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Indian Economic Survey - 2016-17 Part II
Indian Economic Survey - 2016-17 Part II
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Direction of Trade
Top export
destinations Top three import
1. USA destinations
2. UAE 1. China
3. Hong Kong 2. UAE
. 3. USA
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External Debt
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Agriculture and Food Management
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Irrigated area under Principal Crops
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Food-Grain Stocks and Procurement in Central Pool
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Industrial, Corporate and Infrastructure Sectors
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Social Infrastructure, Employment and Human
Development
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Employment Scenario
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Experimental Health Outcome Index
Health Outcome Index has LE at age 1, IMR and MMR as indicators
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9. UNIVERSAL BASIC INCOME: A CONVERSATION WITH
AND WITHIN THE MAHATMA
Despite making remarkable progress in bringing down poverty from about
70 percent at independence to about 22 percent in 2011-12 (Tendulkar
Committee), it can safely be said that wiping every tear from every eye
is about a lot more than being able to imbibe a few calories.
Today, a radical option to realise Gandhijis objective presents itself and
has entered the policy consciousness in India and around the world:
Universal Basic Income, UBI for short.
UBI has three components: universality, unconditionality, and agency (by
providing support in the form of cash transfers to respect, not dictate,
recipients choices).
A universal basic income is, like many rights, unconditional and universal:
it requires that every person should have a right to a basic income to
cover their needs, just by virtue of being citizens.
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Why Universalise?
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The first striking fact is the sheer number of
schemes and programs run by the
government.
The Budget for 2016-17 indicates that there
are about 950 central sector and centrally
sponsored sub-schemes in India accounting
for about 5 percent of the GDP by budget
allocation.
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Misallocation of resources across districts
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Other benefits of UBI
Improved financial inclusion Calculations suggest
that A UBI of INR
More profitable for banks 12000 per adult per
year is expected to
reduce the average
distance from the
nearest business
correspondents to
2.5 km from 4.5 km
at about half the UBI
amount.
This effect is even
larger since a UBI is
targeted at all
individuals, not only
adults.
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Temptation Goods: Would A UBI Promote Vice?
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Poverty reduction and illustrative fiscal cost
calculations: What would a UBI potentially cost?
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11. ONE ECONOMIC INDIA: FOR GOODS AND IN THE
EYES OF THE CONSTITUTION
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This is done on the basis of a new Big Data set
available from the Goods and Service Tax Network on
interstate movement of goods.
Estimates for interstate trade flows indicate that
cross-border exchanges between and within firms
amount to at least 54 per cent of GDP, implying that
interstate trade is 1.7 times larger than international
trade.
While political borders impede the flow of people,
language (Hindi specifically) does not seem to be a
demonstrable barrier to the flow of goods.(evidence
tentative not conclusive)
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State-wise pattern
Smaller states like Uttarakhand, Himachal
Pradesh and Goa trade more
Net exporting states are the manufacturing
powerhouses of Tamil Nadu and Gujarat
States like Haryana and Uttar Pradesh are also
powerhouses because of Gurugram (Gurgaon)
and NOIDA
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Data Sources
Transactions recorded in the process of Central
Sales Tax (CST) collection as provided by Tax
Information Exchange System (TINXSYS)
we are able to quantify not just arms-length
inter-state trade (that is trade between firms),
but also intra-firm trade across states.
The intra-firm is, surprisingly large (at least 68 per
cent of inter-firm trade), and is affected by trade
costs to a greater extent than inter-firm trade.
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Does India Trade More Than Other Countries?
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Trade Patterns
Indias aggregate interstate trade (54 per cent of GDP) is
not as high as that of the United States (78 per cent of GDP)
or China (74 per cent of GDP)
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Patterns of Inter-State Trade: Arms-length trade
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Openness to Intra-firm trade
Goa, Gujarat and Maharashtra, relative to
other states, are as open to intra-firm trades
as they are to arms-length trades.
Madhya Pradesh stands out as having much
higher intra-firm trade than inter- firm trade,
possibly owing to its central location in the
country, making it ideally suited to logistics
supply chains.
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Openness to Interstate Trade (Exports + Imports):
Intrafirm Trade
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Patterns of Inter-State Trade
Inter-Intra Firm Trade Comparison
Is Indian Inter-State trade unusual?
Formal Evidence from a Gravity Model
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Why does India Trade So much?
The current structure of domestic taxes as well as
area-based tax exemptions might actually bias
economic activity towards more internal trade.
The Central Excise Act exempts manufacturing in
certain states from excise duty, including all the
North-eastern states, Sikkim, Jammu and
Kashmir, Uttarakhand, Himachal Pradesh and
Kutch in Gujarat.
CST and VAT
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CST and VAT
Case 1: CST discourages inter-state trade when
firms can receive input tax credits for in-state
purchases
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Conclusion
The analysis does leave open the possibility
that some proportion of Indias internal trade
could be a consequence of current tax
distortions, which are likely to be normalized
under the GST.
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12. INDIA ON THE MOVE AND CHURNING: NEW
EVIDENCE
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Estimates of migration
Based on a straightforward reading of the
2001 Census, is that the stock of migrants in
India is low (around 33 million)
Analysis here pertains to
Migration in India by analysing 2001 and 2011
Census data (Cohort Based Metric Migration)
Railway passenger traffic flows data provided by
the Ministry of Railways.
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Baseline Census Data: Migration Levels and Growth
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Major Findings
India is increasingly on the move and so are Indians.
The growth rate of migrants rose spectacularly to 4.5 per
cent per annum, while the workforce growth rate actually
fell
A breakdown by gender reveals that the acceleration of
migration was particularly pronounced for females.
In the 1990s female migration was extremely limited, and
migrants were shrinking as a share of the female workforce.
But in the 2000s the picture turned around completely:
female migration for work not only grew far more rapidly
than the female workforce, but increased at nearly twice
the rate of male migration.
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Cohort-based Migration Metric (CMM)
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Key findings
Monthly data was obtained from the Ministry of
Railways on unreserved passenger traffic
between every pair of stations in India for the
years 2011-2016.
The key idea is to use net annual flows of
unreserved passenger travel as a proxy for work-
related migrant flow.
Net flows at the All-India level have averaged
close to 9 million, peaking around 2013-14,
considerably above levels suggested by the
Census.
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Magnitude and patterns of migration
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Findings continued
Figure shows the net flows for the 26 states.
Positive (negative) numbers denote in (out)-
migration.
The largest recipient was the Delhi region, which
accounted for more than half of migration in
2015-16, while Uttar Pradesh and Bihar taken
together account for half of total out-migrants.
Maharashtra, Goa and Tamil Nadu had major net
in-migration, while Jharkhand and Madhya
Pradesh had major net out-migration
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Way forward
Portability of food security benefits, healthcare,
and a basic social security framework for the
migrant are crucial potentially through an
interstate self registration process.
Inter-state co-ordination of migrant welfare
schemes
Financial inclusion for migrant workers-
encourage the integration of labour markets in
India
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13. THE OTHER INDIAS: TWO ANALYTICAL NARRATIVES
ON STATES DEVELOPMENT
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Results
Higher the RRT
The slower is growth
The smaller is the share of manufacturing in GSDP
The lower in own tax revenues
RRT CURSE
Greater transfers given in response to the observation that
performance has been lagging
Controlling for whether a state is landlocked or not ,larger
RRT inflows seem to have no positive impact on per capita
GSDP growth, and may negatively impact manufacturing
share ,fiscal effort and governance.
Issue 2: Impact Of Natural Resources
Economies with abundant natural resources
tend to grow less rapidly than resource scarce
economies
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Fiscal efforts
Another indicator that can identify resource curse is
the extent of fiscal effort made by respective states
(captured by the share of OTR in GSDP), which is
expected to decline over time in the wake of excess
reliance on non-tax revenue from natural resources.
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Conclusion
1. Infrastructure and Connectivity-"RRT curse" and
"natural resource curse" could be a result of poor
connectivity in particular and poor infrastructure -
physical, financial, and digital.- Improve
infrastructural facilities
Policy recommendations for RRT Curse
1. Redirect a certain portion of RRT and channel the
resources directly to households as part of a
Universal Basic Income (UBI) scheme
2. Conditioning transfers on fiscal performance
3. Making governance- contingent- the capacity of
states to utilize funds optimally plays an important
role.
Policy recommendations for Natural Resources Curse