INDIA POLICY FORUM VOLUME 15 2018 ` 1395 789353 287191 9 ISBN 978-93-532-8719-1 Contents I
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NCAER INDIA VOLUME 15 2018 Radhika Pandey, Ila Patnaik, and Renuka Sané POLI Impact of Tax Breaks on Household Financial Saving in India Poonam Gupta, Junaid Ahmad, Florian Blum, and Dhruv Jain CY India’s Growth Story Melissa LoPalo, Kevin Kuruc, Mark Budolfson, and FORUM Dean Spears Quantifying India’s Climate Vulnerability Erin K. Fletcher, Rohini Pande, and Charity Troyer Moore Women and Work in India: Descriptive Evidence and a Review of Potential Policies VOLUME Sajjid Z. Chinoy and Toshi Jain What Drives India’s Exports and What Explains the Recent Slowdown? New Evidence and 15 Policy Implications 2018 EDITED BY SHEKHAR SHAH, BARRY BOSWORTH KARTHIK MURALIDHARAN ` 1395 ISBN 978-93-532-8719-1 9 789353 287191 Contents i 15 2018 EDITED BY Shekhar Shah Barry Bosworth Karthik Muralidharan NATIONAL COUNCIL OF APPLIED ECONOMIC RESEARCH New Delhi ii INDIA POLICY FORUM, 2010–11 Copyright © 2019 NATIONAL COUNCIL OF APPLIED ECONOMIC RESEARCH (NCAER) First published in 2019 by SAGE Publications India Pvt Ltd B1/I-1 Mohan Cooperative Industrial Area Mathura Road, New Delhi 110 044, India www.sagepub.in SAGE Publications Inc 2455 Teller Road Thousand Oaks, California 91320, USA SAGE Publications Ltd 1 Oliver’s Yard, 55 City Road London EC1Y 1SP, United Kingdom SAGE Publications Asia-Pacific Pte Ltd 18 Cross Street #10-10/11/12 China Square Central Singapore 048423 Library of Congress Serial Publication Data applied for Disclaimer: The papers and the associated comments represent the views of the individual authors and do not imply agreement by the Governing Body, officers, or staff of NCAER or by members of the IPF panels. ISSN: 0973-4805 ISBN: 978-93-532-8719-1 (PB) All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage or retrieval system, without permission in writing from the publisher. Published by Vivek Mehra for SAGE Publications India Pvt Ltd, typeset in 10.5/13 pt Times by AG Infographics, Delhi, and printed at Avantika Printers, New Delhi. Contents iii 15 2018 Editors’ Summary ix RADHIKA PANDEY, ILA PATNAIK, AND RENUKA SANÉ Impact of Tax Breaks on Household Financial Saving in India 1 Comments by Rajnish Mehra and M. Govinda Rao 28 General Discussion 34 POONAM GUPTA, JUNAID AHMAD, FLORIAN BLUM, AND DHRUV JAIN India’s Growth Story 39 Comments by Sudipto Mundle and Dilip Mookherjee 94 General Discussion 101 MELISSA LOPALO, KEVIN KURUC, MARK BUDOLFSON, AND DEAN SPEARS Quantifying India’s Climate Vulnerability 107 Comments by Navroz K. Dubash and Shreekant Gupta 139 General Discussion 146 ERIN K. FLETCHER, ROHINI PANDE, AND CHARITY TROYER MOORE Women and Work in India: Descriptive Evidence and a Review of Potential Policies 149 Comments by Pranab Bardhan and Farzana Afridi 199 General Discussion 213 SAJJID Z. CHINOY AND TOSHI JAIN What Drives India’s Exports and What Explains the Recent Slowdown? New Evidence and Policy Implications 217 Comments by Surjit Bhalla and Kenneth Kletzer 244 General Discussion 255 iv INDIA POLICY FORUM, 2010–11 Contents v PURPOSE AND ORGANIZATION This 15th India Policy Forum 2018 Volume comprises papers and highlights of the discussions at the India Policy Forum (IPF) held in New Delhi on July 11–12, 2018. The IPF is organized by NCAER, the National Council of Applied Economic Research, India’s oldest and largest, independent economic think tank. The IPF promotes economic policy and original empirical research on India. It commissions original papers and policy-focused expert reviews, the latter usually based on robust, original research. It provides a unique combination of intense scholarship and policymaker engagement at the IPF Conference, held every year in July in New Delhi, leading to this international journal. The IPF in that sense is a lot like an open editorial board meeting, one of its unique characteristics. An international Research Panel of India-based and overseas scholars with an abiding interest in India supports the IPF with advice, active conference participation, and the search for innovative papers that promise fresh insights. An international Advisory Panel provides overall guidance. Members of the two IPF panels are listed below. Papers appear in the annual IPF Volume after revisions based on IPF discussants’ comments, a lively floor discussion, and the editorial guidance provided by the editors of the India Policy Forum Volume. To allow readers to get a sense of the richness of the conversations that happen at the IPF, edited discussants’ comments are included here, as is a summary of the floor discussion on each paper. The IPF also features an annual, invited lecture. The Annual IPF Lecture for 2018 was delivered on July 10 by Professor Avinash Dixit, Professor Emeritus, Princeton University. In recent years, the IPF has featured an IPF Policy Roundtable that allows timely discussion of a topic of current policy relevance: this year’s topic was “India’s Healthcare Reforms: Getting to Health for All.” In 2018, the IPF added a concluding roundtable discus- sion on the policy and research ideas emerging from the conference. In celebration of its 15th Anniversary, the 2018 IPF also featured an extended conversation on July 12 with the outgoing Chief Economic Adviser to the Government of India. Full videos of all IPF sessions, the Annual IPF Lecture, the two roundtables, and the special 15th anniversary event are available on NCAER’s website (www.ncaer.org). The 2018 IPF program, presenta- tions, and videos can be viewed by scanning this SPARQ code: vi INDIA POLICY FORUM, 2010–11 ADVISORY PANEL* Shankar N. Acharya Indian Council for Research on International Economic Relations Viral V. Acharya Reserve Bank of India Isher J. Ahluwalia Indian Council for Research on International Economic Relations Montek S. Ahluwalia Former Planning Commission of India Pranab Bardhan University of California, Berkeley Jagdish Bhagwati Columbia University & Council for Foreign Relations and NCAER Barry Bosworth Brookings Institution Willem H. Buiter Citigroup Stanley Fischer Former Board of Governors of the U.S. Federal Reserve System Vijay Kelkar NIPFP and India Development Foundation Mohsin S. Khan Atlantic Council Anne O. Krueger SAIS, Johns Hopkins University Ashok Lahiri 15th Finance Commission Rakesh Mohan Yale University Arvind Panagariya Columbia University Raghuram Rajan University of Chicago Booth School of Business Urjit R. Patel Former Reserve Bank of India Shekhar Shah NCAER Nicholas Stern London School of Economics & Political Science Lawrence H. Summers Harvard University RESEARCH PANEL* Abhijit Banerjee Massachusetts Institute of Technology Kaushik Basu Cornell University and NCAER Surjit S. Bhalla Oxus Investments Pvt. Ltd and NCAER Sajjid Z. Chinoy J.P. Morgan Mihir Desai Harvard Business School Shantayanan Devarajan World Bank and NCAER Esther Duflo Massachusetts Institute of Technology Subir Gokarn Brookings Institution India Center Maitreesh Ghatak London School of Economics Jeffrey S. Hammer Princeton University and NCAER Vijay Joshi Merton College, Oxford Contents vii Devesh Kapur SAIS, Johns Hopkins University Kenneth M. Kletzer University of California, Santa Cruz K. P. Krishnan Government of India Robert Z. Lawrence Harvard Kennedy School Rajnish Mehra Arizona State University Dilip Mookherjee Boston University Karthik Muralidharan University of California, San Diego and NCAER Ila Patnaik NIPFP Lant Pritchett Harvard Kennedy School Indira Rajaraman Former 13th Finance Commission Tarun Ramadorai Imperial College, London and NCAER M. Govinda Rao Former14th Finance Commission, NIPFP, and NCAER Ajay Shah NIPFP Nirvikar Singh University of California, Santa Cruz Rohini Somanathan Delhi School of Economics Arvind Subramanian Harvard Kennedy School Arvind Virmani Chintan *All affiliations are as of April 2019. PARTNERS NCAER gratefully acknowledges the generous support for IPF 2018 from HDFC Ltd, Reliance Industries Ltd, State Bank of India, and Citibank N.A. Their support reflects the deep commitment of the enlightened leadership of these organizations to rigorous, independent, economic policy research that helps promote more informed policy debates and evidence-based poli- cymaking in India. CORRESPONDENCE Correspondence about papers in this IPF Volume should be addressed directly to the authors (each paper contains the e-mail address(es) of the corresponding author(s)). All author affiliations in the papers are as of the IPF Conference. Unsolicited manuscripts are not accepted for review because all papers are commissioned. Feedback on the IPF Volume may be sent to: The Editors, India Policy Forum, NCAER, 11 Indraprastha Estate, New Delhi 110002, or by e-mail to [email protected]. More information on the IPF is available on www.ncaer.org. viii INDIA POLICY FORUM, 2010–11 THE IPF TEAM NCAER is responsible for development, planning, organization, and publica- tion for the India Policy Forum. The Editors and the IPF Panels are deeply grateful to the following NCAER staff for their dedication and hard work on the 2018 IPF: Anwesha Pandey (until Jan. 2019) Special Assistant to the Director General Namrata Ramachandran Special Assistant to the Director (from Jan. 2019) General Sudesh Bala Team Lead and overall coordination Anupma Mehta Editing Jagbir Singh Punia Publication and production Praveen Sachdeva Conference production and graphics P. P. Joshi Hospitality and logistics Sangita Chaudhary Team assistance Khushvinder Kaur Team assistance Editors’ Summary he India Policy Forum (IPF) marked its 15th Anniversary with its Tconference in New Delhi on July 10–11, 2018. The primary goal of the IPF is to promote original policy and empirical research on India. The annual IPF Conference provides a unique combination of intense scholar- ship and commentary on the research and a focus on its policy implications. The revised papers are published in this journal and benefit from a wide international readership. Over the years, interest in India has grown to the point where there is now much more original research on India appearing in international economic journals than was the case when the IPF started.