6 ECONOMIC SURVEY 2018-19: THE NEW BLUEPRINT MUMBAI | FRIDAY, 5 JULY 2019 1 >

The Economic Survey 2019 The Survey reflects the govt’s Industry expects several The Survey shows importance It is heartening to see govt depicts the gains from resolve to maintain fiscal positive factors, like stable of an ecosystem balance promoting health care start- advancement in the social stability while pushing GDP govt, declining oil prices and displaced due to climate change ups. However, it’s sad to see sector, adoption of tech and growth rates by measures to GST buoyancy in FY20, to realities. Hence, the need for life-saving equipment energy security accelerate private investment improve the fiscal situation sustainable manufacturing placed under heavy taxes NARENDRA MODI RAJIV KUMAR NIRANJAN HIRANANDANI PUNEET DALMIA MEENA GANESH Prime Minister Vice-chairman, NITI Aayog CMD, Hiranandani group Managing Director, Dalmia Bharat MD & CEO, Portea Medical ACCESSING DATA  AIM IS TO IMPROVE TARGETING IN WELFARE SCHEMES COMMENT

Govt can monetise citizen data GAURAV KAPUR Chief economist, IndusInd Bank NEHA ALAWADHI & KARAN CHOUDHURY DATA AS PUBLIC GOOD Survey eyes a New Delhi/Bengaluru, 4 July COMMUNITY DATA GATHERING virtuous cycle he Economic Survey suggested the gov-  Digitise existing paper-based data Democratising ernment monetise citizens’ data as part  Initiate digital data collection at source The annual Economic Survey of the finance ministry, T of its larger plan to use it as a public good. data, bit by bit while projecting a shallow recovery in the current fiscal Making a case for digital storage and pro- STORING year, has set the policy path for increasing the size of the cessing data, the Survey said technology The first suggestion for sharing of economy to $5 trillion by March 2025.  brought down the cost and effort of data col- Initiate real-time storage for community data that serves larger In that endeavour, the Survey targets a real growth lection, storage, processing, and dissemination. select data public interest came in the draft e- rate of 8 per cent, which, along with 4 per cent inflation, “Data is generated by the people, of the peo-  Reduce time lag between collection commerce policy, introduced in or 12 per cent growth in nominal terms, would allow for ple and should be used for the people. As a pub- and data entry February this year. reaching the target set by the government. lic good, data can be democratised and put to Building on that premise, the The journey towards that goal is envisaged through a the best possible use,” it noted. PROCESSING Economic Survey explained how virtuous self-sustaining growth cycle created by The Survey proposes improving the delivery  Build capacities of govt bodies the cost of per gigabyte of storage enhancing savings, investment and exports. The Survey of government services by building on the to analyse data has dropped from ~61,050 in 1981 to draws on the experience of China and high-growth East “administrative, survey, institutional and trans- less than ~3.48 today, and data Asian economies to identify investments, particularly actions data” that the citizens willingly or law-  Involve private sector in analysis analytics has grown as a much private investments, as the key driver of that cycle. fully share with the government. and insight generation sought-after field. Analysing the growth experience of these economies, The government would be able to improve Given that the cost of the Survey establishes the primary role of savings in targeting in welfare schemes and subsidies by DISSEMINATING disseminating data over the internet driving growth and calls for pushing up savings rates in reducing errors, it said. “The private sector may  Create scheme dashboards is also negligible, with mobile data order to enable an investment cycle funded from be granted access to select databases for com-  Open district-level dashboard and broadband becoming domestic resources. mercial use. Consistent with the notion of data to the public increasingly affordable, the Survey It notes that since higher savings would preclude as a public good, there is no reason to preclude has proposed connecting citizen domestic consumption, it is imperative to develop an commercial use of this data for profit...  Open data from third-party studies data across ministries and aggressive exports strategy in order to absorb domestic Although the social benefits would far exceed to the public departments into one capacity created in the process. And, in order to gain a the cost to the government, at least a part of the ILLUSTRATION: BINAY SINHA comprehensive database. global market share, the Survey emphasises exports generated data should be monetised to ease the The white paper that was floated growth led by productivity gains rather than just pressure on government finances. Given that izen data. But, the Ministry of Road and which, if implemented in their current form, by the Ministry of Electronics and currency depreciation. the private sector has the potential to reap mas- Highways announced a policy for sale of vehic- could have a direct bearing on the proposed Information Technology, before the Furthermore, taking into account India’s sive dividends from this data, it is only fair to ular registration data. This is of concern because activity and the same could lead to a situation draft Personal Data Protection Bill, demographic advantage of a rising share of working-age charge them for its use,” the Survey notes. India does not have any meaningful data pro- where the government may be directly vio- spoke about issues concerning the population, the Survey notes that mildly positive real It further says “datasets may be sold to ana- tection law,” said Apar Gupta, executive editor, lating its own laws by engaging in such activ- unregulated collection and use of interest rates would be enough for driving the savings lytics agencies that process the data, generate Internet Freedom Foundation. ities, at least from the commercial perspec- data by private entities and the rate higher and that will also help in keeping the cost of insights, and sell the insights further to the cor- According to Salman Waris, managing part- tive,” said Waris. government alike. capital low. That conclusion is based on the evidence porate sector, which may in turn use these ner at TechLegis Advocates & Solicitors, two pro- Another expert pointed out the proposed “Some of the concerns relate to that favourable demographics helped drive savings insights to predict demand, discover untapped posed pieces of legislation, if passed, would mil- applications were problematic. centralisation of databases, profiling higher in China and other high-growth East markets or innovate new product”. itate against the plan the Survey has charted. “Research has proved there is no fully secure of individuals, increased Asian economies. At present, there is no law that explicitly “Currently there are no specific provisions way of data anonymisation and it is possible to surveillance, and a consequent Specifically, on the issue of cost of capital, the survey deals with monetising government or other that prevent the government from giving the re-identify data... this means the data of minors erosion of individual autonomy,” the notes that real interest rates in India are quiet high in data. The proposed Personal Data Protection private sector access to select public databases can get re-identified or misused,” said Smitha paper had noted. comparison to other countries and that affects prospects Bill, in its last draft, does not deal with this for commercial use.” Krishna Prasad, associate director, Centre for However, the government’s for investments. An investment-led growth model issue comprehensively. “However there are two proposed pieces of Communication Governance, National Law thinking on the issue of data has therefore requires lowering the cost of capital. In the Legal experts are not enthused by the sug- legislation (Digital Information Security In University, Delhi. evolved in the past couple of years. financial sector otherwise, the Insolvency and gestion to sell data. Healthcare Bill, 2018, and the Personal Data “We also don’t have anti-discrimination laws NEHA ALAWADHI Bankruptcy Code and banking sector clean-up, have laid “Governments usually do not monetise cit- Protection Bill, 2018) pending in Parliament, in India… so data can be misused.” the foundation for boosting investments. A key area of reform identified by the Survey is restrictive labour regulations and perverse incentives which encourage small firm size. It recommends labour law changes to PRICE RISE ANALYSIS  CPI INFLATION HAD DIPPED IN FY19, COURTESY LOW GROWTH IN FOOD PRICES enhance investments and foster job creation. The Survey also makes the case for a more supportive tax policy, monitoring and reducing economic policy uncertainty and creating an ecosystem for promoting private Tuition, doctor fee contribute most to inflation investment, especially in start-ups and new economy, to enable the investments driven growth cycle. ABHISHEK WAGHMARE INFLATION BASED ON CPI-IW have been rising the fastest among For the current year, the Survey projects a growth New Delhi, 4 July other expenses such as medicine. pick-up to 7 per cent from 6.8 per cent in FY19, helped by EDUCATION, RECREATION & MEDICAL CARE SUB-GROUP (%) But for the populace in general, a nascent investment recovery, political stability, AMUSEMENT SUB-GROUP (%) accommodative monetary policy, and lower oil prices. In In a first-of-a-kind analysis of price Doctors’ fee inflation in health goods such as rise in important services, the 16.5 medicine and family planning terms of key risks to growth, an erratic monsoon and Secondary Private Economic Survey has shown that 13 devices has been lower than that in lower credit off-take from the non-banking financial school fee tution fee 11.5 private tuition fees, doctors’ fees, 8 health services such as consulting companies sector are to be watched out for on the bus fares and telephone charges 3 6.5 fees and lab tests. consumption front. Slower global growth and were the areas that contributed the -2 Telephone charges showed an increased uncertainties around trade tensions, most to consumer inflation in the College -7 1.5 inflation of more than 6 per cent in could affect external demand too. fiscal year 2018-19 (FY19). fee Medicine - 2018-19 after many years of zero Ahead of the Budget presentation, the survey also This analysis has been done from -12 homeopathic -3.5 inflation. strikes a note of caution on the fiscal front. It notes that Labour Bureau estimates of con- Primary -17 Medicine - Similarly, three years of low infla- slowing growth has implications for revenue collections school fee allopathic sumer price index inflation for -22 -8.5 tion in major transport modes used and therefore meeting higher allocation requirements industrial workers (CPI-IW). 2007-08 2018-19 2007-08 2018-19 by workers — bus, rail and auto — for welfare schemes without a diversion from the newly This is an important insight Source: Computed from Labour Bureau data was followed by a near 6 per cent revised glide path of fiscal consolidation, remains the into price situation in the econo- inflation in 2018-19, the Survey foremost challenge. my, especially when inflation in The Survey used the general CPI which witnessed higher-than-aver- Analysis of CPI-IW showed that showed. The Budget may pay heed to that caution and health and education was more estimated by the National Statistics age inflation in 2018-19. inflation in private tuitions, which Rail was the only mode of trans- may incorporate survey suggestions to kick-start than the average general consumer Office to show the interplay between When it comes to education, analy- had the highest inflation among port that showed flat inflation in investment activity. price index-based (CPI) inflation. goods and services inflation, and sis of general CPI shows that inflation education related spending, is on 2018-19 for industrial workers. This General CPI inflation had dipped the CPI-IW to demonstrate those in goods such as books and stationery the rise again. suggests that rail fares have not Views are personal in FY19, courtesy low growth in services under health, education, was lower than that in services such as In terms of health expenses of risen commensurate with overall food prices. transport and communication tuition and private coaching. industrial workers, doctors’ fees price rise in recent years.

MGNREGS  DIRECT BENEFIT TRANSFER IMPROVED WAGE PAYMENT AND REDUCED DISTRESS AMONG VULNERABLE SECTIONS Aadhaar-linked payments checked leakages

SANJEEB MUKHERJEE work, and reduced distress among vulnera- pre-Aadhaar period, the average amount New Delhi, 4 July ble sections. More importantly, it has PAYMENT TIMELINE disbursed to bank accounts more than checked leakages in the scheme by elimi- Share of payments done within doubled from ~1.82 crore per block per Citing Awadh Nawab Asaf-ud-Daula’s flawed nating “ghost workers”, the Survey said. 15 days under MGNREGS (%) year to ~3.98 crore per block per year. 90.4 “food-for-work” programme for famine- The Survey advocated creating a real- 84.5 “This indicates that more funds stricken people, the Economic Survey 2018- time data base of rural distress, using the flowed through DBT after ALP was insti- 19 has criticised the execution of the MGNREGS job demand data. tuted,” the Survey said. Mahatma Gandhi National Rural It said in blocks not affected by drought, However, civil society activists and peo- Employment Generation Scheme (MGN- there was no effect of Aadhaar-linked pay- 43.4 ple working on the MGNREGS say the intro- REGS) under previous governments and ments on the number of persons demand- 36.9 duction of Aadhaar-linked payment and described how things improved after ing work, but in drought-affected blocks the 26.9 DBT have increased exclusions and, instead Aadhaar-linked payments (ALP), tied with number of persons demanding work rose by of facilitating payments, hurt workers more. Jan-Dhan accounts, were introduced in 2015. 20.7 per cent after the system was intro- “Even before ALP and DBT was intro- Under Asaf-ud-Daula’s “food-for-work” duced. In 2015, the government introduced duced in the MGNREGS, over 100 million programme, started in 1784 in Lucknow, Aadhar-linked payments in the MGNREGS FY15 FY16 FY17 FY18 FY19 bank accounts had been opened under the one set of workers was employed during in 300 districts that had a high banking pen- Note: Under the MGNREGS Act, it is mandatory to make final programme and wages were being deposit- daytime to construct the Imambara while etration, while the rest were covered in 2016. payment to beneficiaries within 15 days of closure of muster ed there. Aadhaar-linked payments have roll after which they have to be paid a compensation at the another lot was hired at night to demolish The Survey said so far of the 116.1 mil- rate of 0.05% of the unpaid wages per day denied benefits to eligible people,” Nikhil what had been built. lion active workers under the MGNREGS, Source: Economic Survey 2018-19 Dey of the Mazdoor Kisan Shakti Sangathan Chief Economic Advisor (CEA) K V 101.6 million with Aadhaar (87.51 per cent) told Business Standard. Subramanian has given a chapter in the had been collected and seeded. He said the Survey’s claim that the Economic Survey — his first — to highlight Almost 55.05 per cent of payments technological advancement in other which involve transfer of cash benefits er input subsidies needs to be strength- number of muster rolls under the MGN- how direct benefit transfer (DBT) in the under the MGNREGS are through the schemes of the government such as the pub- (scholarships or pensions) and price sub- ened to minimise exclusion and inclusion REGA rose after Aadhaar-linked payments MGNREGS has improved wage payment, Aadhaar-based Payment Systems. lic distribution system, scholarships pro- sidies (such as those given for kerosene, errors. This will make public spending were introduced was incorrect. Demand raised the number of muster rolls filed, Subramanian has advocated using the gramme, and LPG subsidy. liquefied petroleum gas (LPG), public dis- more efficient and effectively targeted,” for work has always been there in dis- increased the demand for and supply of Aadhaar-linked payment system and other “The adoption of DBT in programmes tribution system (PDS), fertilisers and oth- the Survey said. The Survey said in the tressed districts, he said. ECONOMIC SURVEY 2018-19: THE NEW BLUEPRINT MUMBAI | FRIDAY, 5 JULY 2019 . 7 <

We are in affirmation with At this juncture, bold and Survey rightly states huge The Survey gives us hope of The Survey implies scope for the Survey’s key prognosis flexible labour reforms mandate augurs well for riding over some challenges. expansion in the context of that for sustaining growth would be crucial to create economy. Expect big-ticket Issues like NBFC liquidity cooperative federalism. at 8%, investment would employment opportunities reforms in Budget in farm, and impact on consumption States can raise infra capex need to be the key driver for millions of youth FDI, natural resources sectors would require bold moves yet remaining in FRBM limit CHANDRAJIT BANERJEE RAJEEV TALWAR ANIL AGARWAL B K GOENKA D K SRIVASTAVA Director General, CII President, PHDCCI, and CEO, DLF Executive Chairman, Vedanta Resources President, Assocham & chairman, Welspun Chief Policy Advisor, EY India

CHEAPER FINANCE TIME TO SIGNIFICANTLY LOWER COST OF CAPITAL Need modest real interest rates COMMENT ANUP ROY SAMEER NARANG Mumbai, 4 July makers as the savers and the bor- Chief economist, Bank of Baroda HIGH COST REAL ESTATE RETAIL rowers can be disentangled. he Economic Survey for 2018- (General/diversified) (in %) (Grocery and food) (in %) “As investment depends crucial- OF CAPITAL 14 20 19 stressed the need to lower The cost of capital ly on a low cost of capital, reducing Shifting gear T real interest rates to give 12 real interest rates need not neces- a boost to private investment, some- for Indian firms, 10 15 sarily lower savings when the demo- Chief Economic Advisor Krishnamurthy Subramanian’s thing that was proposed by a across sectors, 8 graphics are favourable. At the same first Economic Survey has been guided by Blue Sky is one of the 10 member in the Reserve Bank of 6 time, the reduction in real interest Thinking and aims to adopt the appropriate economic India’s (RBI’s) monetary policy highest in the rates can foster investment and model for India. The underlying theme of the Survey is 4 committee (MPC). world, the 5 thereby set in motion the virtuous shifting gears to catapult India to a $5-trillion economy The real interest rate is the dif- Survey showed. 2 cycle of investment, growth, exports by 2024-25. In 2018-19, the size of the economy is ference between the lending rate This affects 0 0 and jobs,” the Survey said. estimated at $2.7 trillion. For achieving the ambitious (the Survey took State Bank of investment India China US Europe Japan India China US Europe Japan The Survey will have powerful target, 8 per cent growth needs to be sustained compared India’s base rate) and the prevailing prospects in the backers even in the RBI, particular- with 7.5 per cent growth seen over the past five years. inflation rate. Similarly, the country. The rates TRUCKING (in %) ENGINEERING/CONSTRUCTION (in %) ly as the generally hawkish Deputy So how does India shift gears? The Economic real policy rate is the repo rate can touch nearly 12 Governor Viral Acharya is slated to Survey points out examples of East Asian economies, minus inflation. 20 leave the central bank. Shaktikanta which witnessed a virtuous cycle of increase in Considering the latest inflation 20% for some 10 Das, who became RBI governor in savings, investments and exports. With increase in print at 3.4 per cent, while the repo sectors such as 15 December, has reduced interest savings and investment rate, the growth rates of 8 rate is 5.75 per cent, and the SBI base trucking, whereas rates thrice since February. East Asian economies improved. A corresponding rate is 9.05 per cent, the real policy the comparable 10 6 His dovish colleague in the MPC, increase was also seen in exports. rate works out to 2.35 per cent, while rate is a little external member Ravindra Dholakia, In India’s case, a favourable demographic phase 4 the real interest rate is roughly above 5% for 5 is a strong proponent of rate cuts. should support growth. Lower real interest rates can 5.65 per cent. Japan and less 2 “In my opinion, we should con- increase the savings rate. These savings can be harnessed Both the real interest rate and tinue correcting our real interest into investments thus kick-starting the virtuous cycle. than 10% for 0 0 the real policy rate are way above China India China US Europe Japan India China US Europe Japan rates by bringing down our policy However, as the savings rate goes up, the consumption India’s competitors. The Economic rate,” Dholakia said in the MPC min- rate has to naturally fall. Thus exports form an important Source: Economic Survey Survey made a strong pitch to bring utes, advocating a 25-basis-point cut element of this strategy. Investments will foster job them down. even as he preferred a 40-basis- creation and thus, imply more taxes for the government There are various views on what by another 35 basis points. sheet problem is getting addressed. primarily by demographics and point cut in the policy repo rate. to spend on infrastructure. an ideal real policy rate for India The Economic Survey noted that “Now that the foundations for income growth. Therefore, keeping “Our real policy rate is in excess The investment cycle can be kick-started by public should be. The consensus seems to the real rate of interest had expansion have been laid, it is time domestic interest rates high may not of 2 per cent and our real interest spending, which can crowd-in private spending. The be 1.5-2 per cent. “increased significantly in India to significantly lower the cost of cap- encourage savings behaviour. rates are very high, making our pro- government is already doing this, as seen in investments This means at the current infla- over the years”. ital,” the Survey said. Rather, a “mildly positive real rate is duction globally less competitive. in roads, affordable housing and railways. For private tion rate, which is expected to However, with the bankruptcy According to Chief Economic good enough”, he said. We must bring it down to realistic sector capex to improve, the Economic Survey shows the remain till December at least, the code in place and capital infusion Advisor Krishnamurthy This savings behaviour also gives levels of around 1.5 per cent sooner way forward. It talks about the following reforms: a) repo rate has the scope to go down done in banks, the twin balance Subramanian, savings are driven a key degree of freedom to policy- than later,” Dholakia had said. strengthening legal systems by reducing backlog and improving contract enforcement. India ranks 163 in contract enforcement in World Bank’s Ease of Doing Business, 2) labour reforms such as seen in Rajasthan can increase investments, 3) reducing the real rate of interest IBC IMPACT: CULTURAL FINANCIAL CREDITORS NUMBER OF DAYS TAKEN TO SECTOR-WISE DETAILS OF IBC CASES to make Indian firms competitive, and 4) encouraging RECOVER MORE UNDER IBC APPROVE RESOLUTION PLAN TEXTILES AND MANUFACTURING micro, small and medium enterprises (MSMEs) to invest SHIFT IN ECOSYSTEM PRODUCTS 40 more and gain from economies of scale. On the fiscal (In ~ trillion) Number of cases 70 OTHER SECTOR The Economic Survey said while the sustainable impact of 2.0 front, the Economic Survey reiterates that the 60 20 government should continue on the path of fiscal the Insolvency and Bankruptcy Code (IBC) would be known 65 1.73 1.6 consolidation and maintain the trajectory of the revised in due course, green shoots had already emerged and some 50 ENGINEERING & fiscal glide path. This will reinforce lower inflation and significant benefits of the IBC were visible. “The threat of 1.2 40 CONSTRUCTION thus give room to the Reserve Bank of India to reduce real promoters losing control of the company or protracted legal 0.8 0.75 30 10 In % interest rates. This, in-turn, will spur savings. The proceedings is forcing many corporate defaulters to pay off 0.38 0.4 20 current global backdrop of lower interest rates should their debt even before insolvency can be started,” it said. 5 24 TRADE 10 favour India. Thus, the Economic Survey sets the Till March 31, 2019, the corporate insolvency resolution 0 10 economic and reform agenda of the government for the process yielded a resolution of 94 cases, which has resulted FC claims Liquidation Realisation 0 next five years. In many ways the reforms undertaken by value by FCs <= 180 180-270 >270 in the settlement of claims of financial creditors totalling the government have laid the framework for the next FC: Financial creditors ~1.73 trillion. These cases include six out of 12 large accounts REAL ESTATE 20 phase of growth. The Insolvency and Bankruptcy Code where insolvency resolution was initiated by banks, (IBC) allows for a smooth and timely bankruptcy process. according to the directions of the RBI in 2017. The overall QUARTERLY TREND OF ADMITTED CASES STATUS OF ADMITTED CASES The goods and services tax sets the framework for data- recovery in case of resolved cases is nearly 43 per cent, which Number of cases Number of cases driven lending and better tax compliance. is 194 per cent of the liquidation value, the Survey said. 400 1,250 The Blue Sky approach is ambitious, but doable. It is In the two years of the IBC, real estate was the top sector, 320 1,000 also in contrast with the current trend where savings,

359 investment and export rates have been falling. The with 20 per cent of the insolvency cases being registered. 240 750

Manufacturing, which includes steel, power and chemicals, 1,143 decline in investments has gone hand-in-hand with 275 160 147 246 383 500 rising non-performing loans in the banking system.

comprised 40 per cent. A large number of firms also opted 238 129 232 378 for voluntary liquidation. One of the objectives of the Code 195 80 250 However, with a massive recapitalisation program and 37 152 94

91 implementation of the IBC, non-performing loans are was to give companies a chance to exit if they did not carry 0 0 now declining. Thus, the ground-work for a sustained out any business or if the business itself was unviable. Jan- Apr- Jul- Oct- Jan- Apr- Jul- Oct- Jan- Review, Withdrawn Reached Entered Undergoing Voluntary Mar Jun Sept Dec Mar Jun Sept Dec Mar appeal or under Section settlement liquidation resolution liquidation growth path has been laid out. Much needed reforms in COMPILED BY VEENA MANI 2017 2017 2017 2017 2018 2018 2018 2018 2019 settlement 12A Source: Economic Survey, 2018-19 labour and legal systems will push growth higher.

NBFC stress poses risks Households are spending more to growth, says Survey on discretionary items JASH KRIPLANI ABHISHEK WAGHMARE Mumbai, 4 July New Delhi, 4 July WHERE PEOPLE ARE SPENDING The Economic Survey for 2018-19 highlighted Indians are increasingly spending more on contagion risks posed by stress in non-bank- discretionary items and less on basic necessities 2011-12 2017-18 ing financial companies (NBFCs). It has hurt such as food, according to the Economic Purpose of consumption Share in private consumption consumption growth in the automobile sector Survey for 2018-19. Food and 33.2 affecting manufacturing, the Survey said. Private consumption forms the biggest beverages 30.0 It warned that if the impact of the stress in chunk in the gross domestic product (GDP) Housing, basic housing 19.6 the NBFC sector spilled over this year, it might basket. Changes in consumption pattern are needs and maintenance* 17.3 lead to lower credit offtake from NBFCs, which crucial to the growth dynamics of various might impede consumption spending growth. sectors of the economy. Clothing and 6.3 The Survey charted the origin of the NBFC cri- The last two quarters of 2018-19 saw growth footwear 7.1 sis to mutual funds' (MFs') risk aversion after the FALL IN MF DEPLOYMENT TO NBFCs slowing in private consumption — contracted Health and 7.4 IL&FS crisis in September. auto sales and subdued FMCG sales — pushing SERVICES OCCUPY A BIGGER SHARE (In %) 52 education 9.2 "Immediately after the IL&FS crisis, NBFCs down economic growth to the lowest in 20 15.1 Share in private consumption faced a severe liquidity crunch as MFs stopped 42 quarters. Private final consumption expenditure, Transport 16.0 refinancing the loans of NBFCs," the Survey 32 the way it is defined in national income accounts, Goods 53.6 52.4 said. It added MFs' deployment towards NBFCs 22 forms nearly 60 per cent of India’s GDP. Miscellaneous 12.8 Services stood at -12 per cent in April. 12 “Although the share of private consumption in goods and services 15.8 2011-12 to 2014-15 to Banks' attempts to provide liquidity after 2 GDP remains high, the pattern of consumption 5.6 2013-14 2017-18 the IL&FS crisis were short-lived as the Survey has undergone some change over time — Others ** -8 4.6 Source: pointed out that “resources from the banking -18 from essentials to luxuries and from goods to * includes gas, electricity and water ** includes communication Economic 46.4 47.6 side started contracting from November 2018”. April 2016 April 2019 services,” the Survey said. Source: National Statistics Office Survey 2018-19 “This squeeze in the flow of resources to Source: Estimated from Sebi data The trend is important as it gives a hint about NBFCs has affected the lending capability of the outcome of the Consumption Expenditure the sector in recent quarters," the Survey read. Survey (CES), which will be released by the The data from the NSO shows the share of “This shows an increase in discretionary Credit growth in NBFCs in March 2018 stood at Net non-performing assets of NBFCs were National Statistics Office within a month or two. food and beverages has reduced from 33.2 per spending by households, compared to 30 per cent on a year-on-year (YoY) basis. In up at 3.6 per cent from 3.2 per cent. The return The CES forms the basis for deciding the sources cent of private consumption in 2011-12 to necessities,” noted the Survey. March 2019, it was at 9 per cent (YoY). The on equity for the sector slipped to 6.1 per cent and weights of private consumption expenditure 30 per cent in 2017-18 — a reduction of over Spending on housing, its maintenance and Survey showed how some key performance from 7 per cent. in the national accounts; the data that is used for three percentage points. basic household necessities, such as electricity indicators of NBFCs had deteriorated in 2018-19. Last August, MFs put in ~1.3 trillion in GDP formulation. As more children are attending school and and water, reduced as a share of overall spending, The return on assets for the NBFC sector was short-term paper (of less than 90 days) that “From food and beverages, transport and college, incomes are rising. Spending on health from 19.6 per cent to 17.3 per cent, over six years. down at 1.4 per cent in December 2018, from 1.6 NBFCs had issued. By the end of 2018-19, it communication, which are more of necessities, and education has started occupying a larger The Survey noted spending on services was per cent in March 2018. The capital to risk asset had dropped to ~95,708 crore, showed the the spending has been shifting towards clothing pie in the consumption mix. Their share rising vis-à-vis goods. In another chapter, the ratio or capital adequacy slipped to 22.2 per data sourced from Sebi. This shows a fall of and footwear, health and education, and housing increased from 7.4 per cent in 2011-12 to 9.2 per Survey found inflation in services in recent times cent, from 22.8 per cent in the same period. 27 per cent. and maintenance,” the Survey said. cent in 2017-18. has been higher than that for goods. 8 ECONOMIC SURVEY 2018-19: THE NEW BLUEPRINT MUMBAI | FRIDAY, 5 JULY 2019 1 >

Incentivising private sector Electric vehicles finding a In line with the $5-trn vision, it Spent 3 hours speed-reading There are no growth to share transaction-level space in the Survey shows is imperative that public and the two volumes of the projections sector-wise. data with the govt can how crucial this industry is private sectors work in unison. Survey. It’s a cloudy, The govt, speaking through provide rich insights for for economic and ecological Adoption of tech is needed to overcast afternoon in the Survey, is pessimistic futuristic policy formulation condition of the country achieve the lofty vision Delhi. Enough said about the economy ARINDAM GUHA SOHINDER GILL VARUN BHUTANI DEREK O’BRIEN P CHIDAMBARAM Partner, Deloitte India Director General, SMEV MD, WorkKey, Trihund Solutions Rajya Sabha member, Trinamool Congress Former finance minister PUSH COMES TO NUDGE Q&A WITH CHIEF ECONOMIC ADVISOR  DEPLOY BEHAVIOURAL ECONOMICS, KRISHNAMURTHY SUBRAMANIAN RELIGIOUS NORMS TO ACHIEVE GOALS Giving change ‘Divestment to make up for a big ‘nudge’

NITIN SETHI & RUCHIKA CHITRAVANSHI VERIFIED tax-revenue shortfall this year’ New Delhi, 4 July ODF VILLAGES PHOTO: SANJAY K SHARMA Just a day before the Union Budget 2019-20, Chief government that will have five years to From citing religious tenets 2015-16 Economic Advisor KRISHNAMURTHY SUBRAMANIAN implement policy. and making people repay their said asset monetisation and disinvestment were debts to improving the efficacy expected to make up for the expected shortfall in But don’t we have to immediately of social welfare programmes revenue. Subramanian, after presenting the address the NBFC crisis? such as financial inclusion, the Economic Survey 2018-19, told Arup Roychoudhury On the NBFC crisis, we have to ensure we don’t Economic Survey 2018-19 and Somesh Jha the topics not covered in the perpetuate a situation of private profits and has emphasised that the Proportion Survey, like banking sector reforms, would find public losses. We have to take cognizance of the government deploy behav- Below 30 place in the next Economic Survey seven months moral hazard that comes from it. People use the ioural economics as a tool to 30-60 from now. Excerpts: global financial crisis as an example but that improve outcomes. 60-90 Above 90 was a one-off case. And there too, the US This branch of economics Data not The Survey states the fiscal consolidation road government made money. We cannot use that gained traction in policymak- available map needs to be adhered to. But we also have a as an example. Instead, we have to think about ing in recent times and earned massive shortfall in direct and indirect taxes. structural issues, especially the asset-liability more popularity after econo- 2018-19 Money has no colour. What I am saying is that mismatch in NBFCs. If you look at the short- mist Richard H Thaler, popular non-tax revenues have the potential to expand term money they raise, the ratings in almost 95 for his work on Nudge theory, and make up for the revenue shortfall. Our per cent of commercial papers is L1 plus. This won the Nobel Prize in 2017. public sector undertakings are sitting on large means there isn’t any distinction between these The chief economic advi- pools of land, which can be monetised. This is firms. Their long-term ratings are substantially sor, Krishnamurthy Subram- also an opportunity for greater returns from different and this creates an incentive for the anian, has given a chapter to divestment. To be classified as a state-owned asset-liability mismatch. We need to fix utilising insights from this firm, instead of looking at the government structural problems. branch of economics in fur- retaining 51 per cent, you can perhaps look at thering the government’s social

40 per cent of the government and 11 per cent You have spoken about the need to access and economic objectives. ODF: Open defecation free; Source: MoDWS by LIC. That will get in more capital receipts. foreign capital, perhaps through instruments He noted the government Divestment is expected to fill in some of the opportunity we have not tapped enough. If WE WILL WRITE ANOTHER SURVEY IN such as sovereign bonds. Are India’s had deployed concepts and gaps in tax revenue. We have to adhere to the you look at the global environment, in terms of 6 MONTHS … THIS IS A SURVEY FOR macroeconomic indicators strong enough to principles of behavioural eco- goals of weightloss and ceasing fiscal glidepath. liquidity, surplus and interest rates, it is as issue such bonds? nomics to get better results to smoke and auto enrolment benign as it ever was. There is a lot of flush A NEW GOVT THAT WILL HAVE FIVE We have had average growth at 7 per cent, and from schemes such as the of citizens to saving schemes The main plank of your Survey is that liquidity. If the economy is growing at 8 per YEARS TO IMPLEMENT POLICY inflation is low and stable. These are the Swachh Bharat Abhiyan and to improve financial inclusions. investments will lead to more growth cent, this money will find it profitable to invest components of macro-economic stability. We Beti Bachao Beti Padhao. The Survey recommended that and, in turn, job creation. Where will the in such opportunities. We have to rely on some ON THE NBFC CRISIS, WE HAVE are following the path of fiscal consolidation Subramanian said it could “every programme must go investment come from, given the under- foreign savings. They can come in and create TO ENSURE WE DON'T PERPETUATE and should look at opportunities that are there be leveraged across social, through a ‘behavioural eco- utilisation of capacity and slowdown in investment and once that starts, it will be the A SITUATION OF PRIVATE PROFITS for us. You look at the US, Japan, Europe — the economic, and political are- nomics’ audit” before its imple- private consumption? beginning of the virtuous cycle of cost of capital is so low. If our economy grows nas — from increasing tax mentation. When we wrote this chapter, we had the choice productivity, jobs, and demand. And, people AND PUBLIC LOSSES at 8 per cent, and the other global economies compliance, to get people to The Survey served the suc- of trying to get into each of these details or have asked me questions on jobs, exports, and don’t, it would be a real opportunity to take surrender subsidies, and to cessful implementation of the focus on conveying the big picture message of investments — in silos. These are overseas debt. influence policymakers and scheme as proof of how ‘nudg- moving to 8 per cent growth. We had the complementary to the macroeconomic The Survey gives banking reforms, which politicians to take tough eco- ing’ citizens to choose against answers to these questions but we wanted to formula. The other key departure we have you have been talking about since assuming Is further liberalisation of foreign direct nomic decisions. open defecation and high-use stay focused on the Survey. Let me answer a made is that economists love to think of office, a miss, and it offers no solution to investment on the cards? On deploying behavioural of toilets worked well. couple of important things. Some overhang equilibrium whereas the eastern Asian the NBFC (non-banking financial company) If you are growing at around 7 per cent, foreign economics to improve tax The Survey said the nation- from the previous period has unwound economies, including China, went on a crisis. Any reason? money will want to come in. Liberalising FDI compliance, the Survey rec- al sanitation coverage in rural completely, banks have cleaned up their virtuous cycle. And we are saying “double We will write another Survey in six months — further is one aspect we can think about. ommended changes in auto- areas went up to 93 per cent in balance sheets, and credit to large firms has down on investments” and as long as that January 2020 for the Budget. So, we had to matic deduction of taxes as a 2018-19, from around 40 per started going up. There is also an important happens, other things will come through. make the choice. This is a Survey for a new More on business-standard.com default option to public sham- cent in 2014-15 because the ing of individuals who do not campaign emphasised a pay taxes, and tax withhold- behavioural change. ing, followed by refunds at the However, this is also the ‘DEMOGRAPHIC DIVIDEND’ ON THE DECLINE time of tax filing. period over which funds allo- The Survey further suggests cated for the Swachh Bharat Increase in retirement age could be POPULATION AND that religious norms can also Mission increased from ~2,850 considered: Economic Survey ANNUAL POPULATION GROWTH be used to further the cause of crore in 2014-15 to ~16,948 India is set to witness a sharp slowdown ITS GROWTH RATES OF STATES tax compliance. In India, where crore in 2017-18. in population growth in the next two Census Decadal Annual population growth is expected to come down to social and religious norms The Survey showed how decades, the Economic Survey report has years growth % 0.46% between 2031 and 2041 from 1.77% during 2001-11. play such a dominant role in more than 500,000 foot sol- flagged. It says that although the country 1961 21.64 In fact, Tamil Nadu is projected to see an annual decline influencing behaviour, behav- diers, one for each village, as a whole will enjoy the “demographic ioural economics can therefore, leveraged their social ties to 1971 24.8 in population by 0.05% in the decade ending 2041, provide a valuable instrument effect change. dividend” phase, some states will start 1981 24.66 Andhra Pradesh to barely grow at a rate of 0.02% transitioning to an ageing society by for change. Financial savings from 1991 23.87 2030s. With life expectancy for both Top 6 2001-11 2011-21 2021-31 2031-41 The Survey said, a household toilet exceed “Repayment of debt in one’s the financial costs to the males and females is likely to continue 2001 21.54 Bihar 2.54 1.82 1.34 1.0 2011 17.64 own life is prescribed as nec- household by 1.7 times, on rising, increasing the retirement age for J&K 2.36 0.88 0.82 0.49 essary by scriptures across reli- average, and 2.4 times for both men and women going forward Chhattisgarh 2.26 1.17 0.76 0.57 gions. Given the importance poorest households, accord- could be considered in line with the DECADAL TRAJECTORY (%) Jharkhand 2.24 1.39 0.97 0.82 of religion in the Indian cul- ing to the Survey. experience of other countries. Population In 2001, only two states had a decadal growth in population at less than 12%, against Rajasthan 2.13 1.47 0.96 0.75 ture, the principles of behav- The authors of the Survey growth in India has been slowing in 6 in 2011. Similarly, 7 states posted an over 30% growth in 2001, against just 2 in 2011 Uttar Pradesh 2.02 1.48 0.93 0.73 ioural economics need to be note: “Behavioural econom- recent decades from an annual growth No. of states/UTs:  1991-2001  2001-2011 combined with this ‘spiritu- ics is, however, not a panacea rate of 2.5 per cent during 1971-81 to an Bottom 6 al/religious norm’ to reduce tax to policymaking; its poten- estimated 1.3 per cent as of 2011-16. 7 7 7 Kerala 0.49 0.66 0.45 0.18 evasion and wilful default in tial needs to be understood Going with the trend, the Survey suggests 6 6 6 Andhra Pradesh 1.1 0.65 0.31 0.02 the country.” and put in perspective. 5 5 5 4 that policy makers need to prepare for 3 Himachal Pradesh 1.29 0.64 0.57 0.24 The Survey suggested Nudge policies cannot and ageing, which will need investments in 2 2 2 2 Punjab 1.39 0.71 0.42 0.11 ‘nudges’ and consistent mes- should not supplant every 1 saging across the spectrum of incentive-based and man- health care as well as a plan for Odisha 1.4 0.82 0.63 0.38 increasing the retirement age in a the government’s socioeco- date-based policy… However, Tamil Nadu 1.56 0.56 0.25 -0.05 nomic agenda. This included the majority of public policy phased manner. COMPILED BY DILASHA SETH <12 12-15 15-18 18-21 21-24 24-27 27-30 30+ Source: Economic Survey 2019 INDIA 1.77 1.12 0.72 0.46 people being made to make issues are amenable to incor- deposit contracts to achieve porating nudges.” Survey calls for coordinating body for resource efficiency SHREYA JAI & SHINE JACOB been provided under the Ujjwala consumption of resources, New Delhi, 4 July scheme and 99 per cent FOR A GREENER TOMORROW reduce waste generation and Infra over incentive to promote EVs The Economic Survey has corresponds to greater households were electrified under  greenhouse gas emissions, as well Shifting focus on sustainable Saubhagya till April 2019. The Survey suggests setting up of a as, contribute to innovation quoted studies showing that adoption of EVs. The market development and infrastructure The Survey lauded these coordinating body for environment in the space of RE. more than incentives offered share of EVs increases with the creation, the Economic Survey schemes for their impact, but and sustainability concerns The Indian government is to manufacturers and users, increasing availability of this year called for resource noted that as India aggressively  National policy on resource efficiency already running various energy good charging infrastructure is charging infrastructure," the optimisation and energy looked to push energy access, efficiency programmes alongside key to mass adoption of Survey said. It said in India,  efficiency. it would exert pressure on the A policy on sustainable public access schemes. electric vehicles (EVs). This is the limited availability of The Survey has suggested that environment and raise procurement to minimise Energy efficiency programmes because the driving range of charging infrastructure India, like several countries such sustainability concerns. To consumption of resources, reduce have generated cost savings worth batteries in electric vehicles is appeared to be a major as the United Kingdom and address this, the Survey waste generation, greenhouse more than ~50,000 crore and a less, compared to those which impediment to increased Iceland, should invest in resource suggested setting up a national gas emissions reduction of about 110 million run on fossil fuel. adoption of EVs, another efficiency through recycling, coordinating body — the bureau  tonne of CO2 emissions in 2017-18, The suggestion by the chief being the time taken for reusing, minimising consumption of resource efficiency (BRE) An energy policy taking into the Survey noted. economic advisor comes at a completely charging EVs. and reducing wastage. between various ministries. consideration the economies Among the energy efficiency moment when the industry However, despite the In its first stint, the BJP-led “Various studies have analysed of coal and renewable measures suggested, the Survey and the government's policy challenges, the Survey noted central government had initiated the economic impact of effective said India would need a think tank NITI Aayog have that electric vehicles will be and rechristened several schemes RE strategy and identified that comprehensive energy policy expressed conflicting views the future in India and even for energy access, notably ~6,000 crore can be saved in the be created from the extraction of 8 asked for the formulation of a taking into consideration the about the road map. “We find said that the country can Saubhagya for household manufacturing sector. Effective million tonne of steel from the end national policy on the same. economies of coal and renewable. that the market share of EVs is emerge as a manufacturing electrification and Ujjwala for free waste management policies can of life vehicles,” the Survey said. Additionally, it has asked for a It also said renewable energy positively related to the hub of EVs with favourable LPG connections. Around 71.8 generate 1.4 million jobs and To push the agenda for policy on sustainable public needs of $250 billion investment availability of chargers and policy support. million LPG connections have nearly $2.7 billion opportunity can resource efficiency, the Survey has procurement to minimise over the next decade. larger availability of chargers ARINDAM MAJUMDER 10 ISSUES AND INSIGHTS MUMBAI | FRIDAY 5 JULY 2019 >

> employees, customers and business be ignored. In an earlier column (June CHINESE WHISPERS observers. Good CEOs realise that 7), I had mentioned that a controlled Listen to kibitzer nobody is too small to make an impact. degree of narcissism is essential for a The founder of Bodyshop, Anita CEO to be successful. Tejashwi is back Smart leaders know nobody is too small to make an impact Roddick, was credited with the com- CEO narcissism manifests through The leader of the ment, “If you don’t believe it, try going seven skills: ruthlessness, charm, focus, Opposition in the Mindtree acquisition recently. Nelson GE, was perceived as a very authentic to bed with a mosquito.” For example, mental toughness, fearlessness, action Bihar Assembly, Peltz of Trian Fund Management and warm person, but he was removed an American university published an and mindfulness. I am personally famil- Tejashwi Prasad pushed hard for PepsiCo to split. Indra within 15 months of taking over the ill-researched analysis about a con- iar with all seven skills, thanks to my Yadav (pictured), Nooyi engaged without giving in. leadership of GE. sumer product in India, and an obscure two decades as CEO. Without making reappeared in the Nelson Peltz sold his shares and took The CEO response has a connection activist drummed up a public scare in technically controversial statements, I House on Thursday his money. Unilever engaged and fend- with the ability to discern subsonic India. Investors and analysts exert great have also noted the view of professional after a longish break. ed off the bid by Brazilian investor 3G messages from deep within the organ- pressure on the board by their com- psychiatrists, that narcissists and psy- The Rashtriya Janata and Kraft Heinz. isation. Like pigeons! A World Pigeon ments and demands. Boards cannot be chopaths have similarities. They are Dal (RJD) leader had been missing since Others like ICICI, Ranbaxy and Jet Racing competition has been going on dismissive and must respond astutely. along a continuum and belong to the the Lok Sabha results were declared on Airways failed to do so in their recent for over a century. During the 1997 race The case study method has been same species. Both have a high self- May 23. The RJD failed to win even one THE WISE LEADER episodes in India. 3G had bought Kraft, across the English Channel from widely and successfully used in man- opinion, accompanied by a low opinion of Bihar’s 40 Lok Sabha seats. Few knew engineered its merger with Heinz and France, most of the pigeons failed to agement education. One unintended of others. Success is to their credit, fail- where Yadav had been since then. R GOPALAKRISHNAN ran the company to the ground. Klaus reach England — an unprecedented effect is that the method produces kib- ures are due to external factors. Other members of the RJD-led “grand Kleinfeld, a former CEO of Alcoa, got disaster. It appears that, quite mysteri- itzers. I recall my training days when I When these characteristics are alliance”, including Hindustani Awam trapped in his dealings with Elliot ously, the pigeons’ navigation system found fault with various CEOs while bound within a limit, they work posi- Morcha chief Jitan Ram Manjhi, had ibitzer is a Yiddish word for a Management, and had to step down could not discern familiar subsonic sig- discussing case studies. Heaven knows tively; if that limit is breached, the same questioned his absence. This was also spectator of bridge or chess, from his position at Alcoa. Ton Büchner nals from ocean waves crashing into how stupid I must have looked to my characteristics cause damage. the time when more than 150 children K who offers unsolicited advice in at Akzo Nobel responded to the bid by the coast. Why? Because a supersonic team while they observed my decision- in Bihar died of encephalitis. The chess, bridge, sports or even business. an American paints major by divesting Concorde had left Heathrow around 11 making and actions as a CEO! The author is a corporate advisor and Janata Dal (United)-Bharatiya Janata Some leaders respond positively to Akzo of its chemicals business. Ellen am, emitting its own subsonic signals Offering newspaper critiques, writ- distinguished professor of IIT Kharagpur. He Party (BJP) ruling alliance calls Yadav unsolicited ground signals, incorporat- Kullman, chairman of Dupont, fended as the plane broke the sound barrier. ing case studies and television com- was a director at Tata Sons and a vice- ranchhod (one who runs away from the ing the messages into their transforma- of Trian’s Nelson Peltz to join the board, The pigeons got confused by the plane mentaries, all kibitzer activities, are chairman at Hindustan Unilever. His latest battlefield). After returning, Yadav said tion programme — like JJ Irani did at then quit, thus facilitating the complex subsonic signals. They lost their way. a darned sight easier than doing the and new book is Doodles on leadership: he was in Delhi to get his injured leg Tata Steel in the 2000s, or SN surgery of Dupont and Dow. John Likewise, in companies, a CEO job. Howsoever irritating their sug- experiences within and beyond Tata. treated and dismissed reports about Subrahmanyan of L&T did during the Flannery, successor to Jeff Immelt at receives subsonic sounds from the gestions may be, kibitzers are not to Email: [email protected] quitting as the leader of the Opposition.

Battleground Maharashtra The Bharatiya Janata Party and Shiv Sena have started preparations for Pushing bond & currency mkt development the Maharashtra Assembly polls, but the Congress-Nationalist Congress Party (NCP) alliance is still recovering Work by regulators, market infrastructure institutions and market participants needs to mutual funds, insurance and pension from their decimation in the Lok need to facilitate this participation as Sabha polls in the state. The NCP is continue to ensure these markets move to the next phase of development current regulations are excessively waiting for the Congress to appoint its restrictive. Perhaps regulators of all state unit chief before initiating seat- participants in direct equities and can institutional investors need to take sharing talks. Maharashtra Pradesh potentially be large participants in gov- a combined view to develop the Congress Committee (MPCC) Chief ernment bonds too. The large sums of credit markets. Ashok Chavan has stepped down from money invested by retail investors in Coming to currency markets, an the post. Former Maharashtra bank fixed deposits clearly indicates a urgency in permitting longer trading minister Balasaheb Thorat is preference for risk free fixed returns. hours at domestic trading venues is considered Chavan's successor. NCP Government bonds compare needed. Onshore markets operating for President Sharad Pawar and Congress favourably to FDs in many ways. They eight hours as against offshore trading General Secretary Mallikarjun Kharge, provide longer maturity, are much safer venues being accessible for 16 to 23 who is in charge of Maharashtra, met investments and provide an exit oppor- hours creates a distinct disadvantage at Pawar's residence in New Delhi on tunity through secondary markets. for onshore venues. India is perhaps Wednesday. Sources in the NCP said Further, with some of the recent credit among the fewer regimes where the party would seek 144, that is 50 VIKRAM LIMAYE situations observed in the corporate domestic currency transactions are still per cent, of the 288 Assembly seats as bond space, government bonds would mired in substantial documentation part of the understanding with the be the ideal asset class. Bringing in requirements. Documentation may Congress. The Congress is frustrated newer classes of investors to the gov- only be sought when an actual remit- that the Prakash Ambedkar-led he fixed income and currency ernment bond market is key to enhanc- tance takes place, to ensure regulatory Vanchit Bahujan Aghadi is not markets in India have operated ing depth and liquidity. To incentivise compliance. For trading and hedging amenable to a seat-sharing T primarily over the counter investments in government bonds, trade on NDS-OM and retail investment horizon to slightly lower rat- without delivery, proof based docu- agreement with the alliance. (OTC). While government bonds trade these instruments need to be brought participants have a separate segment ed paper in a phased manner. mentation could be eliminated. on an electronic platform, corporate on par with investments in other fixed on NDS-OM and on the stock Sebi’s recent initiative of credit rat- Another measure that needs evaluation bonds are mainly OTC traded with income products. For retail investors, exchanges. Having a seamless and con- ing agencies providing disclosures on is permitting stock exchanges to offer reporting and settlement on clearing interest income up to a certain thresh- nected trading and settlements infras- liquidity and default indicators is a wel- a spot FX platform to SMEs. Study on substance abuse corporations. Currency spot and for- old may be made exempt from tax. tructure could help in developing this come step. Additionally, India could Financial market regulators have Social Justice and Empowerment wards trade primarily in OTC markets, The NSE is proposing to introduce market. look at developing a junk bond market. taken several measures to accelerate Minister Thaawar Chand Gehlot has said whereas futures are exchange traded. some new proposals to facilitate sec- Corporate bonds have seen the As international investors gain more the pace of development of bond and more than 160 million people in India What measures could then be adopted ondary market liquidity, which would most policy measures in the last five confidence in IBC, we could see foreign currency markets. Many recent steps drink, around 31 million use cannabis, to accelerate the pace of growth in these further aid in building this market. The years to aid transition from a bank loan investment in this space, which has will bear fruit in the years to come. The and 7.7 million people take opioids. key markets? RBI, in its last policy, had announced dominated market to a balanced dis- more experience in trading and dealing stock exchange distribution network More than 57 million drinkers, 7.2 Government bonds are very actively that stock exchanges will be permitted tribution between market borrowing in these assets. It is time for India given which has largely distributed equities, million cannabis users, and 7.7 million traded on the Negotiated Dealing to offer State Development Loans and bank funding. More corporate the IBC framework to more actively pro- is now being utilised for increasing opioid users are addicted and need System — Order Matching platform. (SDLs) through non-competitive bid- entities have started looking at capital mote this new class of investors — access points for fixed income prod- help, according to the minister. He said However, liquidity is concentrated ding route. This will be an additional markets for debt raising and the domestic and foreign; who could help ucts. Currency futures and options that the findings were part of a national largely in the 10 year bucket. While the fixed income product that will widen Securities and Exchange Board of India grow this market. are offered by stock exchanges have household survey done by his ministry average daily traded volume is large at the offering to meet varying investor (Sebi) too has nudged corporate India Most international markets actively expanded the number of participants in 2018. The survey revealed around 11.8 ~38,650 crore for the last financial year, needs and risk appetites. Appropriately towards capital markets. trade credit spreads, that is, a spread in this asset class. Work by regulators, million people in the age group 10-75 liquidity is not easily available across incentivising interest income on this Importantly, recent instances of over the sovereign curve. However, giv- market infrastructure institutions and years took sedatives and 7.7 million the curve. In 2018, for the first time, asset class could see substantial invest- default and the markets inability to price en that India does not have a liquid market participants needs to continue used inhalants. Children and stock exchanges were permitted to dis- ment being channelised to govern- these risks satisfactorily, has created sovereign curve across maturities and to ensure these markets move to the adolescents used inhalants more than tribute government bonds through the ment securities and SDLs. Taking the more uncertainties around corporate an underdeveloped derivatives market, next phase of development. others. Gehlot said the government was non-competitive bidding route to retail learnings from equities market, anoth- bonds. With more default resolution it is tougher to price credit risk. While conducting a survey in 10 cities to assess participants. The NSE has seen good er potential avenue to explore could be experience with the bankruptcy code in steps are being taken to develop the The author is managing director & CEO, the pattern and profile of substance use interest from retail participants. In unifying wholesale and retail markets. operation, pension and insurance com- cash markets, derivatives markets can’t National Stock Exchange of India Ltd. among students. India, retail investors are very active Currently, institutional participants panies could be directed to widen their be ignored. Regulators especially for Views are personal

INSIGHT > LETTERS

The rise of the silver generation Rahul’s principles Give and take

of the readers that the magazine In his letter, former Congress party pres- Apropos Abhijit Lele and Raghu Mohan's Modern Maturity was once among the ident Rahul Gandhi has held on to his report "Split wide open" (July 3), it is a largest circulated magazines in the US. stated position that he is taking respon- good sign that Indian Banks' Association So the western markets discovered the sibility for his party's electoral debacle will have two separate wage agreements Silver or should I say Gold in the and not continuing as the Congress pres- with the staff and officers of public sector senior citizen segment many years ident. His refusal to nominate his succes- banks (PSBs). The PSBs are perhaps the before they were spotted in India. sor goes to show his democratic creden- only setup in public sector undertakings Demographers tell us that we have tials when he could have easily where the staff and the officers join in around 130 million senior citizens in handpicked the next party president. He wage negotiations and intermittent India, roughly 10 per cent of the overall has left it to the party to decide. strikes together, to bring the work of population. This number is set to rise It would be of immense symbolic sig- banks to a standstill, thereby forcing man- AMBI PARAMESWARAN to 300+ million by the year 2050, nificance if a Dalit becomes the next agements to agree to their exorbitant almost 20 per cent of the total popula- Congress president. Mallikarjun Kharge demands. Giving the flexibility to indi- tion. The growth in the number of and Sushil Kumar Shinde are now talked vidual banks to pay their employees is elderly is being driven by increased life of as the front-runners. Winning or losing another plus point. It will promote a pay- n the late 1980s there was a rather expectancy [moving from 68.35 to 75.9]. an election is not a measure of whether for-results culture. popular ad on Indian television for Interestingly, the gender ratio is highly what you represent and stand for is right The article also brings out the defi- I Bajaj Bulbs that had a highly skewed towards women [63:37] today or wrong. If the coming back of the ciencies in the HR policies of PSBs. hummable jingle which went some- and this may undergo some change in One of the factors leading to “readiness to retire” could be the bigger roles Congress party did not happen, it was not When the accountability of PSBs is fixed thing like this — ‘When I was a young the next three decades. daughters are playing in the well-being of their ageing parents Rahul's failure. The Hindutva card was with the top management, this gap boy I was a naughty little brat, but now The Aegon Retirement Readiness successful in swaying the voters. would also be bridged. In the 2015 set- I am a boodha and I live on tablets, but survey [2018] says that nearly 49 per your daughter-in-law, your daughter is diapers are taking wings and beaming Remember how Pragya Singh, who called tlement, though bank employees got a Bajaj still fills my life with light’. I won- cent of Indians are confident of their more than happy to help you. So there their messages on national television. Mahatma Gandhi's assassin a patriot, 15 per cent rise in wages and two der if the ad in its original form will healthcare expenses after quitting full is a Plan B, in case of trouble. The success of Saregama Carvaan is won with a huge margin in Bhopal? Saturdays in a month off, the remaining get a positive reaction today; or will it time work. Indians, the report says, The “Silver Generation” today have directly correlated to the rise of the Rahul Gandhi fought for principles days were reduced to half-day of work get critiqued for being so derogatory top the “readiness to retire” index, 7.3 managed to save enough to take care “Silver Generation”. I feel this is just and not for political power. At times, and there was no commitment to about the aged. There was also a vs US (6.5). The Orb Media study that of their daily needs and the occasional the tip of the iceberg. We will soon start he stood alone to fight the Bharatiya improve the financial health of the charming ad featuring thespian tracked attitude towards elderly across treat. The more affluent are indeed seeing other products being tailored Janata Party and Prime Minister organisations. There should be real pro- Shriram Lagoo where his grandkid the world showed that there was no splurging on multiple luxuries. I know for the Indian Sliver Generation. Narendra Modi. He did it without ductivity bargaining this time in the spir- asked him to play badminton; “Dadaji meaningful correlation between aver- of friends who have decided that they Curated nutrition products are waiting hatred or anger. In fact, he had to fight it of give and take. Badminton? ‘Nahin, pehle Dabur age GDP and respect towards the will holiday at least once a month in to hit the mainstream and I think they the entire state machinery. That the set- Y G Chouksey Pune Chyawanprash...’” elderly. May be that explains the India and at least, once a quarter out- will find ready takers. In fact, “Silver back has not diminished the resolve to The aged in India were shown to be Indian “readiness” score. side India. I suspect a large number of Generation” also need their own fash- fight the divisive RSS ideology is wor- Letters can be mailed, faxed or e-mailed to: consumers of pills potions and There could be many factors help- Indians cheering the Indian team in ion labels, dresses that are easy to wear, thy of a great leader. He is not stepping The Editor, Business Standard Chyawanprash, who went on pilgrim- ing the rise of the “Silver Generation” the ICC World Cup are the “Silver easy to wash and great looking. Why back from his fight for India's contin- Nehru House, 4 Bahadur Shah Zafar Marg New Delhi 110 002 ages. And prayed through the day. That in India. For one many of them, at least Generation” cohorts. should my aged mom be dressed only ued existence as a liberal, secular Fax: (011) 23720201 · E-mail: [email protected] was then when the aged were called in the upper- and upper-middle classes The growth in numbers and the in a dowdy nightie ? Why can’t some- democracy. All letters must have a postal address and telephone the boodhas. in urban India own the home they live growth in their affluence is opening new one create a modified saree that can G David Milton Maruthancode number But that definition went through its in. The Agewell Foundation study puts markets for products and services. There be worn by the elderly? first change two or three decades ago the number at 70 per cent. This is a big is of course the growth of managed care More and more ads on television when they were renamed a more contrast to the previous generation homes in key cities like Pune and and digital media will start presenting > HAMBONE respectable “senior citizens”, now in who may have lived in rented houses Coimbatore. There is also going to be a interesting products and services for marketing lexicon they have devel- all their lives. Moving into their chil- boom in packaged tours for the Silver the “Silver Generation”. And then we oped an even better name, “silver gen- dren’s homes [mostly sons] when they Generation. This has been a big market can truly say that they are no longer eration”. The seniors are no longer just retired. With that one big expense han- in countries like the US and Japan. We ‘Goli Khake Jeeta Hoon’ but are the being used as props in happy family dled, they do have a lot more stability will start seeing this boom in India; I sub- ‘Masti Karke Hasta Hoon’ generation. photographs in ads. They are being in their lives. mit there will be multiple segments in wooed by multiple categories, ranging The second factor leading to readi- this too. The ultra luxury, the mid-mar- The author is an Independent Brand from travel to automobiles to invest- ness could be the bigger roles daughters ket and the economy travel segment. Strategist, Founder Brand-Building.com a ments to diapers. are playing in the well-being of their Even products that could be classi- Brand Advisory. He can be reached on It may come as a surprise to some ageing parents. If you are unhappy with fied as unmentionable such as adult [email protected] OPINION 11 > STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM

Volume XXIII Number 231 ILLUSTRATION: BINAY SINHA

MUMBAI | FRIDAY, 5 JULY 2019 tory, and an investment- and export-driven model on the lines of China’s growth model in the 1990s and 2000s cannot be replicated given the acceleration in automation that is fundamentally changing the rela- A new-old approach tionship between capital and labour. One could also Survey skilfully marshals fresh arguments for timeless policy raise issues about education and the acute shortage of the most basic of skills needed to support a manu- n his first Economic Survey as India’s chief economic advisor, K V facturing boom in India. Subramanian has successfully infused a conservative and well-understood While these debates will continue, the importance set of recommendations with a novel, and even indigenous, air. On the of this year’s ES is that it posits a clear economic surface, there may appear to be nothing remarkable about suggestions model that could potentially drive the economy to a I higher growth path in the Modi 2.0 regime. Thus, that the government focus on private investment, and those on re-invigorating those of us who have complained that the government exports and administrative reform. Such a view would, however, miss the point. was high on targets but low on strategy should have The Survey has given these policy directions a new freshness and embedded less of a reason to whine. Besides, my understanding them in a view of recent economic successes in India that will be persuasive to is that some of the senior bureaucrats in government political decision-makers. And, further, Dr Subramanian has chosen to make today share the ES’s basic approach to growth. That these broad, overall recommendations in line with traditional growth strategies is critical if this growth strategy were to stand any at a point when many voices in India and abroad are calling instead for a return A much-needed chance of being implemented. to the days of “industrial strategy”. The Survey has also clearly — and correctly Chapter 2 of the survey provides interesting — poked a hole in the conventional wisdom that India must rely on consump- insights into the use of behavioural economics, par- tion-driven growth by putting investment, and particularly private investment, ticularly the idea of a “nudge’’ in policy design. Take at the centre of its strategy. As a consequence, its strategy also must prioritise tax compliance, for instance. Signboards showing blueprint “tax money at work” in construction projects in a export growth — an implicit rebuke to the increasing protectionism visible in panchayat or district explicitly convey to citizens that some recent actions of the Indian government. their taxes are being used in valuable public goods. Returning private, fixed investment to the highs of the mid-2000s is indeed The Economic Survey posits a clear development model to put This addresses the issue of “vertical unfairness”, the a pre-requisite for a sustainable high-growth trajectory. However, this is not easy perception that the services received by an individual to manage, as the Survey recognises. An increase in investment has to be paid India on a high-growth path are not commensurate with the taxes. What is impor- for with a corresponding increase in savings, unless the current account deficit tant though is that simple interventions based on were again to explode. But in recent years the private corporate sector has essen- ver the last few years, particularly during the to a mode where there is constant disequilibrium these insights are known to work in many areas of tially closed its internal savings-investment gap; and it is the household sector, tenure of the previous Chief Economic Adviser with economies spiralling around in vicious or virtu- public policy. Thus the idea of a behavioural eco- which includes small and unincorporated enterprises, that is the primary net O(CEA) Arvind Subramanian, the Economic ous cycles. nomics audit for every government programme (con- saver of the economy. The problem is where this is going. Net borrowing by the Survey (ES) morphed from an exhaustive — and often All this somewhat bewildering new age econo- ducted by the Niti Aayog) that the ES espouses might public sector — the central and state governments’ budgetary and off-budget tedious— account of the economy’s performance over babble translates into is a prescription for a sharp rise sound a tad radical but is perhaps the only way to borrowing — is estimated to have grown at an average of over 10 per cent a year the previous year into a more analytical and forward in investments (the “key driver” for the virtuous cycle) ensure that outlays are proportional to outcomes. since 2011-12. It is, at this point, no less than an identity: For private investment looking policy statement. that create capacity and an expansion in exports to What about the bread and butter bits of the ES, For one thing, it attempted to join the dots and absorb this capacity. Investments, in KS’s scheme, the stuff on near-term growth, budget deficits and to recover, government dis-saving must be reduced. The government will have draw the proverbial “big picture” need not displace jobs but will the like? The 7 per cent projection for the current to spend less or raise more in revenue. An otherwise excellent argument in the pertaining to some of the critical improve labour productivity and fiscal year’s GDP growth is reasonably conservative Survey could have been improved by making this point. contemporary economic issues. The make exports competitive. Besides, as is the assumption that the investment cycle has A granular understanding of the reasons for the crisis in private invest- notion of a balance sheet recession, “when examined across the entire perhaps bottomed out. There is indeed growing evi- ment underlies Dr Subramanian’s choice of subjects in the Survey. For one, for instance, and its ramifications value chain, capital investment fos- dence of capacity constraints in a number of sectors. there is clearly continuing policy uncertainty in the Indian economy, in spite for economic revival were first for- ters job creation as the production of Besides, as the survey points out, rural wages growth, of there being the confidence provided by a stable government with a working malised in the ES in 2015-16. The capital goods, research and develop- which was declining, has started to increase since the majority. This must be addressed — the Survey suggests transparent, inde- 2014-15 ES provided a rationale for ment and supply chains generate mid-2018. Further growth in rural wages should help pendent quality assurance of policy-making processes, but other possibilities the efficiency and welfare gains from jobs.” In short, KS lays his bets on the spur rural demand. exist. Legal and administrative reform, alongside the preservation of institu- the interplay of basic bank accounts, Chinese growth model with some For the financial market, the reiteration of the tional independence, will also aid in decreasing policy uncertainty. Crucial biometric identification and mobile modifications. fiscal glide path of a central government fiscal deficit telephony (the so-called JAM trini- Of course, all this has to be sup- of 3 per cent of GDP by 2021 in the ES and the clear also is the long-delayed question of judicial reform, which would make dispute ABHEEK BARUA ty). The forward looking policy pre- ported by complementary policies. assertion by the CEA in the post ES release presser settlement and contract enforcement in India less of a nightmare. Real interest scriptions included a workable mod- Like other cheerleaders of the China that budgetary consolidation is desirable have brought rates are too high, and need to come down. el of Universal Basic Income, which underpins paradigm, KS is a votary of scale and demonstrates cheer and assuaged concerns that the Budget might Regressive policy, which creates perverse incentives for companies and programmes like PM-KISAN, and the use of the that “dwarves” (firms that are old and small) are the go a little easy on targets to accommodate funding encourage them to stay small and inefficient, must be phased out, and replaced Reserve Bank of India’s balance sheet reserves to fund biggest drag on the economy. Using data from other for projects promised during the elections. with preferences for newer rather than smaller enterprises — the Survey correctly budget expenditures. Both of these were discussed economies, he shows that young and relatively large This ES has clearly gone the way of recent surveys, points out that it is the former and not the latter that generate growth and jobs. first in the ES. companies have the highest potential to both “grow” dense with ideas, liberal with academic references Finally, the competitiveness of exporters must be a priority — measured through In his first ES, the new CEA Krishnamurthy and “employ” and, thus, the barriers to their growth but not giving the business of economic hisaab- the average productivity of firms in the economy. This, of course, requires labour Subramanian (KS) keeps this new avatar alive and have to be removed. This would mean both labour kitaab short shrift. Its key shortcoming is perhaps law reform, and the Survey makes this point clearly and concisely, embedding well. At the very outset, he provides a blue-print to market reforms and phasing out incentives that the fact that while it’s bursting with ideas about how it in a defence of the outcomes produced by Rajasthan’s labour reforms in 2014. take India’s GDP to $5 trillion by 2024-25 and create encourage firms to remain small. The last bits of the to get to a higher growth path, it is perhaps a little The one missing piece is rupee depreciation. The Survey, in a footnote, argues employment alongside. His key advice is to abandon growth jigsaw are high domestic savings, low cost of reticent on why the current economic slowdown the way economists and policy-makers think —in capital and a tax-regime that is both stable and encour- came to such a pass. that this is unnecessary to boost exports. But fixing an overvalued currency is terms of economies fundamentally being in equilib- ages entrepreneurial risk-taking. the simplest and cheapest way to gain a competitive boost. rium except when there is the odd shock— and switch Critics could argue that it is difficult to repeat his- The author is chief economist, HDFC Bank Power for growth The weak state of discoms is a big risk Saving India’s groundwater he government wants to provide uninterrupted power to all house- holds, which is an important precondition for attaining sustainable ver 70 per cent of India’s water comes from groundwater, the direction of these flows is reversed Pradesh, Kutch and Sikkim. All of them are based on higher growth. While continuous power supply would require more below the ground. India is, by far, the largest and “gaining” rivers get converted into “losing” rivers. collective action by farmers, who come together to capacity, the weaker links in attaining this goal are the electricity Oand fastest growing consumer of groundwater In a similar way, in our mountainous regions, springs, jointly manage their precious shared resource. They T in the world. China and the US are in second and which have historically been the main source of water develop protocols for pumping of water, sequencing distribution companies (discoms), which, with their weak finances, are often third positions, respectively, but India uses more than of the population there, are drying up. of water use, distance norms between wells and tube- not in a position to pay power producers in time. To address this issue, the the two of them put together. Over the last four To understand how we can reverse this dire situ- wells and strictly adhere to them once they under- power ministry last week made it mandatory for discoms to open and maintain decades, around 84 per cent of the addition to irrigated ation requires a careful reflection on the nature of stand that this is the only way they can manage to adequate letters of credit under power purchase agreements. The idea is to area came from groundwater. Most of this was from groundwater and a recognition that it is a common- meet both their farm and domestic requirements. ensure security of payment to power producers. In theory, this will force dis- deep drilling of tubewells or borewells, which are the pool resource. By its very nature, it is a shared heritage. Of course, taking these innovations to scale coms to make timely payments. In case they fail, power producers can encash single largest source of irrigation, as also drinking We can divide the land under which this water is requires massive support from government. the letter of credit. This would make life easier for generators and address water, in both rural and urban India. located but we cannot divide the water, which moves Paradoxically, as groundwater has become more and the issue of liquidity on their part. Power producers pay in advance for fuel Tubewells, which were once in a fluid and fugitive manner, below more important, groundwater departments, at the and its transportation. seen as the solution to India’s water the surface. Competitive, individual Centre and in all states, have only become weaker Although the idea has merit, it will not solve the fundamental problem, problem, have tragically ended up extraction leads to a mutually destruc- over time. We need to urgently reverse this trend, at least in the short run. The basic issue here is that discoms do not generate becoming the main cause of the cri- tive cycle, where each user tries to out- strengthening state capacities in a multi-disciplinary enough revenue and are accumulating debt. In such a situation, it is possible sis. This is because we have indis- do the others in drilling deeper and manner. The 12th Plan saw the initiation of the criminately drilled borewells with- deeper, till the point — which is being National Aquifer Management Programme and the that they might even find it difficult to offer letters of credit, leading to a out paying attention to aquifers, the reached in so many aquifers in India NDA government subsequently launched the Atal reduction in demand and power cuts. A recent report by CRISIL showed rock formations within which our today —where virtually no groundwa- Bhujal Yojana. Both of these are pioneering initiatives, that the aggregate external debt of state-owned discoms is likely to reach groundwater is stored. Much of ter is left. the likes of which the world has never seen before. the pre-Ujwal Discom Assurance Yojana (UDAY) level of ~2.6 trillion by the India is underlain by hard rock for- How then can we protect and con- However, they have failed to take off primarily end of the current fiscal year. This is primarily because they did not pursue mations, which have limited capac- tinue to use arguably India’s single because the requisite multi-disciplinary capacities reforms as desired. For instance, the annual increase in tariffs has been ity to store groundwater and have most important natural resource with- are missing within government. But also because just about 50 per cent of the target and the reduction of losses in supply very low rates of natural recharge. WATER: REFORM out driving it to extinction? Can we they cannot be implemented by government alone. remained below expectations. The real issue that needs to be addressed is Once we extract water from them, OR PERISH save the goose that lays the golden They demand a large network of partnerships with the way discoms function. It is important to note that state governments it takes very long for water to regain egg? One commonly proposed solu- stakeholders, across the board: universities, research may not be in a position to constantly assume discom debt due to the non- its original level. MIHIR SHAH tion is to meter and license the use of centres, panchayati paj institutions and urban local availability of fiscal space. Also, additional liability will affect their ability For decades, we have drilled groundwater. While this might make bodies, civil society organisations, industry, and the to make public investment. aquifers at progressively greater depths, lowering water sense for the few very large consumers, such as indus- people themselves. tables and water quality everywhere. Water quality trial units, it would be impossible to implement on a At the same time, we need profound changes in The sector requires action at multiple levels. For instance, distribution is impacted because at certain depths we encounter large-scale, bearing in mind that we have more than the structure of incentives to support farmers in mov- companies should be encouraged to reduce supply losses and ensure that deposits that gravely pollute groundwater. Official esti- 30 million wells and tubewells in India. ing towards less water-intensive crops, which were consumption is accounted for. This will require proper metering and improve- mates indicate problems of high fluoride in 203 dis- Fortunately for us, there are a few examples, which elaborated in the first article in this column. We also ment in distribution infrastructure. Further, discoms should be allowed to tricts, iron in 206 districts and arsenic in 35 districts. show the way forward. A million farmers in the hard need to break the groundwater-energy nexus that has increase tariffs and states need to end the culture of excessive power subsidies. Fluorosis is estimated to afflict 65 million and leads to rock districts of Andhra Pradesh have come together only encouraged the mining of groundwater. The The poor can be protected through cash transfers, which can be done in a crippling, skeletal problems and severe bone defor- to demonstrate how we can use groundwater in an Jyotigram Yojana of Gujarat shows the way forward way that promotes conservation. To be sure, all this will not be easy as the mities. Arsenicosis affects around 10 million people equitable and sustainable manner. Of course, this ini- here through the separation of power feeders. This problem is more political than financial. In this context, it will be important and causes skin lesions and develops into cancer of tiative required a strong mooring in both science and needs to be urgently implemented through the length for the Centre to work with state governments to find longer-term solutions. lungs and the bladder. Overall, we have reached a sit- social mobilisation. With the co-operation of hydro- and breadth of India. We also need to replace archaic It is now clear that simply taking over the debt of discoms does not work. It is uation where nearly 60 per cent of India’s districts geologists and civil society organisations, facilitated British law, which has only helped in the destruction time to depoliticise power, which will pave the way for tariff rationalisation have either seriously fallen water tables or low ground- by the government, these farmers clearly understood of India’s groundwater, as I will explain in the last and incentivise discoms to invest in infrastructure. Only then will instruments water quality or both. the nature of their aquifers and the kinds of crops article in this column. It is also not often understood that perhaps the that could be grown with the groundwater they had. like the letter of credit have a meaningful impact. The weak state of discoms single most important cause of our peninsular rivers Careful crop-water budgeting enabled them to switch The writer is Distinguished Professor, Shiv Nadar University can not only impede an uninterrupted supply of power but is also a risk for drying up is over-extraction of groundwater. After the to less water-intensive crops, more suited to their spe- and former Member, Planning Commission, Government of economic growth. rains stop, for these rivers to keep flowing, they need cific agro-ecology. Such examples have mushroomed India. Every fortnight, he will outline multiple dimensions of base-flows of groundwater. But when we over-extract all over India, especially in Maharashtra, Madhya long overdue reforms in the water sector

or more of her children, and the erotic objective remains the burial site. But is from unreliable guide books and from becomes more prominent than the bonding with her husband was never it sufficient to write only about an often indecipherable signage mounted Empress. More than a grave diminished by the physical tribulations unadorned grave in a town now relegated at the entrance to the property by the The grave turns out to be placed within of this most fecund woman. Though to being a largish dot on India’s map, par- Archeological Survey of India. a spare high-walled enclosure on the river- story that culminated in the building of Shah Jahan took another wife, a political ticularly as history tells us of its imper- Mr Murari understands all this and bank opposite to where Mr Murari stands the iconic mausoleum. Having learnt manoeuvre at best, and had the most manence? I would think that it would makes a choice. He knows that he has and he observes it receding into the gath- quite a bit about the Mughals from his desirable women in his kingdom to have been more relevant in his search not made any promises to his readers in ering early evening darkness. His com- earlier research, he wouldn’t have looked attend to him, his longing for Mumtaz for Mumtaz Mahal to rediscover the terms of guiding them to Mumtaz panions sense that this is his quest and further than launching a search for burned till the very end of her life, and many forts and palaces that Mahal’s burial site in allow him his space; he crosses over the Mumtaz Mahal’s initial burial site where indeed of his. No doubt, the story had a the young Empress, almost Buhranpur because he, shallow part of the river to the site of the BOOK REVIEW she lay for six months before her body poignant core, but whether it had enough always heavily pregnant, Mr Murari’s book more than his readers, will grave but he carries no sense of disap- was disinterred on her grieving hus- in it to sustain a full-blown novel was a visited other than the fabled makes no effort to probably know what to find pointment with him because it’s not the PARTHA BASU band’s orders and shifted to Agra to await moot point. Mr Murari’s book makes no and legend-encrusted ram- examine or analyse once he gets there. So, like structure that is important but the place the building of her final, peerless, resting effort to examine or analyse the intensely parts and pavilions of the intensely the proverbial clued-up tour where this extraordinary Empress of he problem with writing some- place across the Yamuna. Lending his personal aspects of their relationship and Mandu, Ranthambore and personal aspects of guide, he decides to make Mughal India breathed her last. thing new about historical person- narrative its almost mystic quality would how it could have affected, for better or Asigarh. On the other hand, their relationship and the journey more interest- Perhaps Mr Murari realises then that Tages, more than events, is always be the fact that the grave in question was for worse, the convoluted politics of the Mumtaz Mahal’s life, unlike how it could have ing than the destination. rediscovering his India has been actually going to be to decide what really needs clouded in obscurity. Mughal court. her aunt Nur Jahan’s, is very affected, for better or This, in short, means that as more relevant than finding Mumtaz to be said anew; in other words what Popular belief had it that the No woman in Mughal history cap- sparsely documented, and for worse, the he takes off from Madras Mahal’s first grave. fresh insights could be presented to add Empress, having travelled constantly by tured so comprehensively her husband’s the writer would have his convoluted politics of (now Chennai) with his value to what has gone before. the side of her husband on all his forays passion and his loyalty; history also work cut out for him the Mughal court blonde wife and pushy sis- Needless to say, Timeri Murari does into the Deccan to do battle with the ene- records the prime contribution of her because his only sources ter, and meanders upwards EMPRESS OF THE TAJ: In Search not lack for knowledge on his subject; mies of the dynasty, died, all of 38 years, seven surviving children in shaping the would have been the locals who knew and northwards cutting across state of Mumtaz Mahal some years ago, he wrote a well-received giving birth to her 14th child after a sup- passage of the Mughal dynasty and yet these places, but whose material was boundaries, and in and out of towns and novel, Taj: A Story of Mughal India, and posedly tortured pregnancy. A number Mumtaz, unlike her Machiavellian aunt often unreliable. As a matter of fact, as cities, at the mercy of Indian rail and Timeri N Murari saw the need to pen a captivating prequel of forts and palaces she visited on her Nur Jahan, preferred to remain in the Mr Murari himself notices, the informa- road transport and tricky officialdom Speaking Tiger to the Shah Jahan and Mumtaz Mahal travels were marked by the birth of one political penumbra. Mr Murari’s prime tion about these places comes mainly and antique sellers and guides. India 240 pages; ~350