India

The economy is likely to expand by 5.0 percent in FY2013. Although the slowing momentum of economic growth may have bottomed out in the third quarter of FY2013, even... Show More + a substantial pickup in the last quarter of the fiscal year is unlikely to lift the growth rate of real Gross Domestic Product (GDP) at factor cost much beyond 5.0 percent given the weakness observed over the previous three quarters. Inflation and fiscal deficit have declined, but the current account deficit has widened. The Reserve Bank of India (RBI) has had to strike a tough balance between providing some monetary stimulus and restraining further price growth. As inflation, measured by the wholesale price index, has begun to decelerate in recent months, the authorities may gain additional policy room. Continued progress on the reform agenda is key to mitigating downside risks. The authorities' ability to respond to negative external shocks is more limited today than during the 2008-09 global crisis. Additional efforts may be needed to create the fiscal space for India's progress towards universal health coverage. The depreciation of the rupee appears to have lost steam, and the currency strengthened in the second half of the year. With a weaker Balance of Payment (BoP) position, the rupee continued to lose value during FY2013 and hit an all-time low in June, remaining around that level until August. Food inflation remained high while fuel inflation accelerated after deregulation of diesel prices. Expenditure compression in the social sectors and reduction in capital spending allowed for reaching the fiscal targets. Show Less -

Prevailing practices in evaluating workfare programs have ignored the disutility of the type of work done, with theoretically ambiguous implications for the impacts... Show More + on poverty. In the case of India's National Rural Employment Guarantee Scheme, past assessments have relied solely on household consumption per person as the measure of economic welfare. The paper generalizes this measure to allow for the disutility of casual manual work. The new measure is calibrated to the distribution of the preference parameters implied by maximization of an idiosyncratic welfare function assuming that there is no rationing of the available work. The adjustment implies a substantially more "poor-poor" incidence of participation in the scheme than suggested by past methods. However, the overall impacts on poverty are lower, although still positive. The main conclusions are robust to a wide range of alternative parameter values and to allowing for involuntary unemployment using a sample of (self-declared) un-rationed workers. Show Less -

The Government of Bihar (GOB) has adopted various reform measures to modernize fiscal and financial management such as passing of the Fiscal Responsibility and Budget... Show More + Management Act, adoption of Government of India's general financial rules and decentralization of financial powers to respective departments with a view to increasing the pace of expenditure and implementation of plan schemes. However, for decentralization to be effective the supporting public financial management systems need to be also modernized. Accordingly, the Government had entrusted a project 'modernization of budget and financial rules and procedures' to Centre for Good Governance (CGG), Hyderabad. The project requires CGG to comprehensively revise the treasury code, financial rules and budget manual, and to provide a roadmap to modernize and strengthen internal audit function in the government. CGG has firstly studied the existing organization structure of the internal audit function in GOB, the skills and capacity of the internal audit staff, the working conditions in the main office and divisional offices, the perception of others about internal audit and so on. They have visited the main office in Patna and the divisional office in Gaya. After identifying the strengths and weaknesses of the system, a road map has been prepared for strengthening the internal audit in the government. Show Less -

India's strong economic record since the 1980's has been associated with a significant reduction of poverty levels and important socio-economic gains, including increases... Show More + in literacy and life expectancy. The State of Bihar has been identified as a region that calls for priority attention. Bihar is the poorest state in India and faces some of the most adverse economic and social conditions in the country. The proposed Bihar State Environmental Analysis (BSEA) will provide an analytic basis to proactively address the environmental requirements of the Bank's OP 8.60. To develop this analytic foundation, the BSEA will identify priority environmentally- related development activities. The rest of the concept note provides the context in which the BSEA will be prepared, focusing on economic and governance issues. The note then highlights controversies surrounding water projects in Bihar, because, among all natural resources, water plays a particularly significant role in the state. The concept note continues by providing details about the objectives and content of the proposed BSEA. Show Less -

The purpose of this note is to comment on the 13th Finance Commission's report with a particular focus on subnational finances. The first part comments on the general... Show More + approach of the Commission, the second part responds to specific questions raised in the Terms of Reference (ToR) for this note, and the third part covers a few additional noteworthy issues that merit special comment. The note concludes with modifiable recommendations for broader development of the intergovernmental fiscal system, that would include flexibility to update revenue sharing, and grant-in-aid parameters, during the award period of a Commission, and not just when the awards are made every five years. This would be a very positive development, although it would, as the Commission acknowledges, depend on creating and institutionalizing the more sophisticated type of data system envisioned by the Commission. Show Less -

The fundamentalist view of growth in East Asia seems to have won the debate although the argument regarding the efficacy of interventionist industrial policies remains... Show More + unsettled. To explore the role of financial institutions, the empirical literature needed an available measure of the extent of financial development. Quickly, and perhaps mistakenly, the role of financial institutions came to be defined by the size of the sector's activity. That is an economy with more intermediary activity was assumed to be doing more to generate efficient allocations. Increases in the quantity of intermediation were assumed to be synonymous with increases in the quality. The size of the financial sector is usually measured by the quantity of intermediation relative to Gross Domestic Product (GDP). To explore the role of financial institutions, the empirical literature needed an available measure of the extent of financial development. Quickly, and perhaps mistakenly, the role of financial institutions came to be defined by the size of the sector's activity. That is an economy with more intermediary activity was assumed to be doing more to generate efficient allocations. Increases in the quantity of intermediation were assumed to be synonymous with increases in the quality. The size of the financial sector is usually measured by the quantity of intermediation relative to GDP. Show Less -

The authors use recent data from the 2006 National Family Health Survey of India to explore the relationship between religion and demographic behavior. They find that... Show More + fertility and mortality vary not only between religious groups, but also across caste groups. These groups also differ with respect to socio-economic status. The central finding of this paper is that despite their socio-economic disadvantages, Muslims have higher fertility than their Hindu counterparts and also exhibit lower levels of infant mortality (particularly female infant mortality). This effect is robust to the inclusion of controls for non-religious factors such as socio-economic status and area of residence. This result has important policy implications because it suggests that India's problem of "missing women" may be concentrated in particular groups. The authors conclude that religion and caste play a key role in determining the demographic characteristics of India. Show Less -

The authors use data from three waves of the India National Family Health Survey to explore the relationship between the month of birth and the health outcomes of young... Show More + children in India. They find that children born during the monsoon months have lower anthropometric scores compared with children born during the fall and winter months. The authors propose and test four hypotheses that could explain such a correlation. The results emphasize the importance of seasonal variations in affecting environmental conditions at the time of birth and determining the health outcomes of young children in India. Policy interventions that affect these conditions could effectively impact the health and achievement of these children, in a manner similar to nutrition and micronutrient supplementation programs. Show Less -

This study focuses on people who moved out of poverty during the decade from 1995 to 2005 in rural areas of four Indian states: Andhra Pradesh, Assam, Uttar Pradesh,... Show More + and West Bengal. It also considers people who have fallen into poverty, those who have remained poor, and some who have never been poor but who live alongside poor people in the same communities. The author started by setting aside official and expert opinions, ideologies of the right and left, and, to the extent possible, the beliefs and assumptions of the rich and the middle class, including the own preconceived notions. The study is unique in four ways. First, it examines changes in poverty status of the same households over time. Most poverty studies are snapshots of the poor taken at a particular point in time, with extrapolations made by comparing them with the rich at that same point in time. In the study, the author focus on understanding the dynamics of change by asking individuals to recall their life stories, particularly what happened to them over the past decade? Second, most poverty studies are conducted at the national, state, or district level. The author focuses on local communities, mainly villages, as the unit within which individuals and households are embedded. There is much variation between villages, even within a district, and our sampling strategy enables us to examine these community-level differences. Third, the author relies primarily on nonstandardized data collection methods, including life stories and discussion groups. The author complement these with data the author gather using household and community-level questionnaires. Finally, since the author deliberately adopted an open-ended approach, the author uses inductive methods to systematically aggregate data from life stories and individual discussions over 50,000 pages of notes. The author started with broad questions rather than a particular conceptual framework, but the author did impose a framework after six months of inductive data analyses, before starting the quantitative data analyses. Show Less -

The Indian power sector suffers from considerable supply shortages. The Government of India (GoI) is addressing this problem both through a major new build program (including... Show More + certain fiscal incentives for construction of larger and more efficient plant) and through rehabilitation (renovation and modernization or (R&M) as it is known in India) of existing coal fired plant. Around two-thirds of India's existing 65,000 MW of coal fired plant capacity is owned by State Government utilities, but much of this is reported to be in a poor condition, with low load factors and station heat rates of up to a 4,000 kcal/kWh. Current R&M activity is not keeping pace with the requirements. R&M implementation has lagged significantly behind the requirements over the 10th plan period (2002-07), and during the current 11th plan period nearly 13,000 MW of R&M is targeted. Specifically: section two sets out the context of the study; section three summarizes the constraints and barriers to energy efficient R&M in India, which are set out in further detail in annex four; section four provides a framework for the main options identified, given present state of the Indian power market and describes the key lessons from our review of international best practice, which are described in annex five; section five identifies the various options considered for this study; section six analyses the various options identified in terms of their effectiveness in addressing the barriers and constraints identified in section three; and section seven sets out our conclusions and recommendations for a regulatory framework that can more effectively support energy efficient R&M in India. Show Less -