LETTERS

Issn 0012-9976
Ever since the first issue in 1966,
EPW has been India’s premier journal for On the Proposed Digital brief list of content that users must
comment on current affairs
and research in the social sciences.
India Act, 2023 avoid sending, as opposed to X (formerly
It succeeded Economic Weekly (1949–1965), Twitter) which has an elaborate list of
which was launched and shepherded
by Sachin Chaudhuri,
who was also the founder-editor of EPW.
As editor for 35 years (1969–2004)
Krishna Raj
F resh attempts to regulate online in-
termediaries, such as Meta, Amazon,
Netflix, etc, by the Indian government
rules. In the case of X, the platform does
have policies for misleading and fake
content, but the enforcement is not re-
gave EPW the reputation it now enjoys. have emerged in the Digital India Dia- stricted to content/user removal, it has
Editor logues held in March and June 2023. In additional enforcement options such as
S Mahendra Dev the said consultations, the union minis- labelling the message, reduction of visi-
Deputy Editor ter of state introduced the basic tenets of bility, and turning off likes and comments.
Pyaralal Raghavan
the Digital India Act (DIA) which is set to The result of such varied implementation
SENIOR Assistant editors replace the Information Technology (IT) of uniform legislative requirements gets
INDU K
Nachiket kulkarni (Amendment) Act, 2008. Some of the reflected in the monthly compliance re-
Assistant editor
many highlights of the proposed regula- ports published by the platforms. For
Sahba Fatima tions are the classification of intermedi- example, WhatsApp has no information
editorIAL Assistant aries into nine categories and the pro- on the misleading or fake content it re-
Ankit Kawade posal to formulate separate rules for each moves and provides information on the
Editorial Coordinator class of intermediaries. This is an inter- accounts that are banned on a monthly
Shilpa Sawant
esting move, as the government hopes basis and non-content-related complaints.
copy editor to holistically regulate different online For instance, to not host misleading
jyoti shetty
intermediaries by formulating specific content, WhatsApp would have to read
production
suneethi nair rules for them. user messages, which would interfere
However, whether it is enough to deal with the platform’s unique end-to-end
Chief Administrative and Finance Officer
J DENNIS RAJAKUMAR with the issues within each class of encryption feature. Interfering with pri-
Advertisement Manager
intermediaries is a moot question. For vacy would also mean losing users,
Kamal G Fanibanda instance, the efficacy of classifying all which in turn would lead to revenue loss
General Manager & Publisher social media platforms into one category for the application as it earns from busi-
Gauraang Pradhan and framing common rules warrant a ness communications on the platform.
editorial: edit@epw.in closer and deeper analysis. Examining Similarly, if X starts removing content
Circulation: circulation@epw.in the current regulatory expectations and its indiscriminately, as opposed to the range
Advertising: advertisement@epw.in implementation by social media platforms of enforcement options that allow maxi-
points to some challenges that the govern- mum content to remain on the platform,
Economic & Political Weekly
320–322, A to Z Industrial Estate ment is likely to face as it moves ahead. it would directly impact the volume and
Ganpatrao Kadam Marg, Lower Parel The IT Rules, 2023 prohibit hosting flow of content on the platforms, which
Mumbai 400 013
Phone: (022) 4063 8282 misleading and false information by so- would in-turn affect advertisements on it.
cial media intermediaries. The expecta- Thus, there are issues within specific
EPW Research Foundation tion of the current regulation is pretty classes of intermediaries that uniform
EPW Research Foundation, established in 1993, conducts
research on fi nancial and macro-economic issues in India. simple, that is, to not host false and mis- regulatory expectations may not address.
Director leading content, but its implementation In the present case of (significant) social
J DENNIS RAJAKUMAR by social media platforms is not. Look- media intermediaries, uniform regulatory
C 212, Akurli Industrial Estate
Kandivali (East), Mumbai 400 101
ing at the content policies of various expectations are not complied to by the
Phones: (022) 2887 3038/41 platforms suggests that every platform platforms due to the diverse platform
epwrf@epwrf.in operates differently. operations which are strongly tied to
Sameeksha TrusT And as far as content is concerned, their business models. The policymakers
(Publishers of Economic & Political Weekly) when a user reports a message, Whats- must address these existing lacunae if
Board of Trustees
Deepak Nayyar, Chairman App bans the users (sender) if the claim they truly want to tackle content issues
Shyam Menon, Managing Trustee is found to be correct. This means that on social media platforms.
André Béteille, the (misleading) content can still circu- Given the ever-evolving platform
Deepak Parekh, Romila Thapar,
Dipankar Gupta, N Jayaram, late in other chat boxes and would only operations and the unique challenges
SUDIPTO MUNDLE cease to circulate until all users sending posed to the communication landscape,
Printed and published by Gauraang Pradhan, for and it are banned from the application. As regulating online intermediaries is not
on behalf of Sameeksha Trust and printed at
Modern Arts and Industries, 151, A–Z Industrial Estate, such, WhatsApp does not concern itself an easy task. While external oversight is
Ganpatrao Kadam Marg, Lower Parel, Mumbai–400 013
and published at 320–322, A–Z Industrial Estate, with the content that circulates on the the need of the hour, traditional regulatory
Ganpatrao Kadam Marg, Lower Parel, Mumbai–400 013
platform due to its end-to-end encryp- mechanisms often pose the risk of stifling
Editor: S Mahendra Dev (Editor responsible for
selection of news under the PRB Act) tion feature. Its content policies are a free speech. In the case of regulating
4 january 6, 2024 vol lix no 1 EPW Economic & Political Weekly

social media intermediaries, the govern-
ment may consider two provisions. First,
a robust media literacy for users on end-
to-end encrypted platforms. In the case
of WhatsApp, the current media literacy
campaign seems like a lip service with
two very short YouTube videos called
“Share joy, not rumors” and “Check it
before you share it.” Second, regulatory
obligations for significant social media
intermediaries should allocate a budget
for trust and safety teams proportionate
to the flow of the content. This would
ensure the protection of crucial teams in
the digital infrastructure during lay-offs
and avoid a spike in the circulation of
problematic content due to a lack of
human resources to monitor it.
Tania Chatterjee, Agam Gupta
New Delhi
Pradip Thomas
St Lucia
Digital Twins and
Smart Farming
T he Ministry of Agriculture and Farm-
ers’ Welfare has recently launched
the Agri Stack project to enable effective
digital (service) delivery to farmers and
agricultural stakeholders, aiming to in-
stitutionalise digital public infrastruc-
ture for agriculture (DPIA) and make the
agri-food systems resilient and sustainable.
Evolved from the thinking of indea 2.0
Architecture, Agri Stack has been com-
missioned by the ministry embracing a
federated structure—where states are at
the centre of the design—ensuring a
participatory and inclusive environment
to the new generation of technology-
driven agriculture.
The ministry has signed a memorandum
of understanding with the states/union
territories to digitalise farmers’ registry
and land records for crop assessment,
where Odisha, Karnataka, and Maha-
rashtra have demonstrated the alignment
of farmer details, land records for crop
survey, credit, and insurance services
delivery to agri-stakeholders.
To this end, digital twins receive a re-
newed attention from policymakers and
tech firms for prototyping sustainable
food systems, capturing contextual un-
certainty in agroecology, and monitoring
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january
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the progress of farmer-unified service
interfaces.
The market size of digital twins is ex-
pected to be $29.57 billion in 2025 from
$2.65 billion in 2020, with a 49% com-
pound annual growth rate. These have
footprints in manufacturing (22.16%),
automotive (18.40%), aviation (16.30%),
energy and utilities (12.88%), healthcare
(10.94%), retail, and logistics (8.70%),
and agriculture and others (10.63%).
While digital twins are linked with
immersive learning of biophysical envi-
ronment and action arena, we are yet to
appreciate their application in an envi-
ronment of shared access.
Digital twins are a dynamic digital
model of a physical entity capable of
driving actionable insights through real-
time data analysis. Five characteristics
enable the functioning of digital twins:
(i) timeliness, (ii) fidelity, (iii) integration,
(iv) intelligence, and (v) complexity.
It overcomes fundamental constraints
like place, time, and human observa-
tion—that a digital object can capture a
biophysical environment—and its ex-
plainability and robustness of real-time
situations can help agri-food network
actors improve their decision-making.
Digital twin evolution traces to product
life cycle management, and a key techno-
logy to enable digital twins is the internet
of things (IoTs). The concept of interaction
between physical and digital objects is
embedded in the IoTs, and the data stored
in IoTs can result in analysis and actuation
with deep-tech (artificial intelligence and
machine learning) applications.
As physical entities have digital coun-
terparts in a biophysical environment,
they sense, communicate, act, and interact
with their digital counterparts, and ex-
change data, information, and knowledge.
So, these counterparts are twins of the
physical objects and are linked to and
synchronised with the physical objects.
The Agri Stack project can embed dig-
ital twins in geo-referenced landscapes
EPW Engage
The following articles have been published in the past week in the EPW Engage section (www.epw.in/engage).
(1) Constructive Engagement with Russia: Why Does It Matter for Asian Nations and How to Do It? — Poowin
Bunyavejchewin
(2) Mahatma Gandhi National Rural Employment Guarantee Act: Lessons from Odisha — Geetanjoy Sahu and
Aaishwarya Jadhav
6, 2024volvol
lViii
lixnono
241
LETTERS
and crop registry with a cyber-physical
control cycle and offer comprehensive
farm management stack solutions, ena-
ble data collection through remote and
proximity sensing and data standardisa-
tion, catalyse interoperability and appli-
cation programming interfaces, and ac-
celerate the participation of agri-ecosys-
tem network players.
Agri Stack embedded digital twins
can support the entire life cycle of farm
objects with six modules: imaginary,
monitoring, predictive, prescriptive, au-
tonomous, and recollection digital twins.
These twins can complement the pres-
ence-less layer of farm management by
capturing farm object complexity, farm
network dynamics, farm processes, digi-
tal traceability systems for input, output,
delivery of financial services, agri-food
supply chain, and distribution dynamics.
For resilient agri-ecosystems, digital
twins need the IoT architecture and
blockchain technology-affiliated smart
contracts supported by a distributed ar-
chitecture for data storage, traceability,
trade, and immutability of transactions
between the agri-value network actors.
However, implementing digital twins in
Agri Stack has many challenges. For farm-
ers, who are the pivotal contributors to
agribusiness, sharing extensive farm data
with these virtual systems evokes potent
privacy and interoperability concerns that
the Digital Personal Data Protection Act,
2023 should have addressed. The evolving
dynamics of data ownership and control
should demystify the nexus between
“private and public” data and associated
digital services for rolling out Agri Stack.
To sum up, the prowess of digital
twins lies in their predictive and pre-
scriptive capabilities. Nonetheless, sole
reliance on historical data may some-
times fail to foresee unprecedented dis-
ruptions, from environmental degrada-
tion to market failure.
Kushankur Dey, Aashi Jain
Lucknow
5
 LETTERS

6 january
june 17, 2023
6, 2024volvol
lViii
lixno
no241 EPW Economic & Political Weekly
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 JANUARY 6, 2024
An Elusive Take-off
Savings and investment constraints severely limit the medium-term growth potential of the economy.
T
he International Monetary Fund (IMF) report on the
Article IV consultations in December 2023 presents a
relatively less optimistic scenario of the overall pros-
pects of the Indian economy. Acknowledging India as one of the
fastest-growing economies globally, it also asserts that produc-
tivity gains and a strong government infrastructure programme
will continue to sustain growth. However, its estimates show
that growth had slowed down from 9.1% in 2021–22 and 7.2% in
2022–23 to just 6.3% in both 2023–24 and 2024–25.
Moreover, the IMF estimates also show that the economy’s
output gap, which was as high as -7.4 during the pandemic, has
ebbed and finally closed in 2023–24. Though the potential
growth has been revised up to 6.3% in 2023–24, it is estimated
to remain so over the medium term. This is a sharp climbdown
from the pre-pandemic years when the potential gross domestic
product (GDP) growth of the economy was a much higher 7.3%.
However, the Indian government was more optimistic and
expected potential growth to be robust at 7%–8% in the medium
term. They were of the view that the weaker foreign direct in-
vestment inflows were a temporary aberration. The government
also expects that the improvement in the investment scenario,
aided by the productivity-linked incentive schemes, will give a
big boost to manufacturing, exports and employment.
The three downside risks to the economy identified in the IMF
report are a sharp global slowdown, which will have negative
effects through trade and financial channels, global supply dis-
ruptions that add to inflation and an increase in fiscal pressures,
and inflation due to weather shocks. In contrast, the report
identifies a greater-than-expected consumer demand and private
investments as upside risk factors that can raise growth.
Overall, the IMF says that India’s medium-term growth pros-
pects rest on two factors. One is comprehensive reforms, which
will enhance contributions of labour and human capital, and
other is a greater-than-expected consumer demand and invest-
ments. While the first factor is understandable, given that well-
strategised reforms can increase productivity and boost growth,
the excessive caution about an increase in growth of consump-
tion and investment is less obvious.
A careful analysis, however, shows that there are many rea-
sons for such prudence in the growth of consumption and in-
vestment. In the case of consumption, the IMF expects that the
waning pent-up demand after the pandemic and the pass-
through of monetary policy, which is expected to impact after
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a lag of four to six quarters, will soften consumption demand
despite its buoyancy at the start of the year.
But the government has strongly refuted the IMF apprehen-
sions of a softening in consumption demand. It asserts that the
current private consumption trends are healthy and are also
gaining momentum mainly fuelled by the buoyancy in the ser-
vices sector and the improvements in the informal sector and
the micro, small and medium enterprises. It also expects private
consumption to gain further momentum as consumer price in-
flation moderates in the coming months.
In the case of investments, the IMF report notes that smaller
government-financing needs can reduce crowding-out and cre-
ate room for private investments. Similarly, it also suggests that
the reduction in policy obstacles can also boost investment
flows, including that of foreign investments. But it also states
that the uncertainty relating to the upcoming elections can neg-
atively impact investments.
A closer analysis shows that the stagnant levels of savings
and investments remain the biggest stumbling block to improv-
ing the potential growth of the economy. For instance, the IMF
has projected in the Article IV consultations in 2022 that the
savings rate would move up marginally from 30% of the GDP in
2021–22 to 31.1% towards the end of the decade. But in the 2023
Article IV consultations, it has now sharply revised down the
savings rate to 29.7%. That is, savings rate is expected to
decline over the decade.
Similarly, in its 2022 consultations report, the IMF projects
that investments would go up from 31.2% of GDP to 33.7% dur-
ing the period, an increase of 2.5 percentage points. However,
the 2023 consultations report projects that investments will re-
main almost stagnant with the numbers going up only margin-
ally to just 31.9% by the end of the decade. That is, the increase
would be just a few decimal points. Certainly, it is these stag-
nant levels of savings and investments that have driven down
the growth potential of the economy from above 7% in the pre-
pandemic years to just above 6% now and become a major bar-
rier to a sustained take-off in overall economic growth.
It is in this context that the IMF has suggested comprehensive
structural reforms for improved functioning of the labour mar-
ket, raising women’s participation in the labour force, and also
in sectors like education, health, and agriculture for boosting
growth. It also wanted the phasing-out of restrictive trade poli-
cies and a further improvement in the investment climate to aid
7
 EDITORIALS

the revival. On the fiscal front, the IMF emphasised the need for
consolidation efforts and a sound medium-term fiscal policy
framework to improve transparency and accountability and
align fiscal policies with the development goals.
Another major point of contention during the Article IV con-
sultations was on India’s exchange rate management. The IMF
viewed that the foreign exchange interventions of the Reserve
Bank of India in recent months were excessive and they reclas-
sified India’s de facto exchange rate regime from floating to a
stabilised arrangement. But the Indian authorities attributed
the relative stability of the rupee to the improvements in the
external sector fundamentals.

8 january 6, 2024 vol lix no 1 EPW Economic & Political Weekly

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From 25 Years Ago
Vol XXXIV, No 1-2 JANUARY 2, 1999
Urdu in India since
Independence
Ralph Russell
The link language of everyday communica-
tion in India continues to be, as it was be-
fore independence, one which is as much
Hindi as it is Urdu. It is true that since inde-
pendence the government has shown apa-
thy and worse towards Urdu. But the propo-
nents of Urdu focus almost exclusively on
the injustices done to Urdu. They too often
call upon somebody else — such as the gov-
ernment — to do something instead of do-
ing it themselves. They have failed to take
advantage of factors that favour Urdu. The
defence of Urdu requires an increase in the
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number of people who have a command of
it. The first step is education. But one need
not depend on government-run Urdu medi-
um schools. Those who have a command of
Urdu can start teaching it in their own
neighbourhoods. Confining Urdu to the
Persian script also works against its spread.
There is a large readership for Urdu works
written in Devanagari script and also for
Urdu works introduced through English.
In 1949-50 I spent the greater part of my
study leave at Aligarh. In those days, in the
area regarded as the heartland of Urdu, UP
and to a lesser extent Bihar, the state gov-
ernments were doing everything possible to
destroy it. This was achieved by an absurd
interpretation of the ‘three language formula’
devised by the government of India. This
recommended that in every state three lan-
guages should be taught in the schools —
(1) the language of the state (which would
normally be the mother tongue of the ma-
jority of its inhabitants), (2) another modern
vol lix no 1
EDITORIALS
Indian language (Hindi would often be cho-
sen where the first language was not Hindi),
and (3) one other language. A good deal of
elasticity was envisaged in the implementa-
tion of this formula, and in UP Urdu, the
language of most inhabitants of UP after
Hindi, could, and should, have been chosen.
The UP government decided instead to de-
clare Sanskrit a modern language, and the
teaching of Urdu in the schools — it had been
taught in all UP schools before independ-
ence — was discontinued. On the whole
that situation has continued ever since, at
any rate until fairly recent times, when I un-
derstand some minor changes have taken
place in the situation. In the first years of in-
dependence the main reliance of those peo-
ple in the Urdu field who wanted to preserve
Urdu as far as it could be preserved, to allow
for its development and to counter the poli-
cies being pursued against it was to rely
upon the sympathies for Urdu that existed
at the level of the government of India.
9

From 50 Years Ago
Vol VIII, No 1 JANUARY 6, 1973
Vietnam: Ugly Silence
A Correspondent writes:
Not the least nauseating aspect of the
pounding that the inhabitants of Hanoi
and Haiphong had to take from their
mighty adversary last week is the passivity
with which their fellow human beings re-
acted to the terrible event. […]
In fact what has been revealed starkly
twice in the course of the last two years is
that ‘world opinion’, like every single other
abstraction which students of political phi-
losophy are nurtured on, is a myth. For all
the capacity for sophisticated exercise that
the human brain has given evidence of,
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mankind has not been able to device any ef-
fective way of facing up to the scourges that
visit the earth from time to time in the
shape of rulers of demoniac disposition. The
ugly fact must be faced that Nixon could
dare behave in the way he did in the last fort-
night of 1972 because the rest of mankind
did not feel sufficiently strongly about the
business to make an audible noise. True, the
newspapers carried indignant editorials.
But journalists, or a few contributors to cor-
respondence columns, cannot keep a con-
science that carries so heavy a load. No
amount of space marvels in the remaining
years can cover up the shame that will blot
man’s history of this century if the bravest
among nations perishes from the earth in
fighting for freedom. […]
Far from anything remotely of the kind
happening anywhere — with the odd but
honourable exception of Sweden and to
some extent Australia — men and women
vol lix no 1
EDITORIALS
went about their daily routine as if noth-
ing had happened. Even the inhabitants of
the continent that is directly affected, a
continent that has been turned into a test-
ing ground for the most vicious inventions
of man, felt no urge to cry out against the
out-rage. Contemplating evil when it
stalks a distant land is perhaps not given
to ordinary men. But failure to react to
events that mould history — and there can
be little doubt that the fate of countless
men and women all over this continent, if
not elsewhere, for centuries to come is be-
ing decided in the battlefields of Vietnam
— is a dismal commentary on the values of
this civilisation. Perhaps polite behaviour
does not permit exuberance of expression
and India, claiming to be the foremost
among the civilised nations, does not let
its emotions loose except when it is itself
engaged in contest with another country
in war or in cricket or the like.
9
 EDITORIALS
Illegal Immigration and Institutional Failures
It is important to address the feeling of hopelessness that is driving many Indians to illegally migrate abroad.
O
n 21 December 2023, a charter flight heading to Nicara-
gua from Dubai with 303 Indians on board was stopped
in France on suspicion of “human trafficking.” The
plane was stuck in France for four days as neither Nicaragua nor
the United Arab Emirates agreed to host it. The Indian autho-
rities then persuaded the passengers to come back home. The
plane arrived in Mumbai on 26 December but with only 276
passengers. Twenty-five of the passengers had applied for asy-
lum in France. The French authorities dropped the investi-
gation of human trafficking on 27 December after the passen-
gers told them that they had willingly boarded the fl ight and
embarked on this journey.
Nicaragua, a Central American country, is geographically
close to the United States (US) and has relatively lax entry policies
for travellers from many countries that face visa restrictions
elsewhere. Nicaragua serves as a convenient location for immi-
grants from India desiring to cross over to the US from its south-
ern borders. The freezing environment of the US–Canada bor-
der discourages many immigrants from attempting to illegally
enter the US via Canada, however, that route continues to be re-
lied upon. In January 2022, the dead and frozen bodies of four
members of a family from Gujarat were found lying in Canada’s
Manitoba, just 12 metres away from the US border. This tragic
incident exemplified the dire risks being taken by certain Indian
individuals and families in their desire to reach countries like
the US, the United Kingdom (UK), and Canada through illegal
“donkey” routes.
One of the starkest aspects of the increase in outmigration
from India to the US, the UK, and Canada is the clear class divide
between wealthy and professional immigrants on the one hand,
and poor and working-class immigrants, on the other. From
October 2022 to September 2023, it is reported that the US au-
thorities encountered 96,917 Indians who entered the country
without proper documentation. The trend of undocumented
Indian migration to the US has been rising steadily since the
travel restrictions during the COVID-19 pandemic ended.
The number of Indians who relinquished their Indian citizen-
ship shows the other side of this class divide. In a reply to a
question in Parliament, the minister of external affairs pointed
out that the number of Indians who have relinquished their citi-
zenship till June of 2023 alone is 87,026. The number of people
who renounced their Indian citizenship in 2022 (2.25 lakh) was
the highest in over a decade. It was also stated that more than
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17.50 lakh Indians have given up their citizenship since 2011. Ac-
cording to the Henley Private Wealth Migration Report 2023,
which monitors global trends in wealth and investment migra-
tion, India is expected to see 6,500 high-net-worth individuals
(HNIs) relocate from the country in 2023. This is the second-
highest number of HNI departures in the world, after China.
The rising outmigration of Indians through legal and illegal
channels is usually viewed in a positive light among policymak-
ers. A greater number of Indian-origin individuals abroad have
had the consequence of greater inward remittances, making
India the largest recipient of remittances in 2023. Beyond these
financial advantages, however, are reasons for worry that com-
pel an increasing number of Indians to migrate out of India. The
nature and intent of immigration are obviously graded accord-
ing to the class profile of the immigrants. However, the alarm-
ing increase in the number of legal and illegal immigrants is
also a sign of major institutional failures.
For example, the detained Indians in the Nicaragua-bound
flight were reported to have paid upwards of `60– `80 lakh to
“donkey” immigration touts and agents in exchange for helping
them cross over to the US via Latin American countries. The
ability to pay such a massive amount to realise the American
dream by any means necessary shows the socio-economic and,
perhaps, even existential desperation faced by a certain class of
Indians. This class harbours the greatest aspirations of socio-
economic mobility, while not possessing (or failing to acquire) the
social, economic, and cultural capital required to legally migrate
to Western countries. Thus, it is not surprising that the states in
India that supply the highest number of undocumented immi-
grants to the US, the UK, and Canada are Gujarat and Punjab and,
increasingly, even Haryana—all relatively prosperous states.
Wealth is only a partial enabler of socio-economic mobility. If
one does not possess suitable educational qualifications, profes-
sional credentials, and the right linguistic training, then it is not
possible to legally migrate to these countries even if one pos-
sesses sizeable wealth and property. The Indian nationals de-
tained in France for attempting to enter the US illegally are rep-
resentative of a class of Indians whose class aspirations are not
commensurate with their social and cultural capital.
In this context, it is important to mention that the Gujarat police
had uncovered a racket in 2022 where certain students fraudulent-
ly gained high scores in an international English proficiency exam
so that they could enter the US and Canada on student visas.
vol lix no 1 EPW Economic & Political Weekly

Another instance which could be mentioned here is the scores
of Indian students who were evacuated from Ukraine following
Russia’s invasion in 2022. Most of these students had travelled
to Ukraine to study medicine, citing the inadequate number of
medical colleges in India and exorbitant fees. Both groups of
students who had legally or illegally acquired student visas to
study abroad signal an institutional failure regarding the lack of
globally competent and affordable educational institutions in
India. The outmigration of the youth to these countries who
failed to land respectable jobs in India to work as precarious
and menial labourers in Western nations also signals the crisis
of the finite (and fast-depleting) number of secure jobs in India.
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EDITORIALS
As much as policymakers and government officials prefer
to cite the increasing size of the Indian diaspora with pride,
the swelling number of undocumented Indian immigrants
should also elicit some self-introspection, if not embarrass-
ment, among the same circles. The life-threatening despera-
tion with which an increasing number of Indians are migrat-
ing to certain countries through dangerous “donkey” routes
suggests something alarming—the rising hopelessness expe-
rienced by many regarding a worthwhile future in India. The
fi rst step towards addressing this hopelessness would be to
recognise the institutional failures at home that lay at the
root of this problem.
9
 ALTERNATIVE STANDPOINT
Rebranding Bengaluru
Embracing Eco-socialism to Unveil
the City’s Soul
Debswapan Chatterjee, Prakhar Borgaonkar, Roopa Patavardhan
The Government of Karnataka
has launched the “Brand
Bengaluru” initiative with a
key aim to rebranding the city
to ensure a safe and inclusive
environment. Ironically, such
initiatives are only flagbearers
of capitalism, as the residents
of the city are neglected and
social inclusion is overshadowed
in this initiative. Highlighting
the necessity of an eco-socialist
approach, it is important that we
create an alternative system that
is driven by inclusivity
and social equity instead of
elite consumerism.
Debswapan Chatterjee (chatterjeedebswapan@
gmail.com) and Prakhar Borgaonkar
(borgaonkarprakhar@gmail.com) are
studying at and Roopa Patavardhan (roopa.
patavardhan@christuniversity.in) is a teaching
faculty at the Department of Economics,
School of Social Sciences, Bannerghatta
Campus, CHRIST, Bengaluru.
10
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I
n June 2023, the Government of
Karnataka met with 42 experts from
varied fields and launched the initia-
tive of “Brand Bengaluru.” This initiative
plans to elevate the city’s global potential
to achieve new heights (Express News
Service 2023a). The plan focuses mainly
on aspects of corporate branding so
as to make the city the leader in the
technologically driven world, bringing
in leading multinational companies
and state-of-the-art infrastructure and
improving the current structure to
match global standards. Among all the
eight sub-areas identified, the major
concentration of this initiative is on
infrastructure development to ease traf-
fic congestion and solve the problem of
rain-fed floods.
However, somewhere behind all these
changes, is the city at the risk of losing
its soul? Bengaluru, which was supposed
to thrive on the unique narratives of its
citizens, is devastated by the multitudes of
advancements in the name of the creation
of a brand or reconceptualisation of its
already created brand: “IT Hub,” “Silicon
Valley of India,” or most recently “Startup
capital.” Immediate attention is needed
to rethink the priorities of this initiative,
which neglects the views of residents
from lower socio-economic backgrounds.
The views of these residents are of
utmost importance to rebranding Ben-
galuru as per the initiative of “Brand
Bengaluru.” In this regard, it is argued
that eco-socialism is the need of the
hour to rebuild cities rather than neo-
liberalism, which leaves the environ-
ment to the market’s fate. The soul of a
city emerges from the interconnection of
a generation of inhabitants who grew up
and evolved alongside the city as one
single entity. Such a connection carries a
deep and nostalgic resonance among the
january 6, 2024
hustle and bustle of modern cities. The
soul of the city tries to protect the city’s
inherent charm through the strong
beliefs of such native residents. How-
ever, “Brand Bengaluru” was initiated by
the state government by launching digi-
tal portals to gather the opinions and
suggestions of citizens regarding this
initiative. One of the major stakeholders
of the city, that is, the residents from the
lower strata of society, seems unaware
of this government initiative. These resi-
dents do not have access to these digital
platforms. These people have lived
through the city’s growth, fought for
their aspirations, and struggled to hold
their identities here. They have known
the city as their home, not merely as an
“IT hub” or “Silicon Valley.” They have a
sentimental value attached to the city, in
contrast to a market-driven view which
sees the city merely as a platform to exploit.
Narratives of the City
Through personal narratives, we pre-
sent the heartfelt story of a native
who has witnessed the transformation
of her beloved neighbourhood. Laksh-
mamma (name changed), a 70-year-old
woman hailing from Hulimavu, Banga-
lore South, has been selling coffee in
her little shop for 25 years. We opened
a conversation with her about this gov-
ernment initiative. At the outset, she
was not aware of such a conceptua-
lisation. We furnished details and
answered her queries. After this, she
reflected on how the Hulimavu region
had shifted its dynamics in the recent
past. For her, Bengaluru remains the
old Bangalore city with tree-lined
streets, green public parks, and pristine
lakes inhabited by unique birds. She
believes the city’s old charm has faded
away, replaced by the growth of a con-
crete jungle. The chirping birds have
been giving way to the blaring horns of
vehicles stuck in peak rush hour traffic.
She even remarked that only a handful
of people take their time to talk to
her, as people have grown very “busy”
with their lives. Upon our suggestion
of expressing her views in the digital
portal of “Brand Bengaluru,” she smiled
vol lix no 1 EPW Economic & Political Weekly

and held up her old keypad mobile
phone, which made us realise that she
did not have internet access.
She, however, is not alone. The digital
divide is one of the most glaring issues
that India faces in this digital age. In the
World Telecommunication/ICT Indica-
tors Database prepared by the Interna-
tional Telecommunication Union, it was
observed that only 43% of the popula-
tion in India have used the internet.
Even in urban India, according to the
National Family Health Survey-5 data,
the gender gap within the digital divide
is significant, with only 51.8% of urban
women using the internet, compared to
72.5% of urban men (Chandola 2022).
The campaign “Brand Bengaluru” was
an online campaign, and the sugges-
tions from the people were collected
through its dedicated online portal,
despite a significant portion of the popu-
lation not having access to the internet.
In a discrete manner, their voices and
opinions are being ignored, albeit the
motto of this initiative is inclusivity. The
voice of all residents of the city matters,
as they are affected the most by govern-
ment policies.
Bengaluru’s Digital Divide
Hence, the problem of the digital
divide in a city such as Bengaluru
raises the question about the pro-
claimed inclusivity of “Brand Bengal-
uru” as an initiative. If a large section
of the people cannot even access the
basic digital portal to raise their own
views of what they want from the
development of the city, then how is
this initiative inclusive? This further
accentuates the socio-economic divide
among the people, and the “true”
development of the city does not imply
that only the elite few get the benefits
of development at the cost of others.
However, ironically, as per the Brand
Bengaluru portal, a bulk of the 70,000
suggestions received (Thadhagath 2023)
emphasise the problems of information
technology (IT) professionals and the
so-called educated elite sections of
society who have access to the internet
and other modern technology or who
can voice their opinions during the
interaction sessions held with different
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resident associations in the city during
the campaign. Such forms of interac-
tion render the city as coming under
corporate capitalism, benefiting only a
select few. The voices that this initia-
tive should instead focus on and high-
light stand ignored amid the propa-
ganda of developmentalism, modern-
ism, and corporate restructuring of the
city. This is the reason why digital
information transmitted by the gov-
ernment does not find its place in the
heart of Lakshmamma. Moreover, if
Lakshmamma tries to express her
views to reach the heart of the policy-
makers behind this initiative, we are
sure that her voice would be rather
feeble among the odd 70,000 elite
responses received on Brand Bengaluru’s
digital portal.
Lakshmamma is unaffected by the
charm of “Brand Bengaluru,” as exem-
plified by its tagline “Be U.” This irony is
derived from the juxtaposition of her
honest, unassuming personality against
a branding campaign encouraging peo-
ple to be themselves, that is, to adopt a
persona consistent with the city’s image
(DC Correspondent 2017). While the
city’s branding aims to establish a dis-
tinct identity, Lakshmamma epitomises
a genuineness that goes beyond the
requirement for such branding. Her
attachment to the city relates to her per-
sonal experiences and fond memories
rather than the “branded” image that
this initiative seeks to convey. She
becomes a living example of the paradox
between the corporate brand image of
Bengaluru and the actual, unfiltered
essence of those who call Bengaluru
their “home.”
Embracing Eco-socialism
One of the fundamental premises of eco-
socialism is the vision of a society without
class divisions and capitalist alienation.
Such a vision will make people pursue
their desires in cultural, recreational,
and humane connections, and build their
political awareness instead of the capi-
talist approach of consumerism and pur-
suing endless materialistic pleasures.
Lakshmamma epitomises this aspect of
eco-socialism, as she is quite content
with her life and “free” from the race of
vol lix no 1
ALTERNATIVE STANDPOINT
having more and more materialistic
needs, which the current generation,
due to the impact of capitalism and its
culture of consumerism, is trapped into.
In an ironic manner, she is being her
authentic self, and the tagline of this ini-
tiative—“Be U”—seems most fitting for
her. She is in her comfort zone, while it
is the capitalist takeover of the city that
invades her space and creates such cul-
tural changes which she and people like
her did not ask for.
The government has become blinded
by the imagery of metropolitan cities
around the world, ignoring the natural
beauty of a place like Bengaluru. The
concept of “Brand Bengaluru” might
just render it like any other fast-paced
cities around the world, which leads us
to ask whether there will be anything
left that is unique to Bengaluru. Hence,
Lakshmamma is a vital source for bring-
ing back the serendipity in the city
through eco-socialism. However, the
social exclusion faced by individuals like
Lakshmamma is a sign that such initia-
tives do not affect her and that she is left
on her own in the world of crony capital-
ism to “Be U,” that is, be in the lower
strata of society for all her life.
We also spoke to Subendu (name
changed), a 27-year-old IT software
developer from West Bengal to see the
other end of the spectrum. It was inter-
esting to note the opportunity that such
individuals get to showcase their per-
spectives and voice their opinions on
such initiatives of the government, thanks
to social media websites. In contrast to
Lakshmamma’s views, he envisions the
city as a “land of dreams.” Bengaluru,
for him, represents a realm of possibili-
ties that will help catapult his career to
newer heights. It is a heaven for the
youth, brimming with IT parks and a
burgeoning start-up culture, an ideal
arena for “young talent” to chase their
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11
 ALTERNATIVE STANDPOINT
“American dream.” He wants Bengaluru
to be a “global epicentre” of technology,
just like New York is the epicentre of
“modernism.” He advocates for the city
to be the “Silicon Valley of the East,”
which will be a stopgap arrangement for
several youths to land their feet in the
international job market. He appears
unworried about the city’s environmen-
tal or social well-being.
Subendu is chasing a dream, where
his aspirations are fuel for the capitalist
system. He is using the resources of
the city as a bridge to get a career boost.
However, there is always a hidden cost
associated with such “dreams” and the
alignment of the government towards
building Bengaluru as a “brand.” From
the lens of eco-socialism, where social
equity and inclusion are the prime focus,
his views contrast with the values of the
native residents of the city. He views the
city as adopting a consumerist approach,
akin to New York, which is a challenging
threat to the city’s future. It also brings
into question the rise of the influence of
corporations, driven by their profit-mak-
ing agenda and neo-liberal ideology.
Eco-socialism, on the contrary, advo-
cates for a democratic decision-making
process that places the people’s social
interests and a sustainable ecological
future at the centre, leading to inclusive
development in the city (Löwy 2019).
Neo-liberalism versus
Eco-socialism
The principled strategy for Brand Ben-
galuru that the government should adopt
is eco-socialism. It combines the concerns
of the environment and socialism, and
such a strategy will ensure that the voices
of all the significant stakeholders of the
city are heard. Eco-socialism will allow
for the city’s growth in line with an eco-
logical equilibrium, and not only for the
purposes of corporate restructuring.
Eco-socialism also emphasises the need
for a planned economy that prioritises
the well-being of the people and the
environment over profit (Löwy 2015).
These contrasting narratives under-
score the difference between the capitalist
mindset of the IT worker and the unwa-
vering resilience and determination of
a native resident, whose commitment
12
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is to achieve a prosperous and promising
future for the city. Therefore, the rebrand-
ing of this city should go beyond the
marketing jargon of “branding” and rep-
resent the dreams and diversity of the
city. The infusion of eco-socialist principles
into this transformational process adds
an aspect of sustainability to Bengaluru’s
development. “Brand Bengaluru,” thereby,
should focus on the priorities of the locals.
The other problems related to the
initiative of Brand Bengaluru are twofold.
First, the initiative has a flawed approach
that neglects the neighbouring dis-
tricts. Criticism against this initiative
was raised by the main opposition
leader in Karnataka who highlighted
the fact that this initiative is damaging
the neighbouring districts of Bengaluru.
As infrastructure development takes
place, it is estimated to generate 1,600
tonnes of waste, which is a serious threat
to the ecological balance of these neigh-
bouring districts. The opposition leader
has referred to this initiative as a ploy to
convert these areas into Bengaluru’s “dust
bins” (Express News Service 2023b).
Second, the model of “Brand Bengaluru”
is affecting other prominent cities in
Karnataka as well. The most recent exam-
ple is the development of Mysuru along-
side Bengaluru to be developed as “twin
cities” (Express News Service 2023c).
Currently, the focus of development is
on Mysuru, but, in the future, the state
government plans to extend and estab-
lish the same models in tier 2 cities of
Karnataka like Hubli, etc. This shows
that the emphasis is only on infrastruc-
ture development, and not on any other
aspect of society and environment in
Karnataka. The hunger of capitalist
forces is pressuring the stakeholders to
make certain decisions which is forcing
them to change even heritage cities like
Mysuru into an IT-oriented concrete
city like Bengaluru, thus undermining
the cultural importance and significance
of the city (Hindu Bureau 2023).
In Conclusion
The only solution to Bengaluru’s prob-
lems is by aligning the city’s growth
with the principles of social inclusion;
the government needs to foster a model
of development that prioritises the
january 6, 2024
well-being of its residents and the city’s
environment. It is the job of the govern-
ment to implement ecologically sound
policies. If it is successful in its endeav-
our, Bengaluru will grow and prosper,
keeping in mind the aspirations of all its
stakeholders. But if it fails, Bengaluru
will lose its soul and will become just
another soulless corporate playground,
with towers of multinational corporations
standing on the graves of the unheard
voices of the city’s residents from the
lower social strata.
References
Chandola, B (2022): “Exploring India’s Digital
Divide,” ORF, https://www.orfonline.org/exp
ert-speak/exploring-indias-digital-divide/.
DC Correspondent (2017): “Brand Bengaluru: The
Logo Is Finally Here!,” Deccan Chronicle,
https://www.deccanchronicle.com/nation/in-
other-news/251217/brand-bengaluru-the-logo-
is-finally-here.html.
Express News Service (2023a): “Public Suggestions to
be Sought to Enhance ‘Brand Bengaluru’: Karna-
taka Deputy Chief Minister D K Shivakumar,”
Indian Express, https://indianexpress.com/
article/cities/bangalore/public-suggestions-
to-be-sought-to-enhance-brand-bengaluru-
karnataka-deputy-chief-minister-dk-shivaku-
mar-8670607/.
— (2023b): “Govt Developing ‘Brand Bengaluru’
at Expense of Neighbouring Districts: JD(S)
Leader H D Kumaraswamy,” Indian Express,
https://indianexpress.com/article/cities/
bangalore/h-d-kumaraswamy-brand-bengal-
uru-ramanagara-congress-govt-8984422/.
— (2023c): “Bengaluru, Mysuru to be Developed
as Twin Cities,” New Indian Express, https://
www.newindianexpress.com/cities/bengal-
uru/2023/nov/07/bengaluru-mysuruto-be-
developed-as-twin-cities-2630739.amp.
Hindu Bureau (2023): “Mysuru Will be Developed
as Bengaluru’s Twin City, Claims Minister,”
Hindu, https://www.thehindu.com/news/nati
onal/karnataka/mysuru-will-be-developed-
as-bengalurus-twin-city-claims-minister/arti-
cle67504435.ece.
Löwy, M (2015): Ecosocialism: A Radical Alternative
to Capitalist Catastrophe, Haymarket Books.
— (2019): “Why Ecosocialism: For a Red–Green
Future, Great Transition Initiative,” https://
greattransition.org/publication/why-ecoso-
cialism-red-green-future.
Thadhagath, P V (2023): “Over 70,000 Suggestions
Pour in for Brand Bengaluru Initiative,” Hindustan
Times, https://www.hindustantimes.com/cit-
ies/bengaluru-news/over-70-000-sugges-
tions-pour-in-for-brand-bengaluru-initia-
tive-101692366104658.html.
available at
K K Puri News Distributors
9, Dacres Lane,
Ground Floor, Suit No 2
Kolkata 700 069
West Bengal
vol lix no 1 EPW Economic & Political Weekly
 COMMENTARY
NITI Aayog’s Multidimensional
Poverty Index
Some Methodological Issues
Ajit Kumar Singh
The multidimensional poverty
index computed by the Niti
Aayog suffers from several
methodological shortcomings
as well as wrong or improper
selections of indicators. The
most glaring mistake in the
report is the inclusion of
multidimensional deprivation
index estimates for urban areas
for all districts. This reduces
the validity of the findings for
policy intervention as well as
international comparison.
Ajit Kumar Singh (aksingh101@rediffmail.com)
was formerly with Giri Institute of
Development Studies, Lucknow.
24
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D
uring the last decade or so, the
use of multidimensional poverty
index (MPI) has become popular
in academic and policymaking circles all
over the world. The MPI is a much wider
concept than the income poverty con-
cept as it captures multiple and overlap-
ping deprivations faced by the poor.
The MPI is based on the aggregation of
multiple indicators related to three
aspects: (i) health, (ii) education, and
(iii) standard of living. The MPI, thus,
provides a more comprehensive depiction
of poverty, which can serve as a policy
tool to tackle poverty in each dimension at
different levels.
The multidimensional poverty meas-
ure was first developed by the Oxford
Poverty and Human Development Initia-
tive (OPHI) and United Nations Develop-
ment Programme (UNDP) for inclusion in
UNDP’s flagship Human Development
january 6, 2024
Report in 2010, where it has been pub-
lished since then (Alkire and Foster
2011; Godinot and Walker 2020).
In November 2021, the NITI Aayog (2021)
published the baseline report on Multi-
dimensional Poverty for Indian States
and Districts. The report is based on the
unit-level data collected for the fourth
National Family Health Survey (NFHS)-4
and refers to the year 2015–16. The MPI
is calculated by multiplying the head-
count ratio of poverty with intensity of
poverty. The report presents estimates
of multidimensional deprivation index
(MDI) for India and all the states as well
as all districts of India both for the rural
and the urban areas.
MDI: Some Methodological Issues
Because of its wider implications, the
methodology followed by the NITI Aayog
and its estimates require critical exami-
nation. In a recent article, Mohanty
et al (2022) have highlighted some of
the methodological weaknesses of the
MDI as prepared by the NITI Aayog. The
major shortcomings noted by them are
as follows:
(i) Many key indicators with regard to
the dimensions of health, education and
standard of living are absent in this data
set as well as in these estimates. For ex-
vol lix no 1 EPW Economic & Political Weekly

ample, the nutrition-related indicator in
the MPI frame does not take into account
the nutrition level of children aged 6–14
years, as the NFHS does not compute the
body mass index for this group of children.
(ii) The cut-off point of 0.33 sounds arbi-
trary without a strong theoretical justifica-
tion, clearly pinning on the Indian context.
(iii) The inclusion of a few indicators, for
example, “access to banking” in the
standard of living domain appears a bit
absurd, given that more than 90% of the
families have some kind of access to
banking—whether public, private, or
through post offices.
(iv) The chosen indicators for health are
inadequate to capture the deprivations
in these dimensions. Such an outlook to-
wards deprivation overlooks the differ-
ential vulnerability to undernourishment
between the early ages and adulthood.
Further, owing to rapid fertility transi-
tion, a good number of households will
escape the counting of child undernour-
ishment in the complete absence of chil-
dren below the age of five years.
(v) The survivorship domain being repre-
sented by the experience of child/ado-
lescent mortality in a household during a
reference period of five years is not the
most suitable indicator due to varied rea-
sons. The mortality experience below the
age of 18 could be due to varied reasons
and bracketing the child and adolescent
mortality together cannot reflect the sur-
vivorship transition that is underway.
(vi) Given that educational attainment
happens at an age and stage in life, edu-
cational deprivation needs to remain
limited to current educational ages and
not those who have passed the age of
attaining education. Also, the proposed
indicator does not involve any aspect of
the quality of school education.
(vii) While multidimensional poverty is an
ideal construct, it is systematically respon-
sive to the state of development as poverty/
deprivation becomes less and less with im-
provements in the state of development.
These shortcomings lead the authors
to conclude that,
despite all limitations of consumption poverty
with regard to identification, the indicators
designed for identification of components in
multidimensional poverty do not seem bet-
ter and less ambiguous. Hence, an exercise
of this kind may have a genuine intent but
Economic & Political Weekly EPW january 6, 2024
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surely does not have the necessary rigour to
qualify as a better measure than the exist-
ing ones. So, the MPI can at best supplement
consumption poverty but cannot be an ideal
alternative. (Mohanty et al 2022: 20)
Maiti and Mehrotra (2022) attack the
concept of multidimensional poverty used
by the UNDP on conceptual grounds. They
point out that the 10 global indicators
used in calculating the MDI are a “mish-
mash of very different types.” The edu-
cation indicator “not completed six years
of school” is an “output” indicator, while
“child up to class 8 not attending school”
is a “process” indicator, respectively. The
health indicators are “outcome” indica-
tors, while the indicators of standard of
living are input-based. According to them,
In statistics, it is theoretically flawed to
lump together such different indicators to
construct an index as there are associations
among them. They are not independent and
exclusive contributors. They don’t make con-
ceptual sense, unlike the HDI.
The national MDI prepared by the NITI
Aayog uses two additional indicators,
that is, maternal health in the “health”
dimension and access to banking in the
“standards of living” dimension. As Mai-
ti and Mehrotra (2022) point out, inclu-
sion of additional indicators “leads to a
change in the weights assigned to the
indicators, as the overall weight in the
NMPI is now distributed among 12 indi-
cators.” They also criticise the inclusion
of a bank account or a post office ac-
count in the “standard of living” dimen-
sion as the inclusion of this indicator to
measure poverty significantly improves
the non-deprived numbers, given the
fact that over 90% of households al-
ready have a bank or post office account.
One may also note another shortcom-
ing in the selection of indicators. For in-
stance, the indicator for assets includes
such diverse items like radio, television,
telephone, computer, animal cart, bicycle,
motorbike and refrigerator. These assets
differ much in value and also linking
them with poverty is problematic. There
is also a close association with their own-
ership. Moreover, assigning equal weights
to all 12 indicators is also a debatable
issue. No doubt, these are issues on
which experts may have different opin-
ions and it is difficult to give a final
vol lix no 1
COMMENTARY
answer. The best way would have been
to use the UNDP approach to ensure uni-
formity and comparability of estimates.
Reliability of Urban MDI Estimate
An important consideration is the statisti-
cal reliability of the estimates, which de-
pends on the size of the sample and selec-
tion of households. A careful reading of
NFHS-4 report, on which the MDI esti-
mates are based, indicates that the urban
sample is inadequate for the majority of
districts. As the NFHS report observes:
Decisions about the overall sample size re-
quired for NFHS-4 were guided by several
considerations, paramount among which was
the need to produce indicators at the dis-
trict, state/union territory (UT), and national
levels, as well as separate estimates for ur-
ban and rural areas in the 157 districts that
have 30–70 percent of the population living
in urban areas as per the 2011 census, with a
reasonable level of precision. (IIPA 2017)
Thus, it is clear that estimates for
urban areas are valid for only 157 out of
650 districts. In fact, the district-level
factsheets of the report give only rural and
total estimates for the remaining districts
and skip urban estimates as the sample is
not adequate. This important point has
been missed or overlooked by the NITI
Aayog team while preparing the MDI report.
Thus, the NITI Aayog estimates for the
majority of districts are not statistically
reliable as far as the urban areas are con-
cerned. The following empirical investi-
gation based on the estimates of urban
poverty in Uttar Pradesh (UP) as given in
the report will clearly establish this.
As observed previously, the urban esti-
mates of NFHS-4 are valid only for 157 dis-
tricts (out of 650 districts) with more than
30% urban population. In UP, only 13 out
of the 70 districts have an urban popula-
tion of 30% or more, namely Hamirpur,
Bareilly, Kanpur Dehat, Bulandshahr,
Unnao, Jhansi, Gorakhpur, Mahoba,
Baghpat, Gautambudh Nagar, Kanpur
Nagar, Lucknow, and Ghaziabad. The
urban poverty index for only these 12
districts can be said to be statistically reli-
able. For other districts of UP, the urban
estimates suffer from an unknown degree
of error margin.
Table 1 (p 26) shows select indicators
of development for 12 districts which
have an urban headcount ratio of less
25
 COMMENTARY

than 10%. It includes both poor and less the indicators included in MDI as shown on this point by the NITI Aayog will be
urbanised districts (Pratapgarh, Basti, in Table 2. It was also found that the in public interest.
Azamgarh, Raebareli, Sultanpur, and overall differences in these districts be-
Sonbhadra) as well as richer and more tween district average and rural average Postscript
Table 1: Select Indicators of Development in UP Districts with Low Urban Poverty Recently, in July 2023, the NITI Aayog came
District Urban PC Income Urban Urban Population Population Living Population out with the MDI report for 2019–21 (NITI Aayog
Headcount (`) Population Literacy Living in Towns in Towns 50,000 Living in Towns 2023) based on NFHS-5 (2019–21). The NFHS-4
Ratio (%) (%) (%) below 50,000 to 1 lakh 1 lakh + and NFHS-5 provide representative data for all
Pratapgarh 0.83 24,429 9.66 64.90 56.56 43.44 0 28 states and eight union territories. However,
Gorakhpur 4.18 35,253 43.44 82.00 19.46 0 80.54 there has been a change in the coverage of
Lucknow 4.71 71,846 66.21 81.90 5.23 2.07 92.7 districts. As the report explains:
Basti 4.97 39,477 13.92 83.00 16.97 0 83.03 The NFHS-4 provides data for 640 administra-
Azamgarh 5.94 26,732 11.71 77.00 53.88 17.91 28.21 tive districts as per the 2011 Census of India
Raebareli 6.53 30,993 24.79 80.00 37.88 0 62.12 and the NFHS-5 provides data for 707 adminis-
Kanpur Nagar 6.85 57,308 65.83 82.10 4.61 0 95.39 trative districts as on 2017. Since certain dis-
Jhansi 8.53 59,014 41.70 80.00 31.96 7.37 60.67 tricts that were part of the 2011 Census of In-
Hamirpur 9.03 41,823 30.77 77.00 69.00 31 0 dia were subsequently divided into multiple
Jalaun 9.09 48,131 24.79 62.54 0 19.00 81 smaller administrative districts as of 2017,
Sultanpur 9.61 38,884 5.46 83.00 46.16 0 53.84 only 575 districts remain comparable between
Sonbhadra 9.68 49,993 20.06 84.00 100.00 0 0 the two time periods covered by the NFHS
Source: Headcount ratio is taken from NITI Aayog (2011). Other indicators taken from Statistical Diary UP. (2015–16 and 2019–21). Therefore, estimates
Table 2: Indicators for Backward Districts with Low Urban Poverty for changes in the national MPI and its compo-
Indicator Sultanpur Raebareli Pratapgarh Sonbhadra UP nent indicators over time have been provided
Households with electricity (%) 75.0 71.6 71.3 52.4 70.9 for 575 districts that remain comparable
HH with improved drinking water (%) 95.3 98.4 92.5 87.5 96.7 across two time periods. However, the point
HH with sanitation facility (%) 16.7 18.4 15.8 23.7 25.0 estimates for the national MPI, that is, the
HH with clean cooking facility (%) 16.8 22.7 23.5 20.3 32.7 estimates at a fixed period in time have been
Female literacy (%) 60.4 62.2 64.1 56.6 61.0 provided for all 707 districts covered under
Male literacy (%) 81.9 87.1 88.5 82.4 82.4 NFHS-5 and all 640 districts covered under the
Institutional births (%) 73.1 81.7 77.1 57.4 67.8 NFHS-4. (NITI Aayog 2023: 21)
Children below five stunted 45.9 36.4 41.3 45.9 46.3 It is not possible here to analyse critically
Children below five wasted 19.1 15.5 23.8 22.5 17.9 the findings of the MDI 2023 report, but it
Children below five underweight 39.8 41.3 42.6 46.4 39.5 may be pointed out that taking into account
Source: NFHS-4 report. the criticism of the baseline report regard-
ing urban MDI estimates at the district lev-
urbanised districts (Lucknow, Kanpur for various indicators were quite small
el, the NITI Aayog has conveniently omitted
Nagar, Gorakhpur, and Jhansi). It is suggesting that things are not much dif- rural and urban MDI estimates at the district
difficult to believe that Pratapgarh, with ferent in the urban areas of these dis- level without mentioning the reason and ad-
one-third per capita income as compared tricts as compared to the rural areas. mitting the mistake in the baseline report.
to Lucknow, has less than 1% population The NITI Aayog could have given estimates
In Conclusion for the districts for which sample size was
living in poverty in the urban areas.
adequate. The omission of rural estimates at
The correlation analysis at the district The analysis makes it clear that the MPI the district level reduces the usefulness of
level for UP reveals that the urban pover- computed by the NITI Aayog, though a the report for local-level planning.
ty ratio as computed in the NITI Aayog welcome effort, suffers from several
References
report is positively related to the propor- methodological shortcomings as well as
Alkire, S and J Foster (2011): “Counting and Multi-
tion of population living in small towns wrong or improper selections of indica- dimensional Poverty Measurement,” Journal of
(R = +0.2733). On the other hand, the tors. The most glaring mistake in the Public Economics, Vol 95, Nos 7–8.
Godinot, X and R Walker (2020): “Poverty in All Its
poverty ratio in districts with the popu- report is the estimation of the urban Forms: Determining the Dimensions of Poverty
lation of more than one lakh is nega- poverty index, which is statistically reli- Through Merging Knowledge,” Dimensions of
Poverty: Measurement, Epistemic Injustices,
tively related to urban poverty ratio able for only 157 out of 650 districts. Activism, H H Valentin Beck (ed), Springer.
(R = -0.2975). This is generally so be- This is important to highlight especially IIPA (2017): National Family Health Survey (NFHS-4),
2015–16, India, Ministry of Health and Family
cause the urban infrastructure in larger because the report claims that “district Welfare, New Delhi.
towns is relatively better. Thus, we would level estimates are a unique feature of Mohanty, Sanjay K, U S Mishra and K D Maiti
(2022): “Reflections on the NITI Aayog’s
expect urban poverty to be higher in the the report and provide policy guidelines Multidimensional Poverty Index,” Economic
districts with a higher proportion of urban to district level officials.” This claim is & Political Weekly, 2 April, Vol 57, No 14.
Maiti, K D and Santosh Mehrotra (2022): “The
population living in towns of less than not valid with respect to most of the dis- Curious Case of India’s Millions of ‘Missing’
50,000 population like Pratapgarh, Basti, tricts as far as urban poverty estimates Poor People,” Wire, 12 January.
Azamgarh, Raebareli, Sultanpur, and are concerned. On the other hand, the NITI Aayog (2021): India: Multidimensional Poverty
Index, Baseline Report, Based Upon NFHS-4
Sonbhadra. But the MDI estimates show a report may give wrong signals and may (2015–16), Government of India, New Delhi.
different picture. One also needs to note make district-level authorities complacent — (2023): National Multidimensional Poverty
Index: A Progress Review 2023, Government of
that these districts are lagging in most of about the real situation. A clarification India, New Delhi.

26 january 6, 2024 vol lix no 1 EPW Economic & Political Weekly

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Public Expenditure in Agriculture
Unmasking the Real Trends?
Himanshu Pathak, Anjani Kumar, Gaurav Tripathi
Trends in public expenditure
related to the agriculture sector
in India are recategorised and
analysed to understand the
spatial and temporal trends
in expenditure, the extent
to which it has shifted across
various subsectors, and assess
if the sectors, prioritised
and promoted, receive
commensurate allocations.
The authors express their sincere thanks to
the anonymous referee for their valuable
comments. These comments helped them
improve the article.
Himanshu Pathak (h.pathak@cgiar.org),
Anjani Kumar (anjani.kumar@cgiar.org), and
Gaurav Tripathi (g.tripathi@cgiar.org) are
with the International Food Policy Research
Institute, New Delhi.
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P
ublic expenditure in the agricul-
ture sector and its role in reduc-
ing poverty and enhancing
household incomes, especially in rural
areas, is widely studied and firmly es-
tablished (Bathla et al 2020; Fan et al
1999, 2000; Fan et al 2008; Mogues et
al 2015). In India, the union govern-
ment and various state governments
are the primary sources of public ex-
penditure. Agriculture is a state subject
under the Seventh Schedule of the Con-
stitution of India (GoI 2020). However,
considering the vast importance of the
agriculture sector in the Indian econo-
my (Wagh and Dongre 2016), the union
government is also responsible for its
development. In addition to spending
directly on the sector, the union gov-
ernment allocates a major share of its
budgetary resources to the state gov-
ernments through various available
instruments, including central sector
vol lix no 1
COMMENTARY
schemes, centrally sponsored schemes,
and grants-in-aid.
Considering the importance and rele-
vance of public expenditure for public
policies, it is critical to not only observe
its trend over the years but also analyse
its composition and sub-sectoral distri-
bution. To do this, the choice of statisti-
cal publications and data sets is a key
determinant towards the estimation of
expenditure. The issue of selecting ap-
propriate data sets is relevant in devel-
oping countries in Asia and Africa
(Mogues and Caceres 2018) as well as
globally (Mogues and Anson 2018).
Researchers and policymakers face the
tough choice between expenditure esti-
mates that are either based on adminis-
trative or functional classification or
use audited account statements. For in-
stance, expenditure towards the forestry
sector may be included under the aegis
of agricultural expenditure in one coun-
try but excluded by others; likewise,
one country may categorise expenditure
on agricultural research as research ex-
penditure while others include it under
agriculture (African Union 2015). These
choices have significant implications
for the aggregate estimates related to
public expenditure.
15
 COMMENTARY
Such aggregation and estimation
challenges also exist with respect to
various publicly available public ex-
penditure data sets in India. The pre-
liminary estimates related to public ex-
penditure are available in the budget
documents provided by the Ministry of
Finance, Government of India (GoI)
and various state governments. The
Reserve Bank of India (RBI) aggregates
the budget documents for all the state
governments and provides time-series
data of budgeted, revised, and actual
estimates. Lastly, the Comptroller and
Auditor General of India (CAG) provides
audited accounts (that is, actual
expenditure incurred by the govern-
ments) in the reports titled, “Combined
Finance and Revenue Accounts” (CFRA),
which are understandably released
after a lag (CAG nd).1
The objective of this article is to
present an alternate framework for
cataloguing, categorising, and estimat-
ing public expenditures related to agri-
culture and food systems. This is done
primarily to observe the shifting trends
in priorities over the years and to assess
if the stated priorities of governments
are supported by commensurate alloca-
tion. As the major expenditure catego-
ries used by the GoI have remained un-
changed over the last few decades,2 it is
imperative to recategorise expenditure
and aggregate it into categories that are
more relevant to current and emerging
priorities. Although instances of ex-
penditure recategorisation studies exist
for some African countries (Benin 2014;
Mogues and Caceres 2018), we did not
find similar studies for India.
Data and Methodology
We have used audited accounts of the
national and subnational governments
from 2008 to 2019. The CAG annually
prepares the CFRA of the union and state
governments (CAG, 2008–09 to 2018–19).
The CFRA comprises the details of all
receipts and expenditures, including
the details of loans and advances, of
the union and state governments. It is
the most exhaustive and detailed account-
ing exercise done by the CAG at the nation-
al and subnational levels combined.
These accounts comprise disaggregated
16
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expenditure up to a very minute level
(also called “minor heads”), enabling us
to adopt a bottom-up approach of cate-
gorising expenditure based on its eco-
nomic characteristic and objective rath-
er than government-adopted categorisa-
tion. On the other hand, the government
budgets and the RBI data on public ex-
penditure provide details only up to the
level of “major heads.” Table 1 provides
details on the source and level of detail
in each data set.
The key difference between the esti-
mates released by the RBI, by the gov-
ernments through budgets, and by the
CAG does not lie as much in the aggre-
gates as it does in the detailed expendi-
ture account heads. The budget state-
ments primarily classify expenditure
based on its administration, that is, in
terms of ministries and departments
that will implement the government’s
schemes and programmes. In addition,
they shed some light on functional clas-
sification by providing sectoral esti-
mates, that is, sectors for which the ex-
penditure is allocated. However, the
sectoral estimates are limited to broad
classifications called “major heads” in
administrative parlance. For example,
in the agriculture sector, budget docu-
ments provide allocation for the Minis-
try of Agriculture and Farmers’ Welfare
(administrative classification), but they
also provide allocation for “agriculture
and allied activities,” which includes
expenditure for the sector from all min-
istries and departments and some un-
derlying subsectors such as crops and
livestock.
Traditional Categorisation
Here, we describe the categorisation
framework followed by the governments
and public institutions in India. The gov-
ernment’s schemes and programmes
change every year according to the
needs of the sector and other political
and economic considerations. This has
led to the creation of a uniform categori-
sation framework based on the economic
and social objectives of public expendi-
ture. This categorisation framework 3
is made by the Controller General of
Accounts (CGA), the Ministry of Finance,
and the GoI, and is updated at regular
january 6, 2024
intervals to keep it relevant and to meet
the needs of the changing landscape of
public expenditure (CGA 2012).
According to this framework, the GoI
and all public institutions involved in
organising public expenditure data4 cat-
egorise expenditure into four categories:
general services, social services, eco-
nomic services, and grants-in-aid.
Expenditure towards general services
includes routine administrative expenses
incurred for establishments, salaries,
and pensions. Expenditure towards eco-
nomic and social services, as the names
suggest, includes all scheme-related
expenditures for economic development
and social welfare. “Agriculture and
allied activities” come under the aegis
of economic services and are further
categorised into 12 major heads, (i) crop
husbandry, (ii) soil and water conserva-
tion, (iii) animal husbandry, (iv) dairy
development, (v) fisheries, (vi) forestry
and wildlife, (vii) plantations, (viii) food
storage and warehousing, (ix) agricul-
tural research and education, (x) agri-
cultural financial institutions, (xi) coop-
eration, and (xii) other agricultural
programmes.
Expenditure for grants-in-aid includes
transfer of resources from the union
government to state governments. Grants-
in-aid are disbursed primarily for three
purposes: disaster relief, local bodies
(including panchayati raj institutions),
and revenue deficit.
These four broad categories are fur-
ther divided into subcategories and
then into major heads of accounts. A
four-digit code, uniformly followed by
Table 1: Various Available Data Sources Related
to Public Expenditure and Their Level of Detail
S No Public Expenditure Data Level of Detail
and Source
1 Budget documents, Administrative and
GoI functional (up to
major heads)*
2 Database on Indian Functional (up to
Economy, RBI major heads)
3 Combined Finance Functional (including
and Revenue expenditure on minor
Accounts, CAG heads such as oilseeds,
pulses, etc)
* The detailed demand for grants (DDGs) of each ministry
and department includes information for minor heads.
Sources: 1 Government budget documents are available
at https://www.indiabudget.gov.in/
2 RBI e-STATES database is available https://rbi.org.in/
Scripts/Statistics.aspx /
3 CFRA, CAG is available at https://cag.gov.in/en/
combined-accounts.
vol lix no 1 EPW Economic & Political Weekly

all government and accounting agen-
cies across the country and states, is as-
signed to each major head of account.
Note that major heads are the main unit
of classification of government ac-
counts, and they correspond to the
“functions” of the government. For in-
stance, the uniform code for all expen-
ditures towards “animal husbandry” is
2403; for “fisheries” it is 2405. These
major heads of expenditure are then
further divided into minor heads and
detailed heads (Box 1).
The framework for expenditure clas-
sification was introduced in 1974 and
revised with new coding patterns in
1987 (Ministry of Finance 2016). The GoI,
acknowledging the need to reform this
categorisation framework, formed a
committee under the chairpersonship
of C R Sundaramurti, CGA. The Sundar-
amurti Committee submitted its report
in January 2012 proposing a multidi-
mensional classification structure with
seven mutually exclusive segments with
their own individual hierarchical struc-
tures (CGA 2012).
The committee was tasked to
conduct a comprehensive review of the exist-
ing system of expenditure and receipt clas-
sification as contained in the List of Major
and Minor Heads and to evolve a system
which could cater to the requirements for
policy formulation, allocation of resources
among sectors, compliance with legislative
authorisations, accountability, policy review
and performance analysis. (CGA 2012: 7)
It came up with a novel expenditure cat-
egorisation framework that better suited
the nature and objectives of government
expenditure. Having said that, the rec-
ommendation of the committee has not
been adopted till date.
In this article, rather than proposing
a new categorisation framework for all
expenditure categories, we have limit-
ed the scope to only the agriculture
Box 1: System of Expenditure Classification,
Government of India
Major head (4 digits)—represents a major function of
the government
Sub-major head (2 digits)—represents a
sub-function
Minor head (3 digits)—represents a programme
Subhead (2 digits)—represents a scheme
Detailed head (2 digits)—represents a sub-scheme
Object head (2 digits)—represents the economic
nature of expenditure
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sector and have reorganised a few
minor heads.
Modified Categorisation
Framework
We have categorised public expenditure
related to the agriculture sector accord-
ing to its objectives and economic char-
acteristics. The CAG publishes audited
accounts of the expenditure incurred by
the union government and all state gov-
ernments. By definition, the CAG only
publishes actual expenditure and does
not deal with budget estimates or re-
vised estimates. Therefore, all data re-
lated to public expenditure released by
the CAG have a two-year lag, the amount
of time taken by the GoI to finalise and
reconcile its accounts. This is the major
drawback of using the CAG data, but
these data do add another layer of detail
to the expenditure data. In addition to
the details of major heads of accounts,
they include sectoral (instead of admin-
istrative) data related to the minor and
detailed heads of accounts. This addi-
tional layer of data allows us to recate-
gorise expenditures and combine them
according to more refined and custom-
ised categories (or themes).
The 12 major heads of accounts are
further categorised into minor heads of
accounts. For our analysis, we took
expenditure data for all minor heads of
accounts for the selected major heads
relevant to agriculture.
Further, we regrouped these minor
heads of accounts into seven broad
Box 2: Modified Categorisation Framework
1 Crops, livestock, and fisheries
1.1 Crop husbandry
1.1.1 Cereal crops
1.1.2 Non-cereal crops
1.2 Livestock and dairy
1.3 Fisheries
2 Subsidies
2.1 Fertiliser subsidy
2.2 Food subsidy
3 Marketing and storage infrastructure
4 Research and extension
4.1 Research and education related to:
4.1.1 Crops
4.1.2 Livestock
4.1.3 Fisheries
4.2 Extension services
5 Cooperatives
6 Irrigation
7 Risk mitigation and resilience
7.1 Promoting resilience and sustainability
7.2 Risk mitigation
vol lix no 1
COMMENTARY
Figure 1: Categorisation of Public Expenditure
towards Agriculture
Crops, livestock,
and fisheries
Subsidies
(food and
Marketing and
storage
fertiliser) infrastructure
Public
expenditure
Agricultural
finance
towardT
agriculture Irrigation
and cooperatives
Research and Risk mitigation
extension and resilience
categories (Figure 1), (i) crops, live-
stock and fisheries; (ii) marketing and
storage infrastructure; (iii) irrigation;
(iv) research and extension; (v) risk
mitigation and resilience; (vi) agricul-
tural finance and cooperatives; and
(vii) food and fertiliser subsidies. The
subcategories under each of these cat-
egories are described in Box 2. A major
limitation of such a reorganisation is
the inability to categorise expenditure
under minor head (800) which is
termed as “Other Expenditure.” This
minor head (800) is placed under crop
husbandry (major head: 2401) and
sometimes accounts for a large share,
sometimes around 20%, of expenditure
under crop husbandry.
Results and Discussion
Trends in public expenditure: We
analysed the expenditure trends of the
categories listed in Box 2. It is interest-
ing to note that the GoI includes ex-
penditure towards the food subsidy in
its estimate of agriculture sector ex-
penditure. This is despite the fact that
food subsidy is mainly provided to con-
sumers—not producers—by distribut-
ing subsidised foodgrains through the
public distribution system (PDS). Argua-
bly, many beneficiaries under the PDS
are farmers, but the fact remains that
including this expenditure under agri-
cultural development inflates actual
expenditure towards the sector. Simi-
larly, subsidies for fertilisers do not con-
tribute to the creation of capital assets
but do support small and marginal
farmers in their production activities.
In addition to estimating revised
agricultural investments, we calculated
17
 COMMENTARY
Figure 2: Expenditure Including and Excluding Food and Fertiliser Subsidies, 2008–09 to 2018–19; at Constant (2011–12 Prices) (` crore)
1,40,000 1,60,000
1,20,000 1,40,000
Including fertiliser subsidy 1,20,000
1,00,000 Including food subsidy
1,00,000
80,000
80,000
60,000 872% 183%
306% 44% 60,000 407%
40,000 Without subsidies
Without subsidies 40,000
20,000 20,000
0 0
2008–09

2009–10

2010–11

2011–12

2012–13

2013–14

2014–15

2015–16

2016–17

2017–18

2018–19

2008–09

2009–10

2010–11

2011–12

2012–13

2013–14

2014–15

2015–16

2016–17

2017–18

2018–19
Source: Authors’ calculations from the Combined Finance and Revenue Accounts, 2008–09 to 2018–19, Comptroller and Auditor General of India, https://cag.gov.in/en/combined-
accounts?arch=1.

Figure 3: Total Expenditure Including and Excluding Subsidies, 2008–09 to Part of the reason In the last three years of our analysis
2018–19, at Constant (2011–12) Prices (` crore)
for this drastic re- (2016–17 to 2018–19), total expenditure
2,00,000
1,72,254 1,73,564 duction in the ferti- plateaued, signifying a decline in the
1,51,635
1,60,000 1,40,061 1,46,321 1,43,457 1,45,221
1,41,501 1,50,046 1,49,868 1,47,990 liser subsidy was extent of food subsidy. However, careful
the introduction of observation of the government budgets
1,20,000 the nutrient-based as well as the accounts of the Food Cor-
713% Including fertiliser subsidy 227%
and food subsidy subsidy in 2010. Of poration of India (FCI, an institute that
80,000
the three fertiliser acquires foodgrains from farmers and
Without subsidies
40,000 groups (nitrogen, distributes them to consumers) indi-
41,253 46,345 phosphorous, and cates that it is just an accounting exer-
36,260
23,776 17,224 23,444 19,465 22,326 22,848 17,671 14,641
0 potash), nitrogen- cise. Loans taken by the FCI, which
2008–09

2009–10

2010–11

2011–12

2012–13

2013–14

2014–15

2015–16

2016–17

2017–18

2018–19

based urea was ex- should essentially have been part of the
cluded from the federal budget, as they are repaid by the
Source: Same as Figure 2. nutrient-based sub- government—are categorised as non-
expenditure towards categories that sidy, while the other fertilisers were kept budgetary expenditure, resulting in a
are more relevant in the present con- under its aegis. As a result, only the nu- huge undercounting of the food subsidy.
text and promote sustainable agricul- trient-based subsidy is accounted for by The GoI gave up this accounting tactic in
ture. These include expenditure on the GoI under the fertiliser subsidy. the 2021–22 budget and accounted for
non-cereal crops, livestock, fisheries, The urea subsidy is accounted for under FCI loans in the union budget, which
cooperatives, including agricultural subsidies given to “industries,” not under will result in a drastic increase in the
fi nance, and resilience and sustaina- agriculture sector expenditure. Thus, the food subsidy component of agricultural
bility. These expenditure trends not fertiliser subsidy appears to have declined expenditure. It is important to empha-
only bring forward expenditure that is from 2008–09 to 2018–19 at a compound sise here that the objective of Figure 3 is
not explicitly provided by the govern- annual growth rate (CAGR) of -14%. not to point towards the magnitude of
ment but also help in understanding The food subsidy’s contribution to food subsidies but to highlight the lower
how the GoI’s priorities have shifted inflated expenditure is even more stark: expenditure of the union government in
over time. it inflated total expenditure by 407% agriculture if we remove food subsidies
Figure 2 shows GoI expenditure in 2009–10, reaching an all-time high from the estimation.
from 2008–09 to 2018–19 at constant of 872% in 2015–16. This eventually The extent of expenditure that went
(2011–12) prices. The left and right reduced to 183% in 2018–19 because of towards subsidies becomes more evident
panels illustrate the fertiliser and food both a decline in the food subsidy and a if we look at the cumulative numbers
subsidies, respectively, and the extent slight rise in all other expenditures. between 2008–09 and 2018–19. Figure 4
to which they inflate total expenditure. Looking at the impact of both subsi- (p 19) analyses the distribution of
For example, the fertiliser subsidy dies combined (Figure 3), it is interesting expenditure among various categories
inflated total expenditure by 306% to note that total expenditure (includ- listed in Box 2. A total of 83% of the
in 2009–10, after which its extent ing subsidies) increased from 2009–10 expenditure went towards subsidies—
was consistently reduced over the next to 2015–16. This indicates that addi- more than 56% towards food and 27%
10 years. In 2018–19, the fertiliser sub- tional expenditure in the sector between towards fertiliser. The rest of the six
sidy increased total expenditure by a 2010–11 and 2015–16 went towards food categories, including irrigation, research,
mere 44%, signifying its decrease over subsidy, whereas expenditure excluding crops, livestock and fisheries, marketing,
the years. subsidies declined in absolute terms. finance, and cooperative accounted for
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 COMMENTARY
Figure 4: Distribution of Cumulative Expenditure between 2008–09 and 2018–19 Figure 5 shows the yearly distribution
Distribution of Total Expenditure in Categories (including subsidies) Distribution of Total Expenditure in Categories (excluding subsidies) of expenditure within all categories.
between 2008–09 and 2018–19 between 2008–09 and 2018–19
Annual expenditure in the 11 years of
Research and Crops, livestock
Cooperatives
extension and fisheries
the analysis increased from `23,776
Crops, livestock 5% 21%
and fisheries Marketing and
20% crore in 2008–09 to `46,345 crore in
3% Irrigation storage 2018–19, before witnessing a low of
1% infrastructure
Food subsidy `14,641 crore in 2015–16.
2%
56%
Other Table 2 shows the CAGR s annual
expenditure
3% growth rates of expenditure across the
Research and modified expenditure categories. Total
extension
3%
Cooperatives expenditure reduced by a CAGR of 5%
Other 27%
expenditure and ranged from `1,17,523 crore in
Fertiliser 19%
subsidy 2008–09 to `66,574 crore in 2018–19.
27% Marketing and
storage The most notable decline in expendi-
Irrigation
infrastructure
4% ture is observed in non-cereal crops,
9%
Source: Same as Figure 2.
with a CAGR of (-)18%. This is despite
the fact that various policy priorities,
Figure 5: Expenditure Trends and Distribution, All Categories, Government of India, 2008–09 to narratives, and documents of the GoI
2018–19, at Constant (2011–12) Prices (` crore)
15,000
have been emphasising the need to di-
versify away from cereal crops. Simi-
12,772 larly, fisheries and livestock expendi-
12,000
10,263
ture declined over the 11-year period.
9,000 9,177
Expenditure within Categories
7,196
6,000
5,374
This subsection analyses the trends in
3,998 expenditure within the crops, livestock
3,000 3,084 and fisheries and research and educa-
2,276
1,114 1,738
825 1,244 tion categories. Although trends in total
0 557 expenditure remained stagnant for the
2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18 2018–19
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
first few years (2008–15) and increased
Fisheries and livestock Cereal crops
from 2016–19 (Figure 5), the growth and
Non-cereal crops Cooperatives
Irrigation Marketing and storage infrastructure
decline trends in category-wise expendi-
Research, education and extension Risk mitigation, resilience and sustainability ture are somewhat different.
Source: Same as Figure 2. Figure 6 shows the distribution of
Figure 6: Distribution of Expenditure on Research and Education, The right panel of expenditure within the research and
Government of India,
p 2008–09 to 2018–19
, , Figure 4 shows the
8,000
Table 2: Compound Annual Growth Rates
6,958
distribution of expe- across Modified Expenditure Categories,
3%
7,000
5,999 6,185 2008–09 to 2018–19
4% nditure without subsi-
6,000 9%
5,062 5,259 Expenditure Category 2008–09 2018–19 CAGR
4,848
13%
13% dies and the corre- (` crore) (` crore) (%)
5,000 12% 4,333 4,343 4,375
3,942 13% 13% 13% sponding increase in Crops, livestock, 8,201 8,464 -6
3,596 10%
4,000 and fisheries
10% 79%
the share of all other Cereal crops 3,084 5,483 3
3,000 72% 86%
63% 62% 63% categories. Cooperatives, Non-cereal crops 4,002 1,244 -18
64% 63% 64%
2,000
72% 71% including agricultural Livestock and dairy 890 1,550 5
Fisheries 224 187 -5
1,000
16%
finance, contributed to
14% 14% 14% 18% 17% 17% 17% 19% 17% 9% Fertiliser subsidy 93,747 20,228 -14
0 one-quarter of the Marketing and storage 825 5,374 18
2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19
2008–09

2009–10

2010–11

2011–12

2012–13

2013–14

2014–15

2015–16

2016–17

2017–18

2018–19

expenditure. Research infrastructure

and extension, crops, Research and extension 3,998 7,196 3
General agricultural research Research (Crops) Research (Fisheries) Research (Livestock)
Crops 2,591 5,469 5
Source: Same as Figure 2. livestock and fisheries, Livestock and dairy 342 241 -2
a meagre 17% of total expenditure in and risk mitigation and resilience Fisheries 170 110 -4
these 11 years. Of this, 5% went towards each accounted for one-fifth of General agricultural 494 1,137 4
research
agricultural finance and cooperatives. total expenditure. Marketing infra- Extension services 402 238 -11
After that, crops, livestock and fisher- structure accounted for 9%, and Cooperatives 9,177 10,263 6
ies, risk mitigation, resilience, and cli- irrigation, for which state govern- Irrigation 557 2,276 13
Promoting resilience 32 33 -3
mate-smart agriculture, and research ments incur the majority of expendi- and sustainability
and extension expenditure each ac- ture, accounted for 4% of the Risk mitigation 987 12,740 23
counted for 3% of total expenditure. expenditure. Total 1,17,523 66,574 -5

Economic & Political Weekly EPW january 6, 2024 vol lix no 1 19

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 COMMENTARY
Figure 7: Distribution of Expenditure on Crops, Livestock, and Fisheries
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PG
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‒
 
 
 
  
 
 


 
 

 
 

 

 


2008–09
2009–10
$FSFBM
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Source: Same as Figure 2.
education category. It includes expen-
diture towards research related to
(i) crops, (ii) livestock, (iii) fisheries,
and (iv) general agricultural research.
Expenditure towards research related
to crops clearly constitutes the majority
of expenditure under this category,
ranging from 72% in 2008–09 to 79%
in 2018–19. Total expenditure towards
research and education increased from
`3,596 crore in 2008–09 to `6,958
crore in 2018–19. After crop research,
general agricultural research constitut-
ed the second most expenditure-inten-
sive subcategory. Expenditure towards
livestock and fisheries research contin-
ues to remain a meagre expenditure
subcategory, and in fact decreased
from 2008–09 to 2018–19. Livestock
and fisheries research combined ac-
counted for almost 15% of total expend-
iture on research in 2008–09, but de-
creased significantly to 5% by 2018–19.
Figure 7 shows the distribution within
the crops, livestock and fisheries category,
which experienced a decline in overall
expenditure until 2017–18, before a re-
vival in 2018–19 and a decline in the
share of non-cereal crops over the 11-
year period.
Conclusions
The estimation of public expenditure
within a particular sector is critical not
only for guiding and formulating poli-
cies but also for analysing the shifting
priorities of the government in line
with economic and political considera-
tions. In this article, we recategorised
20
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economies. Third, some expenditure
themes such as fisheries, extension
 
services, and non-cereal crops, which

were regularly promoted and priori-
 
    tised by the government in the last few
 


years, show a declining trend in their

 expenditure. This last finding is par-
  
 
ticularly important, as it reveals a di-
   
 vergence between the GoI’s priorities
  
  
   and actual expenditure across a few


  
key subsectors.
     Finally, we would like to shed some









2010–11
2011–12
2012–13
2013–14
2014–15
2015–16
2016–17
2017–18
2018–19
light on one of the primary limitations
faced by researchers and other users
/PODFSFBM
DSPQT -JWFTUPDL
BOE
EBJSZ
5PUBM
of public expenditure datasets. Despite
using the CAG data at the minute level,
no mechanism (available in the public
expenditure within India’s agriculture domain) links expenditure on government
sector to aggregate expenditure by schemes and programmes of a particular
categories more relevant in the present ministry or department with the func-
context and forward-looking. tional classification categories. Therefore,
Having adopted this renewed frame- such linkages between government pro-
work to aggregate expenditure, we found grammes and their functional classifi-
significant deviations between govern- cation should be made public to facilitate
ment-reported agricultural expenditure more sector-specific analyses.
and calculated agricultural expenditure.
Notes
In addition, we observed a few diver-
1 The data and methodology section describes
gences between the GoI’s priorities and the key differences in the aggregation method-
its resource allocation. These deviations ology and the level of detail available in these
signify that considerable scope exists to data sets.
2 The list of major and minor heads of accounts
recalculate public expenditure, re-esti- used to categorise and aggregate expenditure
mate past expenditure trends, and open by the government is prepared by the Control-
ler General of Accounts, Ministry of Finance,
pathways for realigning expenditure GoI, and can be accessed at https://cga.nic.in/
categories that can lead to better policy Book/Published/7.aspx.
outcomes. New expenditure categories 3 https://cga.nic.in/Book/Published/7.aspx.
4 Other public institutions include the RBI and
such as non-cereal crops, agricultural the CAG.
marketing, risk mitigation, and sustain-
ability may be introduced in the ac-
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21

From Incumbency to Dominance
BJP’s Electoral Prowess in
Madhya Pradesh
J Saravanan, Vineeth Thomas, Aviini Ashikho
In the 2023 Madhya Pradesh
assembly elections, the Bharatiya
Janata Party emerged victorious
with a landslide majority. This
electoral triumph, characterised
by a significant mandate for the
BJP, has undoubtedly reshaped
the political dynamics of MP. In
this context, the various strategic
factors that cleared the BJP’s path
from incumbency to dominance
in MP are analysed.
J Saravanan (sarasjsenator@gmail.com)
teaches at the VIT Business School, VIT Bhopal
University, Kothri Kalan, Madhya Pradesh.
Vineeth Thomas (vineethmthomas@gmail.
com) teaches at the Department of Liberal
Arts, SRM University, Chennai, Tamil Nadu.
Aviini Ashikho (avuniady@gmail.com)
teaches at the Symbiosis Centre for Media
and Communication, Symbiosis International
(Deemed University), Pune, Maharashtra.
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I
n the dynamic landscape of Indian
politics, Madhya Pradesh (MP) stands
as a crucible of electoral battles,
where the ebb and flow of political tides
have shaped the destiny of the state. At
the heart of this electoral competition
lies the Bharatiya Janata Party (BJP), an
entity that has not only weathered the
storm of time but has also evolved from
being a political contender to establishing
unwavering political dominance in MP.
The 2023 assembly election results in
MP revealed a clear mandate in favour of
the BJP, securing an impressive 163 out
of the total 230 seats. The overwhelming
success is underscored by its triumph
across the different regions of the state.
This comprehensive victory is particu-
larly pronounced in the Malwa-Nimar
region, which holds significant tribal
populations. In this crucial area with
66 seats, the BJP secured a dominant
45 seats, leaving the Congress trailing
with 20 seats, while the Bharat Adivasi
Party clinched a lone seat. The BJP’s
prowess is further evident in the Bun-
delkhand region, where it nearly swept
the electoral landscape, securing 21 out
of 26 seats, while the Congress was left
with just five. Similarly, in the Vindhya
region, the BJP emerged victorious in
vol lix no 1
COMMENTARY
25 out of 30 seats, leaving the Congress
with a mere five. This regional dominance
is a testament to the party’s strategic
appeal and resonant policies. The saffron
wave extended to Madhya Bharat or the
region of Malwa, where the BJP out-
shone the Congress by winning a stag-
gering 33 out of 36 seats (Malpani 2023).
This substantial margin of victory indi-
cates not only the party’s organisational
strength but also its ability to connect
with the electorate on a regional level.
So, how did the BJP complete the jour-
ney from a party in power to a political
behemoth that has left an indelible mark
on the state’s political canvas? A close
examination in this regard unravels the
fact that it is the conglomeration of
clearly designed multiple tactics that
gave the BJP a winning formula in the
2023 assembly elections.
Charismatic Leadership
The landslide victory of the BJP in MP
elections reflects a sophisticated and
nuanced approach to political strategy,
largely centred around the charismatic
leadership of the Prime Minister. The
decision to place the Prime Minister at
the forefront of the campaign was not
only a recognition of his immense popu-
larity but also a strategic response to
the setbacks faced by the BJP in the pre-
vious 2018 election. By directly taking
charge, the Prime Minister aimed to
provide a unifying force for the party
and to counter any potential anti-incum-
bency sentiments (Das 2023).
The messaging and branding strategy
adopted by the BJP was notable in its
effectiveness. Slogans like MP ke mann
21
 COMMENTARY
mein PM aur PM ke mann mein MP (PM in
the mind of MP and MP in the mind of
the PM) were crafted to bridge the gap
between local aspirations and national
leadership. Prime Minister Narendra
Modi held approximately 15 meetings in
MP (Malpani 2023). This cohesive mes-
saging strategy was aimed to present a
seamless connection between the local
concerns of MP’s voters and the broader
national vision represented by Modi.
This approach was particularly cru-
cial in mitigating the risk of leadership
fatigue, internal divisions, and project-
ing a united front. The decision not to
declare a chief ministerial candidate,
while strategically astute, was a calcu-
lated move to navigate the complexities
of state politics. Recognising the poten-
tial impact of anti-incumbency and local
issues, the Prime Minister ensured that
the focus remained on national achieve-
ments and initiatives. By sidestepping
local leadership dynamics, the BJP
aimed to prevent internal divisions
and maintain a singular narrative that
placed him as the central figure in the
BJP’s campaign.
Furthermore, the shift in focus from
local challenges to national achieve-
ments was a deliberate attempt to sway
voter attention. The emphasis on issues
such as Sanatana Dharma, COVID-19
relief efforts, tribal and Dalit welfare
measures, the Chandrayaan mission,
and economic progress aimed to project
a success story in national politics. By
highlighting these achievements, the
Prime Minister sought to create a narra-
tive that instilled national pride and dis-
tracted voters from localised grievances
(Goyal 2023).
Rhetoric of Hindutva
The strategic deployment of the rhetoric
of Hindutva played a significant role in
the BJP’s victory in the MP elections,
showcasing a realistic picture of the
state’s sociopolitical landscape. The
Jan Ashirwaad (public blessings) rally, a
pre-election mass contact programme,
served as a powerful vehicle to dissemi-
nate the message of the Hindutva ideo-
logy to the voters. Covering a substantial
portion of the state with over 2,500 km
and numerous public meetings, the rally
22
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strategically attacked the Congress over its
stance on Sanatana Dharma (PTI 2023).
The criticism of Congress allies, particularly
from the Dravida Munnetra Kazhagam,
for allegedly undermining Sanatana
Dharma during the rally, demonstrated
a deliberate and smart attempt to con-
solidate the Hindu vote base.
Another pivotal factor in this strategy
was the emphasis on the consecration of
the Ram Mandir in Ayodhya. The union
minister of home affairs, during his elec-
tion campaign in MP, took the opportu-
nity to mock the Congress for previously
doubting the BJP’s commitment to build-
ing the temple. The use of billboards and
posters across the state announcing
bhavya Ram Mandir Taiyaar, Phir Bhaajapa
sarkaar (Grand Ram temple ready, elect
BJP government) and linking it to the
BJP’s potential return to power strategi-
cally reinforced the party’s commitment
to Hindu sentiments.
The Hindutva card not only capital-
ised on religious sentiments but also had
broader implications for the political
landscape. By leveraging the emotive
issue of the Ram Mandir, the party man-
aged to create a positive environment,
effectively sidelining issues of anti-
incumbency and negative perceptions
associated with Chief Minister Shivraj
Singh Chouhan. This strategic move
not only resonated with a significant
portion of the electorate, but also suc-
ceeded in diverting attention away from
local governance challenges, presenting
a more unifying narrative centred around
Hindutva ideals (Gupta 2023).
Organisational Strength
Prashant Kishor’s analysis of the BJP’s
success in Rajasthan, Chhattisgarh, and
MP assembly elections highlights four
crucial factors in its successful perfor-
mance—Hindutva ideology, nationalism,
the party’s financial and organisational
muscle power, and its labharthi yojana
(beneficiary programme). The organisa-
tional muscle power stands out as a key
element that significantly contributed to
the BJP’s victories, particularly in MP
(Kar 2023).
The organisational strength of the
BJP, reinforced by the support base of the
Rashtriya Swayamsevak Sangh (RSS),
january 6, 2024
played a crucial role in establishing an
extensive and intensive grassroots net-
work. The alliance between the BJP and
the RSS has been a long-standing strategic
partnership that facilitates the party’s
outreach and mobilisation efforts at the
ground level. This cohesive organisa-
tional structure allows the BJP to connect
with voters at the grassroots, ensuring
effective communication of the party’s
ideologies and policies (Mathew 2023).
On the day of the election, the visible
disparity in the punctuality of party booth
cadres further underscores the organisa-
tional prowess of the BJP. With 90% of
the BJP booth cadre reaching their as-
signed booths by 8:30 am, an hour earli-
er than the Congress cadre, only reflects
the disciplined and well-organised ap-
proach of the party (Mathew 2023).
The BJP’s success is not solely attrib-
uted to its organisational strength on the
ground, but also to its continuous efforts
to bridge the gap between the party and
the government. The communication
coordination between the two has been
a priority, as emphasised by P Muralid-
har Rao. This ensured that the party
cadre remained motivated and engaged,
fostering a sense of unity and purpose.
The Union Minister of Home Affairs
Amit Shah’s role in micromanaging the
election at the booth level and personally
addressing party dissidents showcased a
meticulous approach in handling inter-
nal party dynamics. This attention to
detail was aimed at preventing any in-
ternal discord that could have under-
mined the party’s unity. The strategic
resolution of internal confl icts and a
focus on effective booth-level manage-
ment contributed to a cohesive and well-
coordinated campaign (Singh 2023).
The BJP’s ability to translate political
strategies and micro management into a
cohesive effort by its cadre is a testament
to its organisational strength, allowing
it to effectively counter the challenges
posed by the Congress (Mathew 2023).
Women Voters
The strategic emphasis on the welfare of
“women and daughters” during the BJP
rallies reflected a well-thought-out ap-
proach aimed at leveraging the signifi-
cant influence of women voters in the
vol lix no 1 EPW Economic & Political Weekly

state. The targeted focus on women
voters is substantiated by the Election
Commission data, indicating that women
constitute 48.20% of the voting population
in MP. This demographic group, often re-
ferred to as “silent voters,” became a cru-
cial target for the BJP’s electoral strategy.
The “Ladli Behna” scheme, a flagship
initiative of the Chouhan government,
played a pivotal role in building trust
and garnering support for the BJP among
women voters. The scheme, which assures
a monthly financial assistance of `1,250
to over one crore women, emerged as a
game changer by addressing the economic
concerns of a significant section of the
female electorate.
In addition to the this scheme, the BJP
strategically implemented other women-
centric initiatives, such as the distribution
of cycles to school girls and the “Mukhy-
amantri Kanya Vivah” scheme. The latter,
offering financial assistance to eligible
girls getting married, further solidified
the party’s appeal to women voters by
addressing the societal and economic as-
pects of their lives.
In fact, Chouhan exuded confidence
ahead of the polls by saying, Kaante
ki takkar, Kaante ki takkar ... Laadli
Behna ne Saare Kaante Nikaal Diye (It
will not be a close contest ... the daugh-
ters have set us on the road to victory).
This reflects the BJP’s conviction in the
success of its targeted approach. By
aligning its policies and rhetoric with
the concerns and aspirations of women
voters, the party not only acknowl-
edged the demographic significance of
women but also demonstrated a keen
understanding of the issues that reso-
nate with this vital segment of the elec-
torate (De 2023).
Regional Leadership
The political landscape in MP witnessed
a notable shift in leadership dynamics
until early October 2023, characterised
by widespread speculation that Chouhan,
the state’s longest-serving chief minister,
was not the preferred candidate of the BJP
high command. This uncertainty created
an air of intrigue around Chouhan’s po-
litical future, with questions lingering
about his role within the party. However,
the narrative took a sharp turn when
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Chouhan’s name prominently featured
in the BJP’s candidate list. This inclusion
seemed to inject a new-found confidence
in Chouhan, prompting him to embark
on an assertive and aggressive campaign
strategy.
In the crucial period following the en-
forcement of the Model Code of Conduct
on 9 October 2023, Chouhan elevated
his campaign efforts significantly. Hold-
ing an impressive number of 165 rallies
in around three dozen days, he demon-
strated an unparalleled commitment to
reach the farthest corners of MP. The in-
tensified campaign not only showcased
Chouhan’s dedication but also under-
lined his strategic importance to the
BJP’s electoral aspirations. The veteran
leader, fondly known as Mama by his
supporters, strategically embraced an
approach that emphasised his familial
bond with the state’s women voters, po-
sitioning himself as a protective figure
or brother. This personal and relatable
touch became the core theme of his
campaigning efforts, resonating with a
significant portion of the electorate
(Malpani 2023).
Congress’s Campaign Strategy
From the outset, it was evident that
Kamal Nath was projected as the focal
point of the Congress’s campaign. How-
ever, this strategic decision did not
translate into a successful mobilisation
of votes. The emphasis on local issues, a
strategy that has proven effective in
some other states, did not resonate
strongly in MP. Unlike states such as
Karnataka and Himachal Pradesh, where
a focus on local concerns bolstered the
Congress, Nath struggled to connect
with voters on these issues.
The organisational strength of polit-
ical parties plays a pivotal role in
shaping electoral outcomes, and in the
context of MP, the Congress has faced
considerable challenges in establishing
a robust organisational base. One sig-
nificant factor contributing to the Con-
gress’s organisational struggles is the long-
standing dominance of the BJP in the
state’s political landscape. Since 2003,
except for the brief interlude after the
2018 elections, the BJP enjoyed continuous
power, resulting in a well-entrenched
vol lix no 1
COMMENTARY
cadre that is inherently challenging for
the Congress to compete with.
The Congress’s organisational woes
were further exacerbated in 2020 when
Jyotiraditya Scindia, a prominent leader
within the party, defected to the BJP. His
departure not only represented the loss
of a key leader but also led to the exo-
dus of a considerable chunk of the cadre
loyal to him. The defection of Scindia
and 22 members of legislative assembly
who accompanied him created a void
within the Congress’s organisational
structure, leaving the party with a weak-
ened ground-level presence and dimin-
ishing its ability to effectively counter
the BJP’s well-entrenched strategies.
Welfare Programmes
The strategic rollout of welfare meas-
ures by the government ahead of the
MP elections played a pivotal role in bol-
stering the electoral prospects of the
BJP. Key initiatives such as the Mukhy-
amantri Ladli Behna Yojana, Ladli Laxmi
Yojana, and Kisan Kalyan Yojana were
instrumental in not only reaching out
to specific voter demographics but also
in cultivating a sense of trust among the
electorate. This multipronged approach
contributed significantly to the BJP’s
image as a pro-woman, pro-farmer, pro-
Dalit, and pro-Adivasi party.
The timing of the schemes’ announce-
ments just ahead of the election was
strategic in creating a positive and last-
ing impression in the minds of the elec-
torate. By showcasing a proactive ap-
proach to welfare, the BJP managed to
establish a trust factor with the voters,
reinforcing the party’s commitment in
addressing their needs. This trust, built
on tangible initiatives, likely influenced
voters’ perceptions and choices during
the election.
In Conclusion
The BJP’s landslide victory in the MP as-
sembly elections can be attributed to a
meticulous combination of various elec-
toral strategies. At the core of their suc-
cess was the formidable leadership duo
of Prime Minister Modi and former
Chief Minister Chouhan, who galva-
nised support by aligning themselves
with voters’ aspirations and concerns.
23
 COMMENTARY
Backed by a robust organisational ma-
chinery of the RSS–BJP cadre, their fo-
cus on development issues as well as
Hindutva-focused campaigns resonated
strongly with the majority of the voters.
Strategic moves like prioritising wom-
en’s empowerment only expanded the
party’s voter base.
In contrast, the Congress’s derailed
campaign, marred by infighting and
lacking a clear vision, failed to effectively
exploit the incumbency factor. This, cou-
pled with the BJP’s agile announcement
of welfare schemes, proved detrimental
to the Congress.
Moving ahead, this success under-
scores the need for other parties to
devise robust strategies, strengthen
grassroots connectivity, and field cred-
ible leaders to pose a formidable chal-
lenge to the BJP’s growing hegemony in
24
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MP. It also sets the stage for the BJP to
consolidate its mandate in the run-up
to the 2024 elections.
References
Das, Y S (2023): “Did ‘Modi ki Guarantee’ Get Vote
of Confidence in Assembly Polls?” India Today,
https://www.indiatoday.in/elections/story/as-
sembly-pm-modi-ki-guarantee-2471475-
2023-12-03.
De, A (2023): “MP Poll Results: How ‘Mama and
Modi,’ and 2 Other Factors, Helped BJP ‘Kamal’
Bloom Despite Anti-incumbency,” ABP Live,
https://news.abplive.com/elections/mp-elec-
tion-result-2023-factors-behind-bjp-win-
shivraj-chouhan-women-voters-ladli-behna-
obc-voters-abpp-1647569.
Goyal, P (2023): “A Scheme, Modi’s Magic, An
‘Irresponsible’ Congress: How BJP Scripted
Victory in MP,” Newslaundry, https://www.
newslaundry.com/2023/12/04/bjp-victory-in-
madhya-pradesh-shivraj-singh-chouhan-ladli-
behna-modi-magic.
Gupta, Suchandana (2023): “Row over BJP’s Ram
Mandir Poll Posters, Congress Complains to
EC,” Times of India, https://timesofindia.india-
times.com/city/bhopal/row-over-bjps-ram-
mandir-poll-posters-cong-complains-to-ec/ar-
ticleshow/104810517.cms.
january 6, 2024
Kar, S (2023): “Factors that Favoured the BJP’s
Sweep in MP, Chhattisgarh, and Rajasthan,”
Outlook, https://www.outlookindia.com/na-
tional/assembly-election-results-2023-factors-
that-favoured-the-bjp-s-sweep-in-mp-chhattis-
garh-and-rajasthan-news-334542.
Malpani, M (2023): “Modi-Shivraj Factor Drives
BJP Win in MP; Congress Caste Census Plank
Falls Flat,” Hindu, https://www.thehindu.
com/elections/madhya-pradesh-assembly/
modi-shivraj-factor-drives-bjp-win-in-mp-con-
gress-caste-census-plank-falls-flat/arti-
cle67602483.ece.
Mathew, Liz (2023): “What Explains BJP’s Massive
MP Lead: Last-minute Push, Congress’s Organi-
sational Weaknesses,” Indian Express, https://
indianexpress.com/article/political-pulse/bjp-
madhya-pradesh-narendra-modi-popularity-
shivraj-singh-chouhan-congress-9052254/.
PTI (2023): “BJP Chief to Flag Off Party’s ‘Jan
Ashirwad Yatra’ in Madhya Pradesh Today,”
NDTV, https://www.ndtv.com/india-news/bjp
-chief-jp-nadda-to-flag-off-partys-jan-ashirwad-
yatra-in-madhya-pradesh-today-4354614.
Singh, U (2023): “Focus on Women Voters to PM
Modi’s ‘Magic’: What Worked for BJP in Madhya
Pradesh Assembly Elections,” Deccan Herald,
https://www.deccanherald.com/india/mad-
hya-pradesh/focus-on-women-voters-to-pm-
modis-magic-what-worked-for-bjp-in-madhya-
pradesh-assembly-elections-2794883.
vol lix no 1 EPW Economic & Political Weekly
 COMMENTARY
Dynamic Pricing in
Indian Railways
What Have We Learned So Far?
Justine George, Amal Baby
The dynamic pricing practice
resulted in a modest increase in
revenue but kept more people
away from using it. This therefore
raises questions on the purpose
of public sector undertakings,
which is to maximise more users
along with revenue generation.
The ticket price must also
compete with the alternative
transportation segment, such as
air travel. Evidence suggests the
rail transport to be comparably
more expensive than air travel
due to dynamic pricing. The
railways must also consider
reducing its mounting subsidy on
the passenger segment by raising
its fare to increase revenue from
the passenger segment and
go further in the way of
inevitable modernisation.
Justine George (jusgeorge@stpauls.ac.in)
teaches at the Department of Economics,
St Paul’s College, Kalamassery. Amal
Baby (amalbabyn@gmail.com) teaches
at the Rajagiri College of Social Science,
Kalamassery.
Economic & Political Weekly EPW january 6, 2024
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T
he abysmal earnings from the pas-
senger segment are the main rea-
son for the reported loss of Indian
Railways, and the earnings from the freight
segment are used to cross-subsidise the
passenger segment and thereby minimise
the loss incurred (Dhameja and Dhameja
2020). The reason for the low revenue
earnings is the cheap ticket prices and sev-
eral concessions, such as those to senior
citizens, students, military officers, mem-
bers of Parliament, and railway personnel.
A change in price strategy is required in the
passenger segment as it now stands as a
stumbling block in the modernisation of the
Indian Railways. The various issues of the
passenger segment are: multiple trains to
the same destination; demand varies across
seasons and also across classes in the same
train; weekend rush, heterogeneous users;
and vacant capacities in the off-season.
Given the context, dynamic pricing was
considered a magic wand in Indian Railway,
which was adopted in selected premium
trains in 2016, as a model to increase reve-
nue from the passenger segment. The criti-
cal questions are: How far has this pricing
model been able to generate more revenue?
How has this model of pricing attracted
additional passengers to this segment?
The Context
The Indian Railways adopted dynamic
pricing in its premium trains, such as
Rajdhani, Shatabdi, Gatiman, Humsafar
Express, Suvidha Express, and Duronto, in
2016, and minor adjustments in dynamic
pricing were made again in 2019. Currently,
141 out of 12,500 trains use dynamic
pricing. These trains have plush coaches,
spotless restrooms, bedrolls, bigger berths,
high-speed operating capabilities, food
availability, and so on. They are known for
their quickness, direct routes, and ability to
vol lix no 1
complete enormous distances in a short
amount of time. The base fares shall be dy-
namic with the increased online ticket de-
mand as per the strategy. The base fare will
hike by 10% for every 10% booking in each
class, but with a cap of 1.5 times on the
original price. The railway has chosen to
lower the upper limit for dynamic pricing
from 1.5 to 1.4 times the base rate in 2019.
The objective of dynamic pricing was
mainly intended to improve the abysmal
conditions of the railways and was not ex-
pected to benefit railway passengers. The
move was not expected to affect the pas-
sengers significantly because few trains
carry passengers of higher economic class.
This move was necessary for a context
where several complaints regarding the
conditions of railways—food, sanitation,
and hygiene—were reported. However,
the railway budget also needs to be raised
if the standards are to be maintained. Typ-
ically, there are more and more passen-
gers on the waiting list, but the passengers
are losing money.
The adoption of dynamic pricing in
the Indian Railway would help the railway
increase passenger revenue. Generally,
dynamic pricing would correctly work
as a signal that allows the producer to
increase supply. But this does not apply
in the case of railways. The supply con-
straints reduce its ability to cater to the
demands of all the customers.
Air and Track Dynamics
The railways face stiff competition
from air travel, especially in the segment
of upper-class customers. People have
been increasingly using domestic air
travel in the last few years (Table 1) due to
Table 1: No of Passengers on Rail and Domestic
Air Travel (millions)
Years Rail Travel Domestic Air Travel
(No of Passengers) (No of Passengers)
2014–15 8,224 70.08
2015–16 8,107 85.20
2016–17 8,116 103.75
2017–18 8,286 123.32
2018–19 8,439 140.33
2019–20 8,086 141.20
2020–21 1,250 53.33
2021–22 3,516 84.18
2022–23 NA 136.0
Source: Compiled from Handbook on Civil Aviation
Statistics (various years), Annual Report of Indian Railways
(various years).
13
 COMMENTARY
the attractive price policies that made air bureaucratic and rigid. The Comptroller
travel more competitive vis-à-vis rail travel. and Auditor General of India (CAG) 2018
The low domestic price of air travel created reported that the dynamic pricing deci-
a considerable strain on railways, resulting sion was wrong and asked Parliament to
in more vacant train seats. Both passenger review it. The railways constituted a six-
and freight transport increased for air travel person group for reviewing dynamic pric-
(Tables 1 and 3). But passenger and freight ing, and the committee made several rec-
movement have not changed during the ommendations on how the pricing system
last few years (Tables 1 and 2) because can be improved. It suggested that shorter-
the railways are operating at full capacity. distance trains should have a higher tariff
Therefore, rationalising price might be and special discounts should be offered for
the only option for modernisation. travelling on trains that arrive off-peak
The railway lost 6,56,570 passengers hours and that special premium rates be
in just 11 months after implementing dy- imposed for overnight trains. Other rec-
namic pricing, whereas the increased ommendations were differential pricing
income generated by the programme for preferred berths, e-auctions for selected
was `552 crore (CAG 2018). Ideally, dy- trains, and higher fares, especially when
namic pricing should work in both direc- there is high demand, such as during the
tions, whereby a demand increase must festive seasons (CAG 2022).
be accompanied by a rise in price and a The past union governments have ef-
fall in demand should also cause a drop fectively reduced energy and petroleum
in the prices. Dynamic pricing technique subsidies in the past to increase the in-
in Indian Railway is unfair to the users come of railways. The railways can also
of the segment because there is no op- adopt the same strategy by lowering
portunity for a falling price when de- their mounting subsidy and raising their
mand is low. Moreover, the dynamic fare charges stage-by-stage to increase
price was adopted to increase occupancy, revenue from the passenger segment.
but the evidence shows a reverse effect
on the occupancy. Railway fares are al- Shift to Air Travel?
ways influenced by political factors, With the rise in the standard of living, the
which forces them to follow a low price higher income users now prefer domestic
in the passenger segment over the years. airlines, in which dynamic pricing works
The failure of dynamic pricing can better than in the railways because of the
be attributed to administrative issues comfort and time. Therefore, a possible
of the Indian Railway, which is more fallout of dynamic pricing in railway could
Table 2: Passenger and Freight Earning in be loss of customers, as the higher-priced
Railways (crore) railway ticket would be almost equal to or
Years Passenger Earning Freight Earning
more than the economy-class airline. This
2014–15 42,190 1,03,100
2015–16 44,283 1,06,941 would lead to a scenario where passengers
2016–17 46,280 1,02,028 would prefer airlines over trains. The CAG
2017–18 48,643 1,13,525 (2018) states that air travel is the least ex-
2018–19 51,067 1,22,580 pensive transportation vis-à-vis train travel
2019–20 50,669 1,11,472
in 17 out of 26 travel directions noted for
2020–21 15,248 1,15,738
2021–22 39,214 1,39,287 reservations made 120 days in advance.
Source: Compiled from Annual Report Indian Railways The report shows that air travel was dis-
(various years).
covered to be the least costly option in
Table 3: Freight Movement in Domestic Air Travel
(tonne) 19 directions during a 60-day reservation
Years Air Travel Freight period. But during the 30-day reservation
2014–15 5,91,919 period, air travel was more affordable in
2015–16 6,23,565 17 directions. These include popular routes
2016–17 6,37,797
2017–18 6,96,530
such as Hyderabad–New Delhi, Bengaluru–
2018–19 7,60,945 New Delhi, Bhubaneswar–New Delhi,
2019–20 7,29,455 New Delhi–Chennai, Bengaluru–Kolkata,
2020–21 4,67,599 etc. In the second week of December 2022,
2021–22 6,05,250
Source: Compiled from Handbook on Civil Aviation
the cheapest flight from Delhi to Kochi
Statistics (various years). costs `4,500, while the first and second
14 january 6, 2024
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classes of the Hazrat Nizamuddin–Thiru-
vananthapuram Rajdhani Express have
increased train rates to `7,500 and
`5,500, respectively.
However, the railway ministry has insist-
ed that there is no rollback of dynamic pric-
ing in the premium trains. There was no
intention of using the dynamic pricing sys-
tem for the air-conditioned classes in other
trains. Is it the best option for Indian Rail-
ways to increase income, given the numer-
ous faults in dynamic pricing? Or should
they be required to develop a new, effective
pricing strategy to increase the revenue?
Because of the efficient management
practices, airline companies have intro-
duced innovative pricing convenient for
each situation and helped passengers save
money and time. Airline companies quick-
ly took advantage of the dynamic pricing
presented by the railways. The railways
must also consider a reduced fare that can
significantly aid lower-middle-class indi-
viduals who travel infrequently. The gov-
ernment must be pressured to revamp the
railway services to attract more customers.
The railways have since taken action to
resolve the problem by reducing the num-
ber of trains where dynamic pricing was in
effect. According to the ministry’s recent
reply in Lok Sabha, the scheme is preva-
lent in around 141 trains (CAG 2022). The
Standing Committee on Railways stated
in their report that the railway commuters
with marginal income or are economically
weak suffer from the burden of higher
fares. Some of the recommendations sug-
gested by the committee are that railways
should be made the most economical
mode of travel as much as possible, the
passenger reservation system must be fur-
ther strengthened through infrastructural
upgradation, new technology must be
injected into the system, especially new
efficient software, updating technology
and special arrangements should be made
for the users with low internet speed.
Efforts are also needed to make the
website booking faster, misuse of privilege
passes must be stopped, and concessions
should be reconsidered and should not
eliminate those who are not eligible.
Conclusions
The dynamic pricing application is
found to have a limited scope in the
vol lix no 1 EPW Economic & Political Weekly

Indian Railways, given the nature of
public sector undertakings. The pricing
practice resulted in only a modest revenue
but kept more people from using it. Thus,
dynamic pricing questions the essential
purpose of public sector undertakings,
which is assumed to maximise more
users along with revenue generation.
Given the problems, the government must
develop a border plan to increase the
revenue from the passenger segment,
and the price must also compete with
the alternative transportation segment,
such as airways.
The practice of dynamic pricing has
been reported to have a negative effect
on occupancy, as it is one of the main
objectives of practising dynamic pricing.
A rational pricing strategy is inevitable,
as the revenue from such a method
would help in the modernisation of
the railways.
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References
CAG (2018): “Report No 5 of 2018-Compliance Audit
on Union Government (Railways) Year Ended
March 2017,” Comptroller and Auditor General
of India, Monsoon Session, Lok Sabha, New
Delhi: Government Press.
— (2022): “Report No 25 of 2022 Vol I-Compliance
Audit on Union Government (Railways) for
the Year Ended March 2021,” Comptroller and
Auditor General of India, Winter Session, Lok
Sabha, New Delhi: Government Press.
Dhameja, N L and M Dhameja (2020): “Indian Rail-
ways Restructuring: Private Sector Involve-
ment—A Beginning,” Indian Journal of Public
Administration, Vol 66, No 4, pp 492–512, htt-
ps://doi.org/10.1177/0019556120980880.
Ministry of Civil Aviation (2015): “Handbook on Civil
Aviation Statistics 2014–15,” New Delhi: Directo-
rate General of Civil Aviation, Government of India.
— (2016): “Handbook on Civil Aviation Statistics
2015–16,” New Delhi: Directorate General of
Civil Aviation, Government of India.
— (2017): “Handbook on Civil Aviation Statistics
2016–17,” New Delhi: Directorate General of
Civil Aviation, Government of India.
— (2018): “Handbook on Civil Aviation Statistics
2017–18,” New Delhi: Directorate General of
Civil Aviation, Government of India.
— (2019): “Handbook on Civil Aviation Statistics
2018–19,” New Delhi: Directorate General of
Civil Aviation, Government of India.
vol lix no 1
COMMENTARY
— (2020): “Handbook on Civil Aviation Statistics
2019–20,” New Delhi: Directorate General of
Civil Aviation, Government of India.
— (2021): “Handbook on Civil Aviation Statistics
2020–21,” New Delhi: Directorate General of
Civil Aviation, Government of India.
— (2022): “Handbook on Civil Aviation Statistics
2021–22,” New Delhi: Directorate General of
Civil Aviation, Government of India.
Ministry of Railways (2015): “Indian Railways
Annual Report and Accounts 2014–15,” New
Delhi: Directorate of Statistics and Economics,
Government of India.
— (2016): “Indian Railways Annual Report and
Accounts 2015–16,” New Delhi: Directorate of
Statistics and Economics, Government of India.
— (2019): “Indian Railways Annual Report and
Accounts 2017–18,” New Delhi: Directorate of
Statistics and Economics, Government of India.
— (2020): “Indian Railways Annual Report and
Accounts 2018–19,” New Delhi: Directorate of
Statistics and Economics, Government of India.
— (2022): “Indian Railways Annual Report and
Accounts 2020–21,” New Delhi: Directorate of
Statistics and Economics, Government of India.
— (2023): “Indian Railways Annual Report and
Accounts 2021–22,” New Delhi: Directorate of
Statistics and Economics, Government of India.
Standing Committee on Railways (2021): “Passenger
Reservation System of Indian Railways,” Winter
Session, Rajya Sabha, and New Delhi: Govern-
ment Press.
15

Did the Implementation of
GST Hurt Municipal Finances?
Muhammed Riyas M P
The revenue sources of urban
local governments are too small
to meet their expenditure needs.
Own source revenue generation
of ULGs is weak and the increasing
dependency on transfers from the
higher governments has declined
the autonomy of municipalities.
The goods and services tax has
adversely affected municipal
finance. The extent of loss due to
implementing GST is examined
and ways to streamline municipal
finance in India are proposed.
Muhammed Riyas M P (mp.riyasbeeran@
gmail.com) teaches at the School of Humanities
and Social Sciences, GITAM Deemed
University, Bengaluru.
Economic & Political Weekly EPW January 6, 2024
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N
ations all over the world, parti-
cularly developing countries see
urbanisation as a key to accelerate
economic growth and reduce poverty.
Agglomeration economies, economies of
scale, and economies of scope make cities
the centres of growth. There is ample
evidence to show that cities facilitate and
accelerate economic growth (Akai and
Sakata 2002; Yilmiz 2000; Qian and
Weingast 1997). There is consensus
among scholars and policymakers on the
positive impact of urbanisation on pov-
erty reduction and employment genera-
tion in the economy.
Around one-third (35%) of Indians are
living in urban areas (UN 2010). Urban
population is expected to grow to 814
million by 2050. The size and pace of
Indian urbanisation is smaller compared
to its Asian and African counterparts. In
China, it is 54%, in Indonesia it is 53%,
South Africa 64%, and Nigeria 47%.
Globally, 54% of people live in urban areas
(UN 2010). In recent years, India has been
pushing for urbanisation aggressively.
The Smart Cities Mission, Atal Mission for
Rejuvenation and Urban Transformation
(AMRUT), Pradhan Mantri Awas Yojana
(PMAY), Heritage City Development and
Augmentation Yojana (HRIDAY), Jawahar-
lal Nehru National Urban Renewal Mission
(JNNURM) and Swachh Bharat Mission
(SBM) are aimed in this direction. The
country perceives urbanisation to reduce
its overdependency on agriculture and
provide meaningful employment to the
youth. Any urban rejuvenation plans in-
evitably have two broad objectives: first,
to facilitate and accelerate production
and consumption activities and thus fuel
economic growth; and second, to provide
the necessary socio-economical infrastruc-
ture for the residents in the jurisdiction.
Urban local governments (ULGs) are
responsible for looking after the govern-
ance of the concerned town/city jurisdic-
tion. The 74th Constitutional Amendment
vol lIX no 1
COMMENTARY
in India has recognised urban local bodies
(ULBs) as independent governments. The
12th Schedule of the Indian Constitution
entrusts huge functional responsibilities to
ULGs like urban planning, including town
planning, roads and bridges, water supply,
public health and sanitation, public ameni-
ties like street lights, parking, other public
convenience, and slum improvement
upgradation. All of these require finance.
Functional distribution and financing
remain an enigma in Indian fiscal decen-
tralisation. Though the Constitution has
assigned a vast functional responsibility to
local governments, the financial position
of municipal governments is too weak to
discharge these responsibilities. Particu-
larly urban infrastructure in India is vastly
underfinanced. The weak constitutional
provisions on the financing of the ULGs is
the main reason for the fragile municipal
financing in India. Unlike the clear con-
stitutional demarcation on centre–state
finance devolution, the financing of the
municipality has been largely left to the
mercy of the state governments. ULGs’
internal revenue mobilisation has been
weak due to a poor tax base, inefficient
tax collection, and unprofessional tax
management. Except for property tax,
there is no significant buoyant tax avail-
able for municipal government. Apart
from tax revenues, user charges, fees,
and licence charges are the major non-
tax revenues of the ULGs. The implemen-
tation of the goods and services tax
(GST) has adversely affected the already
shrunken source of municipal revenue.
This study is an attempt to measure the
extent of loss to the municipal exchequer
due to the implementation of GST and its
implication for municipal finance. The
study provides suggestions to minimise
the adverse impact of GST on municipal
finance and rejuvenate the financial
positions of the ULGs.
Municipal Finance in India
The size of municipal finance in India is
abysmal compared to its size consider-
ing nations with a similar development
trajectory. The municipal expenditure
and revenue in India as a percentage of
gross domestic product (GDP) has re-
mained around 1% in the last decade,
while it is 7.4% and 6% of GDP in Brazil
27
 COMMENTARY

and South Africa, respectively. The con- Figure 1: Own Revenue of Urban Local Governments Per Capita (`)
stitutional provision for devolution to 7,000
ULBs is weak. Indian urban governments 5,782.5
6,000
5,015.3 5,424.4
are the weakest in terms of fiscal autono- 4,667.8
5,000 4,363.2
my. The fiscal capacity of ULGs to pro- 4,011.4
vide civic amenities and to foster eco- 4,000 3,537.5 3,421.3
3,402.9 3,115.7
nomic growth is limited. In the follow- 2,698.8 2,818.2
3,000
ing section, we will dive into various in- 1,992.6 2,392.2
2,000 2,721.3 2,634.6
dicators of municipal finance, its struc- 2,142.7 2,130.4 2,328.6
ture, composition, growth, and implica- 1,000 1,803.9
1,446.2
tions for fiscal autonomy and service de-
0
livery of the ULGs. 2011–12 2012–13 2013–14 2014–15 2015–16 2016–17 2017–18
Table 1 provides the growth of munici- Nagar
Municipal corporation
Municipal Corporation Municipal Council
Municipal council Nagar panchayat
Panchayat
pal revenue and municipal expenditure
Source: ICRIER (2019).
as a percentage of GDP from 2010–11 to
2017–18. Municipal revenue as the per- central governments. It is important to OSR of municipal corporation was `3,000,
centage of GDP has increased from 0.941% separately look at OSR and transfers while that of the municipal council was
in 2010–11 to 1.004% in 2017–18. Ironi- because of their policy implications. `500, and that of nagar panchayat was
cally, municipal expenditure as a percent- `400 in 2017. Thus, it can be said that the
age of GDP has declined from 0.825% in Own Source Revenue larger the size of the municipal govern-
2010–11 to 0.775% in 2017–18. This is in- Internal resource mobilisation, that is, ments, the bigger is their internal resource
dicative of a serious municipal financial revenue generation within ULGs, is impor- generation. Indian municipalities hardly
mishap in the country. tant as far as fiscal accountability is have access to any buoyant taxes; property
tax is the only significant tax source for
Table 1: Municipal Revenue and Expenditure (% of GDP)
2010 –11 2011–12 2012–13 2013–14 2014 –15 2015 –16 2016 –17 2017 –18 municipal governments.
Municipal revenue 0.94 0.98 1.05 1.06 1.04 1.06 1.05 1.00
Municipal expenditure 0.82 0.80 0.83 0.83 0.85 0.86 0.80 0.77
Intergovernmental Transfers
Source: ICRIER (2019: 9). Local governments all over the world do
receives funds from higher-level govern-
Trends of Municipal Revenue concerned. The OSR of Indian municipal ments. It will be particularly inevitable
Table 2 provides the total revenue (and government is one of the smallest com- for Indian ULGs because of the weak
its growth rate) of ULGs. Total municipal pared to other developing countries. The internal resource mobilisation capacity.
revenue has increased from `73,259.8 OSR of Indian municipal government as a In India, the state governments are pri-
crore to `1,71,697.1 crore during the ob- percentage of GDP was 0.43% in 2017–18, marily responsible for the financing of
served period, registering a growth rate while it is 7.4% in Brazil, 6% in South ULGs. Of the transfers to municipal gov-
57%. Nevertheless, it remains at 1% of Africa, and 4.5% in Poland. In China, ernmental, 80% are from state govern-
GDP as of 2018. The per capita municipal municipalities have revenue sources such ments. The Central Finance Commission
revenue has increased from `2,703.2 in as business taxes, real estate taxes, re- (CFC) has also started devolving fund
2011–12 to `4,624.2 in 2017–18. The source taxes, urban land use taxes, land directly to ULGs from the Tenth Finance
decline in the growth rate in 2017–18 is a appreciation taxes, urban maintenance Commission onwards in addition to
matter of concern given the implementa- and construction tax, farm land occupa- other transfers from the central govern-
tion of the GST in the 2017. Total ULG tion tax, deed tax, and tax on vehicles. ment in the form of centrally sponsored
revenue consists of its own source revenue Internationally, cities around the world schemes (CSS).
(OSR) and grants from the state and have access to sales taxes, income tax, The transfers to municipal govern-
Table 2: Total Municipal Revenue value added tax (VAT) share, registration ments in India have been undersized and
Total Municipal Growth Per Capita Growth
tax/stamp duty, and construction tax. haphazard compared to other develop-
Revenue Rate Municipal Rate In India, property tax is the only major ing countries. Table 3 (p 29) provides the
(` crore) Revenue (`)
tax revenue collected by municipal gov- total transfers to ULGs along with the
2010–11 73,259.8 ernments. The situation is precarious in per capita transfers. The per capita total
2011–12 85,627.2 14.44 2,703.2
smaller urban governments. OSR is the transfers have increased from `1,038.2
2012–13 1,04,476.1 18.04 3,212.1 18.83
real indicator of the fiscal autonomy of the crore in 2010–11 to `2,050.7 crore in
2013–14 1,19,620.2 12.66 3,581.6 11.50
local governments. The higher the fiscal 2017–18. The smaller the size of the ULGs,
2014–15 1,30,794 8.54 3,813.8 6.48
2015–16 1,46,578.5 10.77 4,162.4 9.14
autonomy, the greater is the fiscal account- the higher the dependency of the local
2016–17 1,61,978.9 9.51 4,479.5 7.62 ability. Figure 1 shows the per capita OSR bodies on transfers. Municipal councils
2017–18 1,71,697.1 5.66 4,624.2 3.23 of municipal corporation, municipal coun- and nagar panchayats receive higher per
Source: ICRIER (2019). cil, and nagar panchayat. The per capita capita grants from higher-tier governments
28 January 6, 2024 vol lIX no 1 EPW Economic & Political Weekly
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than municipal corporations. Certain big-
ger corporations finance 80% of the total
expenditure by their internal resource
generation. The smaller the municipal
governments, the higher the dependency
on higher governments, particularly state
governments. Heavy reliance on state
governments for the finances adversely
affects the functional autonomy of the ur-
ban governments. The implementation of
GST necessitates more funding from
state governments to municipal govern-
ments. Whether the state governments
can provide additional funds to ULGs is a
different question.
Table 3: Total Transfers to ULGs
Year Total Growth Total
Transfers Rate Per Capita
(` crore) Transfers (` )
2010–11 27,128.1
2011–12 32,884.5 17.50 1,038.2
2012–13 41,552.2 20.86 1,277.5
2013–14 48,786.7 14.83 1,460.8
2014–15 53,229.9 8.35 1,552.1
2015–16 60,641.5 12.22 1,722.1
2016–17 72,691.6 16.58 2,010.3
2017–18 76,143.3 4.53 2,050.7
Source: ICRIER (2019).
GST and Municipal Finance in India
GST is a destination-based indirect tax
regime that came into existence in India
on 1 July 2017 replacing VAT. India’s GST
is a dual GST structure with state GST
(SGST) and central GST (CGST) for the
supply of goods and services within a state
and integrated GST (IGST) for the inter-
state supply of goods and services. GST
taxation is based on universal coverage
and input credit system. It was designed
to eliminate the cascading of tax and in-
crease the tax base and collection while
reducing the average tax burden on indus-
tries and traders and the price on end
consumers. The GST subsumed the exist-
ing central taxes like central excise duty,
some of the additional excise duties, cus-
toms duties, and service tax. At the same
time, SGST subsumed the state VAT, central
sales VAT, purchase tax, luxury tax, tax on
lotteries, betting and gambling, in addi-
tion to all entry taxes, entertainment
taxes, and advertisement tax.
The GST has subsumed major taxes of
municipal governments, including entry
tax, entertainment and advertisement
tax. Octroi, an entry tax, was the biggest
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COMMENTARY
causality of GST implementation apart use or sale. Maharashtra and Gujarat are
from numerous local body tax (LBT). An the major states in India imposing LBT. LBT
entry tax is an indirect tax levied by was imposed after the abolition of octroi;
urban municipal corporations when goods it was imposed throughout tier 1, tier 2,
enter into their jurisdiction. Entertain- and tier 3 cities in Maharashtra such as
ment tax are taxes from theatres, shows, Thane, Pune, Nagpur, and Bhiwandi.
stadiums, and cable televisions. Advertise-
ment tax are the incomes accruing from Entertainment taxes: Entertainment tax
hoarding and billboards set up in the was the sole domain of the local govern-
local jurisdictions. Unfortunately, each ments. Movies ticket was the main revenue
GST Council meeting ends up encroaching base of entertainment tax. Exhibition,
some revenue source of local government performance shows, amusements, sports
directly or indirectly. race, and so on are the other avenues of
entertainment taxation. Entertainment tax
Magnitude and Implications of contributed around 10%–15% of the total
Subsumed Revenue tax revenue to municipal governments.
Growth
On an average, `15 crore was the per
Rate Octroi: Octroi is the tax levied by the capita collection from the entertainment
local governments, particularly munici- tax. The Greater Hyderabad Municipal
pal governments on certain categories Corporation (GHMC) alone incurred a loss
of goods as they enter the area. It is a of `100 crore in revenue from the enter-
18.73
12.55
charge for the transit of goods through tainment tax owing to the implementation
5.88 the jurisdiction. Octroi was the biggest of GST. Kochi Municipal Corporation in-
9.87 causality of the implementation of the curred a loss of `13 crore in entertainment
14.34 GST. The Brihanmumbai Municipal Cor- tax. The bigger the corporation/ULGs, the
1.97 poration recorded a loss of `6,500 crore greater the financial loss to the local
per year after the roll-out of GST. Annual governments. It is estimated that each
octroi collection of Mumbai’s civic body civic body has lost a minimum of `5 crore
was `7,000 crore. in entertainment tax, the loss correspond-
ing to the size and type of ULB. The munici-
Other entry taxes: LBT is a tax imposed pal corporation, particularly in the tier 1
by local municipal governments on goods and tier 2 cities, have incurred more loss
entering into local area for consumption, than municipalities and town bodies.
Omeo Kumar Das Institute of
Social Change and Development
An Autonomous Research Institute of ICSSR, New Delhi and
Government of Assam
VIP Road, Upper Hengrabari, Guwahati-781036
Web: www.okd.in
7th Young Social Scientists’ Conference, 2024
OKD Institute of Social Change and Development, Guwahati is organising the
7th Young Social Scientists’ Conference during 26th-28th February, 2024
for the young scholars working on Northeast India across the disciplines of
Social Sciences. Objective of the Conference is to provide a platform to young
scholars to present their research work, interact with other scholars and
experts, and build network.
Interested scholars may visit www.okd.in for details and apply online with
a summary of their research work within 1000-1500 words and a CV before
25th January, 2024. Only shortlisted scholars will be invited to participate
in the Conference. The Institute will reimburse A/C three tier train fare by
shortest route to all shortlisted scholars and offer local hospitality.
Director i/c
vol lIX no 1 29
 COMMENTARY

Advertisement taxes: Advertisement tax
is the income that accrues from hoard-
ings and billboards set up in the local
jurisdictions. It contributed 2%–5% of
total tax revenue to urban governments.
The loss of revenue varies from across
the urban governments. Kochi Municipal
Corporation lost `2.5 crore advertisement
tax after the implementation of the GST.
Table 4 shows the revenue loss from
each of the taxes after the implementa-
tion of GST.
GST and Transfers Loss
There is a connection between GST and
grants from the state governments. Many
state governments are yet to receives
GST arrears from the central govern-
ment. State government transfers to local
governments are often at the mercy of
the former. Unlike the sanctity attached
to union finance commission’s recommen-
dation, state finance commission’s recom-
mendation, particularly devolution, is not
being honored. The first causality of a
shrunk state exchequer is the local govern-
ment, particularly municipalities. For
example, there are reports of Kerala re-
ducing the share of local governments due
to fiscal pressure. However, the data to
assess the magnitude and pattern of loss
is not forthcoming.
announced the compensation to ULGs
corresponding to entertainment tax col-
lections. However, such acts are subjected
to the willingness and mercy of the state
governments and are not liable to any
constitutional enforcement.
In Madhya Pradesh, the state govern-
ment allowed the Bhopal Municipal
Corporation to superimpose 20% addi-
tional tax on movie tickets and the
Chandigarh Municipal Corporation im-
posed 30% additional tax on movie tickets.
Such acts led to double taxing and con-
sumers ended up paying higher prices;
this may end in a Laffer curve effect for
tax collection. The only plausible solution
is constitutionally guaranteed compen-
sation to local governments.
Sharing of GST
As we have seen, municipal finance in
India requires a complete overhaul. There
must be concrete efforts to improve the
OSR of the ULGs and set up fiscal devo-
lution to finance the basic amenities
and urban infrastructure. The municipal
finance crisis in India has not happened
on account of GST, but has been exacer-
bated by its implementation. This is not
only an issue of revenue forgone, but
rather the removal of revenue sources
of independent local governments with-
out consultation and proper compensa-
tory mechanism.
The GST is an ever-expanding tax
process. Hence, sharing a fixed percent-
age of GST revenue will be the ideal
way forward. It will not only compen-
sate the revenue loss of municipalities
but also provide a buoyant and assured
revenue source to municipal governments
to finance the humongous municipal ex-
penditures. It is also justified as most of
the consumption of goods and services
is in urban areas.
References
Akai, N and M Sakata (2002): “Fiscal Decentraliza-
tion Contributes to Economic Growth: Evi-
dence from State-level Cross-section Data for
the United States,” Journal of Urban Economics,
Vol 52, No 1, pp 93–108.
ICRIER (2019): State of Municipal Finances in India,
A study prepared for the Fifteenth Finance
Commission, Indian Council for Research on
International Economic Relations, New Delhi.
Qian, Y and B R Weingast (1997): “Federalism as a
Commitment to Reserving Market Incentives,”
Journal of Economic Perpectives, Vol 11, No 4,
pp 83–92.
UN (2010): World Urbanization Prospects: The 2009
Revision, Population Division, Department of
Economic and Social Affairs, United Nations.
Yilmaz, S (2000): “The Impact of Fiscal Decentrali-
zation on Macroeconomic Performance,”
Proceedings of the 92nd Annual Conference on
Taxation 1999, National Tax Association (ed),
Washington, pp 251–60.

Reactions of State Governments

to Municipal Revenue Loss
The GST Constitutional Amendment Act
has the provision to compensate the
state governments for their exchequer
loss owing to the implementation of the
GST but it remains muted on the exchequer
loss of local governments. It was expected
that state governments will compensate
the civic bodies of their revenue loss
owed to GST implementation. It has not
been made mandatory for state govern-
ments, hence subjected to the will and
mercy of the state governments.
There was no uniformity in the way
the states responded to the revenue loss
of the local governments. Some states
promised the compensation for the loss
to local governments. In Maharashtra,
the state government offered to com-
pensate the municipal corporations for
the revenue loss due to the abolition of
octroi. In Kerala, the state government
30
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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
For copies write to:
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Economic & Political Weekly,
320–322, A to Z Industrial Estate, Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013.
email: circulation@epw.in
January 6, 2024 vol lIX no 1 EPW Economic & Political Weekly

Digitising Justice
The Potential of Case Management
Systems for State Governments
Varda Mone, Abhishek T
Excessive litigation by
government entities is a major
contributor to India’s pendency
crisis, with over three crore cases
pending nationally. To tackle this
challenge, digitally transforming
litigation management in
state governments through
comprehensive case management
systems can bring substantial
improvements. Harnessing
technology and analytics can help
states overcome inefficiencies,
delays, and knowledge gaps
in managing legal cases. With
comprehensive case management
systems, India can digitally
transform litigation processes to
deliver speedier justice.
Varda Mone (vardamone52@gmail.com) is an
international research fellow at the University
of Religions and Denominations, Pardisan City.
Abhishek T (abhithommandru@gmail.com) is
an international research fellow at the
Tashkent State University of Law.
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T
he introduction of Phase 3 of the
eCourts Mission Mode Project in
the Union Budget 2023, coupled
with “a substantial financial commitment
of `7,000 crore, signifies a pivotal advance-
ment in the endeavour to mitigate the
extensive backlog arising from govern-
mental litigation in India” (Tripathi 2023).
This predicament is attributable to both
the union and the state governments, col-
lectively comprising the most substan-
tial contributors to the litigation burden.
“Government litigation is responsible for
introducing significant challenges to the
already overburdened Indian judiciary,
with governmental litigants accounting
for almost 46% of the cases currently
pending” (Anand 2023).
The reasons for excessive government
litigation include systemic flaws, bureau-
cratic delays, lack of accountability, and
inadequate domain expertise. For instance,
government officials handling litigation
often lack specialised legal knowledge,
resulting in weak case preparation and
unnecessary appeals. Government depart-
ments work in silos with poor coordination
and information-sharing. When officials
change, institutional knowledge is lost.
The absence of centralised case databas-
es leads to critical information slippages.
Moreover, there are no set guidelines
on when to appeal cases and when to
settle. This results in the government
pursuing even frivolous cases out of
excessive risk aversion (Das 2023). As
Kinhal et al (2018) write,
Excessive government litigation has high
costs—administrative, financial and oppor-
tunity costs. It overburdens courts and slows
down dispute resolution negatively impact-
ing the ease of doing business. With over 3
crore cases pending nationally, reducing
government litigation can significantly ease
this burden on the judiciary.
Thus, there is an urgent need for liti-
gation management reforms focused on
vol lIX no 1
COMMENTARY
improving efficiency, accountability, and
coordination within the government.
Digital case management systems can
address many existing challenges. Cen-
tralised databases will eliminate infor-
mation silos, reduce dependence on indi-
viduals, and improve institutional memory.
Automated workflow will streamline case
handling, minimise errors, and direct cases
to relevant officials. Analytical dash-
boards will identify areas of excessive
litigation and support data-driven policy-
making. Big data analysis can reveal
insights on litigation patterns helping to
strategise reforms. Overall, implementing
a specialised case management software
can transform how government depart-
ments handle litigation. It will minimise
frivolous lawsuits, enhance inter-agency
coordination, and reduce pendency bur-
dens on courts. This will benefit the judi-
ciary, government, and citizens alike by
speeding up dispute resolution. The time
is ripe for digitally streamlining litiga-
tion management across state and union
government departments.
While excessive government litigation
burdens India’s judiciary, some states
have taken the lead in digitally trans-
forming legal processes. Kerala has made
rapid progress in court digitisation—im-
plementing e-filing, virtual courts, and a
comprehensive case management sys-
tem. Andhra Pradesh (AP) developed
its own litigation management system
called the AP online legal case manage-
ment system (APOLCMS), but its adoption
has been slow. Furthermore, “Odisha lags
behind, while effectively taking steps for
establishing paper-less courts across state
district courts” (LiveLaw 2023).
The court technology models adopted
by Kerala, AP, and Odisha have been an-
alysed in this article. It is important to
learn how Kerala’s judicial digitisation
system can serve as a blueprint for other
states to follow. Key aspects like real-time
case file tracking, counter filing manage-
ment, stakeholder coordination, and
phased implementation of e-filing were
examined to draw out best practices.
The challenges faced by AP in enabling
the adoption of APOLCMS highlight im-
portant lessons for other states as well.
Against this backdrop, targeted recom-
mendations are made on how states
31
 COMMENTARY
can leverage information technology (IT)
to reform and streamline government
litigation management (Verghese and
Pattanayak 2023).
With over three crore cases pending
nationally and the government being the
largest litigant, optimising state capa-
city for dispute resolution is urgent. As
Kerala’s progress shows, taking a mission-
mode approach backed by political will
and investments in judicial technology
can significantly fast-track court digiti-
sation across India. The objective of this
article is to provide actionable policy
and implementation guidance for repli-
cating Kerala’s success. Digital transfor-
mation of India’s courts and litigation
management will be key in tackling the
pendency crisis and improving access to
timely justice (Kinhal et al 2018).
The Kerala Model
Kerala has emerged as a leader in digit-
ising court records and processes over
the past few years. The state has under-
taken multiple technology-driven initia-
tives to modernise judicial functioning
and improve access to justice. A major
milestone was the roll-out of the e-filing
system in 2018, which enabled lawyers
and litigants to electronically submit
case documents to the high court and
district courts. This reduced paperwork
and brought greater efficiency in case
filings. The success of e-filing then paved
the way for the launch of virtual courts
in 2019. Using videoconferencing, many
routine procedures like bail hearings
and case status updates were conducted
online to avoid the necessity for physical
presence (Benny and Sebastian 2023).
The state also implemented a compre-
hensive case management system called
the management information system for
the advocate general’s office (MISAGO),
which was developed by the National
Informatics Centre (NIC). This centralised
online system helps track lakhs of ongo-
ing cases involving government depart-
ments. It extracts cause lists through the
high court application programming in-
terface (API) and identifies cases where
the state is a party. Once a new case is
added, it can be assigned to a govern-
ment pleader (GP) for handling. Gram
panchayats can view and update case
32
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details, including proceedings, orders,
documents needed, etc, on a user-
friendly interface.
Structured fields are available to
capture case information like subject, sub-
category, government department in-
volved, etc, up to four levels. This enables
robust tagging and searching of cases.
Communication with stakeholders is also
streamlined through document request
templates. Additionally, MISAGO main-
tains a repository of knowledge resources
like government orders, circulars, and
notices to help officers prepare respons-
es. Dashboards provide analytics on case
pendency, disposals, and pending actions.
Overall, it brings transparency, efficiency,
and institutional memory to litigation
management.
Other digital initiatives adopted by
Kerala include linking jails and courts via
videoconferencing to produce undertrial
prisoners, installing display boards show-
ing daily cause lists, and digitising case
records. Most case filings now happen
electronically through Kerala high court’s
e-filing facility. Significant coordination
between the judiciary and government
IT teams enabled this rapid digitisation.
The estimated cost for implementing
MISAGO was around `2 crore. Additional
funds came through the e-courts project.
While internet connectivity issues posed
early hurdles, its overall adoption by
lawyers and litigants has been smooth
due to its citizen-friendly nature.
The impact of going digital has been
striking. The average time for case dis-
posal fell from around seven years in
2016 to two years in 2022. It also facili-
tated virtual functioning of courts dur-
ing the COVID-19 pandemic. With over
three lakh pending cases involving the
government, MISAGO is helping fast-
track dispute resolution. Kerala’s model
shows how political will, stakeholder
collaboration, and sustained investments
in judicial technology can transform
legal processes.
Lessons for Other States
Other states can draw key lessons from
Kerala’s experience. They can adopt a
phased road map aligning with the na-
tional e-courts mission, appoint dedicat-
ed teams for change management, and
January 6, 2024
focus on user-centric design and data
security. Harnessing technology to in-
crease transparency and efficiency will
be key to tackle the pendency crisis
plaguing India’s judiciary.
Kerala’s 100% e-filing adoption enabled
a quicker roll-out of its litigation man-
agement system, MISAGO. In contrast, AP,
lacking comprehensive e-filing, faced
challenges in populating APOLCMS with
real-time case data. Kerala coordinated
between judiciary, lawyers, and govern-
ment right from digitising case records
to analytics. AP’s efforts have been more
government-centric, without extensive
judicial collaboration so far. While
APOLCMS was conceptualised earlier, im-
plementation is still gradual. Integrating
departments, training officers, and change
management has been slower as com-
pared to Kerala’s rapid adoption. Howev-
er, AP shows promise through aspects
like leveraging legal research expertise
by establishing legal management units
and working on drafting standard oper-
ating procedures on litigation manage-
ment. However, it is notable that AP still
relies on the physical movement of files.
Andhra Pradesh online legal case
management system: APOLCMS is a
comprehensive digital platform developed
by the state government to manage litiga-
tion involving public authorities. It was
conceptualised to address challenges like
delays, lack of coordination, and informa-
tion gaps in handling legal cases (OLCMS
nd). APOLCMS creates a unified work-
flow bringing government departments,
law officers like advocate generals, and
ground-level staff into a common digi-
tal ecosystem.
Some key features of APOLCMS include
digital case records with details like case
type, subject matter, acts involved, etc.
It enables workflow allocation of cases to
ground-level staff based on a hierarchy.
The system provides a dashboard for
officials to track cases assigned to them
and get real-time court order updates and
alerts. APOLCMS supports the recording
of compliance status and interim appli-
cations. It maintains a repository of
final judgments. The system generates
reports on case pendency and disposal
providing valuable analytics.
vol lIX no 1 EPW Economic & Political Weekly

The platform leverages digitisation of
high court records, integration with
e-courts, and data pre-population from
e-offices. But adoption by lawyers and
officials has been gradual. Lack of com-
prehensive user training and change man-
agement is a bottleneck. Further enhance-
ments are needed in data standardisa-
tion, reducing user role complexity,
minimising information silos between
departments, and building better ana-
lytical capability. Potential exists for
advanced features like machine learning-
based insights and improved response
templating.
Overall, APOLCMS has immense poten-
tial to aid the judiciary and government
in not only tracking lakhs of cases but
also using data to strategise systemic re-
forms. With rapid technology upgrada-
tion and increased stakeholder buy-in,
the platform can usher in transparency,
accountability, and efficiency in legal
case management across the state gov-
ernment machinery (PTI 2022).
Odisha litigation management system:
The Odisha litigation management system
(OLMS) is an online platform developed
under the National e-Governance Plan
to digitise the management of legal
cases involving government entities in
the state. The system aims to address
various challenges like tracking pen-
dency, monitoring expenses, and identi-
fying priority cases. The portal offers
features like a database of cases, a
document management system, a case
diary, a common communication plat-
form, and management information
system (MIS) reports.
All government departments are man-
dated to use OLMS for improved informa-
tion-sharing and monitoring. The home
page provides an overview of cases
pending at the high court, district courts,
tribunals, and cases cleared. The dash-
board displays monthly analytics on
case movement—institution, disposal,
pendency, etc. Users can filter data based
on categories like department, court,
acts, etc. The case diary captures case
events in chronological order, including
orders, compliance, proceedings, judg-
ments, etc. The communication platform
enables discussions between the law
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department, advocate generals and ad-
ministrative departments.
However, integration with e-courts for
real-time data exchange on case status has
not materialised yet. The lack of modular,
role-based interfaces hampers usage. The
consolidated repository of final judgments
is also missing. Going forward, OLMS needs
to move from a case diary to a smart
workflow engine. Advanced features like
machine learning-based insights, im-
proved MIS, and deeper integration with
the National Judicial Data Grid are es-
sential to realise the true potential of
the litigation management system.
Adoption by all stakeholders, including
advocates, is vital for its success.
Court Digitisation beyond India
Many nations across South Asia and the
world are at various stages of digitising
court processes. Pakistan launched an e-
court system in 2016 to automate case
management and court administration.
However, its adoption remains gradual
due to change management and infra-
structure limitations (Ahmed et al 2021).
Only around 20% of the cases are regis-
tered through the system. Connectivity
issues, resistance from lawyers, and lack
of digitisation of older records pose sig-
nificant hurdles.
Singapore’s electronic filing system
(EFS) enables electronic filing and service
of legal documents (Samavardhana 2017).
But concerns persist around issues of
digital divide, data privacy, and heavy
costs. The Philippines faces a chronic
underinvestment in digitisation. High
cybersecurity risks, limited e-payment
facilities, and lack of integrated case
management hinder progress in adopt-
ing digital measures. However, virtual
hearings gained traction during the
COVID-19 pandemic.
The Supreme Court of Bangladesh
unveiled an online court in 2019. But
factors like unreliable connectivity, lack
of digital skills, and cyber threats have
slowed extensive uptake (Taher and Ja-
maluddin 2022). In Sri Lanka, digitisa-
tion is still nascent with channels like
email being used for electronic docu-
ment submission. Insufficient funding
and training remain as the key gaps
(Narimatsu et al 2021).
vol lIX no 1
COMMENTARY
In the Western world, integrating
technology into courts has moved ahead
rather cautiously. Privacy and surveillance
concerns around aggregating judicial
data with law enforcement databases
make countries like Canada reticent to
digitise their judicial systems fully. Den-
mark’s high e-litigation adoption owes
much to the public trust in government
institutions handling data responsibly.
Resistance from lawyer associations
fearing loss of work and income further
hinders reforms in some nations. Critics
argue that there is little empirical evidence
that digitisation enhances access to jus-
tice. Shortcomings around user-centric
design in many systems could exacer-
bate the exclusion of marginalised groups.
But progressive examples like Estonia
showcase how citizen-focused digitisa-
tion can make the justice system more
accessible and efficient. Over 95% of
court proceedings happen digitally.
However, Estonia’s small population
aids in implementation. Adapting sys-
tems to regional diversity poses chal-
lenges in bigger countries (Numa 2020).
Thus, the road ahead lies in balancing
digitisation with constitutional safeguards.
Multi-stakeholder collaboration will be
key. Impact assessments must guide the
use of technologies like artificial intelli-
gence (AI). Upholding due process and
human rights should take precedence
over efficiency and lower costs. With
astute policymaking, digitally trans-
forming courts can widen access to
timely justice. But for technology to be
an enabler and not an inhibitor of jus-
tice, upholding an ethics of accessibility
will be paramount, especially for the
underprivileged. The overall judicial
stewardship of this complex process
will be vital.
Conclusions and
Recommendations
As seen across South Asia and globally,
judicial digitisation efforts face varying
challenges around change management,
infrastructure limitations, and balancing
efficiency with rights. While new tech-
nologies hold a promise to increase court
access and transparency, realising these
benefits requires nuanced policymaking
centred on public trust.
33
 COMMENTARY
In the Indian context too, a measured
approach is needed as states implement
court digitisation. Kerala’s success demon-
strates how stakeholder collaboration,
capacity building, and citizen-centric de-
sign enabled this system’s rapid adoption.
On the contrary, change management
and integration issues slowed its adop-
tion in AP and Odisha, highlighting the
importance of phased implementation.
Going forward, India must prioritise
frameworks for data security, platform
accountability, and algorithmic transpar-
ency while automating court processes.
The Supreme Court’s e-Committee guid-
ance on “tech justice” balancing digitisa-
tion with constitutional safeguards will
be instructive. Moreover, impact assess-
ments can identify high-risk use cases,
thus requiring effective safeguards.
However, in this nationwide race
to digitise, some caution is warranted.
Virtual courts and new technologies
fundamentally change information flows,
altering the balance of checks and bal-
ances. Interoperability with executive
databases necessitates strict protocols
to prevent potential misuse. Surveil-
lance and privacy concerns around ag-
gregating judicial data with other sys-
tems require oversight mechanisms as
per K S Puttaswamy and Anr v Union of
India and Ors.
Broader collaboration with lawyers,
civil society groups, and technologists
will enable the assessment of risks holis-
tically. Enhancing judicial expertise is
vital to provide stewardship over this
complex transition. A hybrid model re-
taining physical court options recognises
the need for human discretion. By em-
bracing technology prudently while up-
holding an ethics of accessibility, India’s
judiciary can harness digitisation to de-
liver transparent and accountable justice.
To reduce new case filings, a case-
handling procedure should be estab-
lished that benefits similarly situated
parties, while avoiding unnecessary liti-
gation between government depart-
ments and public sector undertakings
via empowered agencies. Effective gov-
ernment presentation can be enabled by
delegating legal functions to legally
trained individuals, responding effec-
tively to petitioners’ claims, grouping
34
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similar cases, and utilising an active infor-
mation and communication technology-
enabled case management system with
nodal officers. There should be a focus
on public interest litigation administra-
tion, training the judges and court
staff, and internal capacity building. A
legal information and management-
based system web portal can be devel-
oped for tracking court cases of the
union government.
It is vital to adopt a balanced road map
that improves efficiency while adhering
to constitutional checks and balances.
Safeguards like end-to-end encryption,
audit trails, and impact assessments
should be instituted for virtual courts
and AI systems. Clear protocols for data
sharing between agencies should be for-
mulated based on consent, anonymisa-
tion, and purpose limitation. Multidisci-
plinary committees with external experts
should provide policy inputs on digitisa-
tion. Standardisation of para-wise remarks
and following uniformity protocols from
secretariat departments should be imple-
mented till the village level.
By upholding constitutional principles,
instituting proper oversight mecha-
nisms, driving change management,
and maintaining continued public en-
gagement, India’s judiciary can lead the
way in ethical and inclusive court dig-
itisation. This will require enhancing
judicial capacity on emerging issues like
data governance, algorithm audits, and
platform accountability. Robust griev-
ance redressal mechanisms and privacy
impact audits will also be important.
Promoting open standards, open data
sharing, and platform interoperability
without compromising security will
ensure transparency.
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policy.in/wp-content/uploads/2019/05/Gov-
ernmentLitigationFinal.pdf.
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rated in Odisha in Phase V of e-Courts Project;
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www.livelaw.in/high-court/orissa-high-court/
orissa-high-court-inaugrates-paperless-courts-
ecourt-project-241450.
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“Digitalization Is the Way Forward for Sri Lan-
ka,” World Bank Blogs, https://blogs.worldbank.
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way-forward-sri-lanka.
Numa, A (2020): “Artificial Intelligence as the New
Reality of e-Justice,” e-Estonia Briefing Centre,
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as-the-new-reality-of-e-justice/.
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load Management System,” http://3.6.97.157/
docs/ONLINE%20LEGAL%20CASELOAD%20
MANAGEMENT%20SYSTEM.pdf.
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able-proper-legal-recourse.
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to Give Technological Boost to Lower Courts:
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deccanherald.com/india/huge-budget-for-e-
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available at
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Telangana
9908074973
vol lIX no 1 EPW Economic & Political Weekly
 Liberal Democracies and
Market Capitalism
Is a Remarriage Possible?
Chandrahas Deshpande
A
rich feast is offered to the reader
on a platter via this timely and
remarkably engaging book, The
Crisis of Democratic Capitalism by Martin
Wolf, the renowned Financial Times
columnist and commentator of long years
of repute. The beauty of the book, among
other things, lies in its “connect” not only
with economists and policymakers but
also with any interested reader. The
combination of lucidity, clarity and sub-
stance is simply breathtaking. The book
has served an important purpose to un-
fold, in no uncertain terms, the present
malaise afflicting today’s liberal democ-
racies in waving a red flag to today’s
market capitalism and in exploring a
sound, dispassionate way forward in the
form of “a new ‘new deal.’”
In this review, we make an attempt to
summarise the select features of the
book, focus on the author’s observations
of the emerging interrelations between
economics and politics in the global space,
and elucidate the “new deal” offered by
Wolf. Last, we reiterate the contempo-
rary relevance of this work, while noting
some of our own observations.
Before we get down to the principal
arguments, contention and message(s)
of the book, some very preliminary, though
important, observations about the key
features of the book are in order. These
features aptly decorate the core of the
book in unique, reader-friendly ways.
They is the storytelling thread which so
easily weaves the solid contents together;
the arguments are crystal-clear backed
by evidence and convincing narrative;
very powerful and illuminating use of a
selective, minimum number of graphs,
diagrams, and data, which takes even
the non-professional readers easily
along with the text; and the analysis is
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book reviewS
The Crisis of Democratic Capitalism by Martin Wolf,
Penguin Press, 2023; pp 474, $30.
strong on both the counts, diagnosis as
well as prescription.
Some Key Messages
The very basic premise of the author is
the following: the liberal democracies
and global capitalism, which together had
ensured so many decades of prosperity
across the globe, are now faltering and,
indeed, losing their legitimacy. Their
synthesis is in crisis, with both democ-
racy and capitalism being individually
sick and the balance between them at a
breaking point.
Two fundamental relationships are
being brought to the fore between the
market and the government and also be-
tween the corporations and rest of civil
society. Wolf argues that just as the peri-
ods of buoyant global capitalism and pe-
riods of democratisation coincided, the
collapses in both have also tended to co-
incide in recent years.
A few more features which have domi-
nated the recent economic scenario in
advanced as well as developing coun-
tries are: a long-term disturbing trend
towards “deindustrialisation” or “the
rapid decline in the share of industrial
employment;” the falling labour force
participation rate of prime-age men and
women; stagnant productivity as a major
obstacle to overall growth and prosperity;
and disappearance of social and institu-
tional capital to renew the economies.
According to Wolf, these developments
have led to the following undesirable con-
sequences: (i) the increasing tendency of
vol lix no 1
the powerful elites to rig the economic and
political systems against the interests of
the rest of society; (ii) the vanishing of
what Wolf calls the “Fordist economy,”
the economy which used to be dominated
by giant plants with moderately skilled
labour and with strong trade unions;
(iii) another manifestation—a permanent
reduction in the prospects for high-wage
and low- and medium-skilled employment;
(iv) an enormous rise in “regional ine-
qualities,” with large-scale disappearance
of factories in erstwhile towns and net-
work externalities in the major cities;
(v) finally, the growth potential of high-
income economies has itself slowed.
It is evident that the global economic
landscape has undergone a structural
metamorphosis after the 1980s, since
waves of globalisation or economic
opening took hold. Wolf points out that
production in emerging economies now
competes directly with that in advanced
economies across many industries. The
emerging economies are now competing
as locations for the use of capital and
technology which is owned by multina-
tional corporations (MNCs) from high-
income countries. The markets of emerg-
ing economies as well as the high-quality
human capital in them are transforming
the incentive structure of the MNCs.
Globalisation, facilitated by the MNCs
via the moving of capital, technology
and people across countries has ena-
bled the formation and operation of
global value chains (GVCs). The simul-
taneous liberalisation of finance has
added another unique dimension to
this process and has also caused and
raised enormous concerns and crises.
Two other paradigms of globalisation
have been trade and migration, as
argued by Wolf. He gives a detailed
account of the impact of globalisation
on labour and inequality and presents a
powerful argument that domestic eco-
nomic institutions and developments,
and not global ones, have led to the
adverse effects of economic change.
The ‘Rentier’ Capitalism Phenomenon
A very forthright quotation from Wolf
clearly spells out the malaise:
35
 BOOK REVIEW
… opportunities for rent extraction have
turned out to be far greater than many ex-
pected four decades ago. And this has helped
generate an extraordinary mal-distribution
of the gains from growth and left a large
part of the population confused, frustrated
and angry. (p 168)
In addition to the big-picture features
mentioned above, Wolf draws the read-
er’s attention to something far more
dangerous, that is, the exploitation of
market and political power, which he
terms as the rise of a “rentier economy.”
This is represented through financiali-
sation, corporate mal-governance, win-
ner-take-all markets, rents from ag-
glomeration, weakness of competition,
tax avoidance and evasion and erosion
of ethical standards.
Managers have powerful desires to
rig incentives in their own interest and
more importantly, to ignore externali-
ties such as the environment and soci-
etal damage. The creation of monopoly
rents is rampant, as Wolf states. Plus,
the explosive growth of the “knowledge
economy” has accentuated the concen-
tration of skills and experience of great
metropolises. The winner-takes-all par-
adigm has meant the actual decline in
competition, especially in the United
States. Consequently, there has been a
clear slowdown in the creation of new
businesses coinciding with the increase
in the market share of top firms!
Wolf argues that in addition to rent-
extraction opportunities, active rent-
creation and rent-seeking by powerful,
wealthy and elite lobbies have also added
to the existing malaise. This again man-
ifests itself in various ways—tax sys-
tems that benefit the wealthiest; weak-
ness of competition policy; dominant
role of the wealthy in shaping and influ-
encing public policy, etc.
Wolf then turns to three key new chal-
lenges facing modern economies: the
challenge of climate change; AI; creation
of the high deficit and debt levels espe-
cially after the outbreak of COVID-19.
These by themselves had huge undesirable
consequences for unemployment, poverty
and inequality both in the advanced as
well as in the developing economies. All
these three challenges, the author ar-
gues, have the potential to further ac-
centuate the existing inequalities.
36
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The Challenge of ‘Populism’
According to Wolf, another serious
challenge to democratic capitalism is
the growing popularity of the political
regimes that are authoritarian, either of
the “Demagogic Authoritarian Capitalism”
or of the “Bureaucratic …” In the first
category, Wolf includes the Philippines,
Turkey, Poland, Russia and prospects of
Brazil and India joining the club; and
the second type is found in China and
Vietnam.
Calling for “pluralism” against pop-
ulism of any variety, Wolf cautions the
readers against the ill-effects of ex-
tremisms of either the left, the centre
or the right. He picks several significant
holes in the “recent trends and tenden-
cies” of populist leaders around the world
to assume unbridled and absolute power;
subvert and destroy institutions; control
technology and media and suppress po-
litical opponents or opposition.
Wolf makes a very pertinent observa-
tion that while in the past only economic
dimension or performance determined
the voting biases or patterns, two more
have been added recently—national
identity and social values (p 187). This
has created obvious dilemmas or con-
flicts for political parties to put together
winning coalitions. For saving liberal
democracy, the author calls for both
political as well as economic reforms.
‘Renewal’ by Radical Reform,
Not Revolution
Wolf offers compelling evidence to sup-
port the intrinsic power of capitalism-
based economic system in terms of con-
tributing to the spectacular reduction in
worldwide poverty and destitution, espe-
cially in the recent 50-odd years. In
debunking the “de-growth” hypothesis, he
rightly stresses the values of a dynamic
market economy, including egalitarianism,
in the sense of the lack of the need for
any social status to participate in the
market economy (p 225).
Building further on the basic Karl
Popperian paradigm of “piecemeal social
engineering” (as opposed to revolution-
ary transformation), Wolf nevertheless
emphatically calls for “radical and cou-
rageous reform” of the capitalist econo-
my. Indeed, Wolf yearns for such social
january 6, 2024
engineering and tells us what exactly it
entails. To quote,
Social engineering of this kind depends on
expertise, but expertise is never enough. We
also need public management in formulat-
ing desired goals and consenting to the out-
comes. To deliver the energy transformation
we need will require an enormous range of
expertise, innovation, planning and global
cooperation supercharged by incentives. Ul-
timately, we must rely on an empowered but
socially responsible, technocracy to manage
the risk of climate change and achieve the
other worthwhile policy goals. (p 227)
The author then strongly recom-
mends four positive objectives for eco-
nomic policy: security, opportunity,
prosperity and dignity. He draws atten-
tion to the important fact that the top
20 happiest countries are prosperous as
well as democratic.
Wolf’s ‘New(er) Deal’
Building on the timeless New Deal of
Franklin D Roosevelt, Wolf somewhat
revises the five-point recipe for the
“basic things expected by our people of
their political and economic systems” in
the following order: (i) a rising, widely
shared and sustainable standard of living;
(ii) good jobs for those who can work
and are prepared to do so; (iii) equality
of opportunity; (iv) security for those
who need it; and (v) ending special priv-
ileges for the few.
To relaunch the economic system
along the above lines, the author discusses
the formidable challenges. These, briefly,
are uncertainty/disruption, systematic
thinking about essentially complex sys-
tems, robustness implying the capacity
to continue throughout unexpected
emergencies, resilience, and accounta-
bility. How does Wolf help us navigate
the web of these critical issues and arrive
at some workable policy prescriptions?
On each of his five-point recipes, he lists
specific requirements.
(i) Rising, widely shared and sustain-
able standard of living: According to
the author, the four requirements of sus-
tainable prosperity in the 2020s are:
(i) macro centric stability, (ii) innova-
tion and investment, (iii) sustainability,
and (iv) sensible openness to the world
economy.
vol lix no 1 EPW Economic & Political Weekly

(ii) Good jobs: On the second pillar of
his “New Deal,” Wolf says that the (ever-
changing?) structure of the economy
determines the demand for skills and
hence the nature and quality of jobs
(p 264). Technological transformation is
one of the key factors in this regard.
Wolf finds little role for policy here.
“One has to question how far the funda-
mental characteristics of technology can
be influenced by government policies”
(p 265). Economic history and regional
dimension of the labour market are very
important according to Wolf. Another
alternative the author recommends is that
of turning “bad jobs” into “good jobs.”
The Danish model of “flexicurity,” the
combination of income security with job
flexibility, is advocated by the author.
(iii) Equality of opportunity: While rec-
ognising the in-principle importance of
“equality of opportunity” as a desirable
goal for any society, Wolf nevertheless
points to many crucial practical aspects
of this principle. These pertain to: (i) is
such equality achievable; (ii) how far a
society should go to ensure it; (iii) does
it conflict with other important policy ob-
jectives; and (iv) what about the issue of
measurement of its dimensions. In gen-
eral, the author favours a reasonably high
quality of education for all and calls simul-
taneously for economic dynamism and a
reasonable degree of equality of earnings.
(iv) Security for the needy: Within this
realm of security for the needy, Wolf
specifically discusses select issues of great
contemporary economic relevance the
“welfare state;” universal basic income;
student loan; old-age insurance and im-
port competition. On each of these, he
has some holes to pick. His overall per-
ception could be summed up in his own
apt words, “A good welfare state politics”
(p 289).
(v) Ending special privileges for the few:
While referring to certain “privileges”
enjoyed by a select segment of modern
society, Wolf discusses five critical di-
mensions of such privileges—corporate
misgovernance; monopoly; new digital
economy; corruption and the (failure
to) tax. These privileges, Wolf argues,
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distort both the market economy as well
as the politics.
On Democracy
Wolf is a staunch defender of liberal
democracy and counters the various
critiques of democracy in an effective
manner, even while recognising and con-
ceding some of the imperfections of the
democratic system. He says that neither
demagogic authoritarianism nor bureau-
cratic authoritarianism is any decent al-
ternative to democracy. He vouches for a
“better working” of the combination of
liberal democracy and market capitalism.
Wolf argues that major threats to the
liberal democracies are domestic, ema-
nating from poor political and policy
responses to economic and technological
changes. Also, he emphasises that
managing global relations has assumed
enormous importance in the present
century. In his opinion, to preserve “peace,
prosperity and planet,” liberal democra-
cies need to be vigilant and full of vitality
on both these parameters. Wolf also
emphatically calls for “alliance of stable
liberal democracies” for the health of
democracy itself (p 352).
The China Factor
Wolf’s views on China, its dominance,
its role in the international arena, and
the ways to deal with it, can be summa-
rised as follows. Although the high-
income democracies dominate in global
output, technology, higher education,
and financial markets, this hegemony is
eroding, as China rises. Keeping the
trio of the paradigms of “cooperation,
confrontation and competition” at the
heart of the strategy for liberal democ-
racies, Wolf lays down certain prescrip-
tions for the future: West needs to pro-
tect and consolidate its own core
strengths—individual freedom, main-
tenance of alliance with other liberal
democracies, autonomy in technology,
security in energy and health and the
preservation of rule-based and cooper-
ative international system; the avoid-
ance, by both sides, of the tendency for
mutual suspicion and fear; the promo-
tion of mutually beneficial interde-
pendence mainly in trade and capital
flows; cooperation on common global
vol lix no 1
BOOK REVIEW
tasks such as climate, disease, interna-
tional debt, technology, peace and se-
curity; the need for a “carrot-and-stick”
approach in dealing with China in all
areas of concern.
The Role of Citizenry
In the concluding chapter of the book,
Wolf propounds that
the renewal of capitalism and democracy must
be animated by a simple, but powerful idea:
that of citizenship … we must think as citizens.
This is the tie that binds people together in a
free and democratic society. (p 380)
He offers a fair amount of clarity on
what citizenship means and also what it
does not mean. Concern for the welfare
of the citizens has to be the paramount
concern of democratic states, Wolf em-
phasises. In turn, this entails the possi-
bility of acquiring education, security,
protection from abuse, etc. Simultane-
ously, it also envisages responsibility
and accountability from other actors like
corporates, elites, and giant, all-perva-
sive tech companies as well.
Wolf ends his masterpiece by assert-
ing that the present scenario is disturb-
ing with the atmosphere more of fear
than hope. He warns that if the present
moment is lost without fighting the
deep evils mentioned and without
appropriately defending liberal democ-
racy with market capitalism, grave
danger lies ahead.
As mentioned at the beginning of this
review, Wolf has produced a timely and
succinct treatise with an impeccable
diagnosis of the current failings of our
eco-system and with thought-provoking
prescriptions for a much better world.
This would be a mixture of economy,
polity, and technology on a global scale,
ultimately aspiring for a peaceful, pro-
gressive and planet-friendly society of/
in the future.
Obviously, such a formidable effort
cannot be adequately and objectively
assessed without raising some doubts,
joining issues with some debatable
propositions. In that vein, the classifi-
cation of India in the group of “prospec-
tive demagogic authoritarian capital-
ist” countries appears to be a little far-
fetched. Over the last three decades,
the marriage of economic liberalism
37
 BOOK REVIEW

38 january 6, 2024 vol lix no 1 EPW Economic & Political Weekly

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with parliamentary democracy has
been firmly entrenched in the Indian
ecosystem. While the cautionary warn-
ing by Wolf is not totally out of place,
India’s inherent resilience combined with
its open-door engagement with liberal
democracies of the world and its com-
mitment to social welfare measures—
especially those of recent years—should
be enough, in our view, to put such doubts
to rest.
While the new deal of Wolf has the
five-point agenda well-placed, he has
somewhat underplayed the interde-
pendence among some of the agenda
points. Illustratively, “widely shared
prosperity” would itself depend on
“good jobs” for a large measure,
especially in developing economies,
which may have a lot to do with “equal-
ity of opportunity,” which is the third
Economic & Political Weekly EPW january 6, 2024
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plank in Wolf’s new deal. Some more
and deeper exploration and explana-
tion is felt wanting here.
Wolf falls short of recommending an
overarching architecture for attaining
global governance, which he rightly
points out as an essential requirement
for a better societal future. Is the radi-
cal reform of present institutions such
as the World Trade Organization, IMF,
etc, sufficient or does the world need
one more global institution on top of
these institutions? One wonders what,
if any, superstructure Wolf has in mind
to “deliver” global governance.
In this context, the work of Acemoglu
and Robinson (2012) on inclusive ver-
sus extractive economic and political
institutions may perhaps provide a key.
The pervasive and pivotal role of insti-
tutions in any economy as recognised
vol lix no 1
BOOK REVIEW
by the economics profession in recent
years needs to be blended with Wolf’s
core thesis.
Our predominant view, however, re-
mains: that of an unambiguous praise
for a wonderful work on the recent and
emerging dimensions of the global po-
litical economy of modern times. Indeed,
the book is a phenomenal contribution
to our understanding of the complex
eco-political dynamics of the tech-
led world.
Chandrahas Deshpande (dchandrahas@
gmail.com) teaches at the Welingkar Institute
of Management, Development and Research,
Mumbai.
Reference
Acemoglu, Daron and James A Robinson (2012):
Why Nations Fail: The Origins of Power, Pros-
perity, and Poverty, Princeton University Press.
39

Independence for French India
or the Freedom to Live
as Franco-Indian
Priya Ange
P
revious works on the history
of French India have mainly
focused on historical facts, politi-
cal events, and juridical texts. These
narratives were linear discourses using
what Pierre Singarevélou (2023) calls a
“methodological nationalism,” whether
they wrote from French, Indian, or British
perspectives. Therefore, Towards Freedom
in Pondicherry: Society, Economy and
Politics under French Rule (1816–1862),
by J B P More is more welcome in that
historiographical context, where com-
prehensive research in social sciences
about French India was almost a forgot-
ten domain.
It is only recently that little research
on French India started to focus on the
formerly colonised population, their nar-
rative, and the cultural consequences
for them after colonialism. There is the
History on the Margins (in English) by
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Towards Freedom in Pondicherry: Society,
Economy and Politics under French Rule
(1816–1862) by J B P More, New Delhi: Manohar, 2022;
pp 456, `2,300 (hardcover).
Jessica Namakkal (2021), where she
focuses on the border territories around
Pondicherry and the violence that re-
sulted during the decolonisation. Priya
Ange defended her thesis (in French) in
historical anthropology in 2021, studying
the narratives of Franco-Pondicherrians
and the circulation of jewellery in their
kinship transnational network. More
recently, the collectively edited volume
directed by Singarevélou (2023) gathers
250 researchers who discuss postcolo-
nialism as a part of the shared history of
the former colonised and colonisers in
the previous French Empire.
These scholarly productions on
French India propose a more sensitive
vol lix no 1
BOOK REVIEW
and biographical approach. In this
line, the writing of More traces the
birth and development of the inde-
pendence movement in Pondicherry.
After Freedom Movement in French
India: The Mahé Revolt of 1948 (2001)
and The Telugus of Yanam and Masuli-
patnam: From French Rule to Integra-
tion with India (2007), this remarkable
book, published in 2022, gives another
insight into the history of decolonisa-
tion of French India from what hap-
pened in Pondicherry.
The narrative considers the perspec-
tive of the formerly colonised popula-
tion and adopts a biographical ap-
proach combined with an analysis of
written sources in French, Tamil, and
English. This book uses the microhis-
tory approach developed by Carlo Gin-
zburg to analyse the freedom move-
ment in French India in a comprehen-
sive way. Therefore, the reader is im-
mersed in accurate details about
social and political life in French India.
The reader discovers the public life and
motives of the main political actors at
the time of the decolonisation, as the
book focuses on the elites in former
French India and their experience. It
highlights their agency and roles in the
process of political decolonisation.
39
 BOOK REVIEW
The Emergence of a New Elite
in French India
To begin with, More presents from
Chapters 1 to 3 the history and develop-
ment of Pondicherry, and the economic
and socio-demographic situation before
and during the French rule. The city’s in-
frastructure included two chambers of
agriculture and commerce, a bank to
grant credit, benevolent establishments,
and choultries for travellers provided by
wealthy merchants in Pondicherry. It was
home to most of French India’s factories
producing cotton, textile, yarns, garments,
and peanuts. The colonies imported from
Pondicherry most of its local products.
France exported to Pondicherry luxury
and industrial goods like alcohol or
cement. Pondicherry and Karaikal were
tax-free ports to facilitate trade between
France and the colonies in East Asia. The
French developed agriculture, which
became its principal source of income.
Nevertheless, More does not limit his
description to only an outside, distant
picture of life in Pondicherry. He aims
to study how the colonised people dealt
with the forced acculturation they
experienced during the colonial and
independence periods in Pondicherry. To
grasp the cultural challenges and reality
from the perspective of the Franco-Indi-
ans, the author intermingles his descrip-
tion with historical anecdotes to give an
insight into the inner experience of the
colonial presence. For instance, he pre-
sents in detail the existing caste organi-
sation of Hindus, Christians, and Mus-
lims living in the French settlements. He
notes that the lower castes were not
designated and considered as Tamils,
even though they spoke Tamil. He also
narrates the sometimes conflicting rela-
tions between Hindus and Muslims or
those between categories of people from
different castes within the same reli-
gious denomination. Another example
is when he describes the streets, which
had French and Tamil names from 1856
onwards. However, the physical separa-
tion between White Town and Black
Town still exists today and was made
visible by constructed infrastructures
during the colonial period.
The description of the socio-economic
context in the French colony helps to
40
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analyse the formation of a new elite
because of the new social, political, edu-
cative, economic, and administrative
organisation. They were influential in
the Freedom movement in Pondicherry.
With the arrival of the French colon-
isers in India, education became secu-
lar, free, and accessible to all castes
and religions from 1877 onwards, with
an educational system based on compe-
tition, merit, and the possibility of
obtaining scholarships. In schools, French
was the dominant language, while
teachers considered local languages
equivalent to a second language. The
students learned French history and
geography as if they were in metropoli-
tan France, while Indian history was
quickly glossed over or ignored. This
situation led to protests from students
and those wishing to promote Tamil
culture. Subsequently, some created
several Tamil and French language
associations inspired by progressive
French ideas, and actively engaged in
the abolition of caste discrimination,
which gradually disappeared. Women
in French India took advantage of the
system to gain access to intellectual,
social, and political life. The French
Indian elites were members of these
associations and societies. However,
“the instruction in English and Tamil
not only exposed some students to Brit-
ish Indian influence but also potentially
woke up their linguistic consciousness”
(p 59). The early presence of the print-
ing press in Tamil and French, from 1817
onward, played an important role too in
conveying political opinions from the
various political parties in the debate
for independence.
This educational system enabled all
inhabitants of the territory of French
India, regardless of caste or religion, to
gain access to education and high posi-
tions due to the spread of progressive
French values. Catholic Christians were
favoured in access to employment and
education, although there was no quota
system or community representation at
the administrative level. The Brahmins
were absent from political and adminis-
trative life in the French establishments.
So, there was no anti-Brahmin movement
in these territories. We also witnessed
january 6, 2024
the emergence of a professional class
that was a mix of several communities
and formed the Pondicherry elite. Some
of them also migrated to the French col-
onies to fi nd work. Many people of low
or modest caste took advantage of schol-
arships to pursue higher education and
held influential positions in education,
law, or administration.
Another reason that explains the colo-
nisation and the formation of a new
elite, is that in Pondicherry and Karaikal,
land is the property of the authority that
owns it. The notion of private property
was introduced in the 19th century by
the French and English colonial system,
where those who cultivated it or paid
taxes on it became the absolute owners.
The result was the economic Europeani-
sation of Indian society. Private property,
with its emphasis on individualistic
values to the detriment of the collective,
contributed to the emergence of a race
for prestige and power in acquiring new
land. As a result, existing social and
caste relations in society have changed,
with the emergence of new landowners,
most of them being Hindus, except for a
few Christians and Muslims.
Over time, those educated in the French
system, the new landowners, the wealthy
merchants, the Franco-Indian military,
and those who accessed high positions
in politics and French administration be-
came the social, economic, and political
Franco-Indian elite with a new social
status, no more based on the criteria of
caste or religious belonging. They were
all put in a competitive and meritocratic
system, yet with French progressist and
egalitarian ideas. The book details how
they evolved in this colonial system.
They and their descendants played an
active role in the political decisions and
negotiations held during the period
Pondicherry moved for independence.
The Freedom to Preserve a
Franco-Indian Cultural Legacy
This contextualisation situates the dif-
ferent social categories within the Fran-
co-India elite and makes explicit their
positions at the time of decolonisation.
More identifies the factors that contrib-
uted to the departure of the French and
explains why Pondicherry rallied to the
vol lix no 1 EPW Economic & Political Weekly

Indian union eventually. Thus, he exposes
in Chapters 4 and 5 how the independ-
ence movement in British India evolved,
with the Quit India Movement, the Salt
March initiated by M K Gandhi in 1930,
the quests to boycott foreign products,
to resign from government jobs, or to
wear Indian traditional attire instead
of European ones. However, though the
Indian national awakening happened
all over British India, it did not find
much reception in French India. The
Franco-Indian leaders had different
agendas focused on internal fights for
positions. The population was more pre-
occupied with economic survival due to
the blockade imposed by the Indian gov-
ernment in 1949 to pressure the French
colonisers to quit the territory.
More rightly points out that the cultural,
linguistic, territorial, and religious diversity
in India, combined with the different
colonial administrations, made it difficult
to form a unified nationalist sentiment of
likeness and shared legacy and ideas about
the Indian territory during the period of
decolonisation. He compares the emer-
gence of a nationalist movement based
on Marxist analyses, the works of nation-
alist historians, and Indian intellectuals,
combined with interviews made with the
persons who took part in the independence
movement. In the last six chapters, he
highlights the specificity of the formation
of nationalism in Pondicherry.
There was a discussion among the
political leaders in French India to even-
tually access political autonomy at the
local level while remaining part of the
French Empire. This idea was contro-
versial. Those who were part of the
Indian National Congress wanted to
merge with the Indian union on certain
conditions. The Socialist Party was pro-
French in the beginning, but moved to the
middle, then joined the Indian union as
they looked for the best opportunity to
preserve the Franco-Indian cultural legacy.
The Democratic Progressive Party was
against the merger with the Indian union.
The Dravidar Kazhagham party wanted
Pondicherry, Karaikal, and the Tamil
area as a separate and independent state.
The Muslims were pro-French.
Besides, the question of consulting
the local population and knowing their
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BOOK REVIEW
wish by holding a referendum, as per Karaikal. Some objects I found in my
the French constitutional law, was also fieldwork confirm the conclusion pre-
a turning point in the diplomatic nego- sented in the book (Ange 2021). For
tiations. With a detailed description instance, the gold necklace in Image 1
of the political and personal turn on (available on EPW website) is called the
the side of the Franco-Indian elite, the independence chain. It was made by
author explains how and why French goldsmiths in Pondicherry from 1950
India finally merged with India. The onwards for their Franco-India customers
Franco-Indians chose to rally the Indian and included in the dowry of Pondicherri-
union not because of Indian nationalism an women. It means for them “the free-
but because of their economic situation dom to live their double Franco-Indian,
and the better opportunity that India Franco-Tamil, and Franco-Pondicherrian
offered to preserve their cultural legacy. culture and identity” as they wish.
The book explains why it took almost 15 [Image accompanying in this article is
years between the independence of available on the EPW website]
British India in 1947 and when the Priya Ange (priya.ange@ehess.fr) teaches at
French left India in 1962. the Laboratoire d’Anthropologie Politique
Finally, this book deals with the cultural (LAP-EHESS), Centre d’études sud-asiatiques
consequences supposedly to come after et himalayennes (CESAH-EHESS), School for
Higher Studies in Social Sciences (EHESS).
decolonisation. However, for French India,
the question emerged during the colonial References
period and the process of decolonisation. Ange, Priya (2021): La Circulation Des Bijoux
en Parentèle Tamoule: Migration, Genre et Per-
The debate for freedom in French India sonne, Une Ethnographie Politique, Mémorielle
was not against the colonial rule, as in et Sensorielle Des Joyaux Franco-Pondichériens,
Doctoral thesis, Paris: EHESS.
British India, nor aimed to overthrow it.
Appadurai, Arjun (1996): After Colonialism: The Cul-
The social, political, and economic ele- tural Consequences of Globalization, Paris: Payot.
ments outlined by the author are part of More, Jean-Baptiste P (2001): Freedom Movement
in French India: The Mahé Revolt of 1948, India:
the Franco-Tamil cultural legacy, which IRISH.
was the focus of political debate and nego- — (2007): The Telugus of Yanam and Masulipat-
nam: From French Rule to Integration with
tiation in the quest for freedom. The India, Puducherry: MS.
central point is, at various levels, the will- Namakkal, Jessica (2021): Unsettling Utopia: The
ingness to preserve the identity of being Making and Unmaking of French India, Colum-
bia: Columbia University Press.
Franco-Indian and the meaning behind the Singaravélou, Pierre (2023): Colonisations-Notre
freedom movement in Pondicherry and histoire, Paris: Seuil.
Faculty Development Program on
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vol lix no 1 41
 BOOK REVIEW

Image 1: The Independence Chain in Pondicherry

Credits: Priya Ange, Pondicherry, 2017.

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 PERSPECTIVES
Simultaneous Elections in
Plural Societies
Overlapping Social Cleavages and
Democratic Stability in India
Aejaz Ahmad Wani, Rouf Ahmad Dar
The contentious proposal of
“one nation, one election”
is critically examined. The
interwoven relationship between
elections, social cleavages,
federal balance, and the potential
implications of simultaneous
elections for democratic
(in)stability in India is explored.
In doing so, comparative
literature on concurrent elections
is studied to assuage its merits
and demerits, and better
understand the implications
for a country like India.
The authors would like to acknowledge the
anonymous referee for providing invaluable
insights, which helped enrich and extend the
analysis of some key points in this article.
Javid Ahangar, Bushra Zahoor, Saalim Bhat,
and Muhtashim Issaq reviewed multiple
versions of this article and contributed in
enhancing its quality.
Aejaz Ahmad Wani (aejazahmad.uok@gmail.
com) is an independent researcher with a
PhD in political science. Rouf Ahmad Dar
(roufdar1191@gmail.com) is a PhD candidate at
the Department of Political Science, University
of Kashmir, Srinagar.
42
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T
he catchphrase of “one nation,
one election” has lately entered
India’s political lexicon. It repre-
sents an ambitious proposal envisioned
by the current union government aim-
ing to “harmonise polls” by holding si-
multaneous elections in Lok Sabha and
legislative assemblies. The Prime Minis-
ter proposed this idea with great vigour
during the 2014 general elections. The
fundamental idea or its practice is, how-
ever, not entirely outlandish in India, as
simultaneous elections were held in the
country during the first four general
elections, namely 1951–52, 1957, 1962,
and 1967. Its discontinuation coincided
with the collapse of one-party dominance
in the late 1960s, which would preclude
the entry of new parties in electoral com-
petition (Palshikar 2016; Kumar 2021).
The 1999 Law Commission Report on
the reform of electoral laws enunciated,
perhaps for the first time, the desirabili-
ty of simultaneous elections in India.
Addressing the need to harmonise the
electoral process in the country, the re-
port emphasised that “the holding of
separate election to legislative assembly
should be an exception and not the rule”
(Law Commission of India 1999). Fol-
lowing this, the 79th Report of the Par-
liamentary Standing Committee (2015)
made a “compelling case” for the feasi-
bility of this idea. In 2016, the then min-
ister of state for finance and corporate
affairs tabled a statement in Lok Sabha
on holding simultaneous elections, in-
cluding those in the local units of gov-
ernment). Two years later, the NITI Aayog
recommended a coordinated two-stage
schedule for Lok Sabha and legislative
assembly elections from 2024, seeking
JANUARY 6, 2024
to minimise disruptions to governance
stemming from constant campaigning
(Sundarajan 2018). Finally, in early Sep-
tember 2023, the government constitut-
ed an eight-member high-level committee
led by former President Ram Nath Kovind,
which was tasked with assessing the
proposal of simultaneous elections and
submitting a report on its feasibility in
the country (Hindu Business Line 2023).
With the government anchoring to in-
troduce a bill to enact this proposal, the
idea of simultaneous elections has trig-
gered serious churning in policy circles,
media, and academia.
The ongoing debate on simultaneous
elections has relevantly concentrated on
a variety of aspects such as its economic
implications, development and govern-
ance considerations, harmonisation of
electoral procedures, and its impact on
India’s federal architecture. While it is
convenient to cite the successful work-
ing of the concurrent system of elections
in other countries of the world, very
little is said about their political and
electoral systems which make the
straitjacketed replication of their meth-
od of holding elections very problematic
in the Indian context. A country as small
as Nepal did away with simultaneous
elections after a solitary experiment in
2007 because of the logistical difficulties
involved in holding such elections. How-
ever, the argument of an “Indian excep-
tionalism” is manifest in our democratic
and electoral system and their interac-
tion with India’s regional and social di-
versity. It is hard, if not impossible, to
implement procedures and systems that
have worked relatively well in socially
and politically homogenised nations. If
the system of simultaneous elections is
to be implemented in India, we must
seek answers to a galore of questions. In
this article, possible answers to an es-
sential question are sought: How would
simultaneous elections interact with the
social variables of India’s electoral dy-
namics, which involve an array of social
cleavages and political parties that feed
on them, and whether this interaction
could affect India’s federal balance and
democratic stability?
vol liX no 1 EPW Economic & Political Weekly

We delve into crucial sociopolitical
dimensions of the proposed idea of “one
nation, one election” and explore the in-
tertwined relationship between elections,
social cleavages, the federal balance, and
the implications of simultaneous elections
for democratic (in)stability in India.
Overlapping Social Cleavages
The proposal for the implementation of
simultaneous elections perhaps does not
(or its proponents do not want to?) con-
sider the potential social consequences
that could arise in a country where elec-
tions and social divisions are closely in-
terconnected. Indian electoral dynamics
cannot be easily explained without a ref-
erence to relevant social cleavages which
vary across regions and states. This is so
because electoral players tend to feed on
social cleavages—like caste, religion,
and language—for their immediate and
long-term electoral successes (Quraishi
2014). These social cleavages often re-
main dormant between elections and
become manifest during election cam-
paigns through the actions and plat-
forms of political parties. The structure
of the electorate in India has not
changed much since independence. A
study examining the changing composi-
tion of the Indian electorate between
1962 and 2016 found that Indian voters
are found to be “less driven by straight-
forward economic interests than sectar-
ian interests and cultural priorities”
(Banerjee et al 2019: 1–2).
As political conflicts are routinely fo-
cused upon issues of identity, religion,
and ethnicity, the study underscores the
importance of growing social cleavages
in India and many Western democra-
cies. Indeed, the first four Lok Sabha
elections in India aligned with the state
assembly elections. However, this oc-
curred before successive democratic up-
surges that engaged individuals from di-
verse social backgrounds in the active
electoral process, leading to the emer-
gence of social issues as a central feature
of Indian elections (Yadav 2020: 27–29).
As previously passive social groups were
mobilised on a massive scale, electoral
politics underwent a significant trans-
formation, increasingly relying on issues
related to these social forces. Identity
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politics has since remained a recurring
theme in the Indian political discourse,
although since the 2014 elections, these
have largely remained dormant.
The most fascinating characteristic of
India’s plural polity is the cross-cutting
nature of its social cleavages which fre-
quently work as a lynchpin for its demo-
cratic stability—a contrasting experi-
ence to Western democratic societies that
tend to view social divisions as funda-
mentally hostile to political order. As
elections are instrumental in exacerbat-
ing divisive social cleavages, it can be
argued that simultaneous elections may
run the risk of causing them to danger-
ously overlap in a pluralistic set-up in
which cross-cutting social cleavages sup-
port the long-term working of demo-
cracy. This perplexing trajectory is sup-
ported by a vast global literature demon-
strating that the operational dynamics
of social divisions serve to embed identi-
ties rather than erode them, and that so-
cial cleavages do not naturally undermine
democracy or cause violence, thanks to
their cross-cutting nature (Selway 2011;
Stepan et al 2011).
The argument presented here draws
mainly from Kanchan Chandra’s illumi-
nating work (1999, 2005, 2007), but
there is an excellent body of supplemen-
tary literature that argues on similar
lines (Brass 1990, 1991; Varshney 2002).
To demonstrate how simultaneous elec-
tions could provide a fertile ground for
overlapping social cleavages in India,
it is imperative to briefly reproduce
Chandra’s perspective. In contrast to the
prevailing democratic theory, which
views ethnic divisions as a threat to
democratic institutions, Chandra (2005,
2007) puts forward a unique case based
on India’s experience (Uttar Pradesh).
According to this perspective, when eth-
nic parties are supported by the institu-
tional framework, they can play a role in
maintaining democratic stability. The
idea is that a viable institutional frame-
work can streamline multiple ethnic
parties, thereby avoiding the “outbid-
ding effect,” which is usually attributed
to be a major cause of democratic insta-
bility (Chandra 2005: 236). The institu-
tional structure offers deep incentives
for one “master cleavage” to intersect
vol liX no 1
PERSPECTIVES
with and override other cleavages.
Chandra highlights three such incentiv-
ising devices which include policies of
affirmative action, state boundary, and
language. If the first policy encourages
social cleavages along caste/religious
lines, the latter two policies provide es-
sential counterpoints to them (Chandra
1999: 85–87).
All this leads Chandra to conclude
that the institutional framework enables
the cross-cutting nature of social cleav-
ages in India, preventing the formation
of a master cleavage or overlapping of a
particular cleavage, dividing people on
some issues and uniting them on others
(Chandra 1999: 55–58). This has proven
to be an “inbuilt corrective” within India’s
democratic system. For instance, if the
“Mandir issue” in the 1990s caused divi-
sions among people based on their reli-
gious affiliations, the “Mandal issue” in
the same decade led to fractures along
caste lines, undercutting the possibility
of the overlapping of any single cleav-
age—caste or religious—to dominate
electoral politics. In many South Asian
countries, particularly Sri Lanka, Paki-
stan, and Myanmar, political leaders
have sought to mobilise people on reli-
gious or ethnic lines, frequently helping
particular social cleavages to dominate
the political sphere and elections. These
“experiments” have often resulted in
civil wars and political violence and have
severely undermined political stability
in these societies.
Chandra’s argument is broadly in
agreement with the “state-nation model”
proposed by Stepan et al (2011), suggest-
ing that a meticulously designed institu-
tional framework can embrace various
ethnic and cultural identities harmoni-
ously, as demonstrated in the case of
India. This stands in contrast to the
“nation-state model,” which assumes a
homogenisation of identities. Chandra
(1999) explains how multiple ethnic par-
ties have contributed to what she terms
the “ethnification” of Uttar Pradesh.
The question that is posed here is:
How do simultaneous elections involve
the risky overlapping of social cleavages
or the formulation of a master cleavage
in India’s plural polity? One plausible,
and perhaps least appreciated, answer
43
 PERSPECTIVES
to this question can be drawn from the
current mode of conducting elections in
India. The holding of national and state
elections separately prevents or has the
potential to prevent social divisions
from consistently finding a conducive
environment for overlapping and caus-
ing social unrest. In this sense, it acts as
a preventive measure against politicians
who exploit these divisions for their po-
litical gains by appealing to and consoli-
dating support along specific cleavages,
particularly religion. In Assam elections,
for instance, politicians used a mix of
religio-ethnic material to mobilise vot-
ers, targeting specific voter groups. In
Karnataka, a different combination of
caste and religious division through po-
litical collaboration effectively undercut
religious appeals.
Likewise, when a particular social di-
vision takes centre stage as a major issue
in one state’s election, a contrasting
cleavage or even a non-religious or de-
velopmental issue emerges in another
state during a different period. This ef-
fectively chokes the widespread adop-
tion or multiplication of any specific so-
cial division at the national level. Look-
ing through this lens, simultaneous elec-
tions will likely aid the parties that seek
mobilisation on a single social cleavage,
especially religion, which is why it could
be potentially detrimental. A differential
mode of elections serves to distribute, or
even diffuse, the risks arising from the
prevalence of a dangerous social cleav-
age in a plural society like India.
The phenomenon of intersecting so-
cial cleavages is emerging as a signifi-
cant electoral strategy in India’s current
political landscape. Bharatiya Janata
Party’s (BJP) electoral strategy has tradi-
tionally relied on identity politics (root-
ed in the cleavage of religion) and the
majoritarian rhetoric (Yadav 2023). It
has worked well in the northern states,
though not so well at the national level
until 2014. If this interpretation is fair
enough, the idea of simultaneous elec-
tions may provide a favourable avenue
for the BJP to mobilise the people na-
tionwide and across otherwise socially
diverse states along religious lines. On
the contrary, the opposition parties, led by
the Congress, are increasingly resorting
44
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to identity politics based on caste as a
counter-strategic measure against the
BJP. Their vigorous endorsement of a na-
tionwide caste census is a strategic effort
to undermine the prevalence of the reli-
gious cleavage. In this parlance, the sys-
tem of simultaneous elections might en-
able the BJP to surmount the institution-
al framework that supports the intersec-
tion of social cleavages and hinders the
assimilation of identities.
The experience of conducting concur-
rent elections in other countries of the
world may provide insights that may or
may not apply to India, contingent upon
their political and electoral systems. In
Sweden’s electoral system, national and
regional elections are held concurrently,
and as recent decadal experience shows,
there have been split ticket voting and
coalition governments right throughout
these years (Berg and Oscarsson 2020).
This can misleadingly be taken as a
shred of positive evidence to test out si-
multaneous elections in India, but the
electoral systems in these countries are
structured in entirely different ways.
Sweden uses a proportional representa-
tion system of voting, which has been
known to ensure relatively better demo-
cratic outcomes. Same is the case with
South Africa, another state that holds
concurrent elections to the National
Assembly and provincial legislatures.
This is different from the first-past-the-
post system followed in India, which
usually leads to simple majority govern-
ments. It is no coincidence, therefore, that
the recent calls for introducing prefer-
ential voting in India have been seen as an
effective measure to strengthen demo-
cracy. The “winner-takes-all” elections in
India would likely produce a majoritari-
an democracy if regional politics and in-
tersecting social cleavages were not to
contribute to its representative character.
Furthermore, the regional and national
differential outcomes in Sweden are a
result of the very basic federal segrega-
tion of powers between the union and the
regions. The regional parties have been
restricting their politics to social welfare
issues, most prominently healthcare,
which is a regional function in Sweden.
Hence, irrespective of the outcome of
the national election, Swedish people
JANUARY 6, 2024
vote among the regional parties that of-
fer promises of improved healthcare fa-
cilities (Berg and Oscarsson 2020). In
India, as has been discussed in this article,
group identities and political manifesta-
tions do not hinge on the issues of social
welfare per se. Instead, issues of social
welfare are tailored around group iden-
tities owing to historical disadvantages
faced by marginalised groups. India is
more similar to Canada and Australia in
this sense, where non-concurrent elec-
tions are held to preserve the autonomy
of the multiple levels and branches of
government. So, electoral voting in India
is much more complex and cannot sim-
ply be understood to be commensurate
with some of the European states where
elections are concurrently held.
The Swedish regional elections or
South African provincial elections, or
such elections in other countries that
might have concurrent or non-concur-
rent elections, have been considered
“second-order elections.” It is because
the state is heavily centralised or be-
cause these elections do not involve sali-
ent issues of public importance. This
second-order logic seems to punctuate
comparative literature on elections (Reif
and Schmitt 1980; Marsh 1998). It la-
tently underpins the proposal of simul-
taneous elections in India as well, which
would subsume state and regional issues
under the rubric of a nationwide elec-
toral festival. But as recent election out-
comes in Sweden and South Africa sug-
gest, these elections are not second-or-
der at all and do not provide a simple
walk in the park for statewide parties
whose national performance trickles
down to the regions. Hung assemblies
and coalition governments at the union,
and domination of regional parties in
the regions are enough evidence that si-
multaneous elections might not benefit
the nationwide party aiming to roll over
the regional elections as well.
Issues of Democratic (In)Stability
The separate mode of elections in India
enables multiple democratic functions.
First, it allows voters to thoughtfully
consider both national and local mat-
ters, enabling them to express their pref-
erences in a manner consistent with the
vol liX no 1 EPW Economic & Political Weekly

principles of genuine electoral demo-
cracy. Denying this opportunity not only
fades the articulation of critical issues
but also places stress on the federal bal-
ance. It also means that the privilege of
voters to differentially exercise their
franchise in an electoral system with a
multiparty arrangement and multiple
levels of government will fade away.
Second, the argument that simultaneous
elections could provide a congenial am-
bience to social cleavages to overlap it-
self hinges on the ability of the institu-
tional/constitutional framework to pro-
duce a remarkable federal balance amid
regional and cultural diversity. On that
front, India’s federal structure has played
a crucial role in managing or accommo-
dating diverse social cleavages. The ex-
isting mode of elections, even if costly,
has so far served well to manage com-
peting and contesting identities, wheth-
er ethnic, linguistic, religious, or caste-
based. It has seldom allowed them to
dangerously collate or overlap at the na-
tional level, thereby contributing to civil
peace. In this particular aspect, regional
parties have been instrumental in man-
aging the coalitions of social identities
and helping to deepen the federal polity
in India (Vanaik 2007: 1084–85).
One important strand of scholarship
on federal theory criticises federalism
for its promotion of dual identity, fearing
that it could escalate violence, repres-
sion, and even secession. Yet scholars
generally commend federalism for its
role in fostering unity by way of ac-
knowledging diversity within a demo-
cratic polity. This also goes all the way
to ensure political stability, civil peace,
and progress, especially in a plural polity.
For these reasons, “dual citizenship” is
hailed for its role in the successful work-
ing of a federation and its potential in
accommodating diversity (Elazar 1994).
In a similar vein, K C Wheare (1963: 49)
sees both “allegiances” as a fundamental
requirement for federal governance, with
the condition that neither should domi-
nate the other. The constitutional frame-
work has anchored federal practice in ways
that accommodate competing and con-
testing identities, and potential social
cleavages, by rendering them comple-
mentary, rather than conflictual, to each
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other. These policies, or what Stepan et al
(2011) refer to as “state-nation,” acknowl-
edge the remarkable diversity that makes
up Indian society, and aid the sustenance
and deepening of the federal balance of
both identities and provincial units. It is
possible for an individual in India to si-
multaneously identify as Hindu, a Guja-
rati, a lower socio-economic class work-
er, or a speaker of any language. These
“multiple but complementary identities”
have paved the way for the emergence of
a “holding together federalism” in India
(Stepan et al 2011: 116–43; Sen 2006).
The proposal for simultaneous elec-
tions is seen as being detrimental to fed-
eralism and a multilevel governance sys-
tem that has taken decades to develop
(Aiyar 2023; Hasan 2023). The legitima-
cy and effective execution of simultane-
ous elections will unquestionably de-
pend on the government’s commitment
to foster consensus, as the Prime Minis-
ter has explicitly urged India’s election
authority and other stakeholders to initi-
ate broader public discussions. The di-
lemma in this situation is not whether the
government is willing to persuade re-
gional parties to cooperate but rather
the readiness of those regional parties to
be persuaded. This obstacle primarily
stems from the fact that persuading re-
gional parties would entail them to give
up their sway in their regions or elector-
al districts, a step more likely to encoun-
ter resistance than approval. If the gov-
ernment led by the current ruling party
can successfully tackle this Herculean
task, it would truly showcase their re-
markable political wisdom.
Federalism and Democratic
Accountability
If state elections are a crucial compo-
nent of the federal edifice of the Indian
state, then the implementation of simul-
taneous elections will be unbecoming of
the federal state, or, inversely, imply a
shift towards a unitary state. It is so be-
cause simultaneous elections can send
the principle of political diversity, which
is characterised by the existence of re-
gional parties and their role in accom-
modating social and cultural diversity in
India, into a dangerous limbo. This
mechanism has long offered a channel
vol liX no 1
PERSPECTIVES
of articulation to social diversity in India
(Tillin 2016; Chhokar 2016). However,
simultaneous elections have to be seen
in terms of political incentives provided
to national parties for expanding the
sway of national politics over state-level
elections. The alignment aimed through
the proposal will serve, in the words of
Louise Tillin (2016), to “centralize politi-
cal life [and] to reverse the trend of last
several decades which saw state politics
as the preeminent arena of Indian politics.”
The empirical evidence seems to con-
firm Tillin’s apprehension. A study of the
electoral data from six states (Arunachal
Pradesh, Maharashtra, Andhra Pradesh,
Sikkim, Karnataka, and Odisha) where
elections coincided with the Lok Sabha
elections after 1999 demonstrates that
voters tended to choose the same party
(Chakravarty 2016). On the one hand,
this brings us closer to the phenomenon
of what is referred to as the “coat-tail ef-
fect” that simultaneous elections in India
could very much result into. This refers
to the capacity of a thriving candidate to
garner votes for fellow candidates from
the identical party in an election (Singh
2022; Campbell 1960). The data from
the first two decades after independence,
during which simultaneous elections
were held in India, go on to show that
national parties were able to consolidate
their vote share at both levels, the union
and the state (Kumar 2021: 189–91).
The concurrence of multiple-level
elections magnifies the incumbency ad-
vantage to benefit the incumbent govern-
ment. On the contrary, while concurrent
elections increase voter turnout, as it may
well do in India, the incumbency advan-
tage is generally thought to be a hindrance
to accountability (Ansolabehere and Gerber
1997). As concurrency extends the in-
cumbency advantage to another elector-
al arena, a “spill-over implies an unde-
served electoral gain in an unrelated
electoral contest and biases electoral
selection in this contest” (Rudolph and
Leininger 2021). The successive demo-
cratic upsurges and consolidation of re-
gional parties have long served to pre-
vent this “undeserved turnover” and to-
talistic homogenisation of voters.
There have been differential out-
comes in the state elections in the last
45
 PERSPECTIVES
decade. The ruling party at the union
has not translated its national success
into the state elections or even local
elections, and there are regional parties
that still hold sway over the common
voter. The intended effects to be produced
relate to these observations and are sup-
posed to feed on the incumbency advan-
tage. Successful simultaneous elections
not only mean that the populist electoral
success at the national level might sub-
sume the regional political parties, but it
also means that the latter might have a
negligible role in influencing the nation-
al elections (by helping in the formation
of coalition governments, for example).
In Conclusion
It has been argued that an illuminating
debate on simultaneous elections needs
to transcend simplistic justifications. In-
stead, it has to attend to the potential
social costs of the proposal and the civic
consequences that are likely to follow. If
social cleavages are still crucial in elec-
toral politics in India, as they ostensibly
are, then simultaneous elections can
cause a particular social cleavage to
dominate at the state and national lev-
els. Conversely, the existing pattern of
holding elections prevents any overlap-
ping of social cleavages at the national
level while keeping them criss-crossed,
engaged, and balanced at the provincial
level. The reasoning underlying the pro-
posal of simultaneous elections is that of
improved and efficient governance, and
to reduce the costs of holding separate
elections. Even if this reasoning is accept-
ed, for the sake of an argument, an even
greater concern is whether simultaneous
elections affect democratic health in any
way. The discussions in this article sug-
gest that they do, and in a negative way.
Diversity of identity is the raw materi-
al of democracy, and nurturing this di-
versity improves the health of democra-
cy. The proposal of simultaneous elec-
tions is aimed at flattening these inher-
ent diversities and undoing decades of
political development of the marginal-
ised social groups. Simultaneous elec-
tions are, therefore, not desirable if they
strike at the heart of Indian democracy.
What safeguards will be envisaged in
case this proposal stirs social cleavages?
46
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What will be its tangible impact on iden-
tity politics and how will regional parties
address its purported centralising effects?
These questions will, sooner or later, de-
mand adequate answers from all the rel-
evant stakeholders of Indian democracy.
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available at
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vol liX no 1 EPW Economic & Political Weekly
 special article
Understanding Migration Behaviour in India
from PLFS Data
Post-lockdown and Future Perspective
Arup Mitra, Puneet Kumar Shrivastav
Based on the Periodic Labour Force Survey (2020–21),
this study focuses on the migration data and tries to
delineate certain broad characteristics of the migrant
population. Negating some of the commonly held views
that less advantaged individuals migrate more frequently
than their counterparts, significant departures are noted
after the pandemic. Not just the casual labourers, even
the regular wage earners suffered seriously during the
pandemic and the lockdown. The sudden crisis and the
severity of job loss, particularly in the urban areas, which
forced many to shift to their native residences are the
main reasons of their unwillingness to move out in the
future from their current locations.
The authors are grateful to the reviewer for insightful comments.
Arup Mitra (arupmitra@sau.int) teaches economics at South Asian
University, New Delhi. Puneet Kumar Shrivastav (puneetshrivastav1@
gmail.com) teaches at NILERD, Delhi.
Economic & Political Weekly EPW January 6, 2024 vol lIX no 1
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T
he pandemic and the subsequent lockdown reduced the
sources of livelihood, particularly in the urban space, and
more so in large cities, which used to attract migrants on a
significant scale (Jeyakumar et al 2022; Mitra and Singh 2021).
While return migration occurred, however, there is a concern
that it raised the vulnerability of the workers. In this context,
the rural employment guarantee programmes (MGNREGA) were a
major safety net. The Periodic Labour Force Survey (PLFS) data
(2019–20) of the April–June quarter in 2020, which exactly
coincided with the first phase of the pandemic-hit lockdown
period, shows a massive decline in the workforce participation
rate in the urban areas. However, the implementation of the
rural employment guarantee programmes at an unprecedented
scale could help restore the sources of livelihood, at least for
some (Mitra et al 2022). In addition, the National Rural Liveli-
hood Mission (NRLM), which was launched in 2011 and later
renamed as Deendayal Antyodaya Yojana (DAY-NRLM) in
2015, aims at empowering the rural poor by helping them ac-
cess financial services which may contribute to the augmenta-
tion of the household income.
Against this backdrop, we propose to revisit some of the ba-
sic questions as to whether people do or do not move to places
with greater opportunities. If individuals respond promptly to
access better prospects, unequal growth across space or con-
centration of economic activities in certain regions may not be
worrisome. However, inter-spatial disparities in growth and
opportunities, in the face of limited population mobility, pose
serious challenges to development and it becomes pertinent
to ask as to what the possible determinants of migration are
(Rajan 2023; Bhagat et al 2022).
In case people decide to migrate, it is again pertinent to
know whether they move as long-duration migrants or whether
it is only a temporary job search, especially during the agricul-
tural slack season. If the latter is prevalent, then the phenom-
enon of return migration can be expectedly high. In such situ-
ations, again, it becomes relevant to assess as to who returns
to the place of origin and who does not.
When a COVID-19-type crisis occurs, does it affect the liveli-
hood decisions permanently? People may return to the place
of origin as a coping mechanism but it may not mean that
they would continue to reside there permanently. Or the
experience at the place of destination might be so adverse that
new opportunities at the place of origin may be explored. So,
47
 speciAl article

who is willing to return as a migrant to the previous place of Figure 2: Return Migrants from Last UPR—All India, 2020–21
destination and who is reluctant is an important question that 100
88.86
needs further analysis. This paper proposes to reflect on some 80
of these issues.
The much-needed official migration data for India was 60
collected in the fourth round of PLFS for the first time during
40
July 2020–June 2021 after the COVID-19 lockdown (Shrivastav
2022). Though, the sample design of PLFS is not specifically fo- 20
11.14
cused to capture information on migration particulars and
temporary visitors, some additional information on migration 0
Return/reserve migration Migration to other UPR
Return/ Reverse Migration Migration to Other UPR
was collected by adding two blocks in the PLFS schedule. We Source: Computed by authors from PLFS unit-level data 2020–21.
utilise this information to assess the migration situation against Figure 3: COVID-19 Lockdown-induced Migrants among the Total Migrants
the backdrop of much larger issues relating to livelihood and in India after March 2020 (2020–21; %)
120
levels of living.
96.86
100
Broad Patterns Relating to Migration
Though the duration of migration cannot be worked out from 80

the PLFS data, on an average, it is noted that a little less than

60
one-third (28.9) of the population in India comprises migrants
(all regions) as the place of enumeration (PoE) differs from the 40
last usual place of residence (UPR) in 2020–21 (Figure 1).
20
Table 1: Sample Distribution for Understating the Flow of PLFS 2020–21 Data 3.14
Sample Distribution of Migrants versus Total No of Individuals Total No of Individuals 0
Non-migrants Migrated to Their Earlier Migrated After March 2020, After March 2020/COVID-19-induced migrants Non-COVID-19-induced migrants
After March 2020/ Covid -Induced Migrants Non covid Induced Migrants
UPR, that is (Proxy that is (Proxy for COVID-19/ Source: Computed by authors from PLFS unit-level data 2020–21.
for Return Migrants) Lockdown Induced
= 13,261 Migrants) = 3,683 in the urban areas and comprised the most vulnerable section
Responses POE Differs from Last UPR POE Was Last UPR in Moved to PoE after of the urban labour market participants. However, return
(Migrant) (N) the Past (N) March 2020 (N)
migration is possible among the rural-to-rural migrants as well.
Yes 1,13,998 13,261 3,683
After completing one rural job, the migrant workers return to
No 2,96,820 1,00,737 1,10,315
their original rural residence.
Total 4,10,818 1,13,998 1,13,998 However, among the migrants, only around 3% moved to the
PoE = Place of enumeration; UPR = Usual place of residence; N= Number of individuals. PoE after March 2020, indicating that COVID-19 and lockdown
Source: Computed by authors from PLFS unit-level data 2020–21.
had reduced the pace of population flow considerably (Figure 3).
Figure 1: Migration Rate in India, 2020–21 (Based on the POE and the Last In India, a nationwide complete lockdown was announced in
UPR Concept) (%)
80 four phases from 25 March 2020 to 31 May 2020 in order to
71.06 arrest the spread of COVID-19. However, in June 2020, partial
unlocking started in a phased manner till November 2020. Thus,
60
“post March 2020” has been taken as a reference point to arrest
the impact of lockdown/COVID-19 on migrants in this survey.
40 Further, Figure 4 (p 49) depicts that among those who moved
28.94
to the present PoE after March 2020 (the most recent migrants),
20 a little more than half are Table 2: Sample Distribution of Type
actually the return migrants of COVID-19/Lockdown-induced
Migrants—All India, 2020–21
as it happens to be their earlier
0 Type of COVID-19-induced Migrants N
Migrants
Migrants
Non-migrants
Non Migrants
UPR (as also highlighted by (Those Who Migrated after March 2020)
Source: Computed by authors from PLFS unit-level data 2020–21. Shrivastav 2022). These mi- COVID-19-induced other migrants 1,737
A significant proportion (11.14) of the total migrants moved grants were possibly the worst COVID-19-induced
migrants
return
1,946
to their earlier UPR while the rest did not move back to their sufferers during the lockdown Total 3,683
earlier UPR (either continued to stay where they were or and most probably travelled Source: Computed by authors from PLFS
moved to new UPR [which is the current PoE] during 2020–21) back to their rural relatives/ unit-level data 2020–21.
(Figure 2). Quite possibly, the most helpless ones exposed to home after losing the urban jobs.
temporary and irregular/casual employment moved back to A very large percentage of the migrants both in the rural
the earlier UPR. Also, it may be inferred that they are the ones and urban areas are females, which could be because of mar-
who probably did not migrate in the remote past. Hence, they riage, though the migration of women due to higher education
had the contacts with the place of origin and could afford to go and job is on the rise (Mitra and Murayama 2008). Further, the
back. Possibly, these were some of the rural migrants working illiterates comprise nearly 40% of the rural migrants while in
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Figure 4: Proportion of COVID-19-induced Return Migrants to Total very large percentage has been engaged as self-employed and
COVID-19-induced Migrants, 2020–21 casual wage workers. Only a small proportion (24%) was
54
53.11 engaged as regular wage workers (Table 4). This suggests that
52 bleak employment prospects at the place of origin are the
compelling push factors prompting people to look for better
50 opportunities outside.
Table 4: Usual Principal Activity Status of Migrants at the Time of Leaving
48 Last UPR
46.89
Usual Principal Activity Status of Migrants Distribution of Migrant Distribution of Migrant
46 Labour Force Workforce
Own account workers 14.7 16.42
44
Employer 0.69 0.77
Unpaid family worker 21.69 24.23
42
COVID-19-induced returned
Covid induced returned migrants
migrants COVID-19-induced othermigrants
Covid induced other migrants Self-employed 37.08 41.42
Source: Computed by authors from PLFS unit-level data 2020–21. Regular salary 24.42 27.28
Figure 5: Migrants in India by Social Category (%) Casual labour in public works 0.23 0.26
35 Casual labour in other works 27.79 31.04
31.7
28.96 28.94 Casual workers 28.02 31.3
30
27.2 Unemployed 10.47 –
25.34
25 Total 100 100
N 28,234 24,779
20
Source: Computed by authors from PLFS unit-level data 2020–21.

15 Given the engagement of the migrant workers primarily in

10 the agricultural sector (a little above 60%) prior to migration,
it becomes more appalling to assess the nature of activities
5
after migration because the urban areas are less likely to offer
0 any activity of similar nature, though the rural-to-rural migrants
ST SC OBC others All may still get absorbed in similar activities. However, it is
Source: Computed by Authors from PLFS unit-level data 2020–21.
important to note that a sizeable proportion of the migrant
Table 3: Distribution of Migrants and Non-migrants across Gender, workers were engaged in manufacturing and construction
Educational Category by Sector in India during 2020–21 (%)
(11% each) before migrating (Table 5).
Gender Rural Urban R+U
Migrants NM Total Migrants NM Total Migrants NM Total Table 5: Distribution of Migrant Workers across Economic Activities
(Industrial Sectors)
Male 11.38 65.33 51.03 32.86 60.65 50.95 18.88 64.09 51.01
Industry of Employment of Migrant Worker at Percentage of Migrant Workers
Female 88.62 34.67 48.97 67.14 39.35 49.05 81.12 35.91 48.99
the Time of Leaving Last UPR Rural Urban R+U
Total 100 100 100 100 100 100 100 100 100
Category of education Agriculture 63.49 25.04 50.51
Illiterate 40.98 26.94 30.67 18.05 17.95 17.98 32.97 24.55 26.99 Mining and quarrying 0.25 0.34 0.28
Up to primary 20.07 30.36 27.63 18.38 25.18 22.81 19.48 28.99 26.23 Manufacturing 9.27 14.32 10.97
Middle 16.71 17.8 17.51 16.97 15.89 16.27 16.8 17.29 17.15 Electricity, gas and water supply 0.31 1.13 0.58
Secondary 15.34 19.09 18.1 23.82 23.78 23.8 18.3 20.34 19.75 Construction 11.26 11 11.17
and senior Wholesale and retail trade 6.9 19.25 11.07
secondary Transport, storage and communication 0.51 3.02 1.36
Diploma 0.78 0.65 0.68 1.96 1.47 1.64 1.19 0.87 0.96
Other services 8.01 25.9 14.05
certificate
Total 100 100 100
Graduate 4.72 4.31 4.42 14.82 11.67 12.77 8.25 6.26 6.84
PG and above 1.4 0.85 0.99 5.99 4.05 4.73 3 1.7 2.08 N 13,465 11,314 24,779
Source: Computed by authors from PLFS unit-level data 2020–21.
Total 100 100 100 100 100 100 100 100 100
NM = Non-migrants. A comparison of the usual principal activity at last UPR with
Source: Computed by authors from PLFS unit-level data 2020–21.
the current UPR brings out several interesting points: a large
the urban areas, the illiterates and those with up to a maximum majority of the workers who were own account workers
of senior secondary education constitute a little above 75% of remained the same after migration as well. Only among the
the total migrants (Table 3). Though the incidence of migration casual workers in the public sector, we are able to observe
across four different social categories does not vary widely, the shifts to casual work in other activities subsequent to movement.
Scheduled Castes (SCs) reported the least (Figure 5). All this is indicative of the lack of occupational flexibility which
could be because of the lack of skill diversification, job market
Migrant Labourers and Workers information, etc. However, the lack of demand which tends to
At the time of leaving the past location (which could be the aggravate the mismatches and compel individuals to remain
place of origin for some), the unemployment rate seems to be within the narrow domain of activities that they already have
exorbitantly high among the migrant labour force. Besides, a been pursuing, cannot be overlooked (Table 6, p 50).
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 speciAl article
Table 6: Economic Activities of Migrants at Current UPR versus Last UPR reasons for movement among the migrant workers.
Usual Principal Activity Status at Last UPR The regular salaried/wage workers among the
OAW Employer HH Regular CL in CL in Un- Total migrants did suffer in the post-lockdown period. A
Worker Salary Public Other employed
Works Works majority of those who lost their jobs after the
Activity OAW 71.56 2.29 19.82 16.62 7.34 15.05 18.25 24.59 announcement of lockdown are casual workers
status at Employer 3 86.74 0.88 2.68 0 0.59 1.91 2.33 followed by regular wage/salary earners (Table 8).
current UPR HH worker
(PoE) at the
7.01 1.59 64.04 3.42 10.44 11.69 1.56 18.54 The movement of population takes place from
time of Regular salary 12.16 7.51 5.59 65.46 7.58 8.95 60.23 28.73 rural to rural, rural to urban, urban to rural and
CL in public works 0.51 0 0.69 0.31 18.75 1.27 0.41 0.74
survey urban to urban across intra- and inter-districts and
CL in other works 4.98 1.12 8.94 6.3 53.21 61.59 8.86 22.37 states. The figures clearly reveal a high prevalence
Unemployed 0.78 0.76 0.05 5.2 2.67 0.86 8.79 2.7
of rural-to-rural migration within the district and
Total 100 100 100 100 100 100 100 100
OAW = Own account workers; HH worker = Household worker/unpaid family labour; CL = Casual labour.
also urban-to-urban movement within the district.
Source: Computed by authors from PLFS unit-level data 2020–21. However, rural-to-urban migration is predominant
among those who move across states, that is, interstate flow
Reasons for Migration (Table 9). As more economic opportunities may be available in
Though marriage is found to be the major reason for migration, the urban areas of the developed states, people from the rural
for those who migrated after March 2020, job loss, unemploy- areas of the relatively low-income states may like to migrate
ment, search for better employment have been the major at a rapid pace. It may also be true that people from certain
reasons. Loss of job/closure of unit/lack of employment socio-economic or cultural background may not like to pick up
opportunities have been the major reasons of migration for petty jobs in the areas of origin, particularly if it happens to be
around one-fifth of the COVID-19-induced return migrants, rural. Hence, their propensity to travel to the urban areas,
which clearly depicts the distress situation after the lockdown: especially of another state, may turn out to be conspicuous.
in the absence of livelihood, people returned to their earlier Table 8: Reasons for Migration by Type of Migrant Workers Who Migrated
UPR (Table 7). after March 2020
Table 7: Major Reasons for Migration for Different Categories of Migrants Reasons for Leaving Last UPR (Migration) Self-employed Regular Migrant Total
Migrant Salaried Casual
Reason for Leaving Last UPR For All For the For Return For COVID-19- Workers Migrant Labour
Migrants Migrants Who Migrants (Who’s induced Workers
Migrated after Current UPR Is Return In search of employment/
March 2020 Their Earlier UPR Migrants better employment 11.81 5.15 10.99 8.61
in the Past)
For employment/work/to take
In search of employment/better up employment/to take up better
employment 4.78 8.09 6.87 7.51 employment/business/proximity to
For employment/work/to take place of work/transfer 9.56 16.32 8.06 12.13
up employment/to take up better Loss of job/closure of unit/lack of
employment/business/proximity employment opportunities 9.11 31.8 34.47 26.65
to place of work/transfer 4.38 6.17 7.99 6.2
Migration of parent/earning member of
Loss of job/closure of unit/lack the family 7.39 2.98 1.4 3.67
of employment opportunities 1.55 11.76 8.86 19.35
To pursue studies 0 0.09 0 0.04
Migration of parent/earning
Marriage 35.58 2.76 4.55 11.88
member of the family 9.21 13.51 10.28 10.88
Natural disaster (drought, flood,
To pursue studies 1.4 4.78 3.89 5.64
tsunami, etc) 2.07 3.54 8.07 4.48
Marriage 71.54 29.1 34.91 12.59
Social/political problems (riots, terrorism,
Natural disaster (drought, flood, political refugee, bad law and order, etc) 0.32 0.32 0.24 0.3
tsunami, etc) 0.2 2.1 0.83 3.06
Displacement by development project 2.09 0.48 0.26 0.84
Social/political problems (riots,
Health-related reasons 7.54 10.58 16.23 11.44
terrorism, political refugee, bad
law and order, etc) 0.19 0.19 0.54 0.35 Acquisition of own house 3.25 1.04 0.96 1.59
Displacement by development Housing problem 5.19 5.92 2.1 4.61
project 0.18 0.82 0.48 0.85 Post retirement 0 0.99 0 0.44
Health-related reasons 0.71 7.94 4.8 14.38 Others 6.09 18.04 12.67 13.34
Acquisition of own house 0.97 1.62 1.18 0.96 Total 100 100 100 100
Housing problem 1.54 2.98 3.68 1.44 Source: Computed by authors from PLFS unit-level data 2020–21.
Post retirement 0.35 0.27 1.78 0.29 Table 9: Inter- and Intra-migration Flow (of In-migrants) across Sectors
Others 2.99 10.68 13.92 16.5 Location of Last UPR
Total 100 100 100 100 Same District Same State But Another State Another All
Number of samples (N) 1,13,998 3,683 13,261 1,946 Another District Country
Source: Computed by authors from PLFS unit-level data 2020–21. Sector Rural Urban Rural Urban Rural Urban – –
Current Rural 83.26 38.19 66.86 34.88 34.35 48.78 52.8 65.06
It is observed that across the three categories of migrant UPR Urban 16.74 61.81 33.14 65.12 65.65 51.22 47.2 34.94
workers, the reasons for migration vary. Job loss, unemploy- Total 100 100 100 100 100 100 100 100
ment, search for better employment emerge as the major Source: Computed by authors from PLFS unit-level data 2020–21.

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Considering the nature of employment, we are able to better off in the job market in terms of quality of employment
observe that a large proportion (nearly three-fifths) of the had to face the adversity in terms of livelihood loss.
intra-district or intra-state migrant workers of rural origin The intention to move out again from the current place of
have been engaged in self-employment in the rural areas of enumeration is very much prevalent among the COVID-19-induced
enumeration (Table 10). In the urban areas, the migrant workers return migrants. Since many of these migrants had gone back
of rural origin are somewhat lesser in self-employed activities to their rural residences or relatives, the tendency to move out
(around two-fifths). Nearly one-third of the migrant workers again is understandable. However, what is more surprising is
of rural origin both in the rural and urban areas of enumera- that nearly half of them have no desire to leave the place.
tion have been employed as casual workers. However, among Among the return migrants in general, nearly 80% are reluc-
the urban-to-urban migrant workers, regular wage employ- tant to move out (Table 12). This is indicative of the fact that
ment is dominant. there has been a permanent loss of employment at the place
Table 10: Movement of Migrant Workers from Last UPR to Current UPR by where they were working prior to the pandemic, presumably
Employment Category at the urban centres, and there is no hope of revival in the near
Present PoE Rural Present PoE Urban future. On the other hand, the COVID-19-induced return
Location of Self-
Last UPR employed
Regular
Salaried
Migrant Self- Regular
Casual employed Salaried
Migrant
Casual
migrant’s desire to remain at the place, which is presumably
Migrant Migrant Labour Migrant Migrant Labour rural, is indicative of the rising pressure in the rural labour
Workers Workers Workers Workers
market. The MGNREGA’s role in providing a cushion could be
Same district Rural 57.89 6.26 35.85 43.25 24.13 32.62
one of the reasons for not wanting to move out any more.
Urban 32.52 33.74 33.74 27.17 60.79 12.04
Same state but Rural 57.27 11.24 31.49 40.66 30.17 29.17 There seems to be a loss of hope as the urban centres are not
another district Urban 20.23 52.61 27.16 22.29 65.2 12.51 able to promise profitable opportunities; individuals are now
Another state Rural 36.76 18.07 45.16 42.47 27.37 30.17 forced to explore livelihood sources in the trade and services
Urban 11.23 41.78 46.99 17.61 65.87 16.52 sector within the rural areas. Such a pattern of changes does
Another
not seem to be sustainable, though. Due to overcrowding in the
country 2.85 83.82 13.33 6.09 79.46 14.44
Total 46.01 17.98 36 32.41 45.51 22.08 face of limited demand, earnings are likely to be meagre.
Source: Computed by authors from PLFS unit-level data 2020–21. Table 12: Intention to Move Out Again from Current PoE among Different
Categories of Migrants
COVID-19 Lockdown Impact Intention to Move–out again from For Migrants For Migrants For Return Migrants For COVID-19-
Current PoE Who Migrated (Who’s Current UPR induced
During the post-lockdown period, there is a clear evidence of after March Is Their Earlier UPR in Return
2020 the Past) Migrants
huge urban-to-rural movement (from last UPR to current PoE)
To go back to the last UPR 4.95 30.29 14.96 40.95
among all the three categories of workers who moved within
To go back to any other 2.9 9.41 7.05 9.82
the state and interstate. Among the migrant workers who place than the last UPR
worked as casual labour, more that 90% moved to rural areas Do not want to move out 92.16 60.31 77.99 49.23
from the urban area of other districts and also from other Total 100 100 100 100
states after March 2020. Among the migrant workers who N 11,3,998 3,683 13,261 1,946
were in regular wage/salaried jobs, nearly 81% moved to the Source: Computed by authors from PLFS unit-level data 2020–21.

rural area from the urban areas of another state where they
were employed (Table 11). This suggests that the casual wage Logit Regression Results
earners were not the only sufferers. Even those who were It is indeed important to figure out who usually the migrants
Table 11: Movement of Migrant Workers Who Moved after March 2020 to
are or, in other words, what the characteristics of the migrants
Present PoE from Last UPR are vis-à-vis the non-migrants. We try to map the migration
Location of Last UPR outcome in a binomial logit framework to several individual
Same District Same State but Another State Another All and household specific variables. It is interesting to note that
Another District Country
though the incidence of migration, in general, is greater among
Rural Urban Rural Urban Rural Urban – –
the females than the males, the regression results suggest the
Self-employed migrant workers
opposite. After controlling for many of the individual- and
Rural 60.41 76.69 42.05 62.17 41.79 92.02 63.51 72.27
household-specific characteristics, for example, marriage, the
Urban 39.59 23.31 57.95 37.83 58.21 7.98 36.49 27.73
males unravel a higher probability of being a migrant than the
Total 100 100 100 100 100 100 100 100
Regular wage/salaried migrant workers
females (Table 13, p 52). Urban areas attract more migrant
population than rural areas. Besides, those with relatively lower
Current Rural 55.82 46.12 69.4 58.08 50.21 81.86 55.74 70.42
levels of education and from poorer social background are
PoE/ Urban 44.18 53.88 30.6 41.92 49.79 18.14 44.26 29.58
UPR
more likely to be the migrants, though the general expectation
Total 100 100 100 100 100 100 100 100
Casual labour migrant workers
is that the better-off individuals can afford to migrate out for
Rural 85.99 79.43 82.38 91.97 80.91 95.01 100 92.62
further improvements in terms of access to education and
Urban 14.01 20.57 17.62 8.03 19.09 4.99 0 7.38 employment. Age plays a positive role in inducing migration,
Total 100 100 100 100 100 100 100 100 though beyond a certain level, the probability declines, imply-
Source: Computed by authors from PLFS unit-level data 2020–21. ing that young adults are more prone to migrate compared to
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middle-aged ones. Though the self-employed and casual wage place of work (the urban areas) and had become the return
earners comprise the set of the vulnerable lot, the unemployed migrants, travelling back to the rural areas. Those with
and those in the labour force are much worse-off. They show a low levels of education migrated less after March 2020 (in
higher probability of migrating out in comparison to the oth- comparison to those with relatively higher levels of education)
ers. Similarly, the married individuals reveal a higher proba- as employment prospects had almost died down in the urban
bility to migrate compared to single ones, first because mar- areas and the job market was bleak for the less skilled and
riage for females involves spatial movement, and second, the uneducated workers who otherwise would have shifted from
married males have the urgency to explore better opportuni- rural to urban areas or from the rural place of origin to other
ties. However, after controlling for marriage, etc, the house- rural areas. Migration, in general, is seen to have declined
hold size is seen to reduce the probability to migrate. That a significantly after March 2020 irrespective of the consumer
large household is less likely to migrate in comparison to its class, as a result of which the monthly per capita consump-
small counterpart can be rationalised in terms of the rising tion expenditure (MPCE) does not turn out to be statistically
cost (both financial and non-financial) of movement in rela- significant (Table 14).
tion to household size. Table 14: Logit Model – 2
Outcome Variable—Migrants Who Moved to POE after March 2020 versus
Table 13: Logit Model – 1 Other Migrants
Outcome Variable—Non-migrants versus Migrants Other Migrants = 0 and Migrants Who Moved to PoE after March 2020 = 1
Non-migrants = 0 and Migrants = 1
Variables Coefficients SD
Variables Coefficients SD
Male .93684433*** (0.044213)
Male -1.9300869*** (0.01098)
Urban -.40370106*** (0.038874)
Urban .31329944*** (0.00927)
Scheduled Tribe 0.048435 (0.065757)
Scheduled Tribe -.52642027*** (0.01626)
Scheduled Caste 0.049649 (0.053616)
Scheduled Caste -.12883644*** (0.01345)
Other Backward Class 0.060379 (0.041459)
Other Backward Class -.0868549*** (0.01048)
Others/general (omitted) (omitted)
Others/general (omitted) (omitted)
Hindu 0.014701 (0.067555)
Hindu .64286511*** (0.01618)
Muslim 0.142575 (0.083717)
Muslim .21331669*** (0.02038)
Other religion (omitted) (omitted)
Other religion (omitted) (omitted)
Illiterate -.41256937*** (0.097233)
Illiterate .10374602*** (0.02780)
Up to primary -.59952746*** (0.095198)
Up to primary -.12456898*** (0.02742)
Middle -.34132642*** (0.091994)
Middle -.20460849*** (0.02723)
Secondary and senior secondary -0.17108 (0.087543)
Secondary and higher secondary -.12730147*** (0.02677)
Diploma -0.25486 (0.133344)
Diploma certificate .65414625*** (0.04491)
Graduates -0.07153 (0.090676)
Graduates -.07071753* (0.02856)
PG and above (omitted) (omitted)
PG and above (omitted) (omitted)
Unmarried .66916287*** (0.113273)
Unmarried -2.002122*** (0.02410)
Married 0.17067 (0.095588)
Married .05907703*** (0.01687)
Other married (omitted) (omitted)
Other married (omitted) (omitted)
Self-employed .20047832*** (0.052756)
Self-employed -.20465824*** (0.01255)
Regular wages/salary .40240675*** (0.058063)
Regular wage salary .22444202*** (0.01602)
Casual worker .46647651*** (0.068791)
Casual workers -.18411555*** (0.01792)
Unemployed 1.0348627*** (0.083249)
Unemployed .51163683*** (0.03476)
Not in labour force (omitted) (omitted)
Not in labour force (omitted) (omitted)
Age -.05432049*** (0.005807)
Age .05243141*** (0.00137)
Age square .00030563*** (0.000072)
Age square -.00061722*** (0.00002)
HH size 0.006694 (0.009371)
Household size -.08242098*** (0.00224)
HH MPCE -2.27E-07 (0.000002)
Constant -.48362636*** (0.04750)
Constant -2.2914636*** (0.190924)
N 410818
N 113998
Pseudo R2 0.2951
Pseudo R2 0.1041
*p<.05; ** p<.01; *** p<.001.
*p<.05; ** p<.01; *** p<.001.
Source: Computed by authors from PLFS unit-level data 2020–21.
Source: Computed by authors from PLFS unit-level data 2020–21.

Making a distinction between migrants who moved to the
place of enumeration after March 2020 vis-à-vis other mi-
grants, we estimated a binomial logit model. From the results,
it may be noted that males and relatively older population, em-
ployed and unemployed in comparison to those not in the la-
bour force are associated with a higher probability of having
migrated after March 2020 (Table 14). In other words, these
categories suffered the most as they were forced to leave the
52
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A very unique question was asked in the PLFS (2020–21) as
to who would be willing to migrate in the future vis-à-vis
who would not. Modelling in the binomial logit framework,
the responses in terms of those who wanted to move out and
those who did not want to pursue migration in the future after
the return migration has already occurred, we note that a very
large percentage of the respondents favoured non-movement
(Table 15, p 53). Particularly the socially disadvantaged castes
January 6, 2024 vol lIX no 1 EPW Economic & Political Weekly
 special article

such as the SCs and Other Backward Classes (OBCs) show a compared to the non-migrants. Among the migrants, a very
higher probability of unwillingness to migrating out in the future. large percentage were engaged in self-employment and casual
Similarly, individuals with lower levels of education and those wage jobs prior to migration. Only a small proportion (24%) of
who are illiterate show a higher probability of non-movement. them were employed as regular wage workers. This suggests
The self-employed, younger population and those from large that bleak employment prospects at the place of origin are
households are more likely not to undertake any migratory some of the compelling push factors prompting people to look
adventure, though common sense under normal circumstances for better opportunities outside.
would have suggested otherwise. The sudden lockdown and Though the general belief is that the incidence of migration
the severity of job loss, particularly in the urban areas, which is more among the females (because of marriage) than the
forced many to shift to their native residences, can provide a males, the regression results after controlling for many of the
rationalisation of such unwillingness to pursue further move- individual- and household-specific characteristics show that
ment in the future from the current location. the probability to migrate is higher among the males. This is
Table 15: Logit Model 3 precisely because migration due to economic reasons such as
Outcome Variable—Intention to move to the Last UPR among Migrants job search, etc, is more prevalent among the males while non-
versus Those Who Do Not Want to Move economic reasons like marriage, etc (included in the individual
Wanted to Move, Yes = 0; and Do Not Want to Move = 1
characteristics) are largely evident among the females. Further,
Variables Coefficients SD
Male -1.0320537*** (0.027260)
the probability to migrate to urban areas is higher than the
rural areas, which is again due to economic factors. Moreover,
Urban -.71265117*** (0.025911)
Scheduled Tribe -.38528034*** (0.040903)
the ones with relatively lower levels of education and from lower
Scheduled Caste .15247541*** (0.034756) social categories are more likely to migrate. This is contrary
Other Backward Class .08608786*** (0.025811) to the general expectation which suggests that those who are
Others/general (omitted) (omitted) better off socially and economically have the ability to migrate
Hindu -.14971944*** (0.043117) for further improvements. The socially and economically dis-
Muslim -0.07771 (0.055006) advantaged classes, as per our findings, are more vulnerable at
Other religion (omitted) (omitted) their places of origin compared to others, and this prompts
Illiterate .28574359*** (0.058923)
them to look for better avenues elsewhere.
Up to primary .24937919*** (0.056002)
Age plays a positive role in inducing migration, though
Middle .18616541*** (0.054714)
Senior and higher secondary .1437822** (0.052288)
beyond a certain level, the probability declines. This is under-
Diploma certificate .20013279* (0.083468) standable as young migrants hold better prospects at the
Graduate 0.010532 (0.054528) place of destination compared to the middle-aged ones.
PG and above (omitted) (omitted) Though the self-employed and casual wage earners at the
Unmarried -.85122673*** (0.066173) place of origin are more likely to move out compared to the
Married -0.06791 (0.053665) regular wage earners, as mentioned above, the probability to
Other married (omitted) (omitted) migrate is the highest among the unemployed and those not
Self-employed .15064963*** (0.036851)
in the labour force. By integrating these findings, we note
Regular sage salary -.55505931*** (0.034117)
that the young adults with no or lower levels of education
Casual worker -.38570342*** (0.046262)
Unemployed -.54554415*** (0.064095)
and especially those from disadvantaged social background
Not in labour force (omitted) (omitted) are more likely to migrate to urban areas in search of liveli-
Age .03112847*** (0.003796) hood, particularly if they are unemployed or outside the
Age square -3.60E-05 (0.000046) labour force at the place of origin. Non-availability of jobs in a
House hold size .12722992*** (0.006511) persistent manner leads to the phenomenon of “discouraged
Household MPCE -5.04E-07 (0.000000) drop-outs” from the labour force. In fact, among many
Constant 1.6898188*** (0.119444) women who migrate due to marriage, the participation in the
N 1,13,998
labour market at a later stage is phenomenal, though in the
Pseudo R2 0.1997
earlier years, they reported to have been outside the job market
* p<.05; ** p<.01; *** p<.001.
Source: Computed by Authors from PLFS unit-level data 2020–21. (Mitra and Murayama 2008).
When it comes to the question as to who suffered during
Conclusions the pandemic and the consequent lockdown, we note that
Based on the PLFS, this paper focuses on issues related to not only the casual labourers, who are otherwise known as
migration and employment prior to and post mobility. Who the vulnerable lot in the labour market, but the regular wage
are more likely to be the migrants; what variations in terms of earners also suffered seriously in terms of livelihood loss.
migration behaviour were located in response to the pandemic Making a distinction between migrants who moved to the place
and lockdown; and what is the willingness to undertake further of enumeration after March 2020 vis-à-vis other migrants, it
movement after the return migration has already occurred, may be noted that males and relatively older population,
are some of the key questions that the study delves into. First employed and unemployed in comparison to those not in the
of all, the migrants witnessed a very high unemployment rate labour force, reported a higher probability of having migrated
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 speciAl article

after March 2020. In other words, these categories suffered
from job loss and hence were forced to leave the then place of
residence (the urban areas) and become the return migrants
(arriving at the rural areas).
The findings also confirm that those with low levels of
education migrated less after March 2020 in comparison to
those with relatively higher levels of education. As the employ-
ment prospects had almost died down in the urban areas for
the less skilled and uneducated workers, there was no motivat-
ing factor to migrate from the rural to urban areas. On the
whole, the pandemic and the lockdown affected those at the
lower echelons with a greater intensity so much so that their
future perspective in terms of willingness to migrate was
dampened significantly, as evident from another econometric
exercise. Modelling the responses in terms of those who want to
move out and those who do not want to move out, we note that
a very large percentage of the respondents did not want to
migrate in the future. The SCs and OBCs show a higher probability
of not undertaking further movement. Similarly, individuals
with lower levels of education and those who are illiterate are
more likely not to migrate out. Those in self-employment,
young adults and members of large households show a higher
probability of not willing to migrate in the future, though
common sense would have suggested otherwise. The sudden
lockdown and the severity of job loss, particularly in the urban
areas, forced many to shift to their native residences (in the
rural areas) and this affected their future perspective about the
urban job market so much so that they showed an unwilling-
ness to move out from the current location.
Given this scenario, the strategy of rural industrialisation
needs to be initiated on a significant scale so that the disguised
unemployment and other strains on the rural labour market
can be reduced sizeably. Besides, the deceleration in demand
will have to be dealt with in an effective manner; or else, the
urban economy is unlikely to revive and create employment
opportunities on a large scale. Certain safety nets for the
low-income workers, specifically in urban areas, will have to
be introduced so that the volatility and other job market vul-
nerabilities can be reduced significantly, and the urban in-mi-
gration can be enhanced. After all, rural-to-urban migration is
a cost-efficient way of reducing poverty and materialising up-
ward mobility at a faster pace.

References
Bhagat, R B, Archana K Roy and Harihar Sahoo
(2022): Migration and Urban Transition in India:
A Development Perspective, Routledge India.
Jeyakumar, Angeline, Devishree Dunna and
Mitravinda Aneesh (2022): “Loss of Liveli-
hood, Wages, and Employment during the
COVID-19 Pandemic in Selected Districts of
Chhattisgarh in India, and Its Impact on Food
Insecurity and Hunger,” Front Public Health,
Vol 10, 6 May, https://doi.org/10.3389.
Mitra, A, P K Shrivastav and G P Singh (2022):
“Livelihood Volatility in the Urban Labour Mar-
ket Reflections from the Quarterly Panel Data
(PLFS, 2017–18),” Economic & Political Weekly,
Vol 57, No 35, pp 62–69.
Mitra, Arup and Jitender Singh (2021): “The COVID-19
Pandemic and Livelihood Loss: Lessons for the
Future,” Economic & Political Weekly, Vol 56,
No 24, 12 June.
Mitra, A and M Murayama (2008): “Rural to Urban
Migration: A District Level Analysis for India,”
Institute of Developing Economics, Discussion
Paper No 137.
Rajan, Irudaya S (2023): Migration in South Asia:
Old and New Mobilities, IMISCOE Research
Series, Springer.
Shrivastav, P K (2022): “Unveiling the Post Lock-
down Migration Statistics,” Economic & Political
Weekly, Vol 57, No 53, pp 22–24.

Money, Banking & Finance

June 3, 2023

Some Contemporary and Classical Issues of Money and Finance —Partha Ray
Monetary Growth, Financial Structure, and Inflation: The Post-Pandemic New Normal — C Rangarajan, Dilip Nachane, Partha Ray
Taming Inflation by Anchoring Inflation Expectations — Sitikantha Pattanaik, G V Nadhanael, Silu Muduli
Monetary Policy in the Midst of Cost-push Inflation — Zico Dasgupta, Indranil Chowdhury
Credit Portfolio Assessment of Domestic Systemically Important Banks — Richa Verma Bajaj, Sagarika Rastogi,
Rhythm Kumar
Do Foreign Banks Affect Market Power, Efficiency, or Stability in India? — Pradyot Kumar Das
RBI’s ‘Financial Stability Reports’ and Stress Testing Methodologies: A Commentary — Amulya Neelam
Retail Investment in India: During and after the Pandemic — Tirthankar Patnaik
Understanding Sovereign Ratings and Their Implications for Emerging Economies — Rahul S Chauhan, Ilisa Goenka, Kaushalendra Kishore,
Nirupama Kulkarni,
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 SPECIAL ARTICLE
To Link or Not to Link
How Aadhaar Impacts the Delivery of Welfare
Anjor Bhaskar, Arpita Sarkar, Preeti Singh
According to the Government of India, linking Aadhaar
with the delivery of welfare schemes has saved nearly
`2,73,093 crore till March 2022 due to, apparently, the
removal of duplicate/fake beneficiaries and plugging of
leakages, etc. What is the overall impact of Aadhaar on
welfare delivery? We try to understand this through a
case study of MGNREGA in Jharkhand. Surveying nearly
3,000 workers in eight villages in Jharkhand to assess
both the costs and benefits of linking MGNREGA with
Aadhaar, the paper focuses on its impact on errors of
inclusion and exclusion.
The authors are grateful to an anonymous reviewer whose extremely
detailed and insightful comments helped us immensely. The study
has benefited immensely from the support of Jawahar Mehta, Pradeep
Singh, Umesh Singh, and Anita Devi of Vikas Sahyog Kendra, Palamu,
Anupa Toppo from the NREGA Sahayata Kendra, Latehar, thousands of
workers and several MGNREGA functionaries in rural Jharkhand who
welcomed, trusted, and spoke to them. The study was supported by the
Digital Identity Research Initiative at the Indian School of Business. Jean
Drèze provided inputs at various stages of the study.
Anjor Bhaskar (anjor.bhaskar@apu.edu.in) teaches economics at Azim
Premji University, Bengaluru. Arpita Sarkar (arpitasarkar966@gmail.
com) works for the Monitoring and Evaluation vertical at the Antara
Foundation. Preeti Singh (preeti.singh@apu.edu.in) is a programme
manager at Azim Premji University.
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B
inod Kandulna (name changed) is a seasonal migrant
worker from Gutuhatu village of Torpa block in Khunti
district. For the last six years, Binod has worked in the
brick kilns of Himachal Pradesh. He is the eldest child of his
widowed mother. In 2019, Binod decided to return to his vil-
lage permanently due to frequent health issues and his wid-
owed mother’s sickness. Upon coming back, he searched for
suitable work in nearby villages and towns. Around the same
time, a fellow villager’s mango orchard plantation work was
sanctioned under the Mahatma Gandhi National Rural Employ-
ment Guarantee Act (MGNREGA). Binod, like other workers, ap-
plied for work on the orchard through MGNREGA. However,
when the muster roll (attendance sheet) was issued, he could
not find his name on it. He could not think of a reason as to
why this would happen and applied for work again. He did this
several times. And yet, the muster rolls that came never had
his name. After hunting desperately for work opportunities for
over a year, the following lean season, Binod left for Himachal
Pradesh—once again, leaving his widowed mother behind.
Why did Binod not find his name on the muster roll? We later
found out that his name had been deleted from the family’s job
card on 7 July 2017 as it was claimed to be a “duplicate card.”
Binod and his family were not informed about the deletion. He
kept applying for work. The muster roll kept getting issued
without his name, but he was not informed of the reason.
MGNREGA is the world’s largest workfare programme. By
July 2022, more than 6.43 crore rural assets such as roads, wells,
check dams, ponds, houses, anganwadi centres, toilets, and
plantations had been constructed under MGNREGA.1 In 2020,
when the COVID-19-induced nationwide lockdown wrecked
the rural economy, MGNREGA provided the much-needed as-
surance to the rural poor. Recognising this, the Government of
India increased its budget from `61,500 crore to nearly `1 lakh
crore in 2020–21 (Tewari and Pandey 2021). On average, nearly
`7.7 crore people worked under the MGNREGA annually be-
tween 2017 and 2020 (Kapur et al 2021). However, the number
of people engaged in MGNREGA work went up to 11.2 crore in
2020–21 with the demand consistently overtaking the supply.
Rationale for Aadhaar Linkage
Despite the several claims for success, MGNREGA has often
been called wasteful, ineffective, leaky, and a drain on the
public exchequer (Sampath and Rukmini 2015). To address
this, the government began linking MGNREGA with Aadhaar.
This was said to have several benefits.
55
 SPECIAL ARTICLE
First and foremost, it would help in the verification of job
cards. Since Aadhaar is said to be unique to every individual, it
becomes easy to identify if a person has duplicate identity doc-
uments (IDs). If all individuals’ IDs are linked to Aadhaar, those
not linked are identified as ghost, duplicate, or fake cards (let us
call them “unwanted” cards). Out of 32 crore workers, 18.6 crore
have been linked with Aadhaar and 10 crore have been authen-
ticated by the Unique Identification Authority of India (UIDAI)
till August 2022.2
Second, it would help identify who was present at the work-
site. To ensure that wages are paid to only those who attend work,
some states experimented with the idea of taking biometric
attendance of workers at the worksite using the Aadhaar-based
biometric authentication (ABBA) facility offered by UIDAI.
Third, it was supposed to help ensure that payments went to
genuine workers. Wages are paid to beneficiaries’ Aadhaar-
linked bank accounts through the Aadhaar Payment Bridge
(APB) instead of the accounts mentioned on their job cards. This
is expected to reduce leakages since payments are made into ac-
counts which are verified and seeded to the workers’ Aadhaar.
Finally, it was supposed to help genuine workers to access
their payments. Banks, bank branches, customer service points,
and banking correspondents allow workers to authenticate
themselves via their biometrics stored on the UIDAI database
that facilitates withdrawal of money from respective accounts.
This is intended to ensure that the money is being withdrawn
by the genuine account holder.
Out of all these uses, the most significant and widespread
use of Aadhaar in MGNREGA has been in the verification of job
cards. This sole act is claimed to have the maximum benefits
by helping to address inclusion errors. This paper, therefore,
shall focus primarily on the impact of Aadhaar linking of job
cards and its use for the verification of beneficiaries. On 30
January 2023, the government mandated routing all payments
through the Aadhaar-based payment (ABP) system (Drèze
2023). At such a point, it is crucial to review the impact of
another type of mandatory Aadhaar linking on MGNREGA—
that of linking job cards with Aadhaar.
Inclusion and Exclusion Errors
The literature about the impact of Aadhaar on the welfare of
workers is mixed and points towards both benefits and costs of
using Aadhaar.
Benefits of Aadhaar in MGNREGA: According to the litera-
ture, there are two primary benefits of using Aadhaar in
MGNREGA. First, it leads to a reduction in inclusion errors by
deletion of incorrect beneficiaries, that is, people “wrongly in-
cluded” in the scheme and deriving its benefits. A cost–benefit
analysis of Aadhaar conducted by the National Institute of
Public Finance and Policy (2012) argues that the reduction in
leakages is about 12% of the total wage payments. Second,
the routing of payments to Aadhaar-linked bank accounts
through APB is claimed to have increased efficiency as pay-
ments go only to Aadhaar-verified and -linked bank accounts,
ensuring that genuine workers’ wages are not pilfered by
56
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intermediaries. Agarwal et al (2019) find that linking Aadhaar
with MGNREGA payments has improved the efficiency of wage
transfers, doubled the amount of funds transferred, made
the programme more countercyclical by increasing the work
allotted in times of distress, and also led to a significant
decline in delayed payments.
Costs of Aadhaar in MGNREGA: On the other hand, a large
body of anecdotal evidence also points towards an increase in
exclusion errors (genuine beneficiaries being denied benefits)
caused by Aadhaar linking. This exclusion has several forms.
One, genuine workers are excluded from accessing work and
payments under the MGNREGA due to deletion of job cards
simply because they were not linked to Aadhaar. Khera
(2016a) mentions how, under pressure to link job cards to
Aadhaar, field staff deleted job cards when the Aadhaar num-
bers were unavailable. Exclusion of workers due to Aadhaar
has been reported for all kinds of welfare programmes where
Aadhaar linking has been made mandatory (either explicitly or
implicitly) to access entitlements. For instance, Muralidharan
et al (2021) found that 88% of the public distribution system
(PDS) ration cards in Jharkhand which were deleted, after
ABBA was made mandatory, belonged to valid beneficiary
families. According to Masih (2017), even after witnessing
high failure rates during its pilot, the government was deter-
mined to link welfare benefits to Aadhaar, which excluded
lakhs of genuine beneficiaries.
Workers are also excluded due to “misdirected payments.”
Workers’ wages often go to other people’s bank accounts
because of incorrect seeding whereby one worker’s job card is
linked with someone else’s Aadhaar card. A single digit being
entered incorrectly by a computer operator at the block level
during the process of linking Aadhaar numbers with job cards
could cause the payment to go to someone else’s account
(Sen 2017). Payment misdirection is a routine phenomenon in
APB transactions with approximately 70% of payments being
misdirected between April 2014 and June 2016 (Munjuluri
and Chhatre 2019). Such misdirections can also prove to be
fatal for those dependent on these incomes (Wire 2018).
Due to ABPs, workers are often unable to trace their wage
payments. They expect wages to be transferred to the account
mentioned on their job cards. However, without their knowl-
edge, wages get redirected to some other account which
happens to be their last Aadhaar-linked account (Khera 2017).
To add to the misery, workers often have no means of finding
out the Aadhaar-linked account to which the money is being
transferred (Narayanan et al 2020).
Finally, several wage payments get rejected due to a pecu-
liar reason in relation to the usage of Aadhaar. LibTech India
found that 18,317 transactions were rejected out of 6.96 lakh
ABP transactions across the states (Narayanan et al 2021).
According to Khera (2016b), moves such as Aadhaar integra-
tion transformed MGNREGA from being “technology-friendly”
to being “technology-servient.” To sum up, while there is sub-
stantial literature regarding the impact of linking Aadhaar
with MGNREGA, there is much less work which comprehensively
january 6, 2024 vol lix no 1 EPW Economic & Political Weekly
 SPECIAL ARTICLE

assesses its impact on both inclusion and exclusion errors. This expenditure on each worker as per the MIS; (ii) average annual
paper attempts to fill this gap. expenditure on the worker; (iii) status of the job card as per
MIS; (iv) whether the worker is alive, belongs to the village,
Research Design lives in the village, wants to do manual labour work under
The primary objective of this study was to understand the im- MGNREGA, is married or not, and moved to new house or re-
pact of linking MGNREGA job cards with Aadhaar on exclusion mains in same house; (v) whether the job card is active or de-
(type I) and inclusion (type II) errors. To achieve this objective, leted; and (vi) whether the worker’s job card status is correct
we adopted a largely quantitative study design which used sec- (as it should be) or whether it should be any different.
ondary data from the official NREGA website and combined it
with data from a primary survey of NREGA job card holders in Findings
Jharkhand. This was combined with in-depth interviews and
case studies of functionaries (rozgar sevaks, block programme Verification and deletion of job cards: Under MGNREGA, a
officers, block development officers, mukhiyas) and workers. job card is issued to every household residing in any rural area
whose adult member(s) have shown the willingness to do casual
Sampling: The assessment required a sample that is repre- manual labour under MGNREGA. The job card is supposed to be
sentative of Jharkhand and allows us to capture the impact issued by the gram panchayat in whose jurisdiction the person
of verification of job cards through Aadhaar, particularly of resides and entitles a household to 100 days of casual manual
vulnerable households. This required us to select regions with labour under MGNREGA. In other words, a person is eligible for
high levels of deletion, high levels of vulnerability and high a job card in a panchayat if they satisfy the following condi-
demand for work under MGNREGA. Therefore, three indicators tions: (i) they are alive and above 18 years of age; (ii) are a
were chosen for selection of the districts, blocks, and panchay- resident of a village under the gram panchayat; (iii) are willing
ats: (i) proportion of registered workers with deleted job cards; to do unskilled manual work under MGNREGA; and (iv) do not
(ii) person-days of work generated under MGNREGA (this was possess another valid job card. Verification of job cards is done
used in place of demand for work since the work “demand” to remove job cards that do not meet these criteria.
data in the MIS has been found to be highly unreliable); and Following the directives from the union government, the
(iii) proportion of Scheduled Caste (SC) and Scheduled Tribe Government of Jharkhand undertook a campaign to link Aad-
(ST) population (as they are likely to be more vulnerable and, haar to job cards as a means of verifying the authenticity of the
therefore, depend on MGNREGA for work) obtained from the 2011 job card and ensuring that no person has two job cards, the job
Census. These values were standardised and the product of card holder is alive, and has not migrated. Job cards which
these standardised values was calculated to create an index to were not linked with Aadhaar were assumed to be “unwanted”
help select the sample districts. and were deleted. The exercise was primarily meant to reduce
Palamu, Latehar, and Khunti were three of the districts inclusion errors (a reduction in the number of ineligible people
with the highest values of the index. One block each was being wrongly included). But, as the literature notes, there
selected from each of these based on the same criteria. These may be people who satisfy the eligibility criteria and yet their
were Chhattarpur (Palamu), Torpa (Khunti), and Mahuadanr job cards were deleted.
(Latehar). Finally, eight villages with the highest proportion of For the purpose of this paper, therefore, we classify job
deleted job cards were selected from these blocks. Once the cards into the following four categories: (i) correct job card: valid
villages were selected, the job card list of these villages was and belongs to people who satisfy the above eligibility criteria;
obtained from the official MGNREGA website (www.nrega.nic. (ii) incorrect job card: valid but belongs to people who do not
in) and all the workers in the list—a total of 2,907—were sur- satisfy all these criteria (for instance, the job card may be valid
veyed between March 2019 and June 2020. but the person may have died or permanently migrated from
As Table 1 shows, nearly 33% of the people in the selected sam- the village or may have another valid job card); (iii) correctly
ple were STs and nearly 22.4% belonged to the SCs. This is higher deleted job card: deleted as one of the above criteria was found
than the state average for these communities as well as their Table 1: Caste Profile of Respondents
proportion among MGNREGA workers due to the sampling design. Caste Number of Percentage Person Days as Overall State Average
Respondents from Respondents in Each Percentage of Total (as per Census 2011)
Out of all, 43% of the respondents were female, which is
Each Category Category Person Days (2019–20)
broadly similar to the proportion of women person-days in ST 784 32.9 25.2 26.21
Jharkhand (Table 2). SC 534 22.4 10.66 12.08
Other 1,067 44.7 64.14 61.71
Methodology: Among the chosen panchayats, two to three Total 2,385 100 100 100
Source: Caste and person-days data obtained from the MIS.
villages were selected using the selection criteria described
above for an extensive survey among all the households of Table 2: Gender Profile of Respondents
Gender Number of Respondents by Gender Percentage Women Person Days Out of Total (%)
each selected village. The quantitative data (obtained from the
F 1,262 43.41 41.31
survey) was complemented with data from the MGNREGA MIS,
M 1,645 56.59 58.69
case studies, and in-depth interviews of functionaries and Total 2,907 100 100
workers to obtain the following information: (i) overall wage Source: MIS.

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 SPECIAL ARTICLE
Figure 1: Estimated Impact of missing (person was dead, mi- imposing strict targets and withholding salaries of officials who
Aadhaar-based Verification of Job
Cards in Jharkhand grated, explicitly unwilling to do failed to meet these targets (TNN 2014; Khera 2016a).
manual work under MGNREGA Meanwhile, block and panchayat offices in Jharkhand face
or had another valid job card); huge capacity constraints. According to guidelines, each pan-
and (iv) incorrectly deleted job chayat is supposed to be served by a separate rozgar sevak
card: deleted, even though the (larger panchayats can be served by more than one rozgar se-
person was eligible for a job vak). However, according to data provided by the Department
card and did not have another. of Rural Development on 17 July 2017, there were only 3,815
What was the impact of this rozgar sevaks to serve the 4,400 panchayats in Jharkhand.
exercise? Among the villages Similarly, out of 413 sanctioned posts for block programme
surveyed, the average rate of officers in the state, there were 171 vacancies.
job card deletion was more than Therefore, given the constraints in terms of staff and infra-
Correctly Eeleted Xorkers

40%, with some villages wit- structure, the targets set for Aadhaar linking of job cards were
Incorrectly Eeleted Xorkers
Source: Authors’ estimates based on the field nessing rates as high as 80%. nearly impossible to achieve. As a block official informed us,
survey and data from the MGNREGA MIS. This is higher than the state the only way to achieve such an impossible task and save their
average because we specifically chose panchayats with higher jobs was to simply delete the names of those job card holders
rates of deletion. But what we found about these deleted cards whom they did not reach, workers who were not available at
was shocking. Close to 85% of the workers whose cards were the time of verification, or workers who could not produce
deleted were not informed before their job cards were deleted, their Aadhaar cards at the time of verification.
let alone asked for consent. Table 5 (p 59) summarises the find- While deleting a worker’s job card on the MIS, the official is
ings of our quantitative survey of 2,894 job card holders. required to enter the reason from various options such as “fake
Out of all the deleted job cards in our survey, 57% belonged job card,” “family shifted,” “duplicate applicant,” “non-existent
to genuine workers (Figure 1). As a matter of fact, 48% of these in panchayat,” “person expired,” “unwilling to work,” “person
workers were keen on working and wanted their job cards re- shifted to new family,” etc. The list of options covers all possible
newed. Out of the 1.51 crore workers registered under MGNREGA “genuine” reasons for deletion of a job card. Yet, the most com-
in Jharkhand, 38.22 lakh were deleted by 23 July 2022.3 mon reason mentioned for deleting these job cards is “others”
Extrapolating from our survey findings, 57% of these belonged to (76% of all deleted workers in our sample). This is an indication
genuine workers. This means that Aadhaar-based verification that the officials had no genuine reason for the deletion of most of
led to the deletion of job cards of over 21 lakh (57% of 38.2 lakh) these job cards but simply chose the most convenient one.
genuine workers in Jharkhand. These are real MGNREGA workers An analysis of job cards for which the reason for deletion is
who are alive, staying in the village, without any other job card, mentioned as “others,” reveals that nearly 60% (or three out of
and need manual labour work. For perspective, the total number five) were actually incorrectly deleted (Table 3). In other
of genuine workers whose job cards were wrongly deleted is more words, if a job card was deleted and the reason for deletion was
than the combined population of the three districts of Lohardaga, mentioned as “other” it was likely that it actually belonged to a
Table 3: Analysis of the Reason Khunti, and Simdega in genuine worker.
‘Others’ Listed in MGNREGA MIS Jharkhand (roughly 16 lakh Naturally, most of the people whose job cards were incor-
Actual Status of Job Cards Number of Proportion
according to Census 2011).4 rectly deleted were people from the most marginalised and
Deleted Listing “Others” Job Cards (%)
in the MGNREGA MIS Deleted But why were these genu- remote communities—those workers who depend on MGNREGA
Correct deletion 331 39 ine workers’ job cards delet- the most. This is because the officials responsible for verifica-
Incorrect deletion 499 59 ed? To link Aadhaar with job tion of job cards found it hardest to reach these places and
Unclear 18 2
cards, the rozgar sevak or found it simpler to just delete the job cards and meet the target
Grand total 849 100
Source: Classification of job cards as “correct panchayat secretary (the staff for verification. In Palamu district of Jharkhand, we visited a
deletion,” “incorrect deletion,” etc, is based implementing MGNREGA at remote hamlet comprising people belonging to particularly
on author’s estimates from the survey of job
card holders. List of job cards deleted with the panchayat level) needs to vulnerable tribal groups (PVTG). It was found that the job cards
reason given as “other” is obtained from the meet the workers (even those of nearly all the residents in the hamlet were incorrectly deleted.
MGNREGA MIS.
in far-off remote villages and Similarly, in the dim and distant villages of Mahuadanr block
Table 4: Comparison of Caste Profile hamlets) and get copies of of Latehar district, where idle villagers anxiously wait for
of Respondents with Deleted and Not
Deleted Job Cards their job cards and Aadhaar MGNREGA works to start in their village, deletion rates were as
Caste Deleted JCs Not cards (which is difficult in high as 85%. Table 4 shows that among the deleted job card
JCs Deleted
such villages). Due to pres- holders, the proportion of SCs and STs was higher than among
Caste not mentioned 18.5 17.6
Other 32.7 39.4
sure from the central gov- the non-deleted job card holders.
SC 20.0 17.3 ernment to achieve 100%
ST 28.8 25.7 Aadhaar linking in a short The trade-off between inclusion and exclusion errors:
Total 100 100 time, the state government Clearly, therefore, linking Aadhaar with MGNREGA has led to
JC is job card.
Source: Information on 2,907 respondents
put pressure on block and an increase in exclusion errors. But what about the reduction
from the MGNREGA MIS. panchayat-level officials by in inclusion errors? Is it possible that the reduction in inclusion
58 january 6, 2024 vol lix no 1 EPW Economic & Political Weekly
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errors due to Aadhaar linkage is much larger than the increase
in exclusion errors?
To answer this question, we need to first find out the reduc-
tion in inclusion errors due to Aadhaar (Table 5). Out of all
the job card holders we surveyed, only 16.8% were actually
correctly deleted, that is, they were ineligible or ghost benefi-
ciaries who were identified through the verification and
removed from the list. This is the actual reduction in inclusion
errors (type I) due to Aadhaar linking.
However, a much larger proportion of the job card holders, that
is, 22.4%, were those who were eligible genuine workers in the
village wanting to work under MGNREGA but whose job cards
were deleted during Aadhaar-based verification. This is the in-
crease in exclusion errors (type II) due to Aadhaar linking. This is
alarming as it tells that while Aadhaar linking has decreased
errors of inclusion by 16.8%, it has led to a corresponding increase
in exclusion errors by 22.4%. In addition, a relatively small but
significant portion (3.46%) of cardholders are those whose job
cards should have been deleted after verification but are not.
They constitute individuals and families who have migrated, or
have died, or who are wealthy enough to not want to do manual
labour work to supplement their livelihood sources. This is the
inclusion error that persists despite Aadhaar linking. Therefore,
while Aadhaar linking does appear to reduce inclusion errors to
some extent, it does not eliminate it. However, even if Aadhaar
linking was able to identify and eliminate all the inclusion errors,
the increase in exclusion errors due to it would still be greater
than the reduction in inclusion errors. In other words, the removal
of ineligible job card holders would still be less than the removal
of deserving job card holders through Aadhaar linking.
The overall impact of Aadhaar on inclusion and exclusion
errors: It is worthwhile to restate the general impact of linking
Aadhaar to MGNREGA. Seeding of job cards to Aadhaar cards did
lead to the deletion of 16.8% of non-genuine or ineligible workers.
These, to a great extent, belonged to cardholders with duplicate
job cards and those who had moved out of the village years ago.
However, it also led to the deletion of 22% of genuine workers’ job
cards (that translates to an increase in exclusion error of 22%).
Furthermore, even after verification, 4% of the job cards continue
to be fake, duplicate, or belong to migrated workers. In other
words, the overall error, a sum of inclusion and exclusion errors,
post-Aadhaar-based verification of job cards, stands at 26%,
while the reduction in error brought about by Aadhaar is only
16.8%. Clearly, even using this simplistic logic, the costs of
Aadhaar linking have been far greater than the benefits. In prac-
tice, however, the cost of each exclusion error is far greater than
the cost of each inclusion error. Even if unwanted job cards are
deleted, the magnitude of leakages may not fall. This is because
most leakages in MGNREGA take place through frauds in filling
muster rolls (attendance sheets) of workers (“quantity frauds”).
Local officials fill in the names of workers in muster rolls who
have not actually worked, payments are made to their accounts
and then extracted from them by the same officials through
means such as “extortion,” “collusion,” or “deception” (Khera
2017). This can continue unabated (or increase) even if unwanted
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SPECIAL ARTICLE
job cards are deleted. On the other hand, if a worker is denied the
right to work because her job card has been “accidentally” or
incorrectly deleted due to non-linkage with Aadhaar, it could cost
her life since she may not be able to access work, income, and
food at a crucial time when she has no other option for survival.
The story of Johnson Guriya: Johnson Guriya is a resident of
Fatka gram panchayat in Torpa block of Khunti district whose
livelihood largely depends on seasonal agricultural output for his
income. He needed a well to be able to irrigate his fields but did
not have enough money. Therefore, in 2016, when his irrigation
well was sanctioned under MGNREGA, Johnson and his family
were elated as they looked forward to greater earnings from agri-
culture. However, circumstances changed soon for Johnson.
When funds for his well did not get credited for three consecutive
months, construction was left midway as workers were reluctant
to work and building materials were exhausted. Johnson decided
to visit the bank which is 15 kilometres away from his village. He
came to know from the bank officials that money would not be
credited further to his bank account. The officials could not ex-
plain to him why such a situation arose out of the blue. Countless
visits to the bank and the block office proved to be useless. The
officials were already dealing with loads of other similar cases.
The following monsoon, Johnson’s incomplete well collapsed.
However, he kept trying to get the well constructed. He was
forced to take a loan to pay the local contractor privately who
charged and built the well which was finally completed in 2018.
But why did Johnson stop receiving MGNREGA funds? This is
because Johnson’s job card was incorrectly deleted in 2016
during the massive Aadhaar seeding push by the government.
Since his job card was incorrectly deleted, Johnson could also
not exercise his right to receive the spent amount back through
MGNREGA. Interestingly, in the past two years Johnson worked
in MGNREGA schemes without a job card. Although he was paid
by the middleman, the payment was less than the wage he was
entitled to through MGNREGA. His job card has been renewed
but not after he had already suffered a huge financial loss. This
is a striking story of how Aadhaar-based verification can worsen
the experiences of beneficiaries and make them suspicious
about the merits of MGNREGA.
The myth of savings due to Aadhaar: The most widely
claimed benefit of linking job cards with welfare is that this
Table 5: Actual Status of Job Cards
Job Card Status Number of Proportion of
Job Cards Job Cards (%)
Correct job card (person is a genuine worker and has 1,622 56.05
a valid job card)
Correct deletion (person is not a genuine worker in 488 16.86
the village and, therefore, job card is deleted correctly)
Incorrect job card (person is not a genuine worker in 100 3.46
the village and yet, the job card exists)
Incorrect deletion (person is a genuine worker in the 649 22.43
village who should have a job card, and yet, the job
card has been deleted after Aadhaar linking)
Unclear (could not verify actual correct status) 35 1.21
Grand total 2,894* 100
*Number of respondents was 2,907 but some respondents were dropped due to
incomplete information.
Source: Authors’ estimates based on the field survey and data from the MGNREGA MIS.
59
 SPECIAL ARTICLE
resulted in massive savings for the government. According to the
government, the savings in MGNREGA alone are over `33,475.47
crore up to March 2021 (roughly 10% of the total expenditure on
wages). These savings arise “on account of deletion of duplicate,
fake (or) non-existent, ineligible beneficiaries.”5 These estimates,
however, have been questioned for three main reasons.
First, the government website (DBTBharat.in) claims that
these estimates of savings are based on “field studies.” How-
ever, it does not provide any reference to these “field studies”
and does not elaborate on the methodology used to derive the
above-mentioned estimate. An RTI application was filed with
the rural development ministry seeking the methodology em-
ployed to compute such a figure. The ministry gave a vague
response stating that “The Mahatma Gandhi NREGA has been
covered under direct benefit transfer (DBT) and savings are in
terms of increasing the efficiency and reducing the delay in
payments etc” (Venkatanarayanan 2017).
Second, Venkatanarayanan (2017) claims that the govern-
ment’s estimates of savings are overstated and are based on
the false assumption that possession of a job card is sufficient
to get paid wages under MGNREGA. However, in reality, the
presence of a job card only makes one eligible for work. It does
not assure payments. Hence, the deletion of job cards cannot
be said to reduce leakages.
Third, the ministry’s estimate is based on the incorrect as-
sumption that removal of ineligible job cards is directly linked
to a reduction in leakages and, consequently, increase in savings.
Khera (2017) classifies wage corruption in MGNREGA into two
types—quantity fraud and identity fraud. Aadhaar can only
address some types of identity fraud. However, the major
source of leakage in MGNREGA is quantity fraud. This takes place
through misrepresentation in muster rolls (putting names of
people who have not actually worked or have worked for fewer
days than stated in the muster rolls) and overcharging for
material expenses. Removal of “unwanted” job cards through
linking with Aadhaar does not address this type of corruption,
namely, quantity fraud. In fact, even if Aadhaar leads to a
reduction in identity fraud, it is possible that quantity fraud can
rise. In effect, it is possible that overall leakages may remain
unchanged, or even increase post-Aadhaar linking.
NIPFP (2012) argues that the adoption of the Aadhaar-enabled
payment system (AEPS) reduces leakages in MGNREGA by 12%
through the “automation of muster rolls” and “linking MGNREGA
bank accounts to Aadhaar.” However, the study fails to elucidate
what “automation of muster rolls” essentially means, how such
Table 6: Average Annual Expenditure by Category of Job Card
Job Card Status1 Average Annual Number of Estimated Annual
Expenditure on the Job Cards Expenditure on the Sample on Each Type
Category of Job in the Job Cards
Cards2 Sample
Correct job card 1,017.54 1,494 15,20,208
Correct deletion 1,170.50 310 3,62,854
Incorrect job card 687.49 70 48,124
Incorrect deletion 1,156.90 400 4,62,758
Grand total 1,052.31 2,274 23,92,956
Source: 1 Classification of job cards done through data from the field survey.
2 Average annual expenditure on wages is calculated by obtaining the total expenditure on
wages for each job card since its registration divided by the number of years job card has
been active (obtained from the MGNREGA MIS).
60
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an “automation” is linked Figure 2: Composition of Savings from
to Aadhaar and why this Deletion of Job Cards
is supposed to lead to a
reduction in leakages or
inclusion errors (Khera
2013). The World Bank in
its World Development
Report 2016 claims that
Aadhaar-linked direct
transfer of welfare benefits
potentially saves “over $11 Savings from Fxclusion of Henuine Xorkers

billion per year in govern- Potential Tavings from Semoval of Jncorrect Kob Dards
ment expenditures through Source: Data on authenticity of workers was
obtained through the field survey while expenditure
reduced leakage and effi- data was obtained from the MIS.
ciency gains” (World Bank 2016: 195). Drèze and Khera (2018),
however, show how this estimate rests on highly flimsy assump-
tions and calculations.
Savings due to Aadhaar in Jharkhand: For the purpose of
this paper, however, we accept the assumption that a reduction
in ineligible job cards could result in an increase in savings. Let
us now try and estimate the savings due to Aadhaar among the
survey participants. Table 6 shows estimates of total annual
expenditure according to job card status.
As Table 6 shows, the total annual savings from deletion of the
surveyed job cards is about `8.25 lakh out of which the major
share (`4.6 lakh) was achieved by deletion of job cards of genuine
beneficiaries. This is actually the annual income denied to genu-
ine MGNREGA workers (what Khera [2017] calls “shrinkage”)
rather than “savings on wages on account of deletion of duplicate,
fake/non-existent, ineligible beneficiaries.” On the other hand,
despite Aadhaar-based verification, `48,000 is still being incurred
on wages to fake/ineligible/ghost job cards which should have
been deleted. Figure 2 shows the percentage of savings incurred
on account of exclusion of genuine beneficiaries (“shrinkage”)
versus the savings due to deletion of ineligible job cards (what
Khera [2017] calls “efficiency”). Shrinkage (exclusion of genuine
workers) accounts for over 56% of the total savings.
In overall terms, this means that Aadhaar led to savings of
nearly 34.5% of the total expenditure on wages (savings of
`8.3 lakh out of total wage expenditure of `24 lakh). However,
the actual savings from reduction in inclusion errors are only
15.2% of the total wage expenditure whereas the savings due
to denial of incomes to workers is around 19.3% of the total
wage bill of the sample.
How do these figures compare with the government’s esti-
mates of 10% savings due to Aadhaar? For the specific sample,
% Expenditure
the estimates of this paper suggest that the genuine savings
of Job Card could potentially be higher (at around 15.2% of wage costs) but
63.5 this comes at the cost of denial of incomes to genuine workers
15.2 of around 19.3% of wage costs.
2.0
19.3 Conclusions
100
We attempted to understand the impact of linking the delivery
of welfare policies with Aadhaar through a case study of MGNREGA
in Jharkhand. We used a combination of publicly available data
january 6, 2024 vol lix no 1 EPW Economic & Political Weekly
 SPECIAL ARTICLE

and data from a primary survey of 2,907 MGNREGA workers in
Jharkhand. We found that the increase in exclusion error is
much higher compared to the reduction in inclusion error.
Among the surveyed job card holders, the introduction of Aad-
haar linking to job cards led to an increase in exclusion error by
a massive 22.4% whereas it has led to a reduction in inclusion
error by only 17%.
The increase in exclusion impacts the most marginalised
people—those who depend upon MGNREGA the most such as
PVTGs living in remote villages. These are the people who
could not go to the block office with their Aadhaar cards or the
rozgar sevak was unable/unwilling to reach them to get their
Aadhaar details. As a result, their job cards were deleted and
they were denied access to MGNREGA. This exclusion can often
prove to be fatal. Reetika Khera and Siraj Dutta compiled a list
of 56 hunger-related deaths between 2015–18, 42 of which hap-
pened in 2017 and 2018. Out of these 42, they found that 25
deaths were caused by exclusion from welfare policies due to
Aadhaar linking (Wire 2018).
The paper also indicates that the savings incurred from
Aadhaar linking can be attributed largely to denial of wages
to genuine workers (“shrinkage”). Out of the total amount
which can be claimed as “savings due to Aadhaar” in the
sample, only 44% can be claimed to be savings from removal
of ineligible beneficiaries (reduction in inclusion errors or
“efficiency”). The rest of the savings (56.1%) are actually
savings incurred by denial of wages to genuine workers
(increase in exclusion errors). Furthermore, the “leakages”
in MGNREGA (as any other welfare policy) happen due to sys-
temic issues through the collusion of various actors and,
therefore, require systemic fi xes. Attempts to fi x these issues
through technological solutions such as Aadhaar linking
of job cards, mandating payments through the APB, geotag-
ging, or the recently launched National Mobile Monitoring
Service (NMMS) which requires app-based attendance of
workers at worksites are unlikely to succeed. Instead, such
solutions may end up increasing administrative centralisa-
tion (Khera 2017) and may cause further exclusion of genu-
ine beneficiaries. Leakages should, instead, be addressed
through systemic solutions, such as strengthening independ-
ent social audits.
Welfare policies like MGNREGA, PDS, and pensions intended
for the poor are often the only hope for their survival. Exclusion
from welfare due to a technical issue like non-linking of job
cards with Aadhaar or an attendance app not working at the
worksite due to network issues, therefore, can prove to be fatal.

NOTES
1 https://nrega.nic.in/MGNREGA_new/Nrega_
StateReport.aspx?typeN=2 viewed on 9 July
2022.
2 https://nreganarep.nic.in/netnrega/UID/Uid-
NPCIStatusRpt.aspx?DBT=&page=S&state_
name=JHARKHAND&state_code=34&fin_
year=2023-2024&Digest=PMhklPygNgGEHaq
vFbC6oA viewed on 9 July 2022.
3 https://mnregaweb4.nic.in/netnrega/state_html/
BPL_ac_photo.aspx?page=S&lflag=eng&state_
name=JHARKHAND&state_code=34&fin_
year=2022-2023&source=national&Digest=mE
MSQkGNoLd/hrYgZ6rHdg, viewed on 9 July
2022.
4 See the District Census Handbook on Census of
India 2011 (Government of India 2011), https://
censusindia.gov.in/census.website/data/hand-
books.
5 https://dbtbharat.gov.in/static-page-content/
spagecont?id=18, viewed on 4 January 2024.
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Munjuluri, Ramya and Ashwini Chhatre (2019):
“MGNREGA and Aadhaar: Analysis of Payment
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 DISCUSSION
Reliability of
Our Statistical System
A Rejoinder to G Raveendran
Sanjay Kumar, N K Sharma
In this brief rejoinder to
G Raveendran’s article “Good and
Bad Statistics” (EPW, 16 September
2023), the authors argue that there
is no empirical or theoretical
ground for treating rates and
ratios from the National Sample
Survey as more reliable, under
the assumption of similar
underestimation in the numerator
as well as the denominator.
The views expressed are personal.
Sanjay Kumar (sanjay.kumar61@nic.in) retired
as additional director general and N K Sharma
(nareshkr.sharma@nic.in) retired as director
general from the Ministry of Statistics and
Programme Implementation, Government
of India.
62
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C
oncerns about the deterioration
of the official statistical system
have frequently been expressed,
more so after the release of the 2011–12
gross domestic product (GDP) series and
thereafter on the non-release of the
Consumption Expenditure Survey (CES)
2017–18 data, delay in releasing the
Periodic Labour Force Survey (PLFS) data
in 2019, etc. The current round of debate
started with Prime Minister’s Economic
Advisory Council (PM-EAC) member
Shamika Ravi’s article questioning the
sample selection in the National Sample
Survey (NSS). This was followed by a
series of articles by Bibek Debroy, chair-
person PM-EAC, Pronab Sen, former chair-
person, National Statistical Commission
(NSC) as well as former Chief Statisti-
cian of India (CSI), P C Mohanan and
Amitabh Kundu (the former having
been the acting chairperson, NSC in 2019),
Raveendran, etc.
The objective of this article is to high-
light the gravity of the problem of popu-
lation underestimation in NSS, which,
though rightly pointed out by Ravi (2023),
got distracted in the articles by Sen (2023)
and Raveendran (2023), from its real
import by looking at the underestimation
issue in isolation without considering the
methodology actually followed by the
NSS. Although Sen (2023) rightly referred
to the definitional differences in the NSS
Table 1: Population Underestimation in NSS vs Census Projections
Round\Segment Rural
Male Female
50th (1993–94) 11.3 10.7
55th (1999–2000) 6.2 4.9
61st (2004–05) 8.1 6.3
66th (2009–10) 10.1 10.0
68th (2011–12) 8.1 7.4
Source: Derived by using interpolated RGI population projections as on 1 March of the relevant two years to the intervening
1 January (for 1 January 2000, 2001 figures extrapolated, 1 January 1994 population taken from Visaria [2002]) and the NSS
population from the respective survey reports.
january 6, 2024
and the census in classifying areas as
rural or urban, he clarified the issue
only partially.1 More importantly, whether
this underestimation in the NSS estimates
could be attributed entirely (or even
largely) to the said definitional differ-
ences, appears to have been missed by
Sen (2023) altogether.
Raveendran (2023), while seeking to
support NSS estimates, in fact, ended up
trivialising the issue of population under-
estimation by putting forward the argu-
ment that instead of aggregates, the NSS
gives rates and ratios as its surveys are
not designed to obtain absolute esti-
mates of rural or urban population and
that the rates and ratios remain invari-
ant to changes in population totals since,
in his view, any correction in the denom-
inator (that is, the population total) is
equally applicable to its numerator (that
is, the population satisfying the given at-
tribute). It is hence claimed that NSS
rates/ratios are considered reliable.
On this aspect, Raveendran’s support
is rather ipse dixit, devoid of any theo-
retical or empirical underpinnings, for
many reasons. For instance, first, NSS
population estimates for total (that is,
rural+urban) which is free from any
classification issue, have been consistently
lower than those from census or census-
based projections (Table 1). Second, the
extent of observed underestimation in
NSS can be considered as a lower bound
only, because the census population
itself is undercounted by nearly 2.3%
as per post-enumeration survey results
for Census 2001 as well as Census 2011
(RGI 2014). Third, from a simple analysis,
it is seen that the estimated number of
households in various NSS rounds is
generally closer to those emanating from
the nearest census. Fourth, the household
(%)
Urban All India
Total Male Female Total
11.0 19.0 18.4 18.7 13.1
5.6 16.5 15.1 15.8 8.4
7.2 21.9 19.8 20.9 11.1
10.1 20.6 19.8 20.2 13.1
7.7 18.1 18.8 18.4 11.1
vol lIX no 1 EPW Economic & Political Weekly
 DISCUSSION

size in NSS, vis-à-vis census, is lower each of which is an outcome of two inter-
(Table 2) and the said definitional dif- nally generated figures. A cursory appre-
ferences cannot account for the ob- ciation of issues in the previous paragraph
served gap. It is germane to recognise leads to the inexorable inference that
that lower household size in NSS may the NSS rates/ratios generated from such
arise from the selection of smaller disparately varying components render
households (a design issue) and/or omis- them unusable for the same reasons as
sion of member(s) within households those for its aggregates. The assumption
(a non-sampling error). Fifth, it may be of uniform underestimation in the numer-
easily verified from NSS microdata that ator as well as the denominator is not
the levels of population underestima- based on any empirical evidence. Rather,
tion vary spatially across age–sex classes evidence to the contrary abounds. For in-
besides fluctuating temporally. These stance, there can be no indicator broader
variations would naturally have reper- than average household size but the
cussions on the reliability of the result- denominator (that is, number of house-
ing rates/ratios. holds) of this ratio is not underestimated
Table 2: Underestimation in Household Size, NSS vs to the extent of the numerator
the Closest Census (%) (that is, population) in NSS.
Round/Segment Rural Urban All India It seems that almost every-
50th (1993–94) vs Census 1991 12.2 16.7 13.4 one is uncritically presuming
55th (1999–2000) vs Census 2001 6.3 12.5 7.7 the sampling errors to be the
66th (2009–10) vs Census 2011 8.1 14.5 9.8
root cause of the problem.
68th (2011–12) vs Census 2011 9.3 15.9 11.2
Statistically speaking, repeated
Source: Derived by using the total rural/urban populations and the
relevant numbers of households from the respective NSS round reports samples from a universe should
and the census results. result as much in overestima-
The issue of population underestima- tion as in underestimation vis-à-vis the
tion in NSS is organically tethered to the true value. Unless it is argued that census
issue of reliability of the rates/ratios, projections are on the higher side by quite
a large margin (which, as stressed above,
may rather be underestimated), the ab-
sence of even a single occurrence of pop-
ulation overestimation in NSS, prima fa-
cie, defies the statistical odds. It is, there-
fore, likely that non-sampling errors are
very large and unidirectional.
That non-sampling errors, perhaps
growing over time, may indeed have
impacted the NSS results may be hypo-
thesised from the fact that in 1972–73,
the consumption expenditure from the
NSS was 0.18% higher in food and 16.7%
lower in non-food (overall 5.47% lower) in
comparison to the private final consump-
tion coming from the national accounts
data. In 1993–94, NSS consumption esti-
mates were lower by 39.76% (food),
47.77% (non-food), and 43.66% (overall)
and stood, in 2011, at 28.29% (food),
54.77% (non-food), and 45.24% (overall)
lower than the national accounts data
(MoSPI 2015). NSS consumption results for
2017–18 were not even released in view
of “the data quality issues” (MoSPI 2019).
Also, the employment–unemployment
data from the NSS has been questioned
at various fora.

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 DISCUSSION
In fact, in view of the gravity of this
issue, the government had constituted a
committee, as noted in NSSO (2008) as
follows:
Some of the observations made by the Bimal
Roy Committee on “Underestimation of Popu-
lation in NSS” may be referred to. It appears
from the report of the Committee that the
reasons for underestimation are mainly at-
tributable to the sources of non-sampling er-
rors, and are more likely to be different for
different segments of the population and may
vary from round to round. This makes it dif-
ficult to construct correction factor to adjust
for variable degrees of underestimation for
different segments of the population …
Moreover, the above observations on the
magnitude and direction of divergence sug-
gest strongly calculating separate adjustment
factor for each class/group/category/domain.
However, despite a lapse of nearly 17
years of the said committee report, no
such separate adjustment factors appear to
have evolved so far. Hence, Raveendran’s
(2023) simplistic defence of NSS rates/
ratios is altogether misplaced. This as-
pect requires a more nuanced under-
standing and careful handling.
In truth, these issues require a holistic
resolution. For minimising non-sampling
errors and improving survey data quality
in NSS, real-time validation checks may
go a long way. Also, presently there is
no system of independent post-survey
checks in NSS, on the lines of the post-
enumeration surveys adopted in the
population census, where the simple
exercise of mere “counting of heads” and
involving no sampling is known to under-
count the population. Obviously, implica-
tions of non-sampling errors on the esti-
mates coming from canvassing a lengthy
questionnaire, as in NSS, would be much
more complex and multidimensional.
NSS is, no doubt, an old organisation
in the field of survey execution. Age,
however, in itself, may not necessarily
be an indicator of continued relevance in
the dynamic socio-econo-techno envi-
ronment we are living in as it requires
continual institutional adaptation and
reinvention. It nonetheless needs to be
appreciated that NSS has been transparent
in sharing its microdata, regardless of the
fact that it is this sharing which has
resulted in more questions being raised
by the users with regard to the NSS data.
However, such a level of transparency
64
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is not visible in the case of other macro census towns during the inter-central period.
The same, however, would not be so classified
indicators like the index of industrial pro- in NSS until these are notified just before the
duction, consumer price index, national next census. In fact, if an area is notified as
urban but no urban frame survey has since
accounts aggregates, etc, though the been conducted there, it would continue to be
relevant microdata may be easily shared classified as rural in NSS.
even while following the government’s
extant Guidelines for Statistical Data References
Dissemination (GSDD) 2019. It is hoped Debroy, Bibek (2023): “The Janus of India’s Official
Statistics,” Indian Express, 10 July.
that this openness shall generate a well-
Mohanan, P C and A Kundu (2023): “Narratives in
informed debate on the quality issues Search of Data,” Indian Express, 12 July.
with respect to these macro-indicators. MoSPI (2015): “Report of the Committee on Private
Final Consumption Expenditure,” Ministry of
Most of the commentators, for the Statistics and Programme Implementation,
present, appear to be in agreement that Government of India, Table 1, p 11.
the official statistical system is collaps- — (2019): Press Note on “Household Consump-
tion Expenditure Survey,” Ministry of Statistics
ing. Some others may even aver that it and Programme Implementation, Government
has already collapsed. However, what is of India, viewed on 25 September 2023,
https://pib.gov.in/PressReleasePage.aspx?PRID
not in dispute is that to remain relevant =1591792.
and useful, the system needs a thorough NSSO (2008): “Review of Concepts and Measurement
overhaul and significant upgradation. Techniques in Employment and Unemployment
Surveys of NSSO,” NSSO (SDRD) occasional
The solution for this, however, does not paper/1/2008, viewed on 25 September, https://
lie in setting up more expert committees www.mospi.gov.in/sites/default/files/work-
shop/nsc_paper_SDRD_12jan09.pdf.
and/or according statutory status to NSC
Raveendran, G (2023): “Good and Bad Statistics,”
since the malaise is much more deep- Economic & Political Weekly, Vol 58, No 37,
rooted than perhaps being fully realised. pp 68–71.
Ravi, Shamika (2023): “The Sample Is Wrong,”
With the authority, albeit limited, at its Indian Express, 7 July.
disposal, what improvements the setting RGI (2014): “Census of India 2011: Report on Post
up of NSC has brought about during the Enumeration Survey,” Registrar General and
Census Commissioner, Government of India,
last 18 years, remain to be assessed. p iii.
Sen, Pronab (2023): “Statisticians Are Not Stupid,”
Note Indian Express, 10 July.
1 The population projections incorporate, by way Visaria, P (2002): “Workforce and Employment in
of urban–rural growth differential, the likely India, 1961–94,” National Income Accounts and
urbanisation since the last census which, Data Systems, B S Minhas (ed), New Delhi:
among others, includes the emergence of new Oxford University Press, Table 1.4, p 13.
EPWRF India Time Series
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EPWRF India Time Series is an e-ShodhSindhu consortium approved online database.
january 6, 2024 vol lIX no 1 EPW Economic & Political Weekly
 CURRENT STATISTICS EPW Research Foundation

Wholesale Price Index Foreign Trade

The year-on-year WPI-infl ation rate decreased to 0.3% in November 2023
from 6.1% registered a year ago and -0.5% a month ago. The index for
primary articles grew by 4.8% compared to 5.9% a year ago and 1.8% a
month ago. The rate of inflation for food articles increased to 8.2% from
1.5% a year ago and 2.5% a month ago. The index for fuel and power stood at
-4.6% against 19.7% and the index for manufactured products decreased by
-0.6% against 3.4% a year ago.
The foreign trade deficit stood at $20.6 bn in November 2023 compared to
$22.1 bn a year ago. Exports contracted by (-)2.8% to $33.9 bn from $34.9 bn a
year ago and imports by (-)4.3% to $54.5 bn from $57.0 bn. Oil imports stood at
$14.9 bn and non-oil at $39.5 bn lower than $16.3 bn and $40.6 bn, respectively.
During April−November 2023−24, the cumulative exports decreased by
(-)6.5% to $278.8 bn and imports by (-)8.7% to $445.1 bn from their respective
values of $298.2 bn and $487.4 bn registered during the same period a year ago.

Consumer Price Index Index for Industrial Production

The CPI-inflation rate rose to 5.6% in November 2023 from 5.9% reported a year
ago and 4.9% a month ago. The consumer food price index grew by 8.7% compared
to 4.7% a year ago and 6.6% a month ago. The CPI-rural inflation rate decreased
to 5.8% and the urban inflation rate to 5.3% from 6.1% and 5.7%, respectively,
registered a year ago. According to Labour Bureau data, the CPI for agricultural
labourers (CPI–AL) and industrial workers (CPI–IW) stood at 7.4% and 5% in
November 2023 compared to 6.9% and 5.4% a year ago.
The y-o-y growth rate of IIP increased to 11.7% in October 2023 from -4.1% a year
ago with growth in manufacturing segment rising to 10.4% from -5.8%. Production
in mining segment grew by 13.1% and electricity generation by 20.4% against 2.6%
and 1.2%, respectively. As per use-based classification, growth in capital goods
segment increased to 22.6% from -2.9% a year ago and infrastructure goods to
11.3% from 1.7%. Production of consumer durables rose by 15.9% and consumer non-
durables by 8.6% against -18.1% and -13.0%, respectively, reported a year ago.

Movement of WPI Inflation April–November Merchandise Trade November 2023

November 2023 Over Month Over Year April–November
Year-on-year WPI Inflation in % ($ bn) (%) (%) (2023–24 over 2022–23) (%)
20
Exports 33.9 1.0 -2.8 -6.5
2022–23
15
Imports 54.5 -16.2 -4.3 -8.7
Trade Balance -20.6 -34.6 -6.7 -12.1
10 Data is provisional. Source: Ministry of Commerce and Industry.
6.1%
5 Components of Trade November 2022 and November 2023
0.3%
0 $40.6 billion
Non-oil Imports $39.6 billion
$34.9 billion
2023–24 40 Exports
-5 $33.9 billion
Apr May Jun Jul Aug Sep Oct Nov*

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

Oil Imports $14.9 billion

Trends in WPI and Its Components November 2023* (%) 0

Financial Year (Averages)
Weights Over Month Over Year 2020–21 2021–22 2022–23
All commodities 100 0.5 0.3 1.3 13.0 9.4
Primary articles 22.6 1.3 4.8 1.7 10.2 10.0 $22.1 billion
$20.6 billion
-27 Trade Balance
Food articles 15.3 2.6 8.2 3.2 4.1 7.3
Fuel and power 13.2 0.8 -4.6 -8.0 32.5 28.1 2022 NOVEMBER 2023 NOVEMBER

Manufactured products 64.2 0.1 -0.6 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 April–October
IIP Index Value
Movement of CPI Inflation January 2022–November 2023
160
Year-on-year CPI Inflation in %
152
9 2023–24 144.7
Rural 144

5.8% 136
6 2022–23
128
CPI (Combined) 129.5
Urban
5.6% 120
5.3% Apr May Jun Jul Aug Sep Oct*
3
* October 2023 are quick estimates; Base: 2011–12=100.

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

0 Weights Over Over Financial Year (Avgs)
Jan F M A M J J A S O N D Jan F M A M J J A S O Nov* Month Year 2021–22 2022–23
2022 2023
General index 100 1.8 11.7 11.4 5.2
* November 2023 is provisional.
Source: National Statistical Office (NSO); Base: 2012=100. Mining 14.4 14.3 13.1 12.2 5.8
Manufacturing 77.6 0.4 10.4 11.8 4.7
Inflation in CPI and Its Components November 2023* (%) Electricity 8.0 -1.0 20.4 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 5.3 11.4 9.7 7.5
CPI combined 100 186.3 0.5 5.6 5.5 6.7
Consumer food 39.1 192.4 1.1 8.7 3.8 6.6 Capital goods 8.2 -5.1 22.6 16.9 13.1
Miscellaneous 28.3 178.6 0.3 4.4 6.7 6.3 Intermediate goods 17.2 2.4 9.7 15.4 3.8
Infrastructure/Construction goods 12.3 1.8 11.3 18.8 8.4
CPI: Occupation-wise
Industrial workers (2016 = 100) 139.1 0.5 5.0 5.1 6.1 Consumer durables 12.8 -1.8 15.9 12.5 0.6
Agricultural labourers (1986-87 = 100) 1253 1.0 7.4 4.0 6.8 Consumer non-durables 15.3 -1.0 8.6 3.2 0.7
* Provisional; *October 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.

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 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 Q2
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) 2370094 (3.1)
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) 373513 (12.4)
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) 1471938 (11.0)
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) 34154 (11.6)
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) 103901 (-4.0)
Net trade (Export–Import) 15631 -46285 -91258 -65580 -86460 -146624 -97506 -6264 -258496 -285849
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) 968011 (4.3)
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) 1253860 (16.7)
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) 106561 (-251.5)
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) 4174312 (7.6)

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 Q2 Q1 Q2 Q3 Q4 Q1 Q2
Current account -17964 -30902 -16832 -1356 -9203 -8319 -1387 [-2.1] -2466 [-3.8] -1384 [-2.0] -111.6 [-0.2] -756 [-1.1] -688 [-1.0]
Merchandise -63054 -78313 -71337 -52587 -56624 -61034 -4867 -6249 -5864 -4326.1 -4654 -5045
Invisibles 45090 47411 54505 51231 47421 52715 3480 3783 4481 4214.5 3898 4358
Services 31069 34426 38713 39075 35124 39950 2398 2747 3182 3214.5 2887 3302
of which: Software services 30692 32681 33541 34370 33928 35237 2369 2608 2757 2827.4 2789 2913
Transfers 22874 24773 28467 24762 22866 24952 1766 1977 2340 2037.1 1880 2063
of which: Private 23065 24991 28641 25080 23073 25169 1780 1994 2354 2063.2 1897 2080
Income -8853 -11788 -12675 -12606 -10568 -12187 -683 -941 -1042 -1037.1 -869 -1007
Capital account 22055 1461 28887 6540 34275 9994 1702 [2.6] 117 [0.2] 2375 [3.4] 538.0 [0.7] 2817 [4.0] 826 [1.2]
of which: Foreign investment -1238 12741 6641 4691 20789 4660 -96 1017 546 385.9 1709 385
Overall balance 4595 -30379 11069 5579 24432 2519 355 [0.5] -2424 [-3.7] 910 [1.3] 459.0 [0.6] 2008 [2.8] 208 [0.3]
Figures in square brackets are percentage to GDP.

Foreign Exchange Reserves Variation

22 December 23 December 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 4723417 4281487 4340297 164735 441930 43870 383120 68050 668976 590416 302585 102680
$ mn 568074 516680 528083 21325 51394 -42936 39990 -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 15 December 24092247 158284 (0.7) 2607729 (12.1) 990789 (4.8) 1748487 (7.8) 2044615 (12.2) 1649151 (8.8) 1850031 (9.0)
Components
Currency with public 3271577 17710 (0.5) 143882 (4.6) 92006 (3.0) -4859 (-0.1) 402080 (17.1) 283860 (10.3) 240747 (7.9)
Demand deposits 2462242 13158 (0.5) 288959 (13.3) -39708 (-1.8) 141644 (6.1) 257428 (14.8) 217871 (10.9) 107607 (4.9)
Time deposits 18283333 126685 (0.7) 2163938 (13.4) 932790 (6.1) 1614367 (9.7) 1376262 (10.9) 1136327 (8.1) 1482361 (9.8)
Other deposits with RBI 75095 731 (1.0) 10950 (17.1) 5701 (9.8) -2666 (-3.4) 8844 (23.0) 11093 (23.4) 19317 (33.1)
Sources
Net bank credit to government 7376546 -98829 (-1.3) 851415 (13.0) 47502 (0.7) 211014 (2.9) 890012 (17.9) 627255 (10.7) 687903 (10.6)
Bank credit to commercial sector 16551142 189351 (1.2) 2662273 (19.2) 1272349 (10.1) 2121506 (14.7) 629822 (5.7) 948054 (8.1) 1813116 (14.4)
Net foreign exchange assets 5205648 149599 (3.0) 441729 (9.3) -90144 (-1.9) 293882 (6.0) 777810 (20.5) 275217 (6.0) 57703 (1.2)
Banking sector’s net non-monetary liabilities 5073354 82163 (1.6) 1350569 (36.3) 240289 (6.9) 879894 (21.0) 253594 (8.4) 202475 (6.2) 710964 (20.4)
Reserve money as on 22 December 4444907 20676 (0.5) 269950 (6.5) 106070 (2.6) 58148 (1.3) 570276 (18.8) 468905 (13.0) 317872 (7.8)
Components
Currency in circulation 3375003 19852 (0.6) 132533 (4.1) 108753 (3.5) -3518 (-0.1) 406451 (16.6) 279954 (9.8) 244804 (7.8)
Bankers’ deposits with RBI 995079 932 (0.1) 126902 (14.6) -8549 (-1.0) 64602 (6.9) 154979 (28.5) 177859 (25.4) 53751 (6.1)
Other deposits with RBI 74824 -108 (-0.1) 10514 (16.3) 5866 (10.0) -2937 (-3.8) 8844 (23.0) 11093 (23.4) 19317 (33.1)
Sources
Net RBI credit to Government 907000 -140703 (-13.4) -199386 (-18.0) -344211 (-23.7) -544126 (-37.5) 107495 (10.8) 350911 (31.9) 529 (0.0)
of which: Centre 904748 -126722 (-12.3) -192010 (-17.5) -352213 (-24.3) -545628 (-37.6) 106606 (10.8) 352625 (32.2) 1405 (0.1)
RBI credit to banks & commercial sector 263851 137537 (108.9) 222458 (537.4) 585094 (-107.6) 358293 (-379.4) -168464 (83.9) -174344 (47.2) 449259 (-82.6)
Net foreign exchange assets of RBI 5011558 172144 (3.6) 514069 (11.4) 55010 (1.2) 424202 (9.2) 608998 (17.0) 243079 (5.8) 144877 (3.3)
Govt’s currency liabilities to the public 32264 325 (1.0) 2881 (8.7) 1371 (4.9) 1979 (6.5) 565 (2.1) 1099 (4.1) 2273 (8.1)
Net non-monetary liabilities of RBI 1769766 148627 (9.2) 270072 (18.0) 191194 (14.6) 182201 (11.5) -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 15 December) 2023 2022–23 2023–24 2020–21 2021–22 2022–23
Aggregate deposits 19791557 139780 (0.7) 2437178 (14.0) 889066 (5.4) 1747643 (9.7) 1546019 (11.4) 1351801 (8.9) 1578601 (9.6)
Demand 2319503 12325 (0.5) 287072 (14.1) -40315 (-1.9) 139073 (6.4) 244190 (15.1) 211553 (11.4) 107684 (5.2)
Time 17472053 127454 (0.7) 2150106 (14.0) 929381 (6.5) 1608570 (10.1) 1301831 (10.9) 1140246 (8.6) 1470917 (10.2)
Cash in hand 84432 -5401 (-6.0) -17173 (-16.9) 15680 (18.2) -5830 (-6.5) 3487 (4.0) -4823 (-5.3) 4337 (5.0)
Balance with RBI 936401 25578 (2.8) 125474 (15.5) 127490 (18.7) 126494 (15.6) 6507 (1.2) 140744 (25.9) 126470 (18.5)
Investments 5960517 -109351 (-1.8) 832911 (16.2) 398659 (8.4) 545369 (10.1) 715177 (19.1) 266421 (6.0) 686201 (14.5)
of which: Government securities 5959761 -109286 (-1.8) 832993 (16.2) 398590 (8.4) 545440 (10.1) 722935 (19.3) 266546 (6.0) 686143 (14.5)
Bank credit 15805276 184722 (1.2) 2650834 (20.2) 1263128 (10.6) 2130041 (15.6) 578649 (5.6) 1044026 (9.6) 1783921 (15.0)
of which: Non-food credit 15762777 182483 (1.2) 2662909 (20.3) 1263565 (10.7) 2107447 (15.4) 569159 (5.6) 1050269 (9.7) 1819027 (15.4)

Capital Markets 22 December 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) 71106.96 (16.9) 66023.24 60826.22 (6.8) 59106.44 71483.75 51360.42 63284.19 49009 (63.7) 57362 (18.4) 58992 (0.7)
S&P BSE-100 (Base: 1983–84 = 100) 21976.67 (19.2) 20366.02 18439.26 (6.9) 17644.91 22095.90 15562.65 19137.18 14689 (68.2) 17423 (20.1) 17602 (-0.7)
S&P BSE-200 (1989–90 = 100) 9452.92 (20.4) 8736.04 7849.10 (6.6) 7406.09 9509.59 6602.62 8144.55 6211 (71.1) 7412 (20.9) 7389 (-2.0)
CNX Nifty-50 (Base: 3 November 1995 = 1000) 21349.40 (17.8) 19811.85 18127.35 (6.9) 17398.05 21456.65 15293.50 18812.50 14507 (67.9) 17153 (19.7) 17360 (-0.6)
CNX Nifty-500 19054.70 (23.5) 17627.70 15431.50 (5.4) 14601.95 19169.25 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.

66 January 6, 2024 vol lix no 1 EPW Economic & Political Weekly

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