India Transformed

by Rakesh Mohan

  2.    ‘Drivers of Growth: Sources and Sectors’, Laveesh Bhandari and Sumita Kale, in A

  Concise Handbook of the Indian Economy in the 21st Century, ed. Ashima Goyal (New Delhi:

  Oxford University Press, 2014).

  3.    B.B. Bhattacharya and S. Sakthivel, Regional Growth and Disparity in India: A Comparison of Pre- and Post-Reform Decades (Delhi: Institute of Economic Growth, 2004); J.D. Sachs, N. Bajpai and A. Ramiah, ‘Understanding Regional Economic Growth in India’, in Asian Economic Papers 1, no. 3 (2002): 32–62; Nirvikar Singh, Laveesh Bhandari, Aoyu Chen and Aarti Khare, ‘Regional Inequality in India: A Fresh Look’, in Economic and Political Weekly 38, no. 11 (15 March 2003): 1069–073.

  4.    Sabyasachi Kar, Debajit Jha and Alpana Kateja, ‘Club-Convergence and Polarisation of States: A Nonparametric Analysis of Post-Reform India’, IEG Working Paper no. 307, 2010.

  5.    As per the statement given by Rural Development Minister Narendra Singh Tomar in Lok Sabha on 2 August 2016.

  Chapter 14: 25 Years of Policy Tinkering in Agriculture

  1.    Indian currency still is, according to Bhagwati, Barua and Khan (2015), overvalued. The rupee’s trade-weighted real effective exchange rate is 26 per cent overvalued as of March 2015 compared to 2004–05.

  2.    Revealed comparative advantage is an index that estimates a country’s relative advantage or disadvantage in a certain class of goods or services as evidenced by trade flows. Based on the Ricardian comparative advantage concept, it most commonly refers to an index introduced by Béla Balassa (1965): RCA = (Eij/Eit)/(Enj/Ent), that is, the RCA is equal to the proportion of the country’s exports that are of the class under consideration (Eij/Eit) divided by the proportion of world exports that are of that class (Enj/Ent).

  3.    Relative prices index between agriculture and manufacturing is taken from Economic Survey, Government of India.

  4.    The result of a simple linear regression model: Log AGDP = 1.575 + 0.582 Log PR (T-1) + 0.341 Log RNI + 0.12 Log Trend, with ‘t’ values as (4.9), (2.4) and (5.4) respectively. The Adjusted R square is 0.913. The equation is the result of an extensive quantitative exercise undertaken by authors in Gulati, Saini and Jain (2013).

  Chapter 17: India Evolving: Infrastructure since 1991

  1.    ‘Highlights of Telecom Subscription Data as of 31 March, 2016’, TRAI, http://www.trai.gov.in/WriteReadData/WhatsNew/Documents/Press_Release_34_25may_2016.pdf. Accessed on 1 November 2016.

  2.    The criteria for considering a village to be ‘electrified’ have evolved over time, but as of 2004–05, a village is considered to be electrified if 10 per cent of all the households of the village have electricity access and if electricity is provided to public spaces such as schools, panchayat offices, health centres, community centres and dispensaries.

  3.    The Swachh Bharat Abhiyan, launched in 2014, was one of Prime Minister Modi’s first initiatives upon taking office.

  4.    A whopping 96 per cent of installed wind and solar capacity are private-sector projects. ‘Installed Capacity, 2016’, http://www.cea.nic.in/reports/monthly/installedcapacity/2016/installed_capacity-10.pdf.

  5.    ‘Statistics: PPP Airports’, figures for 2015–16, Association of Private Airport Operators, 2016, http://www.apaoindia.com/?page_id=1021.

  6.    ‘The Road Ahead: Highways PPP in India’, figures from 2011, https://www.pwc.in/assets/pdfs/publications-2012/the-road-ahead-highways-ppp.pdf.

  7.    ‘Private Indian Ports Take More Public Ports’ Market Share’, Joc.com, 29 June 2015, http://www.joc.com/port-news/asian-ports/private-indian-ports-take-public-ports-market-share_20150629.html.

  8.    Akshay Soni et al., ‘Industrials: The Return of the Transportation Behemoth’, Morgan Stanley, 25 November 2015, http://www.indianrailways.gov.in/Morgan%20Stanley%20Report%20on%20Indian%20Railways.pdf.

  9.    Expert Group on the Commercialization of Infrastructure Projects, The India Infrastructure Report: Policy Imperatives for Growth and Welfare (New Delhi: National Council of Applied Economic Research, 1996).

  10.  P. Devarajan, ‘Power Funding: SEBs, the Weak Link’, Business Line, 9 September 1996, 6.

  11.  Most of the 189 projects (ninety-five, with nearly 50,000 MW) had been awarded through negotiated memoranda of understanding, while some (thirty-two, about 21,000 MW) were through international competitive bidding.

  12.  As of 1998, however, only thirty-one of these projects had gained techno-economic clearance from the Central Electricity Authority; just 3000 MW was under implementation; and a handful of plants had actually been commissioned by 1999.

  13.  For more details on this period, see Seddon Wallack and Singh (2004), ‘Some Light at the End of the Tunnel: Ingredients of Power Sector Reforms in India’, Working Paper 235, Stanford Centre for International Development.

  14.  Noted in ‘Dabhol-nama: Five things that made the plant unique’, Business Standard, 28 October 2015.

  15.  In the landlord port model, a public-sector authority owns land, access and some basic infrastructure, while private operators are invited to construct and maintain terminals, cranes, etc., as well as provide services.

  16.  The Bangalore Metropolitan Transport Corporation, for example, was established in 1997 to provide cost-effective bus services for Bangalore. It broke even in 2011, after increasing ridership by 20 per cent over the previous three years. ‘Best Practices in Urban Transport’, Institute for Urban Transport, 2013, http://smartnet.niua.org/sites/default/files/resources/Best%20Practices%20IUT.pdf.

  17.  Arindam Majumder and Aneesh Phadnis, ‘Listing Possible? Corporatizing Air India Is Not a Sprint, It’s a Marathon’, Business Standard, 8 February 2017.

  18.  Expert Group on Indian Railways, The Indian Railways Report: Policy Imperatives for Reinvention and Growth (New Delhi: National Council of Applied Economic Research, 2001).

  19.  National Transport Development Policy Committee, India Transport Report: Moving India to 2032 (New Delhi: Routledge, 2014).

  20.  Some circles, such as Jammu and Kashmir and Andaman and Nicobar Islands, did not receive any bids but all others had at least one—a demonstration of interest in the potential for communications businesses.

  21.  H.V. Singh, Aparna Soni and Rajat Kathuria, ‘Telecom Policy Reform in India’, World Bank Resources, 2000, http://siteresources.worldbank.org/INTRANETTRADE/Resources/Singh.pdf. Accessed on 2 December 2016.

  22.  Pradip Baijal, A Bureaucrat Fights Back: The Complete Story of Indian Reforms (New Delhi: HarperCollins, 2016) offers a comprehensive insider’s view of the various phases of reform.

  23.  Montek S. Ahluwalia, ‘Infrastructure Reforms in India’s Economic Development’, in India’s Economic Reform and Development: Essays For Manmohan Singh, edited by Isher Ahluwalia (New Delhi: Oxford University Press, 2012).

  24.  The Maharashtra ERC, for example, was formed by the Bombay High Court’s order on a case filed by an industry association.

  25.  Sixty per cent of the surcharge/interest on delayed payments would be waived for the participating states, while the rest of the dues and the remaining 40 per cent of the surcharge/interest would be securitized through tax-free bonds (at 8.5 per cent annual interest rate) issued by the respective state governments.

  26.  Quoted in Sarita Singh, ‘Economic Survey 2016: Simplify Power Tariff Structure with Two-Three Categories’, Economic Times, 27 February 2016.

  27.  The Delhi metro, in contrast, was initially built by a consortium of central and state governments, with aid from the Japanese International Cooperation Agency. The Airport Express Line in Delhi, a PPP with Reliance Infrastructure as the concessionaire, ended in dispute.

  28.  For more details on PPP approaches during this era, see A. Mahalingam, ‘PPP Experiences in Indian Cities: Barriers, Enablers, and the Way For
ward’, ASCE Journal of Construction Engineering and Management 136, no. 4 (April 2010): 419–29.

  29.  Grants awarded to projects on a competitive and vetted basis in order to make the project more attractive and/or lower risk for private investment so that the cost of capital would be lower. The funding can be in the form of a capital grant, subordinated loans, O & M support grants or interest subsidy, Economic Survey 2004–05, Government of India, 2015, 9.116–9.118.

  30.  The ‘model concession’ approach led to mixed results; it eased the way to initiate a number of projects, but complicated their longer-term implementation. It is both credited to and blamed on (depending on one’s views) Gajendra Haldea, infrastructure adviser to the Planning Commission.

  31.  Guidelines available at https://www.pppinindia.gov.in/documents/20181/21751/IIPDF_GuideLines_2013.pdf. Accessed on 20 December 2016.

  32.  M. Hellowell, ‘The UK’s Private Finance Initiative: History, Evaluation, Prospects’, in International Handbook on Public–Private Partnerships, edited by G.A. Hodge, C. Greve and A.E. Boardman (Cheltenham: Edward Elgar, 2010).

  33.  Pradip Baijal, A Bureaucrat Fights Back: The Complete Story of Indian Reforms (New Delhi: HarperCollins, 2016).

  34.  Ibid.

  35.  These new ‘balancing act’ state capacities are the focus of an ongoing research project that one of us (Jessica Seddon) is pursuing as visiting fellow at IDFC Institute.

  36.  Sudhir Pal Singh, ‘What Is Wrong with PPP in India?’, Business Standard, 6 July 2013, http://www.business-standard.com/article/economy-policy/what-is-wrong-with-ppp-in-india-113070600510_1.html. Accessed on 3 December 2016.

  37.  Report of the Committee on Revisiting & Revitalising Public–Private Partnership Model of Infrastructure, Executive Summary, Ministry of Finance, Government of India, 2015.

  38.  Budget Speech 2017–18, para 100.

  39.  A Government of India initiative, India Infradebt Limited, with shareholding by the Bank of Baroda (a public-sector bank), ICICI and Citicorp Finance India (private banks) and the Life Insurance Corporation of India obtained the first licence in 2013, but there are now four operational IDFs.

  40.  Railways requested an infusion of Rs 2200 crore as additional budget support in the fiscal year 2016, but the Government of India committed only Rs 80,000 as of December 2016.

  41.  N. Dubash and B. Morgan, ‘The Rise of the Regulatory State of the South’, in The Rise of the Regulatory State of the South, edited by Dubash and Morgan (Oxford: Oxford University Press, 2013).

  42.  Thiruvengadam and Joshi describe the involvement of the judiciary even in the telecoms sector. A. Thiruvengadam and P. Joshi, ‘Judiciaries As Crucial Actors in Regulatory Systems of the Global South: The Indian Judiciary and Telecom Regulation’, in The Rise of the Regulatory State of the South, edited by Dubash and Morgan (Oxford: Oxford University Press, 2013).

  43.  Foxon introduces the idea of co-evolution to describe the interplay between public and private infrastructure provision. Timothy Foxon, ‘A co-evolutionary framework for analysing a transition to a sustainable low carbon economy’, Ecological Economics 70 (2011): 2258–267.

  Chapter 18: Infrastructure: Hopefully a Renewed Opportunity for the Private Sector

  1.    Central Statistics Office, Press Note on Provisional Estimates of Annual National Income, 2015–16, and Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (Q4) of 2015–16, Statement 7, 2016, http://mospi.nic.in/Mospi_New/upload/nad_press_release_31may16.pdf. Accessed on 20 June 2016.

  2.    ‘Economic Survey 2014–15’, Volume 1, Ministry of Finance, Government of India, 2015, 66, , http://indiabudget.nic.in/budget2015-2016/es2014-15/echapter-vol1.pdf. Accessed on 20 June 2016.

  3.    ‘India Transport Report: Moving India to 2032’, National Transport Development Policy Committee (NTDPC), 2014, Volume III Part 1, Table 2.1, 131.

  4.    Including backward and forward linkages. See pages 90 and 97 of Economic Survey 2014–15, Ministry of Finance.

  5.    Xin Wang and Yi Wen, ‘Is Government Spending a Free Lunch? Evidence from China’, Working Paper no. 013A, Federal Reserve Bank of St. Louis, 2013, https://research.stlouisfed.org/wp/2013/2013-013.pdf. Accessed on 20 June 2016.

  6.    See Chapters by Ambani et al. and Mittal et al. in this volume.

  7.    ‘The India Infrastructure Report: Policy Imperatives for Growth and Welfare’, Expert Group on the Commercialization of Infrastructure Projects, 1996, 6.

  8.    NTDPC, Volume 2, Part 1, 52.

  9.    ‘Economic Survey 1997–98’, Ministry of Finance, Government of India, 1998, Box 9.1.

  10.  NTDPC, Volume 3, Part 1, 131.

  11.  NTDPC, Volume 3, Part 2, 309.

  12.  ‘170th Report on Modernization of Major Ports’, Department-Related Parliament Standing Committee on Transport, Tourism and Culture, 52.

  13.  ‘New Innings for the Indian Ports Sector’, EY Report, 2012, 20, http://www.portfinanceinternational.com/newsletter/2012india/special/PFI_India2012_Ernst&Young_report.pdf. Accessed on 20 June 2016.

  14.  Sandeep Singh, ‘Shipping Industry: Synergy to Anchor Ports Push’, Indian Express, 20 April 2016, http://indianexpress.com/article/india/india-news-india/maritime-india-summit-shipping-industry-investment-2761389/. Accessed on 20 June 2016.

  15.  NTDPC, Volume 2, Part 1, Figure 2.18; Basic Port Statistics of India 2014–15, Table: ‘Port Sector at a Glance’.

  16.  NTDPC, Volume 3, Part 2, 308.

  17.  ‘Govt to Abolish Tariff Authority for Major Ports, Unveil New Act: Nitin Gadkari’, Indian Express, http://indianexpress.com/article/business/business-others/govt-to-abolish-tariff-authority-for-major-ports-unveil-new-act-nitin-gadkari-2991340/. Accessed on 6 September 2016.

  18.  ‘Sagarmala Project: Government to spend ₹70,000 crore on 12 major ports, says Nitin Gadkari’, Economic Times, http://economictimes.indiatimes.com/news/economy/infrastructure/sagarmala-project-government-to-spend-rs-70000-crore-on-12-major-ports-says-nitin-gadkari/articleshow/49229434.cms. Accessed on 27 July 2016.

  19.  International Monetary Fund, Primary Commodity Prices. Data relates to prices for Australian thermal coal 12,000 BTU/pound, http://www.imf.org/external/np/res/commod/index.aspx. Accessed on 20 June 2016.

  20.  Ibid., 277.

  21.  NTDPC, Volume 3, Part 1, 277.

  22.  Ibid., 277.

  23.  Debroy et al., ‘Report of the Committee for Mobilization of Resources for Major Railway Projects and Restructuring of Railway Ministry and Railway Board’, 2015, para 7.11, 175.

  24.  Ibid., 174–175.

  25.  Ibid., 174–175.

  26.  NTDPC, Volume 2, Part 1, 29.

  27.  Source: infrastructureindia.gov.in.

  28.  Kelkar et al., ‘Report of the Committee on Revisiting and Revitalizing Public–Private Partnership Model of Infrastructure’, 2015, 13.

  29.  Kelkar et al., para 2.5.4, 12.

  30.  Surojit Gupta and Dipak K. Dash, ‘Roads Sector Needed a Positive Approach for Revival: Gadkari’, Times of India, 24 September 2015, http://timesofindia.indiatimes.com/india/Roads-sector-needed-a-positive-approach-for-revival-Gadkari/articleshow/49083966.cms. Accessed on 6 September 2016.

  31.  Kelkar et al., para 4.3.6.

  32.  Montek Singh Ahluwalia, Foreword to Vinayak Chatterjee’s ‘Getting It Right: India’s Unfolding Infrastructure Agenda’, 201.1

  33.  Vinayak Chatterjee, ‘Whither infra investments?’, Business Standard, 4 August 2015, http://www.business-standard.com/article/opinion/vinayak-chatterjee-whither-infra-investments-115080401727_1.html. Accessed on 25 July 2016.

  34.  Vinayak Chatterjee, ‘A Wake-up Call for PPP Version 2.0’, Business Standard, 11 May 2015, http://www.business-standard.com/article/opinion/vinayak-chatterjee-a-wake-up-call-for-ppp-ver
sion-2-0-115051101299_1.html. Accessed on 20 June 2016.

  35.  Kelkar et al., 7.

  36.  Ibid.

  37.  Ibid.

  Chapter 19: Liberalization sans Liberalism: The Control Raj and the Perils of Ideology and Rents in Higher Education

  1.    Data from UGC Annual Report 2014–15, November 2015. These numbers exclude polytechnics and other diploma-awarding institutions.

  2.    Biman Sen, ‘Development of Technical Education in India and State Policy—A Historical Perspective’, Indian Journal of History of Science 24, no. 4(1989): 224–48.

  3.    Roshan Kishore, ‘Post-reform India produced too many (unemployable) engineers, too few doctors’, Livemint, 16 August 2016.

  4.    Surendrakumar Bagde, Dennis Epple and Lowell Taylor, ‘Does Affirmative Action Work? Caste, Gender, College Quality, and Academic Success in India’, American Economic Review 106, no. 6(2016): 1495–1521.

  5.    Kishore, ‘Post-reform India’, 2016.

  6.    Rakesh Bhatnagar, ‘Medical Council of India Largely Responsible for Corruption in Health Care, Reveals Committee’, Firstpost, April 2016.

  7.    Kunal Saha, ‘Medical Council of India Is Corrupt, Says Health Minister’, BMJ, July 2014; 349: g4762.

  8.    ‘Medical Council of India a Den of Corruption’, Times of India, November 2001.

  9.    Yu Xie, Chunni Zhang and Qing Lai, ‘China’s rise as a major contributor to science and technology’, Proceedings of the National Academy of Sciences 111, no. 26(2014): 9437–442.

  10.  Devesh Kapur and Pratap Bhanu Mehta, ‘Mortgaging the Future? Indian Higher Education’, India Policy Forum 4 (2008): 101–57.

  11.  In 2015, there were 16,694 Indian students in China. Source: Project Atlas report on ‘International Students in China’, https://www.iie.org/Research-and-Insights/Project-Atlas/Explore-Data/China/Inbound-Mobility. Accessed on 2 May 2017. In 2015–16, there were 16,745 India students in the UK. Source: ‘Chart 8—Top ten non-European Union countries of domicile in 2015/16 for HE student enrolments 2011/12 and 2015/16’, https://www.hesa.ac.uk/news/12-01-2017/sfr242-student-enrolments-and-qualifications. Accessed on 2 May 2017.