Three snappy ideas from our “pink” Economic Survey of 2017-18

From Sunny Deol to Shakespeare and climate change to gender equality -- it's all there.

WrittenBy:Meghnad S
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Seems like our Chief Economic Adviser Dr Arvind Subramanian wants us to judge the Economic Survey by its cover this time ’round. Heh.

The Economic Survey 2017-18 was tabled in Parliament on Monday and it has many things to say.

First off, this document is essentially an overview of the state of our nation’s economy and the immediate challenges it faces. It also attempts to give some ideas to our Government about factors it needs to keep in mind while designing future policies.

Like this year, it makes a compelling argument for solving the problem of pending cases, sounds an alert about the impact of climate change on agriculture and has a whole chapter on the “son meta-preference”.

Quite a few snappy ideas in there, so let’s talk about those.

Want “ease of doing business”? Ensure timely justice

The Economic Survey this year presents a very compelling argument to increase our ease of doing business rankings: Reduce pendency of cases and hasten the process of justice delivery. This is probably to nudge a primarily business-headed leadership in the right direction, so the CEA decided to invoke that one person who can get us to act for further judicial reform: Sunny Deol.

No seriously. The introduction paragraph captures the sentiment quite well.

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This chapter has made an attempt to quantify how much economic loss our economy is facing due to stalled projects and pending cases.

Delays and pendency of economic cases are high and mounting in the Supreme Court, High Courts, Economic Tribunals, and Tax Department, which is taking a severe toll on the economy in terms of stalled projects, mounting legal costs, contested tax revenues, and reduced investment more broadly.

The Survey points out that the one big reason for pendency is the immense workload on all of our courts, from lower courts to the Supreme Court alike. This causes infrastructure projects to be stalled and corporate money has to flow into building their legal case. Money which could be used for doing more business (with “ease”) gets stuck in our sluggish judicial process.

Which ultimately results in this:

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Projects worth Rs 52,000 crore are stuck and legal expenses incurred by corporate India to get these cases ‘unstuck’ amount to approximately Rs 20,000 crore. The report gives 5 main suggestions to solve this problem:

  • Expand capacity of the lower courts and reduce the burden on the High Courts and Supreme Court while further empowering the lower courts to deal with economic cases.
  • The tax department should stop being so enthusiastic about filing cases, given their horrible success rate in winning such cases.
  • Increasing state expenditure on modernising the judiciary.
  • Creating more subject matter-specific benches that can specialise in cases of economic nature
  • Imposing stricter timelines to dispose off cases.

Climate change is real & has a disastrous effect on agriculture

The Economic Survey this year made a bold move by doing a whole chapter on the effects of climate change on agriculture because the findings are something that would worry any policy-maker.

It argues that climate change is leading to extreme temperature and rainfall shocks, reducing farm income across the country by 4.3 per cent to 13.5 per cent.

… farmer income losses from climate change could be between 15 percent and 18 percent on average, rising to anywhere between 20 percent and 25 percent in unirrigated areas. These are stark findings, given the already low levels of incomes in agriculture in India.

That’s not all, it goes on to say:

Even more worryingly, it is possible the estimates arrived at in this chapter might be lower than the true effects of climate change, given the potentially non-linear impact of future increases in temperature.

Simply put, the report points out, that climate change is likely to result in an income depletion of more than Rs 3,600 per year for the median farm household. One primary worry in the minds of our Government should be the depleting levels of groundwater as India pumps more groundwater than any country in the world.

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The solution to this? Agriculture reforms, of course.

But when doing so, the report says, it’s important to note how there are “two different agricultures” in India- 

One: There is an agriculture—the well-irrigated, input-addled, and price-and-procurement-supported cereals grown in northern India—where the challenge is for the policy to change the form of a very generous support from prices and subsidies to less damaging support in the form of direct benefit transfers.

Two: Then there is another agriculture (broadly, non-cereals in central, western and southern India) where the problems are very different: inadequate irrigation, continued rain dependence, ineffective procurement, and insufficient investments in research and technology (non-cereals such as pulses, soybeans, and cotton), high market barriers and weak post-harvest infrastructure (fruits and vegetables), and challenging non-economic policy (livestock).

In conclusion, the current Government really needs to pull its socks up and make some incisive reforms in agriculture. And fast.

Why work towards a gender-equal society? Because there are direct economic benefits

The Economic Survey has a chapter which is dedicated to the economic benefits of having a more gender-equal society.

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Yeah. That explains the pink cover…

This chapter is a straight up 101 lesson on “How to convince right-wingers on progressive social issues:” Just show them the economic benefits of reform.

The Survey makes an assessment based on three broad categories:

  • Agency relates to women’s ability to make decisions on reproduction, spending on themselves, spending on their households, and their own mobility and health.
  • Attitudes relate to attitudes about violence against women/wives, and the ideal number of daughters preferred relative to the ideal number of sons.
  • Outcomes relate to son preference (measured by sex ratio of the last child), female employment, choice of contraception, education levels, age at marriage, age at first childbirth, and physical or sexual violence experienced by women.

A few key takeaways from this chapter:

  • India’s performance has improved on 14 out of 17 indicators of women’s agency, attitudes, and outcomes. On seven of them, the improvement has been such that India’s situation is comparable to, or better than, that of a cohort of countries after accounting for levels of development.
  • The adverse sex ratio of females to males led to 63 million “missing” women – driven by a combination of sex-selective abortion as well as neglect of the girl child after birth.
  • The meta-preference for sons manifests itself and creates “unwanted” girls – girls whose parents wanted a boy, but instead had a girl – estimated at about 21 million.
  • Just as India has committed to moving up the ranks in the ease of doing business indicators, it should perhaps do so on gender outcomes as well. Here, the aim should be broader.

This is the first time we have been given an estimate of this new category of “unwanted” girls which are a direct result of male child preference. The Survey finds that richer states like Punjab and Haryana have more of a son meta-preference than other states. Only one state, Meghalaya, exhibits the perfect combination of ideal sex ratio AND ideal son meta-preference combined.

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The chapter broadly provides a great summary of how much say women in India have on matters of property purchase, abortion, employment, education and much more. The final conclusion being that a more gender-equal society will lead to more overall economic development. (Do give this chapter a glance.)

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