Access to Institutional Credit by Farmers in Eastern India

The supply of institutional credit plays an important role in promoting agricultural growth and also saving the farmers from the clutches of private moneylenders who charge exorbitantly high rates of interest and force them to live in perpetual debt trap. There has been a phenomenal increase in the flow of institutional credit to agriculture in the recent years but this has been quite uneven between regions. As of 2018–2019, the Southern Region had the highest share (43.0 %) in the institutional credit followed by Northern Region (21.0 %), Central Region (13.6 %), Western Region (12.0 %), Eastern Region (9.0 %) and North Eastern Region (0.9 %) respectively. Despite so much talk about the need for green revolution in Eastern India, the institutional credit to agriculture in almost all the Eastern and North Eastern states has been very poor. Based on various standard criteria such as credit–deposit ratio, credit absorption capacity, level of agricultural diversification and untapped potentials for higher agricultural growth and poverty reduction, farmers in the eastern states deserve a better deal in terms of access to institutional credit. Besides, the article explodes the myth of low credit absorption of farmers in Eastern India.

Effect of Economic and Environmental Policies on the Mangrove Economy: A General Equilibrium Framework

This article attempts to provide a theoretical model of a small local mangrove economy. The structure of the model is based on observations from a qualitative field survey conducted in the Sunderbans region of West Bengal. The study showed that fishery is the primary source of income in this region. Agriculture is practised by many, but due to soil salinity, the sector, at best, provides sustenance for the family. Most of the other requirements are met from goods bought from outside. The role of the forest cover on shrimp cultivation is captured through the productivity effect, which increases the output per unit of labour and capital. In this structure, an optimum tariff on the timber industry is derived, and it is shown that the optimum tariff depends on the intensity of the productivity effect.

Public Policy Dilemma of Choosing the Medium of Instruction for School Education: A Case for Questioning Fallacies and Connecting Objectives

This article focuses on the issue of the public policy choice of the medium of instruction in public schools in India, taking the high demand for English-medium school education into consideration. Building on the available literature and evidence, the article argues against the introduction of English as a singular medium of instruction in school education. The introduction of English in public and private low-cost schools is not helping children in attaining any proficiency in English. The use of English also adversely impacts their capacity to learn other subjects well. The article argues for the adoption of the translanguaging philosophy and multilingual approach to address all objectives that drive the choice of a particular medium of instruction: gaining proficiency in the said languages, ability to communicate well using those languages, using those languages to learn other subjects, making schools inclusive by including diverse home languages present in school education and enabling diverse languages to flourish by promoting their learning and usage in formal schools. This requires a reform in institutional approaches and capacity building but does not necessarily imply additional burden. Certain parts of the world have adopted these approaches successfully and learning from them. Indian states can device their own approaches taking local contexts and realities into account.

Institutional Innovations in India: An Assessment of Producer Companies as New-Generation Co-operative Companies

There are many types of innovations such as technological, social, product, process, marketing and organizational, and institutional innovation is one type. The producer companies (PCs), which are a case of legal institutional innovation in the Indian domain of primary producer organization are more market-oriented co-operative companies and can help farmers buy and sell more effectively. They have gained currency across India during the past 15 years since the amendment to the Companies Act made this possible in 2003, and India now has thousands of such PCs, with many of them being supported by state agencies. This article examines the uniqueness of these entities as an institutional form wherein principles of co-operation and corporate entity have been combined so that they could be more relevant entities in a globalized and liberalized market environment. It discusses their competitive edge over other forms of producer organizations like co-operative societies in India and farmer companies in Sri Lanka, and new-generation co-operatives in other parts of the world. After discussing some innovations in their governance and management, it concludes by making suggestions for augmenting this institutional innovation for inclusive and sustainable agricultural and rural development.

Inclusive Growth in Maharashtra: A Dual Narrative

This study seeks to show how disaggregate profiles of welfare dimension of ‘inclusive growth’ could provide useful public policy insights in formulating development strategies. The disaggregate profile is defined with respect to regions and social groups. The study proposes concepts and illustrates with empirical estimates of measures of inclusion/exclusion and mainstreaming/marginalization for the six National Sample Survey (NSS) regions, and four social groups in rural and urban Maharashtra. The information base is the NSS estimates of household per capita consumer expenditure distribution for the two periods 2004–2005 and 2011–2012, respectively. The findings on outcomes show that the development experience of Maharashtra does not hold much promise on the inclusive growth front.

Delegation and Decentralization: Reform Ideas for Bihar’s Economic Transformation

This article proposes reform ideas for Bihar using advances in economics research on the role of institutions in economic development. Institutions—the formal and informal rules of the ‘game’ of how people interact in society—are fundamental determinants of economic activity and entrepreneurship. Historical institutions of caste-based feudalism in Bihar have been regarded as depressing entrepreneurship and encouraging lawlessness and corruption. New survey data–based evidence shows the potential of two reforms to bring about Bihar’s institutional and economic transformation: greater delegation of public policy implementation in bureaucracies and greater decentralization of public policy selection to local governments. Greater delegation means giving autonomy and discretion to agents in bureaucracies, and promoting professional norms for service delivery rather than hierarchical monitoring and disciplining to achieve performance. Greater decentralization means that more policy choices—such as on the composition of public expenditures, tariffs and fees for public infrastructure—are made by local leaders who gain the power to make these choices by winning more local elections. Communication within bureaucracies and through local media about the performance of public policies is part of these institutional reforms. Taken together, these can reduce the influence of patronage politics and enable the selection of leaders who pursue policies in the broad public interest. In turn, these institutional changes can spur greater economic activity and entrepreneurship, including all social groups in growth and prosperity.

A Real Bonds Doctrine

Two assumptions drive our policy construct. First, the task of implementing a Green New Deal will necessarily fall on the government. Second, artificial intelligence (AI) and robotics have meant a reduction in labour in the production process. The connection between the two is production by public firms, and the financial instrument is the government bond. The Real Bills doctrine meant the tracking of credit disbursed by commercial and central banks with the returns realized by borrowing firms. The horizon was finite. In the case of our bond, the issuer is the government, and the horizon is infinite. Balance sheet accounts with the central bank are maintained. We write down a model with no labour. Households lend to the government, which, in turn, lends to firms to purchase their capital inputs. Households earn returns from their holdings of the government bond. The central bank mediates the accounts. JEL Classification: E16, E58, E64

Long-term Growth–Employment Relationship in India

This article focuses on the growth–employment relationship and the determinants of labour force participation rate. In the time-series framework, employment is seen to have a greater impact on GDP rather than vice versa. This is quite consistent with the literature that employment contracts can be long term in nature, and they are usually not flexible in the short run. Hence, fluctuations in the commodity market do not affect employment immediately. The effect of employment on growth through the demand linkage is usually overlooked, which is brought out by this study, suggesting that demand deceleration caused by sluggish expansion in jobs can make economic growth unsustainable in the long run. From supply side of labour, poverty-induced participation in the job market is evident, and women are seen to be largely engaged in the agricultural sector. The effect of physical infrastructure on women’s work participation is positive. Large household size and child to women ratio affect women’s work participation adversely. On the whole, the positive effect of health and education and a strong impact of physical infrastructure on labour market participation of rural women are evident.

Intergenerational Occupational Persistence: Recent Evidence from Indian States

This article studies intergenerational occupational persistence using three recent rounds of a nationally representative sample survey from India. More than 60% of Indians are employed in the industry where their fathers are also employed. We find that individuals from Scheduled Tribes (ST) and Hindus have higher occupational persistence than those from the General Class (GEN) and Muslims, respectively. Persistence in general is higher in rural areas. We find considerable interstate and intrastate variations in the incidence across General Category States (GCSs) and Special Category States (SCSs). It has remained almost unchanged among GCSs on average, whereas it has decreased gradually for SCSs. Large inter-regional disparity exists within states between rural and urban areas and between capital and non-capital districts. Such disparity is found to be higher among GCSs. Bihar, Madhya Pradesh, Chhattisgarh and Jharkhand are the GCSs with large and increasing occupational persistence. Nagaland, Arunachal Pradesh, Meghalaya and Mizoram are the SCSs with persistence of above 70%. Using a probit estimation analysis, we find family background (father’s education in rural area and ownership of productive assets) to have a significant and consistent influence on intergenerational persistence compared to own education. Results in general indicate that background factors play a stronger role than education does in the choice of occupation among Indians.

Book review: Jan Breman. Capitalism, Inequality and Labour in India

Jan Breman. Capitalism, Inequality and Labour in India. Delhi: Cambridge University Press, 2019, 279 pp., ₹ 536.00 (Paperback).