INDIA’S ECONOMIC “REVOLUTION”: A PERSPECTIVE FROM SIX DECADES OF ECONOMIC DEVELOPMENT IN PALANPUR, A NORTH INDIAN VILLAGE Report to Department for International Development May 2011 . Introduction The data collected for Palanpur since 1957/8 provide a unique opportunity to understand development in India through the experience of one village. There is one economic/social survey for each decade since independence covering a 100% sample of households. There is strong continuity in the research investigators. And three of the surveys involved long residency in the village (more than eight months in each of 1974/5, 1983/4, and 2008/10). Thus there is strong acquaintance not only with the household data, but with the households themselves, together with the economic, social, and political institutions of the village. The latest data collection covers two agricultural years – it was extended beyond the one year originally planned in large part because the kharif season of 2009 was so poor that the year 2008/9 would have been strikingly unusual. The extension allowed us not only two years of data but still deeper knowledge of village affairs and still greater data quality. Whilst this delayed the completion of data collection and the start of the analysis, it has provided for the highest quality and detail of all the surveys. The story of Palanpur over six decades had already provided interesting ideas and hypotheses for more aggregate studies for India as a whole, ideas which are already bearing fruit. An important example is the indication of the advancement of the poorest caste in the village – the Jatabs – which is consistent with and has suggested a reason for, the growth in incomes of the poorest two deciles in the NSS surveys (see our report on the growth and inclusion project). These data represent a gold mine of opportunities for research which is probably unique in the development literature and we are very grateful to DfID for supporting the data collection and analysis. The analysis itself it still in the early stages, although is already producing striking and important results. This is the story of a village integrating into the UP and India economy over the last three decades with strong effects on incomes, assets, distribution, markets and institutions. The report on work so far is presented as nine analytical papers: the first six papers are broadly economic and the next six papers are broadly social, although there are, as one would expect, powerful overlays and links between the two. There are also six papers by interns associated with the project – these have already been submitted to DfID (Appendix 1). These can also be found at this weblink http://www.csh- delhi.com/programs.php?selectedcategory=5&idprog=257. The first paper (Paper 1) sets change in Palanpur in the context of change in India and serves also as an overview of our work so far. It has an appendix describing the data. Each of the papers indicates some of the potential for further work. We do not provide a detailed summary of the nine papers as the first of them, by Himanshu and Stern, serves that purpose. Very briefly, Paper 2 examines the change in the composition of income, in particular the rapid rise in off-farm income as Palanpur integrates into India and India starts to grow more rapidly, and the implications for diversification and poverty decline. Paper 3 examines poverty, inequality and mobility in Palanpur in some detail using a number of different metrics for the economic aspects of well-being. The fourth paper analyses the way in which households and individuals have found opportunities outside the village and how experience over time has led to further opportunities. Papers 5 and 6 cover rural India as a whole. Autonomy of women shows some advance too, but difficulties and obstacles to independent participation in the economy and society remain strong. And violence against women continues. All the papers make use of the rich data concerning changes over time in household and individual circumstances, characteristics and opportunities and they all draw on the detailed knowledge by the investigators of village society and institutions. The programme was led from LSE by Nicholas Stern and from India by Himanshu. Ruth Kattumuri has played a major role from LSE and Himanshu has had a strong team in India. Peter Lanjouw of the World Bank, who did a thesis on Palanpur at LSE in the late 1980s, has also been a key member of the research programme. A list of the staff involved is provided as Appendix 2. It has been a genuine India-Europe collaboration with many of the interns coming from France (particularly from the Ecole Polytechnique, and the base in Delhi being the Centre des Sciences Humaines (CSH) to whom we are very grateful. Collaborators in India are from Jawarhalal Nehru University (JNU), the Indian Statistical Institute (ISI), the Institute for Economic Growth in Delhi (IEG) and the National Council for Applied Economic Research (NCAER). We have tried to reach out to and to work with leading Indian institutions. Dissemination is already under way with seminars have been held in New Delhi and at LSE. The Seminars in Delhi have been organised in partnership with Institute for Human Development, ISI and CSH. A list of workshops is supplied as Appendix 3. Whilst many research papers have already been produced the wealth of the data and the extension of the period of data collection imply that we are still in the early stages of data analysis and writing. Many further articles will be necessary together with at least two books. The quality and quantity of the data, the readiness of the researchers who now know the data and village well, and the significance of the results already emerging require another two years of work to do justice to the extraordinary potential of this unique set of data. Many of the research opportunities are identified in the attached papers. There will be a collection of papers arising from the programme (this may require two volumes). There should also be a book which stands back and examines how these data and the work on them illuminate development economics and India's development as a whole over the last six decades. Such a time-series of cross-sections and the close knowledge of one place provides a unique potential for special insights into the process and understanding of economics and social development. Nicholas Stern India and an Indian village: 50 years of economic development in Palanpur Himanshu Assistant Professor Jawaharlal Nehru University Nicholas Stern IG Patel Professor of Economics and Government London School of Economics April 2011 This work is based on a programme of work in Palanpur from 1974, based primarily at the LSE, and uses two previous studies from the Agricultural Economics Research Centre of the University in Delhi from 1957/8 and 1962/3. There are now six surveys of the village, one for every decade since Independence. The most recent covers 2008/9 and 2009/10 and is the most detailed and comprehensive: its collection was led by Himanshu of Jawaharlal Nehru University (JNU). The analysis of the new data is under way and will be carried out largely in Delhi and the LSE. We are very grateful to Jean Drèze, Ruth Kattumuri, Peter Lanjouw, and Naresh Sharma and all the Delhi team for guidance, advice and support. This paper is based in part on a “Distinguished Lecture” by Nicholas Stern at the University of Hyderabad on 25 October 2010. The work is supported by a grant from DFID to whom we are very grateful. SECTION I : INDIA, PALANPUR AND A UNIQUE DATA SET The last two decades have seen profound transformation in the economy and society of India including the increasing integration of India in to the world economy. The same is true of Palanpur, a small village in Moradabad district, and its process of integration into the Indian economy and society. Understanding each process can illuminate the other: a village of a little over 1000 people can help understand the economy of a country one million times as large and the changing nature of the country is fundamental to understanding the changes in the village. Palanpur is not particularly unusual amongst India’s half a million or so villages in its social and economic structure, although it cannot be seen as “representative” in a country of so many villages. But it is “uniquely endowed” with data and studies. It was first studied by the Agricultural Economics Research Centre (AERC) of the University of Delhi in 1957/8 and then again by the AERC in 1963/4 (there was then particular interest in some co-operative initiatives). Christopher Bliss and Nicholas Stern returned there in 1974/5 because, inter alia, they sought base-line data for examining some of the context, processes and impacts of the “green revolution” which was focused on wheat in North India, and for examining some theories of land tenancy and the formation of wages. Stern returned in 1983/4 for a more intensive study in which Jean Drèze and Naresh Sharma played leading roles; this had more detailed information on income; Drèze and Sharma also undertook a smaller-scale study in 1993. There was continuity with the first two studies in that S.S. Tyagi Jr, the brother of S.S. Tyagi Sr who carried out the first study, was central to the data collection in 1974/5 and continued to advise for 1983-84. The 2008/9 and 2009/10 data collection was still more detailed than 1983/4 (see appendix on coverage).