and Its Components October 2023* (%)

0
Financial Year (Averages)
Weights Over Month Over Year 2020–21 2021–22 2022–23
All commodities 100 0.4 -0.5 1.3 13.0 9.4
Primary articles 22.6 1.2 1.8 1.7 10.2 10.0
Food articles 15.3 1.3 2.5 3.2 4.1 7.3 -27 $26.3 billion
Trade Balance $31.5 billion
Fuel and power 13.2 0.7 -2.5 -8.0 32.5 28.1 2022 OCTOBER 2023 OCTOBER
Manufactured products 64.2 0.0 -1.1 2.8 11.1 5.6 Oil refers to crude petroleum and petroleum products, while non-oil refers to all other commodities.
* Data is provisional; Base: 2011–12=100. Source: Ministry of Commerce and Industry.
Movement of IIP January–September
IIP Index Value
Movement of CPI Inflation January 2022–October 2023
160
Year-on-year CPI Inflation in % 2023
152
9
141.6
Rural 144

136
6 2022 133.8
5.1%
CPI (Combined) 128
Urban
4.9% 120
Jan Feb Mar Apr May Jun Jul Aug* Sep*
4.6%
3
* September 2023 are quick estimates; Base: 2011–12=100.

Industrial Growth: Sector-wise September 2023* (%)

Weights Over Over Financial Year (Avgs)
0
Jan F M A M J J A S O N D Jan F M A M J J A S Oct* Month Year 2021–22 2022–23
2022 2023
General index 100 -2.4 5.8 11.4 5.2
* October 2023 is provisional.
Source: National Statistical Office (NSO); Base: 2012=100. Mining 14.4 -0.4 11.5 12.2 5.8
Manufacturing 77.6 -2.0 4.5 11.8 4.7
Inflation in CPI and Its Components October 2023* (%) Electricity 8.0 -6.6 9.9 7.9 8.9
Latest Month Over Over Financial Year (Avgs) Industrial Growth: Use-based
Weights Index Month Year 2021–22 2022–23
Primary goods 34.0 -4.5 8.0 9.7 7.5
CPI combined 100 185.3 0.7 4.9 5.5 6.7
Consumer food 39.1 190.4 1.1 6.6 3.8 6.6 Capital goods 8.2 3.9 7.4 16.9 13.1
Miscellaneous 28.3 178.0 0.1 4.4 6.7 6.3 Intermediate goods 17.2 -1.7 5.8 15.4 3.8
Infrastructure/Construction goods 12.3 -2.8 7.5 18.8 8.4
CPI: Occupation-wise
Industrial workers (2016 = 100) # 137.5 -1.2 4.7 5.1 6.1 Consumer durables 12.8 1.7 1.0 12.5 0.6
Agricultural labourers (1986-87 = 100) 1,241 1.2 7.1 4.0 6.8 Consumer non-durables 15.3 -3.5 2.7 3.2 0.7
* Provisional; # September 2023. * September 2023 are quick estimates; Base: 2011–12=100.
Source: NSO (rural and urban); Labour Bureau (IW and AL). Source: NSO, Ministry of Statistics and Programme Implementation.
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.

72 November 25, 2023 vol lViii no 47 EPW Economic & Political Weekly
 CURRENT STATISTICS EPW Research Foundation
India’s Quarterly Estimates of Final Expenditures on GDP
2021–22 2022–23 2023–24
` Crore | At 2011–12 Prices Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Private final consumption expenditure 1822102 (17.6) 2121839 (14.2) 2426098 (10.8) 2333501 (4.7) 2182357 (19.8) 2298123 (8.3) 2478700 (2.2) 2399515 (2.8) 2312601 (6.0)
Government final consumption expenditure 403808 (-2.1) 346501 (11.7) 350565 (5.8) 474406 (11.8) 411243 (1.8) 332450 (-4.1) 348329 (-0.6) 485284 (2.3) 408300 (-0.7)
Gross fixed capital formation 1077836 (61.0) 1209609 (12.4) 1179221 (1.2) 1412108 (4.9) 1297588 (20.4) 1325580 (9.6) 1273453 (8.0) 1538071 (8.9) 1400832 (8.0)
Change in stocks 28895 (974.6) 31402 (655.9) 29902 (618.9) 33964 (613.8) 31050 (7.5) 30591 (-2.6) 29868 (-0.1) 35954 (5.9) 32256 (3.9)
Valuables 22035 (481.3) 134378 (156.6) 73595 (44.5) 48751 (-51.7) 34959 (58.7) 108206 (-19.5) 45595 (-38.0) 37330 (-23.4) 27633 (-21.0)
Net trade (Export–Import) 15631 -46285 -91258 -65580 -86460 -146624 -97506 -6264 -258496
Exports 765031 (46.1) 826729 (25.1) 825929 (27.8) 888144 (22.4) 915111 (19.6) 927872 (12.2) 917492 (11.1) 994047 (11.9) 844252 (-7.7)
Less imports 749401 (44.8) 873014 (26.6) 917188 (19.7) 953723 (6.7) 1001571 (33.6) 1074495 (23.1) 1014998 (10.7) 1000311 (4.9) 1102748 (10.1)
Discrepancies -59256 (-173.6) -145787 (-293.2) -117350 (-388.8) -124790 (-758.1) -126452 (113.4) -70326 (-51.8) -55812 (-52.4) -128375 (2.9) 114019 (-190.2)
Gross domestic product (GDP) 3311050 (21.6) 3651659 (9.1) 3850772 (5.2) 4112360 (4.0) 3744285 (13.1) 3878000 (6.2) 4022625 (4.5) 4361515 (6.1) 4037144 (7.8)

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

2022–23 ($ mn) 2023–24 ($ mn) 2022–23 (` bn) 2023–24 (` bn)
Item Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1
Current account -17964 -30902 -16832 -1356 -9214 -1387 [-2.1] -2466 [-3.8] -1384 [-2.0] -111.6 [-0.2] -757 [-1.1]
Merchandise -63054 -78313 -71337 -52587 -56596 -4867 -6249 -5864 -4326.1 -4652
Invisibles 45090 47411 54505 51231 47382 3480 3783 4481 4214.5 3895
Services 31069 34426 38713 39075 35125 2398 2747 3182 3214.5 2887
of which: Software services 30692 32681 33541 34370 33928 2369 2608 2757 2827.4 2789
Transfers 22874 24773 28467 24762 22866 1766 1977 2340 2037.1 1880
of which: Private 23065 24991 28641 25080 23073 1780 1994 2354 2063.2 1897
Income -8853 -11788 -12675 -12606 -10609 -683 -941 -1042 -1037.1 -872
Capital account 22055 1461 28887 6540 34374 1702 [2.6] 117 [0.2] 2375 [3.4] 538.0 [0.7] 2826 [4.0]
of which: Foreign investment -1238 12741 6641 4691 20812 -96 1017 546 385.9 1711
Overall balance 4595 -30379 11069 5579 24432 355 [0.5] -2424 [-3.7] 910 [1.3] 459.0 [0.6] 2008 [2.8]
Figures in square brackets are percentage to GDP.

Foreign Exchange Reserves Variation

10 November 11 November 31 March Month Year Financial Year So Far Financial Year
Excluding gold but including revaluation effects 2023 2022 2023 Ago Ago 2022–23 2023–24 2018–19 2019–20 2020–21 2021–22 2022–23
` crore 4501237 4041190 4340297 27190 460047 -196427 160941 68050 668976 590416 302585 102680
$ mn 540015 500082 528083 2669 39931 -59532 11931 -14168 56831 94535 21435 -31532

Monetary Aggregates Variation

Outstanding Over Month Over Year Financial Year So Far Financial Year
` Crore 2023 2022–23 2023–24 2020–21 2021–22 2022–23
Money supply (M3) as on 3 November 23815816 129705 (0.5) 2357372 (11.0) 964715 (4.7) 1472056 (6.6) 2044615 (12.2) 1649151 (8.8) 1850031 (9.0)
Components
Currency with public 3206519 18424 (0.6) 123449 (4.0) 47381 (1.6) -69917 (-2.1) 402080 (17.1) 283860 (10.3) 240747 (7.9)
Demand deposits 2430860 2930 (0.1) 233119 (10.6) -15251 (-0.7) 110262 (4.8) 257428 (14.8) 217872 (10.9) 107606 (4.9)
Time deposits 18104162 107524 (0.6) 1997356 (12.4) 920201 (6.1) 1435196 (8.6) 1376262 (10.9) 1136327 (8.1) 1482361 (9.8)
Other deposits with RBI 74276 827 (1.1) 3448 (4.9) 12384 (21.2) -3485 (-4.5) 8844 (23.0) 11093 (23.4) 19317 (33.1)
Sources
Net bank credit to government 7424442 54773 (0.7) 815669 (12.3) 131144 (2.0) 258909 (3.6) 890012 (17.9) 627255 (10.7) 687904 (10.6)
Bank credit to commercial sector 15722967 236162 (1.5) 2066314 (15.1) 1040133 (8.2) 1293331 (9.0) 629822 (5.7) 948054 (8.1) 1813116 (14.4)
Net foreign exchange assets 5019082 -9428 (-0.2) 549517 (12.3) -384498 (-7.9) 107316 (2.2) 777810 (20.5) 275217 (6.0) 57703 (1.2)
Banking sector’s net non-monetary liabilities 4382613 152092 (3.6) 1076855 (32.6) -176738 (-5.1) 189154 (4.5) 253594 (8.4) 202475 (6.2) 710963 (20.4)
Reserve money as on 10 November 4421793 60140 (1.4) 288061 (7.0) 64846 (1.6) 35035 (0.8) 570276 (18.8) 468904 (13.0) 317872 (7.8)
Components
Currency in circulation 3361734 60152 (1.8) 139016 (4.3) 89001 (2.8) -16787 (-0.5) 406451 (16.6) 279954 (9.8) 244804 (7.8)
Bankers’ deposits with RBI 984638 -2352 (-0.2) 144306 (17.2) -36394 (-4.2) 54161 (5.8) 154979 (28.5) 177859 (25.4) 53751 (6.1)
Other deposits with RBI 75421 2340 (3.2) 4740 (6.7) 12238 (20.9) -2340 (-3.0) 8844 (23.0) 11092 (23.4) 19318 (33.1)
Sources
Net RBI credit to Government 1104071 29615 (2.8) -121856 (-9.9) -224669 (-15.5) -347054 (-23.9) 107495 (10.8) 350910 (31.9) 529 (0.0)
of which: Centre 1084101 29967 (2.8) -138141 (-11.3) -226731 (-15.6) -366275 (-25.3) 106606 (10.8) 352627 (32.2) 1403 (0.1)
RBI credit to banks and commercial sector 50762 20301 (66.6) 106962 (-190.3) 487501 (-89.7) 145205 (-153.7) -168464 (83.9) -174344 (47.2) 449258 (-82.6)
Net foreign exchange assets of RBI 4776466 61618 (1.3) 529945 (12.5) -195958 (-4.4) 189110 (4.1) 608998 (17.0) 243079 (5.8) 144877 (3.3)
Govt’s currency liabilities to the public 31939 290 (0.9) 2728 (8.3) 1199 (4.3) 1654 (5.5) 565 (2.1) 1099 (4.1) 2273 (8.1)
Net non-monetary liabilities of RBI 1541445 51685 (3.5) 229717 (17.5) 3228 (0.2) -46120 (-2.9) -21682 (-1.6) -48160 (-3.5) 279065 (21.3)

Scheduled Commercial Banks’ Indicators ( ` Crore) Variation

Outstanding Over Month Over Year Financial Year So Far Financial Year
(As on 3 November) 2023 2022–23 2023–24 2020–21 2021–22 2022–23
Aggregate deposits 19712355 105026 (0.5) 2346031 (13.5) 901011 (5.5) 1668441 (9.2) 1546019 (11.4) 1351801 (8.9) 1578601 (9.6)
Demand 2288739 2682 (0.1) 232180 (11.3) -16188 (-0.8) 108308 (5.0) 244190 (15.1) 211554 (11.4) 107684 (5.2)
Time 17423616 102344 (0.6) 2113851 (13.8) 917198 (6.4) 1560133 (9.8) 1301831 (10.9) 1140247 (8.6) 1470916 (10.2)
Cash in hand 94706 636 (0.7) -22132 (-18.9) 30912 (36.0) 4443 (4.9) 3487 (4.0) -4822 (-5.3) 4337 (5.0)
Balance with RBI 934236 -26376 (-2.7) 132691 (16.6) 118109 (17.3) 124329 (15.4) 6507 (1.2) 140743 (25.9) 126471 (18.5)
Investments 6112343 51332 (0.8) 1030666 (20.3) 352730 (7.5) 697195 (12.9) 715177 (19.1) 266421 (6.0) 686201 (14.5)
of which: Government securities 6111627 51312 (0.8) 1030777 (20.3) 352671 (7.5) 697305 (12.9) 722935 (19.3) 266547 (6.0) 686143 (14.5)
Bank credit 15565673 222932 (1.5) 2639440 (20.4) 1034918 (8.7) 1890438 (13.8) 578649 (5.6) 1044027 (9.6) 1783920 (15.0)
of which: Non-food credit 15542870 219409 (1.4) 2655016 (20.6) 1051550 (8.9) 1887540 (13.8) 569159 (5.6) 1050270 (9.7) 1819026 (15.4)

Capital Markets 17 November Month Year Financial Year So Far 2022–23 End of Financial Year
2023 Ago Ago Trough Peak Trough Peak 2020–21 2021–22 2022–23
S&P BSE SENSEX (Base: 1978–79 = 100) 65794.73 (6.5) 66428.09 61750.60 (2.9) 59106.44 67838.63 51360.42 63284.19 49009 (63.7) 57362 (18.4) 58992 (0.7)
S&P BSE-100 (Base: 1983–84 = 100) 20309.86 (8.8) 20304.00 18671.21 (2.2) 17644.91 20666.08 15562.65 19137.18 14689 (68.2) 17423 (20.1) 17602 (-0.7)
S&P BSE-200 (1989–90 = 100) 8716.60 (9.7) 8684.73 7942.38 (1.8) 7406.09 8819.05 6602.62 8144.55 6211 (71.1) 7412 (20.9) 7389 (-2.0)
CNX Nifty-50 (Base: 3 November 1995 = 1000) 19731.80 (7.6) 19811.50 18343.90 (2.5) 17398.05 20192.35 15293.50 18812.50 14507 (67.9) 17153 (19.7) 17360 (-0.6)
CNX Nifty-500 17600.50 (12.8) 17467.70 15597.25 (0.9) 14601.95 17665.80 12950.75 16003.95 12149 (73.7) 14652 (22.2) 14558 (-2.3)
Figures in brackets are percentage variations over the specified or over the comparable period of the previous year. | (-) = not relevant | - = not available | NS = new series | PE = provisional estimates
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.

Economic & Political Weekly EPW November 25, 2023 vol lViii no 47 73
 CURRENT STATISTICS EPW Research Foundation

Secondary Market Transactions in Government Securities and the Forex Market—Weeks Ending 3, 10 and 17 November 2023
1 Settlement Volume of Government Securities (G-Sec) Transactions (Face Value in ` Crore)
Week Ended 17 November 2023 10 November 2023 3 November 2023 18 November 2022 2023–24* 2022–23**
Number Volume Number Volume Number Volume Number Volume Number Volume Number Volume
of Trades of Trades of Trades of Trades of Trades of Trades
Outright 10954 172854 18033 254398 12382 191855 18159 199929 629504 8704388 520561 6432516
Repo 4227 591545 4880 698006 4933 726873 4235 694949 160503 24727996 122817 20452440
TREP 3789 1317458 4544 1541155 4644 1656334 5221 1978155 147404 49547360 198913 60277099
Total 18970 2081856 27457 2493558 21959 2575062 27615 2873034 937411 82979744 842291 87162055
Daily Avg Outright 2739 43213 3607 50880 2476 38371 3632 39986 4114 56891 3402 42043
Daily Avg Repo 1057 147886 813 116334 987 145375 847 138990 950 146320 722 120308
Daily Avg TREP 947 329364 757 256859 929 331267 1044 395631 872 293180 1170 354571

2 Instrument-wise Outright and Repo Details (Amount in ` Crore) 3 Top 5 Traded Central Govt Dated Securities (17 November 2023)
Security Description Trades Value (` Crore) % Value to Total
Outright Repo Outright Repo Outright Repo Outright Repo
7.18% GS 2033 5595 58543 41.59
Central Government 140754 394915 200813 498181 138425 543417 199929 494886
7.18% GS 2037 1766 23992 17.05
State Government 7296 140080 13298 158137 16224 142240 10058 111281 7.25% GS 2063 248 6166 4.38
Treasury Bills 24804 56551 40287 41688 37207 41216 19788 88782 7.38% GS 2027 190 5646 4.01
Total 172854 591545 254398 698006 191855 726873 229774 694949 7.06% GS 2028 233 4556 3.24

4 Category-wise Buying/Selling Activity (Market Share %) (17 November 2023)

Outright Reverse Repo Repo TREP Lending TREP Borrowing NDS Call IRS MIBOR IRS-MIFOR
Category Buy Side Sell Side Buy Side Sell Side Buy Side Sell Side Buy Side Sell Side Buy Side Sell Side Buy Side Sell Side
Cooperative Banks 1.80 1.83 0.25 0.73 0.46 2.61 39.42 3.67 – – – –
Financial Institutions 0.96 0.01 0.75 0.00 0.40 7.39 – – – – – –
Foreign Banks 21.05 20.31 43.28 23.39 4.35 1.89 9.86 3.32 51.28 44.50 77.69 70.99
Insurance Companies 2.34 1.94 1.49 0.00 11.07 0.03 – – – – – –
Mutual Funds 10.52 11.13 35.28 0.00 70.93 1.25 – – 0.89 0.00 0.00 0.00
Others 6.73 4.77 0.13 1.55 9.32 3.80 – – – – – –
Primary Dealers 17.21 21.28 4.69 46.20 0.00 6.56 0.00 74.55 24.25 27.36 0.00 0.00
Private Sector Banks 29.46 25.42 10.34 20.01 3.47 32.94 24.83 9.38 22.05 26.07 22.31 29.01
Public Sector Banks 9.93 13.32 3.80 8.11 0.00 43.53 25.89 9.08 1.53 2.07 0.00 0.00

5 Trading Platform Analysis—Trading Value (Face Value in ` Crore) (17 November 2023)
Week Ended OTC NDS-OM Brokered Deals Total
Number Volume Market Number Volume Market Number Volume Market Number Volume
of Trades Share (%) of Trades Share (%) of Trades Share (%) of Trades
Central Government 369 28574 17.53 11777 134406 82.47 81 5240 3.21 12146 162980
State Government 195 4384 56.28 379 3405 43.72 14 620 7.96 574 7789
Treasury Bills 115 14896 53.51 346 12943 46.49 47 7170 25.76 461 27839
Total 679 47853 24.09 12502 150754 75.91 142 13030 6.56 13181 198608

6 Settlement Volume of Forex Segment

Segment 17 November 2023 10 November 2023 3 November 2023 18 November 2022 2023–24* 2022–23**
Number Volume Number Volume Number Volume Number Volume Number Volume Number Volume
of Deals ($ mn) of Deals ($ mn) of Deals ($ mn) of Deals ($ mn) of Deals ($ mn) of Deals ($ mn)
Cash 1652 25635 2240 32901 2378 36541 1612 25050 53490 863655 56176 874164
Tom 2208 30548 2890 43446 3160 44449 1766 25568 69000 996563 71252 1020622
Spot 69618 86027 70506 86442 82420 105690 140154 134307 2879207 2909313 2815546 3010046
Forward 750 10152 654 9310 14420 132385 820 10532 131741 1235338 121516 1278224
Total 74228 152362 76290 172100 102378 319066 144352 195457 3133438 6004870 3064490 6183056
Average 18557 38091 15258 34420 20476 63813 28870 39091 21172 40573 20847 42062

7 Tenor-wise Forward Trades

Tenor 17 November 2023 10 November 2023 3 November 2023 18 November 2022

Number Value % to Total Number Value % to Total Number Value % to Total Number Value % to Total
of Deals ($ mn) Value of Deals ($ mn) Value of Deals ($ mn) Value of Deals ($ mn) Value
< 30 Days 165 6034 59.44 1474 39324 29.70 1474 39324 29.70 158 6305 59.86
> = 30 Days & < = 90 Days 122 2976 29.32 1487 32035 24.20 1487 32035 24.20 80 1357 12.88
> 90 Days & < = 180 Days 41 560 5.51 1215 21304 16.09 1215 21304 16.09 87 1228 11.66
> 180 Days & < =365 Days 28 336 3.31 2489 33506 25.31 2489 33506 25.31 69 1504 14.28
> 1 year 19 246 2.42 545 6216 4.70 545 6216 4.70 16 140 1.33
Total 351 12574 100 441 15727 100 7338 127433 100 499 12520 100
* Data pertain to 1 April 2023–17 November 2023. ** Data pertain to 1 April 2022–18 November 2022.
(i) Tables 1 to 5 relate to Securities Segment, and (ii) Tables 6 and 7 relate to Forex Segment.
Source: Clearing Corporation of India Limited (CCIL).

74 november 25, 2023 vol lViii no 47 EPW Economic & Political Weekly