EPW, Vol.58, Issue No.29, 22 July 2023

LETTERS
Issn 0012-9976
Ever since the first issue in 1966,
EPW has been India’s premier journal for Rising Waters, Recurrent on boats and divers for support. Some of
comment on current affairs
and research in the social sciences.
Challenges them even reported to paying between
It succeeded Economic Weekly (1949–1965), `3,000 and `5,000 to divers to seek help
which was launched and shepherded
by Sachin Chaudhuri,
who was also the founder-editor of EPW.
As editor for 35 years (1969–2004)
Krishna Raj
D espite the historical occurrence of
flooding in Delhi, the recent inun-
dation has shed light on the reactive ap-
in evacuating their livestock.
Years of experience and exposure to
recurrent flooding have led them to de-
gave EPW the reputation it now enjoys. proach of government bodies to managing velop their own coping mechanisms. One
Editor such events. On 13 July 2023, the water such strategy involves tying items with a
GOPAL GURU levels in the Yamuna river surged to an cloth towards the ceiling of their houses.
SENIOR Assistant editors unprecedented height, surpassing 208 By elevating their belongings, they aim
INDU K metres and resulting in the flooding of to protect them from being damaged or
Nachiket kulkarni
low-lying areas near the banks. This sit- submerged in floodwater. In addition to
Assistant editor uation broke a record set 45 years ago in safeguarding their possessions, flood-
Sahba Fatima
1978 when similar flooding occurred in affected individuals prioritise their per-
editorIAL Assistant parts of Delhi. The recurrence of such sonal safety and survival by leaving
Ankit Kawade
events raises concerns about the factors behind heavier items like mattresses and
Editorial Coordinator contributing to the escalating water levels beds. These objects are often difficult to
Shilpa Sawant
in the river. Data from the Central Water transport during evacuation and may
copy editor Commission (CWC) reveals that over 8 lakh hinder mobility or become waterlogged.
jyoti shetty
cusecs of water were discharged from Instead, they opt to carry essential items
production Hathnikund Barrage this year, which such as clothing and rations, ensuring
suneethi nair
reached Delhi in a shorter period com- they have the necessary supplies for their
Chief Administrative and Finance Officer pared to previous years. This phenome- immediate needs. This approach reflects
J DENNIS RAJAKUMAR
non can be attributed to various factors, their understanding of the potential risks
Advertisement Manager including the construction of bridges, associated with flooding and their pro-
Kamal G Fanibanda
encroachments on the river’s banks, and active efforts to mitigate those risks.
General Manager & Publisher siltation. The construction of bridges Recognising the severity of the situation,
Gauraang Pradhan
and encroachments have narrowed the relief efforts have been mobilised to pro-
editorial: edit@epw.in cross-section through which the water vide support and assistance to those
Circulation: circulation@epw.in must pass, limiting its flow capacity. As affected by the floods. Shelter is a primary
Advertising: advertisement@epw.in a result, the water from the barrage in concern, and two types of support have
Yamunanagar, Haryana, approximately been provided: self-support through tar-
Economic & Political Weekly
320–322, A to Z Industrial Estate 180 kilometres from Delhi, now reaches paulin sheets and government-provided
Ganpatrao Kadam Marg, Lower Parel the capital in two to three days. This tents. These measures aim to ensure that
Mumbai 400 013
Phone: (022) 4063 8282
heightened intensity of flooding, cou- individuals have a safe and dry place to
pled with the accelerated speed of the seek refuge during the flood crisis.
EPW Research Foundation rising waters, surpasses the experiences The provision of clean water is another
EPW Research Foundation, established in 1993, conducts
research on fi nancial and macro-economic issues in India. of the 1978 flood event. essential aspect of relief efforts. The Delhi
Director The experiences of the affected indi- Jal Board has been supplying water to
J DENNIS RAJAKUMAR viduals belonging from Budaun, Bareilly, affected areas twice a day; to address
C 212, Akurli Industrial Estate
Kandivali (East), Mumbai 400 101
and Patna highlight the need for better sanitation needs, mobile/van toilets have
Phones: (022) 2887 3038/41 risk perception and proactive measures. been provided, but, in some places, the
epwrf@epwrf.in Despite receiving multiple warnings from people reported practising open defeca-
Sameeksha TrusT authorities, including the police and in- tion. In terms of food distribution, dry
(Publishers of Economic & Political Weekly) formation from various sources such as ration is being distributed through the
Board of Trustees
Deepak Nayyar, Chairman news channels and social media platforms government to those staying in govern-
Shyam Menon, Managing Trustee like Facebook, WhatsApp, and YouTube, ment-provided tents, whereas cooked food
André Béteille, D N Ghosh, people were hesitant to evacuate promptly. is being provided by charitable organi-
Deepak Parekh, Romila Thapar,
Rajeev Bhargava, Dipankar Gupta, Residents from low-lying areas tended sations, religious institutions, etc.
N Jayaram, SUDIPTO MUNDLE to wait until the water reached ankle While these relief efforts provide im-
Printed and published by Gauraang Pradhan, for and length before moving out without seeking mediate support and assistance, they are
on behalf of Sameeksha Trust and printed at
Modern Arts and Industries, 151, A–Z Industrial Estate, any external help, while those residing not without limitations. Efforts should
Ganpatrao Kadam Marg, Lower Parel, Mumbai–400 013
and published at 320–322, A–Z Industrial Estate, in relatively higher areas evacuated be made to enhance coordination, ensure
Ganpatrao Kadam Marg, Lower Parel, Mumbai–400 013
with their livestock when the water sustainability, and prioritise long-term
Editor: Gopal Guru (Editor responsible for
selection of news under the PRB Act) reached mid-waist level, often relying recovery and resilience-building measures.
4 july 22, 2023 vol lViii no 29 EPW Economic & Political Weekly
LETTERS
The coping mechanisms developed by media. In the last few years, passenger is negligent on this issue, showing that it
individuals living in flood-prone areas trains have become exclusive carriers will cost `35 lakh per train in India. In those
reflect their resilience and adaptive meant for migrant workers, students from countries, there are railway track-sensor
capacity in the face of recurrent flood- lower-middle-class families, artisans, ordi- systems in place. If there is overloading,
ing. Their strategies, such as tying items nary patients and their relatives, pilgrims, this system will stop the train. This has
with a cloth towards the ceiling, demon- and daily travellers like office clerks, prevented the problem of derailment of
strate their understanding of the risks petty hawkers, etc. Thus, trains are meant goods trains. However, it is speculated
and their proactive efforts to protect for carrying these passengers just like that this is not being implemented in India,
their belongings. ordinary luggage from one city to anoth- thanks to the lobby of mining companies.
In conclusion, the recurrence of these er, and these common passengers have The Shah Commission’s report has already
destructive floods underscores the need no power to influence the government. pointed out that there is a lot of smug-
for a more proactive approach in manag- The government also feels that the people gling of minerals in goods trains.
ing and mitigating the risks associated of the country should be grateful to them Many countries of the world have
with flooding in Delhi. A more compre- for providing low-cost transportation adopted the “Japanese safe system” in rail-
hensive approach is required, focusing facilities and thus should not demand way interlocking. Earlier, railway engi-
on long-term solutions and effective the protection of their lives. neers used to monitor the working condi-
communication strategies and commu- The Annual Statistical Statements tion of machineries and equipment at every
nity awareness programmes to address report prepared by the Railway Board level. Now, after the private company sup-
the root causes of the floods and reduce shows that in 2021–22, there were 8,747 plies the machineries and equipment, it is
vulnerability. It is imperative for policy- failures of railway equipment, out of not clear who is monitoring it and who is
makers, urban planners, and communi- which the number of failures of signal- responsible for any failures. More and
ties to adopt a proactive approach that ling apparatus is 2,592. One of the rea- more trains are rolling on the track day by
not only anticipates and addresses the sons for this is that 14,850 posts in the day, but neither are they being properly
challenges posed by increasing flood risk signal section of the railway depart- maintained nor monitored. There are sev-
and urbanisation but also integrates ment of the country are lying vacant. eral issues that can arise due to poor main-
climate resilience, sustainable infrastruc- Further, the English Daily, Hindu, has tenance and monitoring, such as accidents,
ture development, and robust disaster reported on 9 January 2023 that accord- delays, and breakdowns. The railway
management strategies to mitigate the ing to a minister’s reply to a starred department has handed over many tasks
risks posed by future floods. question in the Rajya Sabha, the Indian from manufacturing to services that pro-
Sidharth Verma, Aditi Madan Railways has 3.12 lakh non-gazetted vide convenience to passengers in the
New Delhi posts lying vacant across the country, hands of private companies.
spread across 18 zones, as on 1 December The Indian Railways’ main slogan is
Understanding a 2022. Official data reveals the staggering “Lifeline of the Nation.” It is a symbol of
Preventable Tragedy understaffing in Indian Railways, which development of the country. Without
[This is an abridged version of a press release of is putting a stress on the system and ensuring that railway systems meet the
the Ganatantrik Adhikar Surakhya Sangathan, its current employees. Nonetheless, on requirements for reliability, availability,
Bhubaneswar.]
8 February 2023, due to the presence of maintainability, and safety, the Indian
T he country will remember the tragic

train crash of 2 June 2023 at Bahanaga
in Balasore district of Odisha. Judging by
mind of the locopilot, the Sampark Kranti
train survived an impending accident
(due to signal failure).
Railways puts forth useless arguments to
cover up its weaknesses. Like many other
ministries and departments of the country,
the number of people killed in the acci- According to data obtained through the railways has become a moneymak-
dent, it is one of the biggest disasters of the internet, between 2010 and 2019, ing machine for a few private companies
the Indian Railways. The railway depart- the safest train system was in place in and corporate houses instead of catering
ment’s slogan of “safety of passengers is countries like Finland, Canada, Sweden, to the needs of the common people of
our sacred duty” has come under question. Ukraine, Czech Republic, Hungary, Mexico, the country. To materialise the slogan
Two flagship trains of the Indian Rail- Russia, China, Greece, etc. They have that “Indian Railways is in the service of
ways, Coromandel Express and Banga- focused on three main systems, which the people” in the real sense, it needs a
lore–Howrah Superfast Express, connect the Indian Railways is not ready to radical change, more regarding the safety
with the three major cities of the coun- accept. They have a system of sensors in of the passengers.
try (Kolkata, Chennai, and Bengaluru). case a fire breaks out in the train com- Deba Ranjan, Golak Bihari Nath
However, there were neither any high- partment. However, the Indian Railways Bhubaneswar
ranking railway official nor any wealthy
person travelling in both the trains on that EPW Engage
fateful day. Had it been the case, it would The following article has been published in the past week in the EPW Engage section (www.epw.in/engage).
have been published in newspapers, (1) Modern Challenges to the Dravidian Movement: The Question of Access and Quality of Higher Education in
Tamil Nadu — Vishal Vasanthakumar
flashed time and again on the electronic
Economic & Political Weekly EPW june 22,
july 17, 2023 vol lViii no 24
29 5
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LETTERS
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6 july
june 22,
17, 2023 vol lViii no 29
24 EPW Economic & Political Weekly
FROM THE EDITOR’S DESK
From 50 Years Ago ownership in 1969. There is no doubt about the from the Reserve Bank of India — are included
legal position. The ‘existing banks’ received on each of the Boards. The government has wide
their compensations, though these may not have powers to give directions to the Boards. The gov-
been distributed among the shareholders. The ernment has all the rights of ownership and con-
‘corresponding new banks’ are all governed by trol. If, nevertheless, these rights have not been
Vol VIII, No 29 JuLY 21, 1973
Boards appointed by the government and head- exercised with a view to attaining the objectives
Commercial Banks: Four Years ed by Chairmen-Managing Directors also ap- of nationalisation, it is necessary to find out
after Nationalisation pointed by the government after consulting the what have been the inhibiting factors.
Bhabatosh Datta Reserve Bank. Even the appointment of work- Strictly speaking, the 14 banks which were
Four years after the major commercial banks men’s representatives is made by the Govern- acquired in 1969 are more nationalised than
were acquired by the Government of India, the ment from out of a panel of three names selected the State Bank of India which still has a small
primary question one is tempted to ask is wheth- by the workmen. In addition, two officials — percentage of private shareholders. The spe-
er these banks really came under government one from the Central Government and the other cial role of the State Bank, however, continues.
Economic & Political Weekly EPW JULY 22, 2023 vol lViii no 29 9
JULY 22, 2023
Papering over the Cracks

The multidimensional poverty index conceals more than it reveals.
T
he second edition of the multidimensional poverty index continues to be close to a disturbing high one-third of the total
(MPI) titled “National Multidimensional Poverty Index: population. Similarly, in the case of maternal health, another
A Progress Review 2023” indicates a significant decline health indicator that measures the share of women deprived of
in deprivation levels. The report, authored by the NITI Aayog, proper antenatal care and childbirth assistance, the numbers
shows that the headcount poverty ratio, or the proportion of the have gone down by only 3.4 percentage points. Consequently, the
multidimensionally poor, has declined from 24.85% in 2015–16 share of pregnant women still not receiving proper maternal
to 14.96% in 2019–21. That is almost a 10 percentage point decline healthcare also remains inordinately high at close to one-fifth.
over a five-year period. It estimates that 135 million people have Similarly, some of the indicators on the standard of living not
exited from multidimensional poverty during these years. only show continuing privation but also put a big question mark
However, what is surprising is that despite the significant over the tall claims made by the government regarding the suc-
decline in multidimensional poverty levels, the intensity of pover- cess of various government flagship programmes to provide
ty, or the average proportion of deprivations, has remained al- subsidised cooking fuel, toilet facilities, and proper housing.
most unchanged. The ratio only fell from 47.14% in 2015–16 to Though the government claims that around 10 crore domestic gas
44.39% in 2019–21, a decline of less than 3 percentage points. supply connections have been given under the Pradhan Mantri
This indicates that the people exiting from poverty are those Ujjwala Yojana, the MPI numbers show that around 45% of the
who are relatively better off among the poor and that the condi- households still use wood, coal, dung, and other local materials
tions of life of the poorest largely remains unchanged. as their primary cooking fuel.
The MPI also shows large differences in the headcount poverty It is also seen that the share of households with no toilets or
ratio across regions and states. The numbers on the levels of rural those depending on shared toilets still remains a sizeable one-third
and urban multidimensionally poor show that while the rural MPI of the total. This runs contrary to the government claims of the
has come down by more than 13 percentage points to 19.28%, country having achieved open-defecation-free status a couple of
the urban levels have declined by around 3 percentage points to years back. Similarly, the government claims that the programmes
5.27%. This indicates that the rural–urban disparities remain to provide proper housing for all by constructing almost three
largely unchanged with the multidimensional poverty levels in crore houses by March 2024 have gained traction and are on the
the former remaining almost four times larger than in the latter. way to achieving great success. But the MPI indicators show that
In contrast, the disparities in the intensity of multidimensional the share of the poor with inadequate or proper housing facilities
poverty in the rural and urban areas seems to be converging. This has only declined marginally by 4.4 percentage points to 41.3%
was because the decline in the intensity of poverty was marginally during this period. This means that almost half of the population
higher in the rural areas where it fell by 2.83 percentage points still lacks decent housing. Clearly, the MPI headcount numbers not
to 44.55%. In the urban areas, the intensity dropped by 2.17 per- only refute the much-touted claims of the welfare programmes but
centage points to 43.1%. Thus, the disparities in the intensity of also obscure the real levels of deprivation and distress.
poverty in rural and urban areas seems to be slowly dissipating. The other interesting highlight of the report is the substantial
The broad MPI numbers, which are made up of 12 indicators interstate variation in the MPI. The headcount poverty ratios
on health (three), education (two) and standard of living (sev- show that Kerala retained the top spot with the least headcount
en), however, seem to conceal more than they reveal. This is numbers of multidimensional poor in both years: 0.7% in 2015–16
because despite the decline in the headcount numbers, many of to 0.55% in 2019–21. At the other extreme was Bihar with the
the core multidimensional poverty indicators remain at dis- highest levels of multidimensional poverty. The only consolation is
tressingly high levels. For instance, if one looks at the share of that the share of the multidimensionally poor in Bihar dipped
the undernourished in the population—an indicator of the sharply by around 18 percentage points to 33.76% during the peri-
health standards—the numbers remain substantially high despite od. Consequently, the interstate disparities in multidimensional
the increase in food production during this period. poverty levels slid down marginally during these years.
Between 2015–16 and 2019–20, the share of the undernourished Another big gain is that as many as 10 states registered a
population has only gone down by 6.1 percentage points and it double-digit fall in the MPI numbers during the period. It fell
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EDITORIALS
between 5 percentage points and 10 percentage points in an- one-third in 15 states and between 5% and 10% in another
other eight states. However, the fall in multidimensional pov- eight states. The remaining five states where the multidimen-
erty levels was less than 5% in the remaining 10 states. Conse- sional poverty level was the least were Punjab, Sikkim, Tamil
quently, the headcount ratio ranged between one-tenth and Nadu, Goa, and Kerala.
8 JULY 22, 2023 vol lViii no 29 EPW Economic & Political Weekly
FROM THE EDITOR’S DESK
Politics in a Desperate Need for Dialogue
I
t seems like an irony to plead for a politics with dialogue in the encouraged to involve themselves in nefarious activities, which,
current moment, especially such a dialogue that is internally due to the absence of dialogical transparency, make their politics
democratic. It is equally needless to mention that a politics slanderous, if not scandalous. Dialogue needs to take place within
based on dialogue requires transparency within which debates a particular political framework of our own making. The democ-
about certain core issues can take place and judgments having a racy principle in general and parliamentary democracy in particu-
bearing on the common good or welfare of the people are shared lar offered us a unique opportunity to produce morally decent and
publicly. But this has become increasingly difficult, especially in politically attentive leaders who would care for the problems of
the context where defections have followed secretive roots rather the people, who are morally responsible to the electoral mandate
than the ones of open debate to defect from one party to another. given by the people. Those who, with a humble background, surge
Politicians often show an extraordinary caution in speaking less ahead in terms of individual mobility but subsequently lose the
in private conversations, even with those who are relatively harm- moral advantage that they got in the first instance fail to build on
less. Everyone is turned into a potential suspect who can be a dan- this advantage that democracy has offered them. They do not
ger to one’s personal reputation, thanks to digital media, which has seem to be morally rattled by the act of ethically unwarranted de-
created this “art of suspicion” among the brand of current politi- fections and feel bold enough to claim that they still continue to
cians. One could characterise this facet of contemporary politics in represent the poor and the needy from their respective constitu-
a post facto manner—that dialogue is impossible, and that strong encies. Albeit, they speak from the position of the super-rich.
decisions should be taken at the very moment when suffocation is The defectors do work on the assumption that the communica-
detected in the party structures. But such confidence was not evi- tion between them and the common people is devoid of any cogni-
dent in most of the cases. And yet, one might argue that the asso- tive element, which helps the people to differentiate between, for
ciation and assimilation in some parties with resources indicate example, what is wrong and what is right. Any redemptive process of
the violence that occurred within the politicians’ self as much as it communication involving core public issues cannot occur without
disrupts the moral consistency within the peoples’ representatives. deploying one’s cognitive ability to put thought into the sequence
Such association or assimilation of politicians, particularly from of sound arguments. Arguably, common people and even party
one party to another, also speaks of the unhappy existence that workers have the political need to furnish sound arguments that
becomes unhappy for those who still have some sense of self-worth often come to them in a short-circuited form, such as bullet points
that pricks their conscience even after their defection, for example, that are promoted by digital media, Facebook, WhatsApp, messag-
from the parent party to the patronising party. It is also an act of es, etc. The digital platforms are driven by their urgency to post the
violence against the aspirations of the people. content from the impatient digitalised entities, rather than patient
Politics, which lacks the atmosphere and even culture of open debaters who take time in the mode of restive communication.
dialogue and debate, necessarily ends up promoting acts of de- Of course, in some rare cases, some of the public intellectuals
fection, which are the result of the internal limits of dialogue on do write for the common people; thus seeking departure from
the one hand and an inability of dialogue to accommodate the the exegetical language that is understandable only to a few. But
oversized interests of those who are vulnerable to defection, on the common people reduce values to attitudes and prejudices.
the other. Politicians become compelled both by their unwill- So, the intellectual who has the promise to involve the people in
ingness to dialogue or by political pressure from outside. a serious dialogue faces a tough challenge, which is why the de-
The future of a healthy pro-people dialogue depends on the twin fectors and the communalists feel assured that they do not have
but imperative condition that the political class and the vigilance to face any challenge from the intellectuals. This is a denial of
of the people keep the former on continuous probation, so that the deliberative abilities that can undoubtedly be harnessed within
former does not make its personal interests override the common a robust democratic framework.
interest. Since this urgency or vigilance seems absent, the elected
representatives and those who engineered such defections feel
EDITORIALS
Reforming the Goods and Services Tax

Simplification of the GST structure does not necessarily mean harmonisation of rates between the union and states.
T
he goods and services tax (GST) implemented in 2017 the lowest rate category to the higher rate category. All these,
continues to be a “work in progress” when it comes to its particularly the third exercise, will significantly improve the base
basic design and structure. The 50th GST Council meet- and create space for the reduction of the standard rate.
ing held on 11 July 2023 realigned the rates of certain products Given the experience of GST during the last six years, it can be
from a higher rate category to a lower rate category, exempted said that the flexibility in GST design to accommodate differential
certain essential imported drugs from GST, and also applied a needs of revenues of the union and states requires active consid-
28% tax rate on the full value of online gaming, casinos, and eration of all the stakeholders. The available evidence would show
horse-trading. It is true that GST, when introduced in 2017, had a that the revenue base conceded by the states to the GST pool is
high element of selectivity in taxation. The rate differentiations much higher than that by the union government. However, the
were more actuate then compared to what it is today. However, GST rate structure, as adopted, has equally shared this base, and this
to derive the full benefit of GST, it is important to minimise se- has resulted in further accentuation of the vertical fiscal imbal-
lectivity in taxation. It is also important to preserve the fiscal ance between the union and states. In many GST regimes, dif-
autonomy of the states. The GST should try to achieve the right ferential tax rates between the federal and provincial govern-
balance between tax harmonisation and fiscal autonomy. ment is not uncommon. For example, in Canada, the federal GST
In a GST regime, selectivity introduces subjectivity and per- rate is 5%, while the provincial GST rate varies across provinces.
ception in determining tax policy and is contrary to the basic In other words, simplification of the GST structure does not nec-
principle of GST. This makes the GST system non-neutral to eco- essarily mean harmonisation of rates. It is more about harmonisa-
nomic activity and is highly distortionary. The basic principle of tion of processes. Though 28 states with 28 different rates in the
modern-day taxation is to adopt a “broad-based and low-rate Indian context may not be possible and has the potential to com-
approach” to taxation. Though the current GST regime is an im- plicate the tax system, a higher rate for state GST would certainly
provement on the earlier tax regime, it is still far from an ideal enhance state autonomy and reduce the increase in the vertical
GST structure. It is based on rate harmonisation across levels of fiscal imbalance induced by the introduction of GST. This change in
governments but highly differentiated across commodities and the rate structure will not complicate the tax system. In a complex
services. What is required is just the reverse. federal system, the idea of simplicity should not be pushed too
In India, we have observed significant convergence in commodity- hard that it compromises fiscal autonomy and creates a func-
specific tax rates during the last six years. This convergence in tional deficit not backed by the own-revenue power of states.
rate accompanied by procedural simplification seems to have Going forward, the petroleum sector, if brought under GST, will
helped in revenue generation. Central GST increased by 22.45% eliminate its cascading effect and improve economic efficiency. In
between 2021–22 (accounts) and 2022–23 (revised estimates). the non-GST pool of revenues, the share of petroleum revenue is
The monthly GST collection growth rate during the first quarter significant. But bringing it under GST will also eliminate the inde-
of the current fiscal year has also been impressive. Though the pendent power to tax this sector and will result in a disproportion-
monthly date reflects the gross GST collection, the increase in ate loss of fiscal autonomy to the states. The critical issue is to have
the volume of tax indicates an enhancement in the revenue a comprehensive understanding of the cost of the loss of fiscal au-
buoyancy of the tax. Given that the tax is buoyant, and expect- tonomy and the benefits of economic efficiency gained by bringing
ed to remain so in the medium term, it is also time to introduce petroleum under GST. Any reform of the petroleum sector should
structural reforms in GST to make it more broad-based, less dis- also be based on the principle of preserving fiscal autonomy and
tortionary, and to ensure fiscal autonomy of the states. revenue needs and the energy policy of the government.
What are the key areas of reform that could be considered for a Finally, the GST process in a federal system is complex, and it
better GST? A comprehensive rate restructuring would be important is not easy to accommodate all the different priorities, including
to improve the design. This rate restructuring should have three ele- a number of redistributive considerations, through the indirect
ments: (i) a reduction in the number of rates, (ii) a reduction of the tax system. Though the purest form of GST is difficult to achieve,
standard rate of taxation from its current level of 18% to a level there is a need to work towards the objective of having a GST that
that reduces overall tax incidence and promotes business and trade, strikes a fine balance between fiscal harmonisation and auto-
and (iii) a comprehensive review of the rate structure and the nomy. In the name of simplicity, GST should not make revenue
schedule of rates to move a large number of commodities from collection only an agency function of state governments.
8 JULY 22, 2023 vol lViii no 29 EPW Economic & Political Weekly
LAW & SOCIETY
Amid a Legal Conundrum and employment potentials, which created

greater demand for low- and medium-
skill gig and platform workers in India.
The Fate of Platform Workers in India On the other hand, such employment
growth is replete with the challenges of
nature and quality of these jobs, as this
Areesha Khan, Rahul Suresh Sapkal growth has brought in the structural
changes that further strive away from
O
Platform economy promotes ver the last decade, the intensity standard employment relationships as
flexibility and assures autonomy to of online platforms using digital well as legal protections and expect
technologies, including algori- these modern workers to function as
the workers. With a rapid increase
thms, to match labour demand and supply “independent and atomised workers”
in digitally mediated platforms to has rapidly gained ground worldwide. (Stanford 2017). So, the natural questions
govern the world of work, we Given their disruptive nature, rapid arise: What is the legal employment
often overlook the legal existence growth, high visibility and concentration status of this ever-growing workforce in
in labour-intensive sectors that are tradi- India? Are they independent contractors
of workers’ employment status.
tionally strictly regulated, digital labour or employees of the platform?
Around the world, the highest platforms quickly came on the radar of
courts are making concerted the policy and stakeholder communities Platform Workers Autonomy:
as they sparked lively debates on issues Blessing or Curse?
efforts to re-evaluate the core
such as (unfair) competition, taxation, and The official website of the Uber (nd)
aspects of the criteria traditionally
inducing precarity and perilous working company asks drivers to join Uber as
used to distinguish between conditions of platform workers (Lenaerts partners and earn as per their own
employees and the self-employed. et al 2017). According to the ILO (2021), convenience (Drive with Uber—Be Your
However, the judicially the number of digital labour platforms Own Boss). It is claimed that the platform
worldwide has increased fivefold during economy promotes flexibility and assures
interpreted test for employee
the last decade. In the Group of Twenty autonomy to the workers (Cramer and
status determination often (G20) countries, the number of platforms Krueger 2016). More autonomy is associ-
provides mixed results. This grew from 128 to 611 in the past decade. ated with more satisfaction with working
article, while providing an This represents 79% of the platforms conditions. We should bear in mind that
operating worldwide in 2021. Within the this economy is heterogeneous in various
overview, advocates for using
G20 countries, platforms are largely sectors so also in the nature of work and
organisational integration tests concentrated in the United States (37%), the workers engaged in it. The autonomy
instead of supervision and control followed by the European Union (22%), of the worker varies across platforms with
tests to determine the legal India (10%), and the United Kingdom their skill and mobility. Nonetheless,
(uk) (6%). Among these countries, India platform work can be broadly categorised
employment status of
deserves special attention. Coupled with into “crowd work” or web-based work
platform workers. its demographic dividend, rapid urbanisa- and “app-based work ” or location-based
tion, widespread adoption of smartphones, work in the form of local service-ori-
and associated technology have enabled ented tasks such as driving, delivery, or
India to emerge as the new frontier of cleaning houses. The latter is the focus
platform revolution by promoting inde- of our analysis.
cent jobs and intensifying occupational At present, about 47% of the gig work
health hazards. According to NITI Aayog is in medium-skilled jobs, about 22% in
(2022), approximately 6.8 million plat- high skilled, and about 31% in low-skilled
The authors would like to express sincere
form workers in 2019–20 engaged in jobs working in transport, retail, and
thanks to the anonymous reviewer for the
constructive comments, which greatly
web- and location-based platforms, con- domestic industries (NITI Aayog 2022). It
improved the earlier version of this column. stituting 1.3% of the total workforce in is, however, expected that this trend
India. It is further projected that the size of will reduce the concentration of workers
Areesha Khan (areesha.khan@monash.edu) is
pursuing PhD from IITB-Monash Academy and this workforce will grow by 4.1% of the in medium-skill occupations and will
Ashank Desai Centre for Policy Studies, Indian total Indian workforce by 2029–30. shift to low-skill and high-skill occupa-
Institute of Technology Bombay. Rahul Suresh So, on the one hand, the higher tions in the next decade. Location-based
Sapkal (rahuls@iitb.ac.in) teaches at the Ashank employment elasticity for these workers platform workers are more visible run-
Desai Centre for Policy Studies, IIT Bombay.
indicates the nature of economic growth ning on the roads round the clock. It is
LAW & SOCIETY
characterised as relatively low-skilled to determine the employee–employer under the Factories Act, 1948; Industrial
work in India. In the case of on-location relationship (Hießl 2022). In the common Disputes Act, 1947; Minimum Wages
platform work, the worker appears to employment law principles, employment Act, 1948; and Industrial Employment
have agency to decide over their time, status is largely determined by the degree (Standing Orders) Act, 1946. Thus, the
place, work intensity, and engagement of autonomy and control that employers formal sector, in which the employer–
with the customer. However, workers’ have on workers’ efforts. Now, countries employee relationship is clearly defined,
subordinated agency is embedded within like Sweden, the Netherlands, France, is governed by these labour laws that
the platform’s reputation, rating, and and Italy have been using organisational cover not only the employment protec-
task allocation mechanism (Graham et al integration as a precondition for apply- tive provisions and legal definitions but
2018; Rosenblat and Stark 2016). Hence, ing a presumption of employment with also expand it to cover to occupational
the categorisation of workers as self- regard to contract tenure, working hours, safety, provident fund, gratuity, pen-
employed has come to be termed as “fake” and work performance due to intermit- sion, and other social security schemes.
or “bogus” self-employment (Behling and tent character of work performed in the On the contrary, as many industrial/
Harvey 2015; Wright et al 2019). platform economy. In India too, in production units are home-based or
In the legal context, employment con- Dhrangadhara Chemical Works Ltd v the small that fall outside the purview of
tract becomes a “platform” that decides State of Saurashtra (1957), the Supreme industrial relation laws, which define
the workers’ status and establishes the Court has devised the twin tests of the legal status of establishment or nature
entitlements and benefits extended to “supervision and control.” Under this of work/type of employment, it leaves out
them (Langille 2002). Along with the doctrine, a relationship of employer– millions of workers as informal workers
contract, the legal construction of what employee will be established where the without any recourse to employment
constitutes an employee or a contract employer not only will exercise control protection or social security laws. In this
worker and what benefits extend to and direct what work has to be done but case, these informal workers are left at
whom are decided by the law. In the gig will also control the manner in which it the hands of the state for regulation on
economy as well, the contract becomes has to be done. However, this was in the minimum wage or different social secu-
the instrument of an engagement in work, case of the contractual employment. rity as prescribed under the Unorganised
which is scrutinised by the courts to Given the pretext of high informality Workers’ Social Security (UWSS) Act, 2008,
decide whether the worker is an employee of the workforce in India, it is difficult to provided they fulfil the eligibility criteria
or an independent contractor. The real see the platform workers through the lens under the said act. Recently, the Indian
nature of the relationship can go hidden of the standard employment relations. Federation of App-based Transport Work-
and unnoticed, and there it becomes There are parallel laws for formal and ers (WP [C] 1068/2021) has filed a writ
necessary to understand whether the informal sectors. There is a clear defini- petition in the Supreme Court and has
relationship that is represented by their tion of what constitute formal employment prayed to recognise the gig and platform
contract does or does not align with how
both the parties—the worker and the
platform (company)—work.
In the famous cases of Uber in California
and the UK and Deliveroo in Australia,
Review of Urban Affairs
courts went beyond the service contract January 29, 2022
to look at the nature of the work in Pandemic and the City —Karen Coelho, Vinay Gidwani,
which the workers were engaged. In the Anant Maringanti, Partha Mukhopadhyay
former case, Uber and Others v Aslam Recovery as Resilience: Domestic Work and Workers —Kinjal Sampat, Antara Rai Chowdhury,
in the Aftermath of COVID-19 Gautam Bhan
and Others (2021), Uber drivers were
Pandemic Precarity: Life, Livelihood, and Death in
held to be “dependent contractors” of the the Time of the Pandemic —Aseem Prakash, Hem Borker
company by the Supreme Court of the Intensifying Urbanities in Karachi: A South Asian City —Adam Abdullah, Soha Macktoom,
UK using an intergration test of employ- in the Time of COVID-19 Nausheen H Anwar, Noman Ahmed
ment. In the latter, Klooger v Foodora COVID-19 and the State of Exception: Urban Mobility under the Epidemic State —Gaurav Mittal
Australia Pty Ltd (2018), a terminated How Places Matter: Understanding Workers’ Responses to Garment Factory
Closures during the Pandemic in Bengaluru and Srirangapatna —Swathi Shivanand, R Prathibha
food delivery worker was held to be an COVID-19 and the Women at Work: —Vanshika Singh, Syeda Asia, Shivangi Gupta,
employee of Foodora by the Fairwork An Ethnographic Account of Sanjay Colony, Bhatti Mines Lakshay Talwar, Aashna Gutgutia, Pushpa
Commission of Australia through apply- Closure of Schools and Migration of Adolescent Tribal Girls:
ing the degree of work control and A Case Study of Surat —Shilajit Sengupta
supervision test based on the principle For copies write to:
of employment common law. However, Circulation Manager,
in Europe, a combination of elements of Economic & Political Weekly,
320–322, A to Z Industrial Estate, Ganpatrao Kadam Marg, Lower Parel, Mumbai 400 013.
direction and control and indicators of
email: circulation@epw.in
organisational integration has been used
Economic & Political Weekly EPW july 22, 2023 vol lViii no 29 11
LAW & SOCIETY
workers under the “unorganised workers” to form a welfare board for this segment economy that is leveraging on the large
so that at least the unorganised sector of workers is a first step towards recog- pool of unorganised workers in an infor-
social security schemes are extended to nising them as workers. In this initiative, mal urban sphere of labour (Dhar 2022).
them. Through this petition, the platform the state government has come forward This makes it important for us to trace
workers could be covered under the UWSS to take the responsibility to provide the and understand what are “precarious work
Act by making the state responsible to safety net to the workers against the conditions” and how is platform work pre-
provide social security to them. flexible and uncertain market conditions. carious. Precarious work can be attributed
Through looking into the evolution of Nonetheless, these attempts of the state to changing employment relations and
labour jurisprudence in India, it was are devoid of making the employer equally conditions held or aspired for (Hewison
noted that the Supreme Court, in many responsible for providing decent work- and Kalleberg 2013). In the case of the
instances, is reluctant to apply the clause ing conditions and legal entitlements to developing countries in Asia, precarious
of automatic absorption of contract worker its workers, are largely the outcome of the work has been the norm where being
in the absence of any explicit notification codification in the form of the Industrial locked into precarious work and fewer
under Section 10(1) of the Contract Labour Relations Code, 2020, and has given better opportunities for work are also
(Regulation and Abolition) (CLRA) Act, more centralised power to the union seen as a loss (Hewison and Kalleberg
1970 and has prohibited employment of than state governments. 2013). The use of technology and capital
contract labour (SAIL v National Union Thus, Indian labour laws also need to with the motive of reduction in costs by
Waterfront Workers [2001] 7 SCC 1). In go beyond the binaries of supervision reducing wage cost and other social
such a situation, when it becomes diffi- and control approach to define the employ- benefits to the workers had resulted in
cult to establish the employer–employee ment status for platform workers, as lean business models on which the on-
relationship and to hold the principal they are largely driven by third-party location service platforms are based.
employer accountable, a newly risen contractors. Moreover, there is a need to The union government sees huge
worker-driven collective, Indian Federa- re-conceptualise how the nature of work potential in the booming gig and plat-
tion of App-based Transport Workers, has is integrated within the organisation’s form economy for employment genera-
filed a writ petition seeking to include business-to-customer relationships using tion as is evident from the NITI Aayog
platform workers, under the Unorganised the organisational integration test as an report (2022). It makes the economic
Workers Social Security Act, 2008, and alternative to grant the employment status. agenda clear regarding why is platform
is an alternative strategy to reclaim the economy ideal for both the economy and
status of workers in the highly unregu- Platforms: A Modern Driver of businesses, and hence, all the government
lated platform economy. Second, due to Economic Growth has to do is to make grounds for the gig
growing employment concerns of platform In India, globalisation and fragmentation and platform economy to flourish as it is
workers and lack of legal entitlements, of supply chains coupled with techno- creating employment opportunities. The
the declaration of Rajasthan government logy has led to an ever-growing platform question then arises over the policy
BUDGET 2023–24
March 25, 2023
An Introduction and Overview —Pinaki Chakraborty
Independent Fiscal Councils: Lapdogs or Watchdogs? —Y V Reddy, Pinaki Chakraborty
Electoral Cycle and the Union Budget 2023–24: Some Departures from the Past? —Ashok K Lahiri
Concerns about Balancing Growth and Stability —M Govinda Rao
Union Budget 2023–24: The Long View —Ashima Goyal
Massive Capital Expenditure, Modest Fiscal Consolidation, and Cut in Pillars of Social Safety Net —Sudipto Mundle, Ajaya Sahu
Balancing Growth with Fiscal Consolidation —D K Srivastava
The Union Budget 2023–24 and the Financial Sector: The Devil May Lie in the Details —Partha Ray
Agriculture and Rural Areas in Budget 2023–24: A Need for Comprehensive Approach for Transformation —S Mahendra Dev
For copies write to:

Circulation Manager,
Economic & Political Weekly,
LAW & SOCIETY
priorities for quantity over quality of jobs. definition of wage worker. Similarly, it also protect their fundamental rights as
Voluminous studies assessing the effects coincides with the definition of contrac- enshrined in the Constitution.
of perceived job quality on worker per- tual labour under the CLRA Act, 1970.
formance, productivity, and organisa- The Indian labour courts echo this confu- References
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carried out both in the global North and different sections of laws that applied to False Self-employment in the British Construc-
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www.rosalux.de/en/news/id/46886/organiz-
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The NITI Aayog report (2022) acknow- absence of a clear employment relation Economic Times (2023): “Rapido Flays Maharashtra
ledges the occupational safety and health and a legal definition. Ban on Bike Aggregators, May Challenge It,”
21 January, https://economictimes.indiatimes.
risks, including those of road safety, theft This legal picture, in a nutshell, is com/tech/startups/rapido-flays-maharashtra-
and physical assault, income and job called a legal vacuum that is created by ban-on-bike-aggregators-may-challenge-it/
articleshow/97204726.cms.
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due to isolated work arrangements; how- of the platform economy. First, instead and I Hjorth (2018): “Could Online Gig Work
Drive Development in Lower-income Countries?”
ever, these challenges are not addressed of a legal vacuum, we term it as a legal
Hewison, K and A L Kalleberg (2013): “Precarious
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has been considered to be the main by the platforms and the Indian legal east Asia,” American Behavioral Scientist,
Vol 57, No 4, pp 395–402, https://doi.org/
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or through any productivity link schemes camouflaging contracts. We find legal Law E-Journal, Vol 15, No 1, pp 13–28, https://
doi.org/10.6092/issn.1561-8048/15210.
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(Sehrawat et al 2021; Surie 2017), taking of work that are defined concretely in the New Platform, New Paradigm,” Canadian Public
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Lenaerts, K, M Beblavý and Z Kilhoffer (2017):
also criticised. Not until the Motor Vehicle Factories Act, 1948 and Industrial Dis- “Government Responses to the Platform Econ-
Aggregator Act and Guidelines came out putes Act, 1947—the core of statutory omy: Where Do We Stand?”
labour laws—application of varied nature NITI Aayog (2022): “India’s Booming Gig and Plat-
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Study of Uber’s Drivers,” International Journal
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N Rangaswamy (2021): “The Everyday HCI of
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COMMENTARY
school, INSEAD, in collaboration with

In Search of a More Innovative India’s leading industry and business as-
sociation, the Confederation of Indian
Innovation Index for India Industry (CII). Initiated in 2007 and cov-
ering 107 countries, this is a composite
measure of innovation by considering
K J Joseph, Kiran Kumar Kakarlapudi various dimensions of the innovation
process and is published annually. The
I
The construction of the India ndices are, indeed, interesting inno- latest publication of the GII in 2022 is the
Innovation Index, following the vations in representing complicated 15th edition, covering about 132 countries.
economic and social processes. While The GII comprises an input sub-index
Global Innovation Index, by the
they provide new avenues of enquiry for and an output sub-index. The input sub-
NITI Aayog and the Institute the analysts, it enables the policymakers index is based on five pillars: institutions
for Competitiveness, is a timely to easily capture complex situations. No that capture political, regulatory, and
initiative that gained significant wonder we live in a world of indices at business climate. The second pillar is
the global, national, and subnational human capital and research, which cap-
traction in academic and policy
levels. The more popular indices include, tures the general education level, higher
circles. However, it is shown that but are not limited to, the human devel- education, and R&D expenditure. The
III could be made more robust opment index (HDI), entrepreneurship infrastructure pillar captures informa-
by strengthening its analytical index, ease of doing business index, gov- tion and communications technology
ernance index, and hunger index. infrastructure, general infrastructure,
foundations by characterising
Ever since Joseph Schumpeter discov- and ecological sustainability. Market so-
India’s innovation system from a ered the bearing of innovation in the devel- phistication, the fourth pillar of the in-
southern perspective and locating opment of capitalist economies, numerous put sub-index, measures credit, invest-
more appropriate indicators that scholars have highlighted the role of sci- ment, and trade. The fifth pillar is busi-
ence, technology, and innovation (STI) in ness sophistication which measures know-
capture the process of innovation
shaping economic growth and develop- ledge workers, innovation linkages and
at the national and subnational ment outcomes. Over the decades, concep- knowledge absorption. The innovation
levels in India. tualising and measuring innovation has output sub-index entails two pillars.
undergone substantial changes from inno- One is knowledge and technology out-
vation being narrowly understood as re- puts, and the other is creative outputs.
search and development (R&D) investment The first pillar measures three compo-
and patents to a broader approach in- nents; knowledge creation, knowledge
corporating non-R&D measures (Smith diffusion and knowledge impact. The
2005; OECD 2005, 2010). Especially nota- second pillar measures intangible as-
ble is the contribution by scholars using the sets, creative goods and services and on-
innovation system approach that concep- line creativity. The index presents the
tualised innovation as an outcome of an country’s rank with respect to each pil-
interactive learning process among differ- lar, enabling the country concerned to
ent actors at the global, national, subna- locate its positioning in the global inno-
tional, and sectoral levels (Lundvall 1992; vation landscape.
Nelson 1993; Edquist 1997). Regardless of From the GII, it is evident that there
the approach used in understanding inno- are two phases with respect to the trend
vation, the relevance of appropriate indica- in India’s rank. During the first phase
tors of innovation performance cannot be (2007–15), India’s rank declined from 41
overemphasised in devising innovation to 81, whereas in the second phase (2015
policies. Drawing insights from different to 2022), the rank improved consistently
perspectives in innovation studies, the to reach the 40th position in 2022. Since
Global Innovation Index (GII) places differ- the number of countries included inc-
ent countries across the world with respect reased during the first phase, compared
to their performance in innovation. to the second phase, which remained
almost constant, the observed decline
K J Joseph (director@gift.res.in) and Kiran India in the GII must be viewed cautiously. Nonetheless,
Kumar Kakarlapudi (kiran@gift.res.in) are The GII is perhaps the latest contribution India’s significant improvement in GII
with the Gulati Institute of Finance and in the tradition of innovation indicators, rank during the second phase could be
Taxation, Thiruvananthapuram, Kerala.
brought out by the world’s business perceived as a return to the strategy of
Economic & Political Weekly EPW juLY 22, 2023 vol lViii no 29 25
COMMENTARY
the Government of India to achieve Figure Innovation

Figure 1: India’s Rank in the Global 1: India's Rank in Global Innovation Index
Index
innovation-driven growth as manifested 90
141 142 143 141
160
80 130 132 131 132 132
in the STI policy 2013, along with declar- 81 128 127 126 129 140
70 76
ing the previous decade as the decade 107 62 64 66 120
60 66
of innovation. The second phase also 56 60 100
50 57
52 48 80
witnessed a vigorous innovation-driven 40 41
46 40
60
growth agenda manifested in policy ini- 30
20 40
tiatives such as “Make in India” that in-
10 20
tend to make India the most attractive 0 0
global destination for foreign direct in-
2008–09
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2008-09
2009-10
2009–10
vestment (FDI) and develop India into a
“global manufacturing hub” by facilitat- Number of countries India’s
India'srank
RankinGlobal
the Global Innovation
Innovation Index
Index
ing investment and integration with the Source: Authors compilation from Global Innovation Index reports, various years.
global innovation network. Another no- pillars—human capital, investment, total number of indicators included in
table initiative has been the Atal Innova- knowledge employment, business envi- constructing the latest version of the III
tion Mission (AIM), the flagship project ronment, and safety and legal environ- for 2021 is only 66 compared to 80 in the
of NITI Aayog, to promote innovation and ment—indicate innovation inputs at the case of GII. As is evident from Table 1,
entrepreneurship in the country. The lat- subnational (states and union territo- while the total number of input indica-
est effort in this regard is Atmanirbhar ries) economies. Two performance pil- tors of III is almost at par with GII, the
Bharat. This aims to further strengthen lars include knowledge output and know- output indicators are significantly lower;
our national, regional, and sectoral in- ledge diffusion. These two pillars are 16 as compared to 27 in GII. All the indi-
novation system to hasten the transfor- akin to the input sub-index and output cators are normalised, and the aggre-
mation of India into an innovation-driven sub-index of the GII. Over the past three gate index is estimated using the princi-
economic superpower. Other policy initia- years, considerable progress has been made pal component analysis (PCA). The III
tives like the “Digital India programme” in identifying the appropriate indicators covers all 28 states and eight union ter-
and “Skill India programme” are also towards building the two pillars. Yet, the ritories, subdivided into districts, cities,
aimed at facilitating the strategy of in- Table 1: Number of Indicators Included in India and towns.
novation-driven growth. Innovation Index and Global Innovation Index
Dimension 2019 2020 2021 State-level
India Innovation Index India Innovation Index Innovation Performance
Enablers 23 25 50
Although the GII places different coun- Performance 10 11 16
The index shows that among the major
tries with respect to their innovation Total 33 36 66 Indian states, Karnataka tops in innova-
performance based on certain globally Global Innovation Index tion performance, followed by Telanga-
applicable indicators, when it comes to a Input sub-index 54 53 53 na, Haryana, Maharashtra, and Tamil
developing country like India, which is Output sub-index 27 27 27 Nadu. Chhattisgarh scored the lowest
known to be diversified with its own Total 81 80 80 rank, followed by Odisha, Bihar, Guja-
Source: NITI Aayog (2022) and Dutta et al (2022).
development dynamics, the index for rat, and Madhya Pradesh (MP) (Table 2).
India at the subnational level assumes Table 2: Innovation Performance of Major States
much importance. To the extent that the in 2021
States III 2021 Enablers Rank Performers Rank
performance at the national level is con- EPW Index
Karnataka 18.01 1 22 2 14.02 2
tingent on the subnational level, the India Telangana 17.66 2 20.08 4 15.24 1
Innovation Index (III) highlights the inn- An author-title index for EPW has been
Haryana 16.35 3 22.68 1 10.02 8
ovation readiness of Indian states and prepared for the years from 1968 to
Maharashtra 16.06 4 19.97 5 12.16 4
union territories. Such an exercise could Tamil Nadu 15.69 5 18.93 6 12.45 3 2012. The PDFs of the Index have been
help the central and state governments Punjab 15.35 6 20.41 3 10.3 7 uploaded, year-wise, on the EPW website.
influence the innovation process at the Uttar Pradesh 14.22 7 16.54 11 11.9 5 Visitors can download the Index for all the
national, subnational, and sectoral lev- Kerala 13.67 8 18.17 9 9.17 11 years from the site. (The Index for a few
els. In this context, the construction of Andhra Pradesh 13.32 9 18.66 8 7.99 14 years is yet to be prepared and will be
Jharkhand 13.1 10 16.38 12 9.81 9
the III at the instance of NITI Aayog and uploaded when ready.)
West Bengal 12.98 11 15.37 15 10.6 6
the Institute for Competitiveness deser-
Rajasthan 12.88 12 18.68 7 7.09 16 EPW would like to acknowledge the help
ves much appreciation. Started in 2019,
Madhya Pradesh 12.74 13 16.2 13 9.29 10 of the staff of the library of the Indira
the third edition is for 2021. Gujarat 12.41 14 16.05 14 8.78 13
Following the conceptual and metho- Gandhi Institute for Development Research,
Bihar 11.58 15 14.21 17 8.95 12
dological approach of GII, the III measures Mumbai, in preparing the index under a
Odisha 11.42 16 15.19 16 7.64 15
innovation inputs through “enablers” Chhattisgarh 10.97 17 17.72 10 4.22 17
project supported by the RD Tata Trust.
and output as “performers.” Five enabler Source: Compiled from NITI Aayog (2022).
26 juLY 22, 2023 vol lViii no 29 EPW Economic & Political Weekly
COMMENTARY
Figure 2: Global Innovation Index the system. On the contrary, the rela-
Panel A: Innovation Input Sub-index and Output Sub-index tively low value of innovation input indi-
150
cators coincides with higher innovation

Input sub-index rank
outcomes, which could be viewed as

100
high innovation efficiency. In both cases,

the bearing of the observed outcome on
50
account of the poor representation of in-

0
dicators used in constructing the index

0 50 100 150
Output sub-index rank cannot be ruled out. These premises pro-
Panel B: Global Innovation Index and Human Development Index
vide one of the methods to check the
Human Development Index rank
robustness of the index in representing

1 1.2
the innovation process at work in the

country concerned.
Literature on innovation and develop-
.8
ment firmly upholds the direct bearing

.4 .6
of innovation on development outcomes

0 20 40 60 80
(Lundvall et al 2011). Hence, one could
Global Innovation Index rank expect a strong positive correlation bet-
Source: Complied by authors from Dutta et al (2022) and UNDP (2022).
ween the innovation index and the pop-
Figure 3: Correlation between Ranks of Enablers and Performers ularly used index of developmental out-
Panel A: India Innovation Index 2019 comes like the HDI. This could be yet an-
other method to check the robustness of
20
JH the index.
BR
15
UP
CH
MP
Enablers
RJ
WB
Robustness of GII
10
OD
TS
AP
PB
GJ Let us begin with the robustness check
TN
5
KL
KA
HR
MH for the GII. We have estimated the rank
0
correlation coefficient between the inn-

0 5 10 15 20
Performers ovation input sub-index and innovation
Panel B: India Innovation Index 2021
output sub-index of GII. We have also
estimated the rank correlation between
20
BR the global innovation and human devel-

OD
WB
15
MP
GJ opment indexes at the country level.
JH
Enablers
UP Similar estimates of rank correlation

CH
10
KL
AP
TN
RJ have been made using the India innova-
MH
5
TS tion index at the state level.

PB
KA
HR
The estimated rank correlation coef-
0
0 5 10 15 20 ficient between the innovation input

Performers
Source: NITI Aayog (2022). sub-index and innovation output sub-
index of GII for 2021 is 0.89, which is
Although the index is generally high Robustness of Innovation Indices statically significant at 1% level. This
among the states with higher per capita As indicated, GII draws its analytical estimate corroborates the perceived re-
income and vice versa, there are two no- foundations from the innovation system lationship bet ween innovation inputs
table exceptions. Despite having a per perspective. Analytically, it is perceived and outputs, as Panel A in Figure 2
capita income much higher than West that innovation inputs have a crucial shows. With a view to ascertaining the
Bengal and MP, Gujarat ranks only 14 out bearing on innovation outputs. Hence, relationship between innovation and
of 17 major states. Similarly, Uttar Pradesh one could postulate different scenarios development, we have plotted the scores
(UP) ranks seven, although its per capita based on the relative performance of of GII and HDI (Figure 2). It is evident
income is among the bottom five states. innovation inputs and outputs. To begin that they move in tandem with each
Overall, there is reason to believe that with, both indicators could move in sync other at the global level. This is further
while the construction of the innovation with each other, which manifests the reinforced by the estimated value of
index for India is an attempt in the right theoretically articulated positive rela- rank correlation coefficient 0.90, which
direction, a careful look at the estimated tion between them. However, it is possi- is found to be positive and statistically
values of the index presented across ble that a relatively high value of innova- significant. With respect to GII, the
states tend to highlight certain apparent tion inputs could result in low innova- higher innovation input leads to higher
inconsistencies. tive outcomes, indicating inefficiency in innovation output and higher innovation
COMMENTARY
Figure 4: India Innovation Index and HDI to enablers. On the contrary, in uP, West
Bengal, and Bihar, the performance
.8
KL score is five points higher than the ena-

blers. Analytically, these states could be
.75
seen as cases of extreme innovation effi-

Human Development Index rank
PB ciency. Yet, considering their position

TN HR
among the Indian states with respect to
.7
MH
K
KA development, one is inclined to raise
GJ TS
concerns about the relevance of the indi-
AP
.65
WB cators used.
RJ
CH
The analysis of the relationship be-
OD MP
JH tween the III and HDI reveals a positive
.6
UP
BR association (Figure 4). The rank correla-

tion coefficient is 0.5, with a statistical
.55
10 12 14 16 18 significance of 5%, which suggests weak

India Innovation Index links between innovation and develop-
Source: NITI Aayog (2022).
ment. This finding contrasts with the
work towards a higher level of develop- coefficient innovation inputs and out- estimated rank correlation coefficient
ment, as indicated by HDI. puts are as high as 0.89 and statistically between the GII and HDI, which is 0.9,
significant at a 1% level. This clearly in- with a statistical significance of 1%. The
Robustness of III dicates the scope for improving the in- weak relationship observed in the Indian
Following the same approach, we checked dex by carefully selecting indicators for context could be attributed to Gujarat’s
for the robustness of the III, and the out- enablers and performers. low ranking in the innovation index de-
come has not been encouraging. The es- In 2021, the relative contribution of spite being one of the developed states in
timated rank correlation coefficient be- enablers in innovation performance was the country. Conversely, Kerala ranks
tween innovation inputs and outputs for higher than performers in all the states. first in terms of HDI, Sustainable Devel-
India for 2019 is found to be negative This could be indicative of the ineffi- opment Goals (SDGs), and several other
(-.70) and statistically significant. Such a ciency in translating innovation input indicators and is ranked eighth in the III
relationship is untenable and points to- into output. For instance, in states like (Figure 4). Moreover, states such as uP
wards weak empirical and analytical Andhra Pradesh, Chhattisgarh, Hary- and West Bengal, which have low levels
foundations of the maiden index. Spe- ana, and Rajasthan, the rank in terms of of human development, exhibit high III
cifically, we found that states such as UP, performance is at least six points lower ranks. These findings raise questions about
West Bengal, and Telangana performed than the corresponding rank with respect the possibility of development without
poorly in the enablers index. Yet, they
ranked much higher in the performance
index, with ranks of 15, 9, and 9, respec-
tively (Figure 3, Panel A, p 27). This indi-
cates that these states had high innova-
tion efficiency, which is puzzling given
their level of economic development.
In contrast, states such as Maharash-
tra, Haryana, Kerala, and Gujarat ranked
high in the enablers index but performed
poorly in the performance index. Thus,
Panel A in Figure 3 illustrates a negative
relationship between enablers and per-
formance ranks, which is untenable.
However, with the inclusion of addition-
al indicators for 2021, the relationship
becomes positive (0.45) and statistically
significant only at a 5% level. This sug-
gests an improvement in the accuracy of
the index (refer to Figure 3, Panel B).
Nevertheless, the credibility of India’s
innovation index still lags far behind the
GII, where the estimated rank correlation
COMMENTARY
innovation, which contradicts current framework (regulatory quality; the rule of III. Similarly, since innovation out-
understandings of the issue. Conse- of law) and generation of science-based comes in developing countries are non-
quently, it is necessary to investigate and experience-based knowledge (pat- technological in nature, the inclusion of
the reasons behind the III’s shortcom- ents, for example, cluster strength, firms organisational and marketing innova-
ings and identify strategies to improve training and exports) are captured by tions and innovations in the informal
its future editions. the GII. The appropriate choice of indica- sector (apart from grassroots innova-
tors representing interactive learning, tions) would help in capturing innova-
Creating a Robust Innovation innovation inputs, innovation outputs, tion outputs better. The World Bank
Index: Plausible Directions and the institutional context seems to Economic Survey for India 2021 will
The maiden attempt by the NITI Aayog have made GII a robust index. help capture many of the interactions
to construct an innovation index for In- Since the III deals with a developing discussed above.
dia is a timely and laudable initiative. country, the innovation system ap- Overall, the III could be made more
However, we observed that although proach needs to be adapted to a develop- robust by strengthening its analytical
the III is based on the methodology of ing country context. Using firm-level foundations by characterising India’s
the GII, the estimated index of India data in the Indian context, Joseph et al innovation system from a southern per-
appears to lack robustness, suggesting (2021) showed that experience-based spective on the one hand and locating
that there is scope for improving the in- learning arising mainly through the DUI more appropriate indicators that capture
dex to which the innovation scholars mode plays a significant role in innova- the process of innovation in a develop-
need to contribute. tion performance. Hence, adopting the ing country like India.
The plausible directions of improve- GII methodology for III calls for incorpo-
ment could be both in terms of analytics rating country-specificities in the inno- References
and empirics. Analytically, the innova- vation process. Though the III has cap- Dutta, S, B Lanvin, S Wunsch-Vincent and L R León
tion system perspective, the most widely tured some of the key aspects of differ- (eds) (2022): Global Innovation Index 2022:
What is the Future of Innovation-driven Growth?
used approach in innovation studies, ent kinds of knowledge and the institu- Vol 200, WIPO.
provides a comprehensive framework tional context, the innovation character- Edquist, C (ed) (1997): Systems of Innovation: Tech-
for understanding the innovation pro- istics of a developing country are weakly nologies, Institutions, and Organizations, Psy-
chology Press.
cess. The innovation system perspective represented in input and output pillars.
Jensen, Morten, Bjorn Johnson, Edward Lorenz
considers innovation as a process of in- For example, university–industry inter- and B-A Lundvall (2007): “Forms of Knowledge
teractive learning among different ac- action in R&D, the percentage of firms and Modes of Innovation,” Research Policy, 36,
pp 680–93.
tors in the innovation system resulting with foreign technology collaborations,
Joseph, K J, K K Kakarlapudi and T Arun (2021):
in the creation and diffusion of knowl- and R&D financed abroad are key ele- “Reconciling Higher Productivity with Innova-
edge, which is governed by the institu- ments within the STI mode governing tion Paradox: Mode of Learning and Innova-
tional framework in which the actors the nature of innovation and have not tion in India's Manufacturing Sector,” Innovation
and Development, Vol 11, Nos 2–3, pp 323–42.
operate (Lundvall 1992; Nelson 1993; been considered for the III. The latter Lundvall, B Å (1992): National Innovation Systems:
Edquist 1997). The nature of interactions becomes even more important when in- Towards a Theory of Innovation and Interactive
could be in STI and doing, using and innovation systems in the global South, Learning, London: Pinter Publishers.
Lundvall, B Å, K J Joseph, C Chaminade and J Vang
teracting (DUI) modes (Jensen et al including India, are increasingly getting
(eds) (2011): Handbook of Innovation Systems
2007). While the former contributes integrated with the global innovation and Developing Countries: Building Domestic
mainly to scientific knowledge in the network, inter alia, through foreign in- Capabilities in a Global Setting, Edward Elgar
Publishing.
form of patents, trademarks, etc, the lat- vestment in R&D and foreign technology
Nelson, R R (1993): National Innovation Systems: A
ter leads to synthetic- or experience- licensing. Though the interactions in STI Comparative Analysis, Oxford, UK: Oxford Uni-
based knowledge like non-technological mode and the resultant knowledge are versity Press.
innovations (Parrilli and Heras 2016). relatively well captured in the construc- NITI Aayog (2022): India Innovation Index 2021,
New Delhi.
Finally, the institutions govern the over- tion of the index, interactions in the
OECD (2005): Oslo Manual: Guidelines for Collect-
all interactions. form of DUI and the outcomes therein ing and Interpreting Innovation Data, Paris.
The conceptual foundations of the GII leave much scope for improvement, es- — (2010): Measuring Innovation: A New Perspec-
are drawn from the Oslo Manual of pecially when the DUI mode is the pre- tive, Paris: OECD Publications.
Parrilli, M D and H A Heras (2016): “STI and DUI
Innovation, which heavily relies on the dominant learning strategy for many Innovation Modes: Scientific-technological and
insights from the innovation system ap- firms in developing countries. Including Context-specific Nuances,” Research Policy, Vol 45,
proach. Hence, the index has several in- key indicators of DUI, such as private No 4, pp 747–56.
Smith, K (2005): “Measuring Innovation,” The Ox-
dicators capturing key characteristics of firms offering training, the proportion
ford Handbook of Innovation, J Fagerberg,
both interactive learning modes of ac- of firms participating in global value D C Mowery and R R Nelson (eds), Oxford:
tors within and across countries (for ex- chains, knowledge parks, special eco- Oxford University Press, pp 148–77.
ample, university–industry R&D collabo- nomic zones, export processing zones, UNDP (2022): Human Development Report 2021-22:
Uncertain Times and Unsettled Lives: Shaping
rations; gross expenditure on R&D fi- and interactions with input dealers and Our Future in a Transforming World, New York:
nanced abroad). Similarly, institution customers, would enhance the robustness United Nations Development Programme.
COMMENTARY
(Trow 1973) by the last decades of the

Public Funding for Research in 20th century (Altbach et al 2009). By the
turn of the century, a larger part of the
Higher Education world entered the stage of massification,
except for some of the countries in Asia
The Perspective of Equity and Diversity and sub-Saharan Africa.
During the first decade of the 21st cen-
tury, India entered a stage of massifica-
C M Malish tion of higher education. According to
the All-India Survey of Higher Education
K
Recent government policies for nowledge and human capital (AISHE) 2018–19, the gross enrolment
promoting research are aimed at produced by the higher educa- ratio (GER) in India stood at 26.3% with
tion sector is a crucial determi- 37 million students enrolled in close to
making India globally competitive
nant of growth of the national economy. 993 universities, 40,000 colleges and
in an era of knowledge economy. It is not surprising that concerted efforts 10,725 stand-alone institutions (MHRD
Against the backdrop of the have been made by the union govern- 2019). However, the GER in higher edu-
National Education Policy 2020 ment to leverage the advantages of the cation in India stands below developed
knowledge economy and reap the bene- countries and is lower than the world
and the draft National Science,
fits of India’s demographic dividend. The average. For instance, in 2013, while the
Technology and Innovation Policy National Education Policy (NEP) 2020 GER in India was 21.1% (MHRD 2013), that
2020 for enhanced public funding (MHRD 2020) and the draft National for the world, North America and Western
for developing the research Science, Technology and Innovation Pol- Europe, and Central and Eastern Europe
icy (NSTIP) 2020 (DST 2020) place a major was 32.9%, 76.6%, and 71.4%, respec-
ecosystem in higher education
emphasis on research in higher educa- tively (Marginson 2016).
institutions, this article discusses tion institutions (HEIs) and propose new As previous education policies were
how public funding can be better funding mechanisms to promote rese- not in favour of the expansion of higher
utilised for the promotion of arch and innovation. The National Re- education (Varghese 2015), the proposal
search Foundation (NRF) is a new fund- of NEP 2020 to expand higher education
research and inclusive expansion
ing mechanism proposed by the NEP to reach a GER up to 50% by 2035 could
of higher education. 2020. It is argued that inclusion of equity be seen as a major deviation from the
and diversity perspectives in matters of past policies. Currently, the private sec-
research funding can be an important tor is a major player in higher education
strategy to maintain the accountability in India. Around 78% of colleges are in
of public funding and channelise funds the private sector in India, contributing
to those HEIs that serve students and to 66% of the enrolment (MHRD 2019).
teachers drawn from diverse socio-eco- Persisting social inequality and widening
nomic, regional, linguistic, and cultural regional and income inequalities in ac-
backgrounds, reflecting the diversity of cessing higher education are major ob-
the country. stacles for envisaging an inclusive sys-
tem of higher education and hence an
The Global Knowledge Economy inclusive society in the future (Varghese
Higher education has become a necessary et al 2018; Tilak and Choudhury 2019).
level of education to participate and take While the advantaged strata largely occu-
advantage of the opportunities opened py “elite institutions” and most sought-
up by the knowledge economy. There- after subjects such as engineering, medi-
fore, the level of enrolment in higher ed- cine, and management, the larger share
ucation in general and that in doctoral of disadvantaged students are enrolled
studies in particular are indicators of in arts, sciences, and social science disci-
improving national capacities and glob- plines of “non-elite” public universities
al competitiveness. Since the 1960s, de- and affiliated colleges (Sabharwal and
C M Malish (malishcm@niepa.ac.in) teaches veloped regions of the world witnessed a Malish 2018). This has serious implica-
at the Centre for Policy Research in Higher massive expansion of higher education, tions on inclusive growth.
Education, National Institute of Educational and many of those countries reached the Despite the commendable growth in
Planning and Administration, New Delhi.
advanced stage of “universalisation” overall enrolment, the share of students
COMMENTARY
enrolled in PhD programmes is low in Organisation (DRDO). In social sciences, Commission (UGC) for minor and major
India. Total number of students enrolled establishment of research organisations, projects is confined to those HEIs (both
in research degree programmes such as for instance, the Indian Council of Social government and government aided)
PhD (1,69,170), MPhil (30,692), and inte- Science Research (ICSSR), further accel- which are included under Sections 2(f)
grated PhD (3,880) is 2,03,742 which is erated the growth of research outside and 12(B) of the UGC Act, 1956. Accord-
equivalent to 0.54% of the total enrol- the university sector. The R&D spending ing to AISHE 2018–19, only 9,755 colleges
ment (MHRD 2019). In 2018–19, the total by universities remains very low in India. are eligible to receive research funds from
number of PhDs awarded was 40,813. Contribution of the university sector to the UGC, which are less than one-fourth of
The share of student enrolment in PhD total R&D spending in India is only 6.3% the colleges in the country (MHRD 2019).
programmes in science, engineering and as compared to other countries such A few of the public entities such as the
technology, social sciences, languages, as Russia (9.8%), the US (13%), France Department of Science and Technology,
and medicine are 26%, 24.8%, 09.9%, (22.1%), and the United Kingdom (25.8%) however, fund public as well as private
6.7%, and 4%, respectively. Poor enrol- (UIS 2021). All of these insights point HEIs for carrying out research.
ment in PhD programmes is not favour- towards the need to promote research The NEP and the NSTIP propose new
able for developing a strong and vibrant in HEIs. funding mechanisms for promoting rese-
research and development (R&D) system. arch in HEIs. According to the NEP, the
It is noteworthy that 97.5% of the PhD Mechanisms for Funding NRF is an autonomous agency which
enrolment is in universities, particularly Research in HEIs would work in coordination with the
public universities. As Varghese (2020: Research is part of the core activities of existing funding agencies and follow a
303) notes, “Private universities have yet HEIs, although the thrust for research is competitive and peer-reviewed process
to establish their presence in the area of not uniform across HEIs. In addition to of funding. It aims to transform “quality
doctoral programmes.” In 2018, only 13% research carried out by students for the and quantity of research” across the dis-
of doctoral studies were carried out in fulfilment of degrees, teachers in univer- ciplines and streams and enable a “culture
private universities (Varghese 2020). In sities and colleges are also engaged in of research” in HEIs. The union budget
other words, despite the inexorable pres- research activities. Research is conduc- for FY 2021–22 allocated `50,000 crore
ence of private players in higher educated independently or as a collaborating to the NRF to spend for a period of five
tion, public universities make the most team involving teachers and researchers years (MoF 2021). Some of the commen-
significant contributions in developing from own institutions and other HEIs. tators, particularly those who belong to
the pool of researchers in India. Research-related outcomes are a major the private sector, tend to visualise the
determinant of career progression for NRF as a means to bring parity in re-
Research in Higher faculty members. Compared to research search funding for the public and pri-
Education Institutions in humanities and social science disci- vate sector. However, as the call for app-
R&D spending as a share of the gross do- plines, research in science and techno- lications has not yet been announced,
mestic product (GDP) is an important logy disciplines is expensive due to high- we need to wait to know more about the
indicator of growth of research and er costs of latest equipment, materials, process and eligibility criteria for dis-
innovation. According to the United and setting up of laboratories. Research bursing funds.
Nations Educational, Social, and Cultural collaboration is more dominant in sci- Similarly, the major goals of NSTIP are
Organization’s Institute of Statistics (UIS ence and technology disciplines than to double the number of full-time equiv-
2021), India’s R&D spending stands at 0.7% humanities and social sciences. alent researchers and gross expenditure
of the GDP, compared to that of South Funding sources for research carried on R&D in five years. The NSTIP proposes
Africa (0.8%), Brazil (1.3%), China (2%), out in HEIs can be government and non- a new collaborative funding model
the United States (US) (2.7%), Germany government agencies. In addition to called advanced missions in innovative
(2.9%), Japan (3.4%), South Korea (4.2%), ministries and departments at the union research ecosystem (ADMIRE). This hy-
and Israel (4.3%). India’s position is at and state governments such as the DST, brid funding model would support pub-
the bottom of the list in terms of R&D there are a number of autonomous and lic and private enterprises, academic
spending among the BRICS countries. independent public-funding agencies institutions, and the non-governmental
R&D in India takes place in universi- such as the Indian Council of Medical sector. Creation of higher education
ties, stand-alone government-funded Research, ICSSR, CSIR, Indian Council of research centres and collaborative rese-
research organisations and industrial Agricultural Research, Indian Council of arch centres, as joint initiatives of HEIs,
research laboratories (Bhargava 2016). Historical Research, and Indian Council R&D institutions, and industry sectors,
Much of the public spending on R&D is in of Philosophical Research, to list a few. are among the other strategies to promote
non-university sectors such as govern- Many of them have a narrowly defined research and innovation in HEIs. Teach-
ment-owned research organisations and disciplinary focus. Moreover, not all HEIs ing–learning centres would also be cre-
laboratories such as the Council of are eligible to receive public funding ated in HEIs to provide research-based
Scientific and Industrial Research (CSIR) from these agencies. For instance, re- capacity building for faculty members
and Defence Research and Development search funding by the University Grants of HEIs. ADMIRE also envisages HEIs to
COMMENTARY
engage with non-higher education sectors would remain as assets for the institu- programmes such as post-matric schol-
for research and innovation activities. tions. Academic benefits from research arships, stipends, and hostel schemes.
studies directly contribute to the profes- Public universities produce a major share
Research and Social sional growth of faculty members and of PhDs in India and make a substantial
Accountability thereby student learning. Research would contribution to the national research ca-
The nature of higher education and also contribute to ranking and accredita- pacity. Against the backdrop of the pro-
knowledge produced as a public good is tion scores and thereby the academic posed new funding mechanisms for re-
the major rationale for continued public prestige of HEIs. This, in turn, will posi- search in HEIs, it is argued that the inc-
investment in research. Social accounta- tively impact student admissions. In a lusion of the perspective of equity and
bility can be seen as an important con- nutshell, research funding is attached diversity in research funding should be
cept here. As Trow (1996: 310) notes, with many direct and indirect benefits an important policy strategy for main-
“Accountability is the obligation to re- to HEIs and their clientele. Therefore, taining the public accountability of pub-
port to others, to explain, to justify, to which institutions would receive public lic funding for research. Espousing and
answer questions about how resources funds is very important. enacting values of diversity and equity
have been used, and to what effect.” As Many commentators have cited exam- are critical for breaking the vicious circle
autonomy in teaching and research is ples of the system for liberal public fund- of educational inequalities in HEIs, there-
the foundational feature of higher edu- ing for research as followed in the US. In by reducing inequalities in development.
cation, who is the “other” to whom HEIs the US, private HEIs are also eligible to Moreover, an equity and diversity per-
are obliged to report is a big question. receive funding from the NSF, an inde- spective would enable funding agencies
Accountability can be, on the one hand, pendent federal agency for the promo- to incentivise those institutions that
classified into external and internal tion of research in science and engineer- serve the masses and the deprived sec-
accountability, and on the other, legal/ ing. It is very important to note that tions of the society. Quality research in
financial and academic accountability private institutions in the US such as those institutions can also lead to an im-
(Trow 1996). Harvard University, California Institute provement in teaching–learning and
At the level of fund disbursal, prioriti- of Technology, Massachusetts Institute overall quality, public funding for re-
sation of research areas is an important of Technology, etc, are committed to the search needs to be located in a larger
measure of social accountability. For ins- policy of equity and diversity in student context of institutional reforms for equi-
tance, the ICSSR had a list of priority admissions and faculty recruitment. They ty and quality in HEIs. Perhaps, more re-
areas of research such as gender, caste, make efforts to ensure that their student search-based capacity development may
and social exclusion. Similarly, a recently and faculty profiles reflect social diver- be required to promote research in those
launched scheme called Impactful Policy sity. For instance, according to Forbes institutions admitting students from di-
Research in Social Sciences (IMPRESS) (2020) America’s Best Employers for Di- verse and underprivileged backgrounds.
promotes policy-relevant research in versity Survey 2020, in the education In a nutshell, the inclusion of the per-
certain identified domains. In this pro- category, five out of the top 10 employers spective of equity and diversity in public
cess, funds are allocated to promote res- are private universities. funding for research in HEIs would act as
earch in those areas. This prioritisation On the contrary, elite private HEIs in a measure of social accountability and
can be progressive when funds are ade- India predominantly serve the elite uphold the vision and foundational prin-
quately pumped into research that dire- socio-economic strata. Most of them are ciples of NEP and NSTIP aiming to build
ctly contributes to the welfare of disad- not committed to equity, inclusion, and an inclusive society.
vantaged groups and the overall socio- diversity, adding to the widening of ine-
economic development in the country. quality in accessing higher education, a References
The very act of prioritisation involves major hindrance to envisage an inclu- Altbach, Philip G, Liz Reisberg and Laura E Rum-
some inclusion and exclusion criteria. sive society. Therefore, bringing in the bley (2009): Trends in Global Higher Education:
Tracking an Academic Revolution, a report pre-
Therefore, the negative aspect of prior- US case to support liberal research pared for the UNESCO World Conference on
itisation is exclusion of certain domains. funding in India needs to be seen with Higher Education.
It can also adversely affect the autonomy adequate caution. Bhargava, Pushpa M (2016): “Scientific Research
and Economic Development,” Social Change,
of researchers to expand the knowledge Vol 46, No 2, pp 260–66.
in preferred domains. A New Paradigm for DST (2020): “Draft National Science, Technology
Research funding has a major spillo- Public Funding and Innovation Policy (NSTIP) 2020,” Depart-
ver effect on institutions and its clien- The composition of students in public ment of Science and Technology, New Delhi.
Forbes (2020): “America’s Best Employers for Div-
tele. Funding for research projects pro- institutions, particularly state universi- ersity 2020,” https://www.forbes.com/best-
vides many benefits to HEIs. In addition ties and affiliated colleges, reflects the employers-diversity/#401e5bad9b9e.
to direct financial benefits in the form of diversity of the country. It is mainly due Marginson, Simon (2016): “High Participation Sys-
tems of Higher Education,” Journal of Higher
overhead charges, equipment purchased to the policy of reservation followed in Education, Vol 87, No 2, pp 243–71.
such as machines and computers and public colleges and universities and other MoF (2021): “Union Budget 2020–21,” Ministry of
other facilities developed for research supportive government schemes and Finance, Government of India, New Delhi.
COMMENTARY
MHRD (2013): “All India Survey of Higher Educa- Institute of Educational Planning and Adminis- UIS (2021): “UIS.Stat,” http://data.uis.unesco.org/.
tion 2012–13,” Ministry of Human Resource tration, New Delhi. Varghese, N V (2015): “Challenges of Massification
Development, Government of India, New Delhi. Tilak, Jandhyala B G and Pradeep Kumar Choud- of Higher Education in India,” CPRHE Re-
— (2019): “All India Survey of Higher Education hury (2019): “Inequality in Access to Higher search Papers 1, Centre for Policy Research in
2018–19,” Ministry of Human Resource Devel- Education in India between the Poor and Rich: Higher Education, National Institute of Educa-
opment, Government of India, New Delhi. An Analysis of the 64th and 71st Rounds of tional Planning and Administration, New Delhi.
NSSO Data (2007–08 and 2013–14),” Working
— (2020): “National Education Policy 2020,” Min- — (2020): “The Role of Doctoral Education in De-
Paper, CSD-2/2019, Centre for Social Develop-
istry of Human Resource Development, Gov- ment, New Delhi. veloping Research Capacities in India,” Trends
ernment of India, New Delhi. Trow, Martin (1973): Problems in the Transition and Issues in Doctoral Education: A Global Per-
Sabharwal, Nidhi S and C M Malish (2018): “Stu- from Elite to Mass Higher Education, California, spective, M Yudkevich, Philip Altbach and Hans
dent Diversity and Social Inclusion: An Empiri- Carnegie Commission on Higher Education. De Wit (eds), New Delhi: Sage, pp 295–315.
cal Analysis of Higher Education Institutions in — (1996): “Trust, Markets and Accountability in Varghese, N V, Nidhi S Sabharwal and C M Malish
India,” CPRHE Research Papers, Centre for Higher Education: A Comparative Perspective,” (eds) (2018): Indian Higher Education Report
Policy Research in Higher Education, National Higher Education Policy, Vol 9, No 4, pp 309–24. 2016: Equity, New Delhi: Sage.
COMMENTARY
units in the 2012 edition. The other source

Assessing India’s Energy Balances of India’s energy balance is the Interna-
tional Energy Agency’s (IEA) World Energy
Climate and SDGs Balance. Most of the estimates of India’s
CO2 emissions use the IEA energy bal-
ances. It collects energy statistics from
Manisha Jain various countries through annual ques-
tionnaires or national publications and
N
Comparison of the data from ational energy statistics are es- reports (IEA 2020).
the Ministry of Statistics and sential to track a country’s pro- The MOSPI’s energy statistics is rarely
gress in its human development used in research or government reports
Programme Implementation and
goals (Vera and Langlois 2007). Energy despite being national data. For exam-
the International Energy Agency data is also crucial to estimating carbon ple, in the chapter on sustainable energy,
for 2019–20 shows that the two dioxide (CO2) emissions from energy use India’s Economic Survey 2018–19 refers
energy balance estimates are (Bruckner et al 2015). CO2 emission from to data from the World Bank and British
energy use is the key driver of the cli- Petroleum on India’s per capita energy
different owing to the adoption
mate change crisis. Most countries have consumption (ES 2019). Similarly, most
of different calorific values and pledged reductions in CO2 emissions or research studies on energy supply obtain
incomplete disaggregation of emissions intensity under the United data from international organisations
energy use by end-users. Nations Framework Convention on Cli- (Karstensen et al 2020). Few studies have
mate Change (UNFCCC) framework. CO2 compiled national energy statistics using
emissions data is critical for monitoring data from different energy ministries
the progress in meeting the emission re- (Das and Roy 2020).
duction targets. Energy statistics-related issues in India
Countries collate their energy statis- have been raised several times (Andrew
tics and present them in energy balances 2020; Rai et al 2017; Dukkipati et al
(UN 2017). An energy balance is an ac- 2015). The problems pertain to either
counting framework for the compilation the sufficiency of the data or errors in it.
and reconciliation of data on all energy To develop a national energy data set
products entering, exiting, and used within and provide single-window access to it,
the national territory of a given country NITI Aayog, in collaboration with Prayas,
during a reference period. Energy bal- launched the “India Energy Dashboard
ances are essential to calculate energy (IED)” in 2017. A comparison of India’s
indicators of development and estimate primary energy supply by fuels from
CO2 emissions from energy use. Figure 1 the three data sources is shown in
shows a few energy indicators of human Figure 2 (p 31).
development and the required data. It is evident from Figure 2 that the
The official source of India’s energy estimates of primary energy from IED
statistics is the annual publication by the are the same as IEA data. The primary
Ministry of Statistics and Programme energy supply estimated from MOSPI is
Implementation (MOSPI). Given the im- somewhat similar to IEA and IED esti-
portance of the energy balance, MOSPI mates for 2013 and 2015 but not for other
(2010, 2012) began publishing energy years. As per MOSPI’s energy balances,
commodity balance in the 2010 edition India’s primary energy supply increased
and energy balance in standard energy at a compound annual growth rate (CAGR)
Figure 1: Energy Data Used to Calculate Key Indicators of Development
Total primary energy supply,
Energy use per capita, energy use per
total final consumption and
unit of GDP; CO2 emissions
electricity use
Sustainable
Efficiency of energy conversion and development
Energy Losses in transformation
The author is grateful to the anonymous distributin; CO2 emissions and
data systems
referee of this article. It has greatly benefited climate-change
indicators
from the comments. Energy intensity of industry,
Energy use by end-use
agriculture, service/commercial,
Manisha Jain (manishajain@igidr.ac.in) sectors
household, transport; CO2 emissions
is assistant professor at the Indira Gandhi
Institute of Development Research, Mumbai.
Source: Compiled from Vera and Langlois (2007).
COMMENTARY
Figure 2: India’s Primary Energy Supply by Fuel from Three Data Sets
MOSPI IEA IED
1,000 1,000
1,000
800 800
800
600 600
600
400 400
400
200 200 200
0 0 0
-200 -200 -200
2012
2013
2014
2015
2016
2017
2018
2019
2012
2013
2014
2015
2016
2017
2018
2012
2013
2014
2015
2016
2017
2018
2019
C&L Crude C&L Crude C&L Crude

PP NG PP NG PP NG
Electricity PES Electricity PES Electricity PES
Primary energy supply in MOSPI data is around 26% higher than in IEA and IED for all years except 2013 and 2015.
Source: Compiled by the author from MOSPI (2021) energy statistics, IEA (2021) energy balances, and IED (2021) energy balances.
of 5.1% during 2010–19. However, the cor- reported in the MOSPI’s energy statistics Ministries and various organisations
responding values from IEA and IED data have errors and are inadequate. These provide data on the flow of energy prod-
are much lower at 3%. It is also evident energy balances, if used, can provide in- ucts in physical quantities. The energy
from Figure 2 that the difference across correct estimates of key statistics, such as equivalent is estimated using the energy
the three data sets is mainly due to esti- energy intensity, the efficiency of energy content of different products.
mates of energy from coal. The share of conversion and transmission, and energy Most countries follow the International
coal in the primary energy supply in the intensities of industry and agriculture. Recommendations for Energy Statistics
MOSPI’s data is around 63%–65% in all After elaborating on MOSPI’s energy (IRES) adopted by the United Nations
the years except 2015. On the other hand, statistics reports followed by a compari- Statistical Commission in 2011 to develop
the share of coal in IEA and IED data sets son on India’s energy balances, I present national energy statistics (UN 2017). The
is less than 60% for all the years. the results on energy and environmental IRES recommended the compilation of
The IED addresses the issue of incor- indicator estimates from India’s energy energy balances to enhance the rele-
rect estimates of primary energy supply balances. Key conclusions and policy rec- vance of energy statistics and serve as a
from coal in the MOSPI data. However, ommendations are presented in the end. quality tool to ensure completeness, con-
while the IED offers statewise production sistency, and comparability of basic sta-
and consumption of all energy sources, Energy Statistics Reports tistics. An energy balance is an account-
it does not provide fuel-wise consump- Energy statistics facilitate reliable and ing framework for the compilation and
tion of energy products in the end-use timely monitoring of the supply and use reconciliation of data on all energy prod-
consumer category in the internationally of energy. It is a collated database of the ucts entering, exiting, and used within
recommended format. Research on India’s flow of energy sources in an economy. It the national territory of a given country
development and climate goals requires provides data on energy flows, including during a reference period.
sector- and subsector-level estimates of production, import, exports, bunkering, The MOSPI publishes India’s national en-
energy consumption and CO2 emissions. stock changes, transformation, its use by ergy data. Its Energy Statistics India is an
Hence, both the national energy data energy industries, losses during conver- annual publication and contains the pre-
sources, MOSPI and IED have limitations sion, and final consumption of energy vious financial year’s data. For example,
that must be addressed for effective products within the national territory. the edition published in 2021 includes
monitoring and implementation of India’s
Table 1: List of Indicators Tracked in MOSPI’s Energy Statistics
energy and climate goals. S No Theme Indicator
This article aims to advance the dis- 1 Overall use Energy use per capita
cussion on India’s national energy statis- 2 Overall productivity Energy use per unit of GDP
tics to track its energy and climate goals 3 Supply efficiency The efficiency of energy conversion and distribution
effectively. Keeping the focus on energy 4 The ratio of TPC and TPES
balance tables, I compile energy balances 5 End use Sectoral energy intensities
from MOSPI’s data for 2019–20 and com- 6 Sectoral electricity intensities
pare them with IEA energy balances. 7 Diversification (fuel mix) Fuel shares in TPES
8 Fuel shares in TPC
Then I estimate energy indicators of
9 Fuel shares in electricity
development and CO2 emissions using
10 Imports Net energy import dependency
the two sources for 2019–20 and com- TPES = total primary energy supply; TFC = total final consumption.
pare them. I find that energy balances Source: MOSPI (2021).
COMMENTARY
data for 2019–20. Each issue collects en- commodity balance and energy balance development indicators and CO2 emis-
ergy statistics for the past 10 years. The in standard energy units are available sions are production, imports and ex-
MOSPI sources data on energy products from government data since 2007 and ports, fuel transformation, and final con-
from various ministries dealing with dif- 2010. Since the 2017 edition of its energy sumption by end-use sectors. According
ferent energy products and compiles them. statistics, the MOSPI began reporting a to the IRES, an energy balance matrix
The MOSPI’s energy statistics have sections few of the energy indicators of sustainable shows the relationships between energy
such as energy production, energy avail- development. It estimates 10 indicators products (represented in columns) and
ability, and energy consumption. These under the use, production pattern, and flows (represented in rows). The rows are
tables give energy data in both physical security (Table 1, p 31). It utilises the sequenced such that there are three main
quantities and energy equivalents. data reported in its energy balance tables blocks of rows. The top block shows en-
The MOSPI follows IRES recommenda- to calculate the indicators. ergy entering and leaving the national
tions to prepare the energy balances. Given territory and stock changes to provide
the importance of the energy balance Energy Balance Tables information on the total primary energy
table, the MOSPI began publishing energy The energy balance tables record the supply (TPES). The middle block shows
commodity balance in the 2010 edition flow of all the energy sources from pro- how energy is transformed, transferred,
and energy balance in standard energy duction and imports to final consump- used by energy industries, and lost in
unit in the 2012 edition. Hence, the energy tion. The significant flows for estimating transmission and distribution. The bot-
tom block shows the final energy con-
Table 2: India’s Primary Energy Supply Flow in 2019–20 from MOSPI and IEA Energy Balance Table
Energy Flow (in Mtoe) Coal and Lignite Crude Oil Oil Products Natural Gas Nuclear Hydro Renewables Electricity Total
sumption and non-energy use of energy
MOSPI
products. In the following sections, I
Production 433 33 29 12 13 12 533 compare the three blocks of MOSPI’s and
Imports 161 232 45 31 0.5 469 IEA’s energy balances for 2019–20.
Exports -1 -69 -1 -69
Stock change 14 14 Energy supply: The primary energy
Primary energy 607 265 -23 60 12 13 12 -0.27 946 supply in the top block of the energy bal-
IEA
ance is calculated as energy production
Production 289 38 25 12 15 12 391
Imports 133 233 43 30 1 440
plus energy imports, minus energy exp-
Exports -1 -71 -1 -72 orts, minus international bunkers, and
Bunker -6 -6 then plus or minus stock changes. The
Stock change -1 -1 0.3 -2 top block of MOSPI’s and IEA’s energy bal-
Primary energy 420 270 -34 56 12 15 12 0 751 ance for 2019–20 is shown in Table 2. As
Primary energy supply is calculated as production plus imports minus exports plus stock changes. The positive values per MOSPI’s data, India’s primary energy
indicate inflows and negative values indicate outflows. Primary energy supply from nuclear, hydro and renewables is
estimates by applying an assumed conversion efficiency to the electricity generated from these sources. All values are supply in 2019 was 946 metric tonnes of
energy equivalent estimated by multplying the physical quantities of fuels with their energy content (net calorific value). oil equivalent (mtoe), 26% higher than
Source: MOSPI (2021), IEA (2021).
IEA data. Primary energy from coal in
Table 3: Energy Transfers, Transformation, Energy Industry Own Use, and Losses in India, 2019–20 the MOSPI’s data is 607 mtoe compared
All Value in Mtoe Energy Flow Coal and Lignite Crude Oil Oil Products Natural Gas Nuclear Hydro Renewables Electricity Total to 420 mtoe in the IEA data. However,
MOSPI the two data sets’ primary energy esti-
Primary energy 607 265 -23 60 12 13 12 -0.3 946
mates of the other sources are similar.
Statistical differences 37 19 -26 -2 21 49
A possible reason behind the differ-
Electricity plants -420 -1 -10 -12 -13 -12 121 -362
Oil refineries -260 271 -7 4
ence in the estimates of energy derived
Energy industry own use -9 -7 -17 from coal in the MOSPI’s energy balance
Losses -24 0 -23 -47 table is the choice of calorific value of
Total final consumption 224 221 31 111 587 coal. The energy derived from coal in
IEA other tables of MOSPI’s energy statistics
Primary energy supply 420 270 -34 56 12 15 12 -0.3 751 also differ from that of the energy balance
Transfers 3 -3 0 table. For example, 731 metric tonnes (MT)
Statistical differences -4 -4 -6 0 8 -5
of coal produced in 2019 is 264 mtoe
Electricity plants -286 -3 -14 -12 -15 -10 138 -202
(11,058 TJ) in coal production data and
Oil refineries -269 272 3
Coal transformation -21 -21
433 mtoe in the energy balance table. It
Energy industry own use -2 -18 -7 -12 -39 implies that the average calorific value
Losses -23 -23 of domestic coal in 2017, calculated from
Total final consumption 107 209 34 1 113 465 MOSPI’s energy balance table, is 5,956
Primary energy supply from coal is converted to electricity in electricity plants and that from crude oil to oil products in kilocalorie (kcal)/kilogram (kg) and from
refineries; energy is lost in tranformation from coal to electricity in electricity plants; energy used in electricity plants and
refineries reported in own use; energy lost in distribution is reported under losses.
its coal production data, it is 3,616 kcal/
Source: MOSPI (2021), IEA (2021). kg. The difference in the assumption of
COMMENTARY
the calorific value of coal increased India’s data. On the other hand, the IEA esti- (similar to thermal power plants). There
primary energy supply estimate. It also mates of electricity generation match the are few differences in the assumptions
changed the shares of energy sources in CEA data. It is found that MOSPI’s energy on the conversion efficiency of renewa-
the primary energy supply. balance has a much larger value under bles; few assume that it equals the effi-
statistical difference than IEA, resulting ciency of thermal power plants (British
Energy conversion, transformation, in a discrepancy. Petroleum), and others take it as 100%
and distribution: The primary energy The energy balance tables give infor- (IEA). These assumptions are essential to
from coal is converted to electricity in mation on primary energy sources and arrive at the primary energy equivalent
power plants, and that from crude oil is the total electricity generated from all of the electricity generated from non-
converted to oil products in oil refiner- energy sources. For example, the energy thermal energy sources.
ies. Energy transformation is carried out supply for electricity generation from In both the IEA and MOSPI energy sta-
to convert an energy product to another thermal energy sources, as per MOSPI’s tistics, the efficiency of transforming
more suitable for specific use. Most pri- and IEA’s energy statistics is 431 mtOe primary energy to final energy is as-
mary energy sources, such as coal and and 303 mtOe, respectively. The primary sumed to be 33% for nuclear and 100%
crude oil, are transformed into electricity energy supplied by nuclear is 12 mtOe in for hydro. Thus, the electricity generat-
and oil products for final use. Some of both energy statistics, but hydro and re- ed from non-thermal energy sources in
the coal and natural gas are used direct- newable differ. both data sets is 29 mtoe. The electricity
ly by end-users. The energy lost in con- In thermal power plants, electricity is generated from thermal energy sources
version, transformation, and distribu- generated using coal or natural gas is 92 mtoe in MOSPI’s data and 111 mtoe
tion is reported in the middle part of the where they are the primary energy in the IEA data.
energy balance table. Table 3 (p 32) source, and electricity is considered the
shows the central block of India’s energy final energy form. The efficiency of con- Final energy consumption: The bot-
balance table for 2019–20 from MOSPI’s version in coal power plants is in the tom block of the energy balance table
and IEA’s energy balances. range of 30%–35%. In nuclear, hydro, provides information on fuel-wise ener-
The total electricity generated from and other renewables, the electricity is gy used by various end-users. The ener-
all energy sources is given under elec- generated using primary sources such as gy not specified under any consumer
tricity plants. The gross electricity gen- nuclear fuel, energy stored in the dam, category and the energy sources used for
erated is 1,407 terra-watt hour (TWh) or solar, or wind power. The primary energy non-energy uses are reported separately.
121 mtoe in MOSPI’s energy balance and equivalent of the electricity generated The energy used by the consumer cate-
1,604 TWh (138 mtoe) in IEA’s energy from these sources is estimated based gory is required for estimating energy
balance. As per the Central Electricity on the assumptions about conversion intensities of economic production from
Authority (CEA), the electricity generated efficiency. For example, the efficiency agriculture, industry, services, and tran-
in 2019–20 was 1,623 TWh (140 mtOe), 13% of energy conversion from nuclear fu- sport. India’s final energy consumption
higher than the MOSPI energy balance els to electricity is considered as 33% in 2019–20, reported in MOSPI’s and IEA
energy statistics, is shown in Table 4.
Table 4: Final Energy Consumption by End-users and Fuel in 2019–20 The estimates of final consumption in
All Values in Mtoe Energy Flow Coal and Lignite Oil Products Natural gas Electricity Total
IEA energy statistics differ from MOSPI’s
MOSPI
Total final consumption 224 221 31 111 587
energy statistics. As shown in Table 4,
Industry 224 56 1 47 328 the final energy consumption in MOSPI’s
Transport 48 10 1.68 60 statistics is 26% higher than in IEA. Due
Residential 28 27 55 to the higher value estimated in the final
Commercial and public services 0 9 9 energy consumption, the energy con-
Agriculture/forestry 1 20 21 sumed by industry is 83% more in MOS-
Non-specified (other) 89 7 95 PI’s energy balance than IEA estimates.
Non-energy use 31 20 52 Industries consume coal, oil products,
IEA
natural gas, and electricity. As per IRES
Total final consumption 107 209 34 113 465
Industry 95 31 7 47 180
recommendations, an energy balance
Transport 99 3 1.69 104 table gives data on energy consumed by
Residential 3 28 1 27 61 various industrial sectors such as iron
Commercial and public services 5 3 2 10 20 and steel, chemical and petrochemical,
Agriculture/forestry 11 0 20 31 non-ferrous metals machinery, etc, MOS-
Fishing 0 PI’s energy statistics list all the sub-sec-
Non-specified 5 5 7 18 tors but report two-thirds of the energy
Non-energy use 31 20 52 consumption under non-specified. The
Most of the coal available for final consumption is used by industry; some energy is used for non-energy purpose such a
feedback stock in industry energy not categorised under any end-use is reported in non-specified.
disaggregation is also incomplete for oil
Source: IEA (2021), MOSPI (2021). products, as 40% of the consumption is
COMMENTARY
reported under non-specified. Most of the ratio of energy and economic output. added by the industry. As mentioned
the oil products are used in industry The gross domestic product is taken to above, the estimates of industry, agricul-
and transport. In the MOSPI’s data, in- estimate the economy’s energy intensity. ture, and transport energy intensities
dustry consumption is overestimated, The estimated values are shown in Table widely differ in the two datasets (Table 6).
and transportation and agriculture are 5. Due to the higher estimates of TPES Further, in MOSPI statistics, transport in-
underestimated. and TFC, the per capita energy consump- tensity is estimated as the ratio of energy
tion and energy intensity are 26% higher consumed in the transport sector and the
Results in the MOSPI data than in the IEA data. value added by the transport sector. How-
The indicators of sustainable develop- The electricity consumption is the same ever, this is not an appropriate measure
ment reported in the MOSPI’s energy bal- in the two data sets; hence, the electrici- of transport energy intensity as the
ance tables are compared with that of ty indicators are identical. transport sector adds value to the entire
the IEA. The CO2 emissions from fossil activity. The value added by the trans-
fuel combustion from the two data The efficiency of energy conversion port sector is not an accurate indicator of
sources are also calculated and com- and distribution: Energy is lost in con- activity in the sector. The preferred indi-
pared. As discussed above, the differ- version from coal to electricity and its cator for activity in transport is the vehicle
ences in the energy balance tables of the transmission and distribution. It is cal- miles travelled or GDP.
two data sources adversely affect the es- culated as the ratio of electricity availa-
timates of the indicators. ble for final consumption and the primary Diversification in the fuel mix: The in-
energy supplied. As shown in Table 3, dicators under the fuel mix are used to
Indicators of sustainable development: the electricity available for final con- track improvements in the growth of
The indicators of sustainable develop- sumption is 111 mtoe in MOSPI and 113 renewable energy sources in the supply
ment reported in MOSPI’s energy statis- mtoe in IEA. The statistical differences of energy. The difference in the estimates
tics are divided into the themes of use, are subtracted from these values to of energy from coal distorts the estimates
Table 5: Indicators of Overall Energy Use in India, 2019–20 arrive at the electricity of the share of different energy sources
MOSPI IEA Per Cent Difference available from the gener- in the fuel mix. The percentage of coal is
Per capita TPES (kgoe/capita) 706 560 26 ated units. The statistical 64% in MoSPI and 56% in IEA. The share
Per capita TFC (kgoe/capita) 438 347 26 differences in MOSPI and of renewable and nuclear in the primary
Per capita electricity (kWh/person) 963 960 0 IEA are 21 mtoe and 8 energy supply is 4% in MoSPI and 5% in
Energy intensity TPES (kgoe/'000 ` ) 6 5 26 mtoe, respectively. The IEA. Although the difference between
Energy intensity TFC (kgoe/000' ` ) 4 3 26 electricity available for the IEA and MOSPI data is minor, it is sig-
Energy intensity electricity (kWh/'000 ` ) 9 9 -2
consumption from the nificant considering the small share of
Source: MOSPI (2021) and IEA results estimated from IEA (2021).
generated electricity is non-fossil fuel energy sources.
Table 6: Sectoral Energy Intensities, 2019–20 90 mtoe in MoSPI and 105
Value Added (` crore) Energy (Mtoe) Energy Intensity (kgoe/'000 `) mtoe in IEA. The primary Carbon Dioxide Emissions
MOSPI IEA MOSPI IEA % Difference
energy supplied to the CO2 emissions from fossil fuel combus-
Industry 36,27,074 328 180 9.0 5.0 83
Agriculture 19,68,571 21 31 1.0 1.6 -33
electricity plants is 469 tion are estimated using the primary en-
Transport 639,779 60 104 9.4 16.3 -43 mtoe in MoSPI and 340 ergy supply or activity-wise energy con-
Fuel share in TPES MOSPI (%) IEA (%) mtoe in IEA. The ratio of sumption. A few organisations, such as
Crude Oil 28 36 output electricity of 90 British Petroleum, use the primary ener-
Natural Gas 6 7 mtoe and input of 469 gy supply data to estimate CO2 emis-
Coal 64 56 mtoe gives 19%. Similar- sions. The IEA uses its energy balances to
RE and others 4.0 5.1
ly, the ratio of the output make the estimates of CO2 emissions us-
Source: IEA (2021), MOSPI (2021).
of 105 mtoe and input of ing sector-wise energy use data. The de-
production patterns, and security of ene- 340 mtoe is 31%. Hence, while energy fault emission factors from IPCC are 73.3
rgy supply: I discuss the per capita ener- conversion and distribution efficiency is tonnes (t)/terajoule (TJ) for crude oil,
gy use and intensity indicators, energy 31% as per IEA data, it is much lower at 96.1 t/TJ for coal, and 56.1 t/TJ for natu-
conversion and distribution efficiency, 19% in the MOSPI data. ral gas. The estimate of CO2 emissions
intensities of end-use energy consump- from IEA energy statistics is 2.5 giga-
tion, and diversification in the fuel mix. Intensities of end-use energy con- tonnes (Gt) of CO2, whereas that from
sumption: Intensities of end-use con- MoSPI is 3.3 Gt. The MoSPI estimates are
Per capita energy use and intensity: sumption are helpful indicators for ana- 31% higher than IEA estimates.
Per capita energy consumption and en- lysing the effects of efficiency improve-
ergy intensity are calculated using pri- ments in the sectors. The intensity of Conclusions and Policy Implications
mary and final energy supply. Per capita economic production sectors such as Energy balances are essential to track a
energy consumption is the ratio of ener- agriculture and industry is the ratio of country’s development and climate-
gy and population. Energy intensity is energy used in the sector and the value related goals. The IEA’s energy balance is
COMMENTARY
the widely used energy balance data default calorific values due to limited the transport sector are reported in the
source to analyse India’s energy transi- data. The calorific value of Indian coal is non-specified category.
tion and progress in meeting climate much lower than the global average. The issue of incomplete disaggrega-
goals. Most currently used estimates of India’s coal is divided into several cate- tion of final energy use by sectors should
CO2 emissions from fossil fuels are calcu- gories based on calorific values. The also be resolved. Decomposing energy
lated using the IEA’s energy balances. quantity used in each grade is available intensities into energy efficiency and
The MoSPI publishes the only free-of- in national statistics and should be used structure effects is a valuable way to es-
charge source of India’s energy balance to determine the weighted average timate the impact of energy efficiency
in its energy statistics report. The issues calorific value of coal at the national lev- improvement in different sectors. Such
in India’s energy data and MoSPI’s energy el. IEA computes the weighted average analysis requires energy use data at the
statistics have been raised in the past. calorific value of Indian coal. The MoSPI sector level. Further, the estimates of CO2
However, there is little discussion on the energy statistics should estimate and emissions by activity are also needed to
shortcomings of India’s energy balance report the calorific value of coal for each track climate goals better and design
reported in the MoSPI’s energy statistics. year using grade-wise data on produc- mitigation strategies for different eco-
As the research on tracking progress in tion and imports. nomic sectors.
meeting climate targets and policy ef- The methodologies and standards to
fectiveness is growing, it is crucial to Disaggregation of energy consump- collect final energy use data from sec-
identify the gaps and errors in the nation- tion by end-users: Energy balances pro- tors have been developed and are being
al energy balances and develop them to vide data on fuels used by end-use sec- used by developed economies and inter-
meet international standards. tors. The energy sources used by differ- national organisations. The availability
This article compares the energy bal- ent sectors are essential to track their of reliable energy balance tables from a
ances from MOSPI’s energy statistics and energy intensities and quantify savings country’s official sources is essential for
IEA energy balances and finds significant from energy efficiency improvements. research on tracking improvements in
differences between them. There are two The disaggregation of final energy use to energy efficiency and fuel diversifica-
key issues in the MoSPI’s energy balances. end-users is complete in the IEA energy tion to meet its development and climate
First, an incorrect calorific value of coal balance but incomplete in MoSPIs energy goals. Hence, MoSPI must correct its ene-
and, second, an incomplete disaggrega- balance. Due to the incomplete disaggre- rgy balance tables and provide a reliable
tion of energy use by end-users. These gation, the estimate of agriculture and source for national energy statistics.
issues lead to substantial differences in transport energy intensity is much lower One of the challenges in adopting better
energy indicators and CO2 emissions. in the MoSPI data than in the IEA data. energy data management in India is that
The method used to estimate transport the dissemination of energy data is not in-
The calorific value of coal: The prima- energy intensity in MoSPI does not fol- stitutionalised under legislation (Rai et al
ry energy from coal in the MoSPI data is low international practices. More impor- 2017). While legislation can provide the
higher than IEA due to the assumption of tantly, the transport energy intensity is push for better data management, it is
a higher calorific value of coal. It results incorrect as many oil products used in not essential. There is evidence that India
in a 26% higher estimate of primary
energy supply in the MoSPI data than EPWRF India Time Series
IEA. It further translates to a 26% higher
estimate of per capita energy consump-
Expansion of Banking Statistics Module
(State-wise Data)
tion and intensity. The efficiency of en-
ergy conversion, transmission, and dis- The Economic and Political Weekly Research Foundation (EPWRF) has added state-wise
tribution is reported to be 19% in the data to the existing Banking Statistics module of its online India Time Series (ITS)
database.
MoSPI statistics but 31% in the IEA data.
State-wise and region-wise (north, north-east, east, central, west and south) time series
In the MOSPI statistics, the energy inten-
data are provided for deposits, credit (sanction and utilisation), credit-deposit (CD) ratio,
sity of the industry is 83% higher than in and number of bank offices and employees.
the IEA data. The estimate of energy–CO2 Data on bank credit are given for a wide range of sectors and sub-sectors (occupation)
emissions from MoSPI differs from IEA such as agriculture, industry, transport operators, professional services, personal loans
and gives a 31% higher estimate than IEA. (housing, vehicle, education, etc), trade and finance. These state-wise data are also
Calorific value is crucial to converting presented by bank group and by population group (rural, semi-urban, urban and
physical values into a standard energy metropolitan).
unit. The energy balance tables in the The data series are available from December 1972; half-yearly basis till June 1989 and
annual basis thereafter. These data have been sourced from the Reserve Bank of India’s
MOSPI likely use the default calorific val-
publication, Basic Statistical Returns of Scheduled Commercial Banks in India.
ues given in the IRES. This error in the
Including the Banking Statistics module, the EPWRF ITS has 32 modules covering a
assumption leads to a higher estimate of
range of macroeconomic and financial data on the Indian economy. For more details,
energy use, the intensity of energy use, visit www.epwrfits.in or e-mail to: its@epwrf.in
and CO2 emissions. Many countries use
COMMENTARY
has responded to the global action on Bruckner, T, I A Bashmakov, Y Mulugetta, H Chum, IED (2021): “India Energy Dashboard,” NITI Aayog,
A de la Vega Navarro, J Edmonds, A Faaij, viewed on 15 January.
climate change and sustainable deve-
B Fungtammasan, A Garg, E Hertwich, D Hon- Karstensen, J, J Roy, B D Pal, G Peters and R An-
lopment goals without any legislation. nery, D Infield, M Kainuma, S Khennas, S Kim, drew (2020): “Key Drivers of Indian Green-
The action on climate change is not cov- H B Nimir, K Riahi, N Strachan, R Wiser and house Gas Emissions,” Economic & Political
X Zhang (2014): “Energy Systems,” Climate Weekly, Vol 55, pp 46–53.
ered under legislation in India. It is still Change 2014: Mitigation of Climate Change, Liu, B, M Evans, S Yu, V Roshchanka, S Dukkipati
at the forefront of international efforts to Contribution of Working Group III to the Fifth
and A Sreenivas (2017): “Effective Energy Data
contribute to meeting the climate change Assessment Report of the Intergovernmental
Management for Low-carbon Growth Plan-
Panel on Climate Change, Cambridge University
challenge. Similarly, India is actively ning: An Analytical Framework for Assessment,”
Press, Cambridge, United Kingdom and New
Energy Policy, Vol 107, pp 32–42.
tracking its sustainable development York, NY, US.
MOSPI (2010): “Energy Statistics,” Ministry of Sta-
goals following international efforts to Das, N and J Roy (2020): “India Can Increase Its
tistics and Programme Implementation, Gov-
Mitigation Ambition: An Analysis Based on
meet them. Hence, it may not be neces- Historical Evidence of Decoupling between
ernment of India.
sary to wait for a new law or institution Emission and Economic Growth,” Energy for — (2012): “Energy Statistics 2010,” Ministry of
Sustainable Development, Vol 57, pp 189–99, Statistics and Programme Implementation,
or duplicate the efforts through other or- Government of India.
https://www.sciencedirect.com/science/arti-
ganisations to meet the energy data cle/pii/S0973082620302568. — (2021): “Energy Statistics 2021,” Ministry of
challenge. The MOSPI energy statistics Dukkipati, S, R K Iyer and A Sreenivas (2015): Data Statistics and Programme Implementation,
Gaps in India’s Energy Sector, Pune: Prayas (En- Government of India.
are published under a well-established Rai, V, R Tongia, G Shrimali and N Abhyankar (2017):
ergy Group).
process. Efforts to improve it can pro- ES (2019): “Enabling Inclusive Growth through Af- “Data for Development: The Case for an Indian
vide the necessary support for tracking fordable, Reliable, and Sustainable Energy,” Energy Information Administration,” Energy
Ministry of Finance, Department of Economic Research & Social Science, Vol 25, pp 105–09.
India’s development and climate goals.
Affairs, Economic Division, Government of India. UN (2017): “International Recommendations for
IEA (2020): “CO2 Emissions from Fuel Combustion Energy Statistics-IRES,” Department of Eco-
References 2020 Edition Database Documentation,” Inter- nomic and Social Affairs Statistics Division,
Andrew, R M (2020): “Timely Estimates of India’s national Energy Agency, Paris. Series M No 93, United Nations, New York.
Annual and Monthly Fossil CO2 Emissions,” — (2021): “World Energy Balances 2021 Edition Vera, Iand and L Langlois (2007): “Energy Indi-
Earth System Science Data, Vol 12, No 4, Database Documentation,” International Ener- cators for Sustainable Development,” Energy,
pp 2411–21. gy Agency, Paris. Vol 32, No 6, pp 875–82.
COMMENTARY
it to Mark Juergensmeyer, a reputed

Lahori Ram Balley (1930–2023) American academic and pioneer of Dalit
studies, who visited him in the early
A Reputed Ambedkarite and Social Activist 1970s during his doctoral research on
the formation of Dalit consciousness in
Punjab. Eventually, the Ad Dharm Man-
Ronki Ram dal report became the forte of Juergens-
meyer’s classic entitled Religion as Social
L
As a committed follower of ahori Ram Balley (also known as Vision: The Movement against Untoucha-
B R Ambedkar’s vision, Lahori L R Balley), a veteran Ambedkarite bility in 20th Century Punjab, published
and social activist, passed away by the University of California Press,
Ram Balley (1930–2023) devoted
on 6 July 2023. He was a household name Berkeley, CA, in 1982. However, Balley’s
his life to advancing the cause among the Scheduled Castes (SCs) of interest in B R Ambedkar’s mission was
of social justice and equality. Punjab, a state known for its largest con- ignited by his paternal uncle, Hakim
He passed away at 93, leaving centration of SC population in India. He Gurcharan Dass, an adept admirer of
was held in high regard in several other Ambedkar, who was also closely associ-
behind a legacy of activism and
states as well as among the SC diaspora. ated with Seth Kishan Dass, the main
leadership that inspired many in Born on 20 July 1930, to Premi Devi financer of the Ad Dharm Mandal and
Punjab and beyond. (mother) and Bhagwan Dass (father) at the founder president of the Punjab
Nawanshahr, Balley inherited political Scheduled Caste Federation (SCF) in 1942
activism from his grandfather, Chaud- —the maiden Ambedkarite political par-
hary Inder Ram, who was associated ty in Punjab.
with Babu Mangu Ram Mugowalia, the
founder of the historic Ad Dharm move- Transformative Meeting
ment, in generating social and political with Ambedkar
consciousness among the so-called lower Balley had shifted to Delhi in 1947 in
castes in Punjab in the late 1920s. Balley search of a job after passing his matricu-
Ronki Ram (ronkiram@yahoo.co.in) is the traced the Ad Dharm Mandal report, a lation examination. On 8 December
Shaheed Bhagat Singh Chair Professor at rare primary document, from the scat- 1948, he landed the job of “copy holder”
Panjab University, Chandigarh.
tered papers of his grandfather and gave in the government office of the state
COMMENTARY
press at Delhi. It was here in Delhi that general election in 1957, and persuaded nurtured by Balley over the years, have
he got the opportunity to meet Ambed- him to contest in the 1962 parliamentary become the most sought-after academic
kar at his residence, Bungalow No 1, election from Hoshiarpur constituency. space in Jalandhar where scholars, po-
Harding Road (currently called Tilak Balley himself contested in the parlia- litical activists, researchers, and leaders
Road) in New Delhi. He used to frequent mentary election of 1957 against Swaran of varied pursuits and journalists from
this road during his routine daily visits Singh, the then cabinet minister in the within the country and abroad have
to his office. He was also present during Congress government. To spread Dhamma been visiting regularly.
the occasion of the stone laying ceremony and further streamline the Ambedkar
of the Ambedkar Bhawan at Rani Jhansi Mission in Punjab, he embraced Bud- A Lasting Memory of Hope
Road, New Delhi in 1951, by Ambedkar dhism in 1963. Balley was a prolific writer and an elo-
himself. In the words of Balley: “Though quent orator with equal fluency in Pun-
I got the opportunity to meet Dr Ambed- Organiser and Institution-builder jabi, Hindi, Urdu, Persian, and English.
kar only thrice, and to see and listen to In the next year, Balley organised two He did not mince words, and was known
him many times, but 30 September 1951 major agitations for the acquisition and for his hard-hitting blunt speeches and
proved to be an historic day of my life.” It distribution of evacuee land among the writings, so much so that several cases
was on this very day that Balley prom- landless SC communities in Punjab. The had been lodged against him and some
ised Ambedkar: “I will dedicate my en- agitations were launched under the ban- of his booklets were banned. I have had
tire life for the fulfillment of his mis- ner of RPI on 15 June and 6 December the honour and privilege to interact with
sion.” In fact, it was the time when the 1964 in collaboration with Charan Dass him many times, including an occasion
Ambedkarite mission had almost come Nidharak. During this struggle, Bihari to spend an entire week with him during
to a standstill in Punjab. Many leaders of Lal Khaar, the elder brother of Balley, our participation in an international
the SCF deserted the mission and joined provided free cycle repair service to a conference on the birth celebration of
the Indian National Congress. Seth Kishan group of 101 cycle-borne activists who Ambedkar, held in Lahore in June 2008.
Dass, the founder of the Ambedkar Mis- began their cycle march to Delhi from I found in him a cordial and at the same
sion in Punjab distanced himself from Chak Hakim Ravidass Mandir near time a never-to-compromise personality,
active politics and got settled in Calcutta Phagwara on 15 June 1964. Before the and a thoroughly dedicated activist tow-
(Kolkata). Another veteran Ambedkarite, second round of this agitation, that took ards the mission of Ambedkar.
K C Sulekh, general secretary, SCF, who place on 6 December 1964, Balley and He was a true person of action who
just a month later had the honour of con- many more male leaders of the RPI were had lived a meaningful life with an
ducting the stage at Ramdaspura (Boota arrested. To keep the agitation alive, uncommon dedication. During his long
Mandi, Jalandhar) during Ambedkar’s women leaders of the RPI took over the journey, he had inspired, and continues
visit to Jalandhar on 27 October 1951, command. On 26 December 1964, they to inspire, millions with his forceful
became absorbed in a full-time job in protested vehemently against the then views and interpretations, giving hope
1952, which prevented him from devot- chief minister of Punjab who was visiting to those who had sometimes lost all
ing quality time to the mission. Jalandhar. Subsequently, many women hope. This grand old man, deeply dedi-
Balley kept his promise. After the were arrested. Among them was Bibi Ajit cated to Ambedkar’s mission of social
parinirvan of Ambedkar on 6 December Balley, wife of L R Balley, who was also justice and equality, had stayed the
1956, he resigned from his job. Since sent to jail along with her two small chil- course until the age of 93 years.
then, he never looked back. He got the dren: son Rahul and daughter Sujata.
SCF reorganised with the support of From among the many noteworthy
Charan Dass Nidharak, another veteran contributions made by Balley, the estab- Permission for
Ambedkarite, and soon after established lishment of Bheem Patrika in 1958, a Reproduction of Articles
the Punjab unit of the Republican Party monthly Urdu and Punjabi publication,
Published in EPW
of India (RPI) as envisioned by Ambed- is the most significant. Its first issue was
kar. He got the Ambedkar Bhawan con- published in May 1959. Since 1965, it has No article published in EPW or part
structed at a place where Ambedkar been published in Hindi and also carried thereof should be reproduced in any
delivered his historic address on the articles in English. Apart from the form without prior permission of the
evening of 27 October 1951. He also monthly journal, Bheem Patrika also be- author(s).
founded Ambedkar Bhawan Trust, gan publishing writings and speeches of A soft/hard copy of the author(s)’s
Ambedkar Mission Society, the Punjab Ambedkar much before the arrival of his approval should be sent to EPW.
wing of All India Samata Sainik Dal, collective works published by the Gov-
Buddhist Society of India, among others, ernment of Maharashtra. It also pub- In cases where the email address of
and led them all from the front till his lished numerous booklets on Ambedka- the author has not been published
along with the articles, EPW can be
last breath. He took Yashwant Ambed- rite literature, including books authored
contacted for help.
kar, son of B R Ambedkar, on a whirl- by Balley. Ambedkar Bhawan and Bheem
wind tour of Punjab during the second Patrika publication office, meticulously
COMMENTARY
or both. The QE undertaken has resulted

Unconventional Monetary Policy into central bank expansion of range of
securities like outright purchase of asset-
in Japan and the United States backed securities, exchange traded funds
(ETFs), gilt purchase mainly to facilitate
New Perception and Different Learnings? smooth financing through adequate
quantum of liquidity supply. These tools
of QE often have policy commitments
Surobhi Mukherjee tied to the real sector like consumer
price index (CPI), index of industrial
T
When most of the advanced he unconventional monetary poli- production (IIP), etc, and are aimed to
countries are on the recourse to cies have been in use to give stim- compress the risk premiums.
ulus to the economies of the ad- The aim of this article is to analyse the
exit the path of unconventional
vanced countries because the conven- effectiveness of the tools (that is, which
monetary policy, it is time to look tional measures of monetary policies of the following central bank purchase/
at a new perspective and review ceased to be effective or large fiscal tool was more effective and how?) used
the unconventional monetary stimulus led to questions of unsustaina- in unconventional monetary policy as
bility of the debt. Post the financial crisis well as how they are transmitted to the
policy from the lens of tool
of 2007–08, the Federal Reserve System concerned variable of interest, therefore
purchase by central banks under introduced the large-scale asset purchase underlying the importance of channels
quantitative easing. The purchase programme, Bank of Japan undertook of transmission as well as the tool. The
of government treasuries affects comprehensive monetary easing1 from tools are essentially the purchase of cen-
October 2010, Bank of England intro- tral bank assets through which liquidity
risk premia and yields more
duced asset purchase programme since provision is happening in the economy.
compared to the purchase of March 2009 and European Central Bank This is explained in Table 2 (p 18).
private assets by central banks. undertook long-term refinancing opera-
tions since May 2009—all measures were Underlying Theory
But the purchase of private
part of unconventional monetary policy The QE is undertaken in the economy to
exchange traded funds/mortgage
or popularly known as quantitative easing provide a boost and the overnight call
backed securities are important (QE), mentioned in Table 1. rate is one of the important target rates.
for cash-starved entrepreneurs In the conventional measures of mon- However, overnight call rate is a short-
and real-estate developers etary policy, the central bank in general term rate and in order to substitute in-
is not engaged in direct buying of public vestment from long-term bonds (which,
compared to government bond
or private assets, but the use of uncon- in turn, depend on some idea of a long-
purchase. How India was different ventional monetary policy means a di- term rate) to short-term bonds, risk pre-
in practising the unconventional rect intervention by the central bank in mium has to be changed, which is con-
monetary policy is also discussed. purchase of either public or private assets sistent with preferred habitat theory. It
Table 1: Quantitative Easing Programmes Undertaken by Central Banks of Advanced Countries
Central Bank Programme
Federal Reserve System Large-scale asset purchase (LSAP) programme
Figure 1 referred in the text is available online. Bank of Japan Quantitative easing programme (QEP), comprehensive monetary easing (CME)
Surobhi Mukherjee (007surobhi@gmail.com) is Bank of England Asset purchase programme (APP)
with the Indian Economic Service. European Central Bank Longer-term refinancing operations (LTRO)
Source: Compiled by the author.
COMMENTARY
Table 2: Unconventional Monetary Policy Tools under Various The capital-inadequacy ap- scenario where operating target in nor-
Programmes
proach could give us an insight mal circumstances could be affected by
Programme Tool/Central Bank Purchase
into why the Bank of Japan various measures, the operating target
LSAP-Federal Reserve (i) Mortgage backed securities (MBS)
(ii) Treasuries
never had call rate as an oper- under recessionary times is only impact-
(iii) Municipal bonds ating target during QE March ed by unconventional monetary policy
CME, QEP-Bank of Japan (i) Japanese government bonds 2001–March 2006. One of the tool. There exists a bilateral relation bet-
(ii) Corporate bonds main reasons why the Bank of ween QE tool and the operating target.
(iii) Exchange traded funds Japan undertook QE was to Two, since the policy tool is also tied
APP-Bank of England (i) Long-term government bonds increase inflation in the econ- with real economy indicators, it makes
(ii) Private assets omy. As stated by Friedman sense to analyse this relationship as well,
LTRO-European Central Bank Mostly government bonds
(1963), the statement that “In- although paucity in monthly availability
is to be noted that if short-term bonds fl ation is always and everywhere a mon- of certain data (like fiscal deficit) could be
are a perfect substitute for long-term etary phenomenon” holds true as long as a constraint. But literature evidences in
bonds, then ex ante term premium would there is private demand for funds in the support of argument could be provided.
be zero and signalling could serve as an economy, which simply may not be the In the case of Japan, the quantitative
active transmission channel. But since case due to weak balance sheets. Liquid- easing programme (QEP) (March 2001)
long- and short-term bonds are imper- ity frictions does impact entrepreneurs was undertaken prior to the 2008 crisis
fect substitute, the unconventional mon- and households, in words of Paul Krug- where the main QE policy tool was the
etary policy can impact term premium man (2007), “an expansionary monetary purchase of Japanese government bonds
(also called risk premium) through port- policy may not lower effective interest (JGBs) and the operating target chosen
folio balance channel (Tobin 1958). rates very much but may simply spend it- was outstanding current account bal-
Therefore, the real question is, what self in making everybody more liquid.” ances. The purchase of JGBs was tied to
could impact the term premium more, It is also essential to pinpoint about consumer price index (CPI), given Japan
private purchase or gilt/government pur- the role of expectations in monetary pol- was facing deflationary situation. The
chase? Which of the following tools of li- icy, which becomes extremely important zero or negative rates in the call market
quidity provision were influential and in times of liquidity trap according to were not explicitly targeted in this QE,
how they are influential would beg an J M Keynes. Hicks also talks about the though it had implications for the QEP
analysis of the transmission mechanisms. importance of central bank announcement which made the cost of funding yen
The QE policy is meant to increase the and how it can result into shift in expec- practically zero.
nominal demand for goods and services. tations (Scazzieri et al 2008), which is In the case of the US, the federal fund
This is done by lowering the interest now popularly known as “Forward Guid- rate was chosen as the operating target.
rates, overnight call rate (fund rate) for ance.” This was based on the assumption The Federal Open Market Committee
instance, which represents the marginal of extreme rationality and central bank’s (FOMC) maintained its target in the
cost at which banks can fund themselves. policy stance on future price stability range of 0%–0.25% following the non-
Banks can in turn pass on the lower cost was an important factor working on these traditional policy actions. The labour
of funds to their loan customers, which expectations, so any minor changes in market was weak and the industrial pro-
increases bank demand for credit and policy creates ripple effect in expectations. duction was declining, thus non-tradi-
nominal spending increases. It is impor- To sum up, theory provides an insight tional policies should aim to correct
tant to emphasise here that banking sys- into the important aspects of unconven- these real indicators. The US conducted
tem should possess capital adequacy tional monetary policy—(i) compres- its QE in three phases, the tool during
which enables them to increase the sup- sion of risk premia and long-term yield, the first phase (QE1), that is November
ply of credit, but if a bank is constrained (ii) capital adequacy of banks, (iii) pri- 2008 onwards, and the second phase
in supply of credit due to capital inade- vate demand for funds in the economy, (QE2), that is November 2010 onwards
quacy (say because of growing non-per- and (iv) role of expectations. of operation, was largely purchase of
forming assets), then stimulation in the mortgage backed securities (MBS) and
economy shall be less even if low policy Model: A Case Study on Japan treasuries, respectively.
rates prevail. This was also one of the and US Keeping in perspective the importance
reasons why the Federal Reserve Bank Two kinds of relationship could be analys- of capital adequacy and risk premia that
of the United States (US) undertook the ed in the article. One, concerns the im- guides the expansion of liquidity further
second round of quantitative easing. In pact of policy tool on the operating target. by commercial banks (lowering rates by
fact Japan, the United Kingdom (UK), Unlike the conventional monetary policy authority might not be passed on), the QE1
Europe, all these countries had balance
Table 3: Tools and Operating Targets
sheet recession and as a result capital
Country Tool Operating Target Real Sector
inadequacy, as the collapse of debt- Japan JGBs Outstanding current account balances CPI
financed bubbles left them with a huge United States Treasuries, MBS Federal fund rate (call rate) Unemployment rate, inflation rate
debt overhang. Source: Compiled by the author.
COMMENTARY
Figure 2: Call Rate (Less Than 24-hour Rate) in Japan Figure 3: Long-term Government Bond Yield in Japan,
April 2001–March 2006 g
60 2
50
1.5
40
Count
30 1
20
0.5
10
0
0
2003M08
2003M12
2004M04
2004M08
2001M04
2001M06
2001M08
2001M10
2001M12
2002M02
2002M04
2002M06
2002M08
2002M10
2002M12
2003M02
2003M04
2003M06
2003M10
2004M02
2004M06
2004M10
2004M12
2005M02
2005M04
2005M06
2005M08
2005M10
2005M12
2006M02
0.00 0.02 0.03 0.05 0.06 0.08 0.09 More
Call Rate
(which was mainly the purchase of pri- rate hovers around 0–0.005, that is, max- The effective fund rate or the call rate
vate assets) although had small impact imum data points are coloured blue with is the operating target for the US, which,
on yield (risk premia therefore), but had very few red dots depicting the range of unlike Japan, does show some variabili-
considerable impact on restoring capital 0.015–0.02. It is as if QE is having the no ty and therefore is non-stationary as
adequacy of banks. The implications of impact on call rate at all compared to the shown in the Hodrick–Prescott filter de-
these purchase were different on the US which has a contrasting distribution composition in Figure 4 (p 20). Federal
economy, the analysis for which is sub- compared to Japan. funds rate is highly influential because it
sequently undertaken in the article. In the case of Japan, time series varia- serves as a base for interest rates for var-
Although Japan undertook such un- ble like QE, less than 24-hour rate, yield, ious credit and financial institutions to
conventional policy measures prior to CPI, and current account balances are business and consumers. It is also worth-
the 2007–08 crisis, the operating target subjected to time series analysis, result- while to note that despite interest rates
and tool of conducting the monetary ing in all the time series variables show- approaching zero-lower bound, it worked
policy were different vis-à-vis the US. ing seasonal or trend components (non- effectively as an operating target, some-
The US, for instance, did not have any stationary), except for call rate which thing that the FOMC can control on a
real indicator tied to its policy tool ex- hardly shows any variability. This call day-to-day basis.
plicitly, unlike Japan which had CPI. rate is essentially the interbank rate in While Fed defines its federal fund rate
Likewise, the tool for QE2 in the US and Japan, the benchmark lending rate bet- target explicitly, Bank of England and
QE in Japan (2001–06) was similar in na- ween banks in Japan. The call rates were European Central Bank only target it im-
ture but the implications on yield and real already prevailing low in Japan prior to plicitly; interestingly, Bank of Japan cre-
targets were pretty different. It is essential QEP undertaken since March 2001. It ates excess reserves and explicitly tar-
to point out the different time periods reduced to 0.001 in February 2002 and geted current account balances (2001
under which such policies were under- the histogram (Figure 2) shows an ex- March onwards). In this context, it could
taken pre- and post-crisis but the two tremely concentrated count of call rate have been argued that why reserve posi-
economies were largely in a similar situ- in Japan. tions are not target of interest and why
ation during the onset of the policy like Expectedly, with little or no variation only short-term interest rates are targeted
worsening bank balance sheets, collaps- in the call rate as a result of QE in Japan, especially in the US, when QE through
ing stock market, poor real indicators, the data is stationary which should not central bank balance sheet expansion is
lower-bound (near zero) rates as a con- come as a surprise. Notice that the gov- happening at such a massive scale. The
sequence of easy liquidity itself. ernment bond yields are very low, but debate has been dealt with in several
It is to be pointed out that irrespective they are not consistently falling as it papers, one of them being Bindseil (2004).
of the operating target chosen, (impact- should be the case. What could explain The frequency of interventions is another
ing risk premia—through alteration of such unexpected behaviour? The long- crucial factor.
government bond yields), capital ade- term government bond yield increased The histogram for effective fund rate
quacy of banks was extremely important from June 2003 to August 2003 and for the US is not as concentrated as Japan’s
for stimulation of growth from a mone- thereafter from June 2005. The reason is call rate (Figure 2).
tarist perspective. because of the large debt incurred by the Unlike Japan, it is to be noticed that
The tools used for QE (that is, purchase government, which practically makes the fall in yield is consistent for the US
of different bonds) might have varied the impact of tool purchase of JGB on from January 2009–April 2013, but
impacts on operating target or yield for yield less. The impact of tool on IIP and thereafter it rises.
countries; for instance, a 3D image with CPI is also muted; however, one must ac- To sum up the model, concerned
QE, yield and call rate is shown in Figure knowledge that real indicators are af- variable(s) of interest in the case of
1 for US and Japan. A priori, one would fected by variables like fiscal deficit, Japan include purchase of JGB (QE, denot-
expect QE to have an impact on call rate growth rate of gross domestic product ed in million yen), yield, call rate (inter-
and yield, but in the case of Japan—call (GDP) itself, among others. bank rate), current account balances
COMMENTARY
Figure 4: Hodrick–Prescott Filter Decomposition for Fund Rate in the US Figure 5: Call Rate (Effective Fund Rate) in the US
(Operating Target) 18
Hodrick–Prescott Filter (lambda=14400)
.24
16
14
.20
12
.16
10
Count
.06
.12
.04 8
.08
.02 6
.00 .04 4
-.02
-.04
2
-.06 0
-.08 0.07 0.08875 0.1075 0.12625 0.145 0.16375 0.1825 0.20125 More
I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV
2009 2010 2011 2012 2013 2014
Effective Fund Rate
Effective fund rate
effective fund rate
Trend
Trend Figure 7: H–P Filter Decomposition for Outstanding Current Account Balances
CycleCycle in Japan (Operating Target)
Hodrick–Prescott Filter (lambda=14400)
Figure 6: Average Yield Rate in the US, January 2009–October 2014
100,000
3.00 80,000
2.50 60,000
2.00 40,000
40,000
1.50 30,000
20,000
1.00 20,000
0.50 10,000 0
0.00 0
-0.50 -10,000
July 2009
July 2010
July 2011
July 2012
July 2013
July 2014
January 2009
April 2009
October 2009
January 2010
April 2010
October 2010
January 2011
April 2011
October 2011
January 2012
April 2012
October 2012
January 2013
April 2013
October 2013
January 2014
April 2014
October 2014
-20,000
II III IV I II III IV I II III IV I II III IV I II III IV I
2001 2002 2003 2004 2005 2006
Current account
current accoutbalances
balances
Trend
Trend
Long-term inflation indexed average US treasury fund rate/yield Cycle
Cycle
(operating target), IIP and CPI (real indi- This is nothing but mainly creation of affected by variables which could be
cators). Similarly, the concerned vari- excess reserves. outside the control of unconventional
able(s) of interest in the case of US in- The data also shows a shock and monetary policy. Out of the two real in-
clude purchase of MBS and treasuries change of intercept in outstanding cur- dicators (CPI and IIP) in Japan, CPI was
(QE, denoted in million dollars), yield, rent account balances from March 2003 tied to the policy tool explicitly during
fund rate (call rate also the operating onwards. The central bank of Japan the QEP, but the results show no impact
target), CPI and unemployment rate stepped up the QEP from early 2003 on- of purchase of government bonds on CPI.
(real indicators). wards, which justifies the shock. Moreover, the change in QE could not alter
It indicates the amount of money that the deflationary tendencies in Japan at all.
Short- and Long-run the financial institutions can use freely The density plot2 between QE in Japan
Relationship(s) to loan, by increasing the amount of and CPI is extremely concentrated in the
The time series variables undertaken funds; the Bank of Japan promotes the south-east corner of the Figure 9 (p 21)
for interpretation of unconventional QE policy of finance. A long-run relation indicating high easing and low CPI.
monetary policy tool in Japan show that between QE and yield also exists, but Moreover, in the construct of the
the purchase of JGB impacts the operat- there is something odd with the Japa- model when a shock was given to change
ing target that is outstanding current nese long-term government bond yields. in QE, it had a muted impact on the
account balances (tested for causality). It is not consistently falling (thus risk change in CPI, confirming the ineffec-
It is essential to point out that Japanese premia would also not fall consistently). tiveness of unconventional monetary
economy never had call rate (interbank) This oddity could be explained by the policy on the explicit CPI target. But the
as an operating target as there was no huge general government debt-to-GDP impact of QE on IIP exists in the short
variation in call rate at all and specifi- ratio of Japan. It is to be noticed how the run, which is why IIP increases post
cally it could not have fallen below fur- level of this debt-to-GDP ratio is also October 2003.
ther and stimulated borrowing. There- higher in Japan compared to the US from
fore, outstanding current account bal- 2003 to 2006, given the US was also in-
ances were chosen as an operating curring fiscal expenditure and the long-
available at
target which means the “amount of term gilt-yields rose from mid-2003 on-
funds of checking accounts which the wards in Japan.
Gyan Deep
Near Firayalal Chowk,
financial institutions open with the The impact of this policy tool on real
Ranchi 834 001, Jharkhand
Bank of Japan for the purpose of settle- economy is ambiguous. It is to be em-
Ph: 09470564686
ment with other financial institutions.” phasised that real indicators might be
COMMENTARY
Figure 8: General Government Debt/GDP of Japan and US, 2003–06 Figure 9: Density Plot between Quantitative Easing and CPI in Japan
200
102.0
150
101.5
CPI
Level
6e–06
100 4e–06
101.0 2e–06
50
100.5
0
2003 2004 2005 2006 100.0
4,50,000 5,00,000 5,50,000 6,00,000 6,50,000
General govt
General govtdebt/GDP
debt/GDPJapan General govt
General govtdebt/GDP
debt/GDPUSUSA QE
Figure 10: IIP Data for Japan, April 2001–March 2006 Figure 11: QE, Fund Rate and Long-term Yield in US from January 2009–
p October 2014
100 6,00,000 3.00
98 5,00,000 2.50
96 2.00
4,00,000
94 1.50
3,00,000
92 1.00
90 2,00,000 0.50
88 1,00,000 0.00
86 0 -0.50
October 2011
January 2009
January 2010
January 2011
January 2012
January 2013
January 2014
July 2009
July 2010
July 2011
July 2012
July 2013
July 2014
April 2009
October 2009
April 2010
October 2010
April 2011
April 2012
October 2012
April 2013
October 2013
April 2014
October 2014
84
82
80
1
4
2001
2001
2002
2002
2002
2002
2003
2003
2003
2003
2004
2004
2004
2004
2005
2005
2005
2005
2006
2006
2006
2006
QE in millions of dollars fund

Fundrate
rate long termaverage
Long-term averageUS
us treasury fund rate
Figure 12: Inflation Rate in US, 2009–14 Figure 13: Government Expenditure in US, 2009–15
5 6,400
4 6,200
3 6,000
2 5,800
1
5,600
0
-1 5,400
-2 5,200
-3 5,000
January 2011
January 2009
January 2010
January 2012
January 2013
January 2014
July 2009
July 2010
July 2011
July 2012
July 2013
July 2014
April 2009
October 2009
April 2010
October 2010
April 2011
October 2011
April 2012
October 2012
April 2013
October 2013
April 2014
October 2014
1/1/2009
1/5/2009
1/9/2009
1/1/2010
1/5/2010
1/9/2010
1/1/2011
1/5/2011
1/9/2011
1/1/2012
1/5/2012
1/9/2012
1/1/2013
1/5/2013
1/9/2013
1/1/2014
1/5/2014
1/9/2014
1/1/2015
1/5/2015
1/9/2015
governmentexpenditure
Government expenditure(in(in Billion
billion dollars)
dollars)
The Federal Reserve pursued its QE corporate. The overall impact on the yield the creation of money but on consump-
programme, and the impact on yield, fund as well as risk premia is also disproportion and insufficient demand may con-
rate (call rate) and real variables could tionate. Therefore, it could be interpret- strain output and prices. As Krugman
be judged based upon the nature of as- ed further that the signalling effect could points out:
sets purchased; for instance, the MBS have been larger under QE2 than QE1. In
Money becomes irrelevant at the margin
purchase under QE1 (initiated in Novem- the same breath, the forward guidance and it is a credibility problem regarding gen-
ber 2008) not only lowered long-term or signalling channel should have a larg- eration of inflationary expectations, espe-
yields but also reduced corporate credit er impact on bonds with intermediate cially for a country like United States or Ja-
risk and helped in restoring capital ade- maturity than on long-maturity rate bonds, pan, as they are not irresponsible country
(Zimbabwe creates inflation easily).
quacy of banks. The QE1 had a dispro- since the commitment to keep rates low
portionate effect on the yield compared lasts only until the economy recovers, Moreover, the implicit 2% inflation tar-
to QE2 where treasury bonds were pur- post which Federal Reserve can sell the get was maintained (shown in Figure 12)
chased and the latter was more influen- accumulated assets—both treasuries and in the US for most of the period under-
tial in changing the market’s anticipa- MBS at market rates, earning windfall taken for analysis and generating expec-
tion regarding future federal funds rate. profits. This is perhaps the reason why a tations beyond this 2% target would
Lower variation in the supply of treas- short-run relation only exists between mean that the public belief had to be al-
uries also helped minimise the “duration QE, call rate and yields when time series tered towards long-run sustenance of the
risk” factor as noted by Vayanos (2014) analysis was carried out. ongoing monetary policy, which clearly
under QE2; on the other hand, the “de- From the perspective of real indica- was not the goal. It is to be emphasised
fault risk premia” was reduced in QE1 for tors, the price index not only depends on here that achieving the 2% target was
COMMENTARY
Figure 14: Unemployment Rate in US, 2009–14 especially TLTRO 2.0. It may be noted
that the COVID-19 circumstances creat-
12
ed an altogether different reason for ac-
10 quiring liquidity unlike the normal
business/economic cycles. The Infra-
8 structure Leasing & Financial Services
6
Limited (IL&FS) default left the NBFCs
lurking for liquidity. Both TLTRO 1.0 and
4 2.0 allowed the central bank to lend
money to banks for one to three years at
2
the current repo rate in exchange for
0 collateralised government assets with a
1/10/2009
1/10/2010
1/10/2011
1/10/2012
1/10/2013
1/10/2014
1/1/2009
1/4/2009
1/7/2009
1/1/2010
1/4/2010
1/7/2010
1/1/2011
1/4/2011
1/7/2011
1/1/2012
1/4/2012
1/7/2012
1/1/2013
1/4/2013
1/7/2013
1/1/2014
1/4/2014
1/7/2014
similar or longer term. It is to be seen
that how the unconventional monetary
policy of India impacted G-sec of dif-
Table 4: Comparison of US and Japan wrt Tool Purchase under Quantitative Easing ferent maturity buckets, is a study for a
US Japan later date.
Both private and treasuries were purchased Mostly government bonds were purchased
Interest rate targeting Reserve targeting
Conclusions
Impact of treasury on yield is more Impact on yield is less: reason fiscal deficit
2% target already achieved No visibly large impact on CPI, muted effect The major channels through which un-
Unemployment fell, gradually IIP increased, gradually conventional monetary policies impacts
Table 5: Comparison of Tool Purchase under Quantitative Easing in Japan (2001–06) and Japan (2010)
the economy are through furnishing ad-
Japan (2001–06) Japan (2010) equate quantum of liquidity and com-
Mostly Japanese government bonds were purchased Both equity and Japanese government bonds were pressing risk premium as argued in this
purchased article. The QE is carried out using vari-
Impact on yield is less Impact on yield and risk premia is more ous tools or asset purchase that has im-
Less impact on inflation Equity prices have risen, so is food and energy.
plications for overall yield, risk premia,
itself not a small task; huge fiscal stimu- which came to be known as Operation operating target as well as real indica-
lus was provided in the form of rebates Twist and was an unconventional meas- tors. This article brings about an impor-
in taxes to investment in business that ure in this sense (without expanding the tant conclusion.
was able to spur the inflation. balance sheet). The tool moderated the There is a disproportionate impact on
Employment or unemployment is a yields of government securities and re- the yield (especially) of policy tool un-
lagging indicator; it typically recovers duced the cost of borrowing. By pur- der QE, the MBS purchase (QE1) in the US
after a period of significant recession and chasing longer-term bonds, the RBI can as a part of QE brought down the yield
the impact of QE on labour market was less help drive the bond prices up and yields and risk premia less compared to treas-
documented. Although, unemployment down (since prices and yields move in ury purchase (QE2). This premise is not
did fall post the QE in the US but workers opposite directions). At the same time, only true for MBS purchase by the Feder-
in the labour market were believed to be selling shorter-term bonds should cause al Reserve Bank but also holds true
underemployed or working below their their yields to go up (since their prices when the Bank of Japan purchases the
skill levels due to lack of availability of would fall)—a befitting action as sur- corporate bonds and exchange traded
higher paying jobs. Even though the plus liquidity often chases shorter-dated funds and the Bank of England purchas-
cash flows and profits of the corporate assets and subsequently leads to cross- es private assets. One could dig deeper
improved, it does not mean that the job country arbitrage, investment in gold, to argue that there are re-saleability
market became efficient as real wages etc. Lower longer-term yields help by constraints in private equity purchase
were low as well as the productivity. making loans less expensive for those vis-à-vis government bonds, and the
looking to buy homes, purchase cars, household liquidity might improve much
India’s Unconventional Policies and finance projects, while saving be- more in the latter case.
Post the Fed’s announcement and inten- comes less desirable because it does not There exists liquidity crisis in private
tion of tapering the QE in mid-2013, vola- pay as much interest. financial assets, and liquidity frictions of
tility in the financial markets returned in The targeted long-term repo operations such large scale cannot be neglected for
India. The Reserve Bank of India (RBI) (TLTRO) was another tool at the disposal revival of the economy because it impacts
twisted the yield of government securi- of RBI, which to a certain extent meant the ability to invest in capital. When cen-
ties to bring liquidity into the markets, by financing the non-bank financiers post tral banks purchase private assets, some
simultaneous buying and selling govern- COVID-19 and easing the liquidity for non- portfolio rebalancing occurs and the pri-
ment securities—both short and long term banking financial companies (NBFCs) vate investors sell their assets to the cen-
—through open market operations (OMOs) and microfinance institutions (MFIs)— tral bank and are forced to find new
COMMENTARY
places to park their money. In fact, li- During recession, economy is far away because the wages at the lower end of
quidity holdings of households and from price stability and optimal output, income distribution were not boosted;
business could be affected by these tools, owing to negative investment shocks low interest rates favoured the borrow-
as some of these tools/asset purchases and if these shocks are persistent in na- ers and if skilled workers were working
also allow credit-starved entrepreneurs ture then it escalates the level of crisis. A in relatively unskilled, low-paying jobs,
to increase investment and households positive shock similarly is assumed to then underemployment phenomena also
to demand more loans. To put it in a have an opposite impact. Thus, practising crops up, as happened in the US.
nutshell, QE is not only concerned with unconventional monetary policy by for-
quantity, but it is also concerned with ward guidance (which is not in nature of Notes
the composition of assets purchased by shock or is more anticipatory in nature) 1 Bank of Japan also practised “Quantitative
Easing Programme—QEP” from March 2001–
central banks. makes the pace of recovery slower, espe- March 2006.
The disproportionate impact on yield cially of the real indicators. 2 Density plot estimated from Kernel Density.
from the purchase of private assets un- One of the limitations of this article
der QE1 compared to QE2 where the has been less focus on the channels References
treasury bonds were purchased is anoth- through which real indicators are im- Bindseil, U (2004): The Operational Target of Mon-
etary Policy and the Rise and Fall of Reserve Posi-
er point to emphasise on tools, where pacted; say, the impact of QE on unem- tion Doctrine, Germany: European Central Bank.
the latter was more influential in chang- ployment rate and CPI would be less di- Friedman, M (1963): A Monetary History of the
United States, 1867–1960, New Jersey: Prince-
ing the market’s anticipation regarding rect compared to the impact of call rate ton University Press.
future federal funds rate, under Japan’s and yield, yet the process of recovery Krugman, P (2007): Conscience of a Liberal, United
second round of QE—comprehensive would be gradual in nature. Empirical States: W W Norton.
Scazzieri, Roberto, Amartya Sen and Stefano Zamag-
monetary easing from October 2010, evidence from the Bank of England also ni (2008): Markets, Money and Capital: Hick-
central bank purchased ETFs. This tool is shows gradual employment recovery sian Economics for the Twenty First Century,
Cambridge University Press.
resaleable and carries higher default risk post the asset purchase programme (QE),
Tobin (1958): “Liquidity Preference as Behavior
unlike JGB, but is important for the liquid- so there is not really a case for job-rich Towards Risk,” Review of Economic Studies,
ity constrained and cash-starved entities recovery. Most importantly, in the US and Vol 25, No 2, pp 65–86.
Vayanos, R G (2014): “Bond Supply and Excess
like entrepreneurs and real-estate devel- Europe, the inequality worsened post Bond Returns,” Review of Financial Studies,
opers who sold ETFs. these unconventional policy measures Vol 27, No 3, pp 663–713.
INSTITUTE OF ECONOMIC GROWTH

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DIRECTOR
SPECIAL ARTICLE
COMMENTARY
$QRQOLQHGDWDEDVHRQ,QGLDQHFRQRP\VWUXFWXUHGLQGLIIHUHQWPRGXOHV
PERSPECTIVES
Monetary Policy Debates in and Barro and Gordon (1983). They

argued that policymakers should follow
the Age of Deglobalisation rules rather than have discretion because

discretion would result in time-inconsistent
outcomes as politicians may seek short-
The Turkish Experiment—III term political gains. Then, central bank
independence became the mantra in the
1980s, and by the end of the 20th centu-
Hasan Cömert, T Sabri Öncü ry, about 80%–90% of the world’s central
banks were independent, at least, opera-
I
This article is the third and the n the second article of this series, tionally (Haldane 2021). Pioneered by
last in a series on monetary “The Turkish Experiment—II,” we the Reserve Bank of New Zealand in
went back to 1980 and summarised 1989, inflation targeting became the
policy debates in the age in
what happened along the way to the on- game in town, and the independent cen-
which deglobalisation became a going monetary experiment that started tral banks focused on price stability (that
buzzword. Here, we continue the after the currency crisis of August 2018. is, low inflation) by employing a single
discussion of the ongoing Turkish Now, we shift our focus to central bank- tool, namely a short-term interest rate,
ing in Turkey and briefly analyse how it usually overnight.
monetary policy experiment by
evolved under the ongoing 20-years’ reign Not that no one had questioned central
focusing on the macro-prudential of the Justice and Development Party bank independence, inflation targeting,
measures, capital controls, and (AKP), the governing political party in a single monetary policy tool consisting
central bank independence, as Turkey, from November 2002 to April of a short-term interest rate, and the
2016. In April 2016, Murat Çetinkaya as- single objective of price stability before
promised in the first article, as an
sumed the position of chair, leading the the GFC (see, for example, Forder [1998]
example of these debates. central bank until he was dismissed in and the references therein). However,
July 2019. It was during his tenure that the GFC changed all of that. The central
the currency crisis of August 2018 took banking practices underwent significant
place. We then analyse the ongoing changes in both developed and develop-
monetary experiment that started in his ing countries, as a result. The obsession
term in detail. This is preceded by the with single-digit inflation targeting weak-
ongoing monetary policy debates in the ened, and the concerns about financial
age in which deglobalisation became stability and MPMs gained importance
a buzzword. (Benlialper and Cömert 2016).
While the term macro-prudential
Monetary Policy Debates gained popularity following the GFC, its
Although the monetary policy debates precise meaning remained ambiguous
on central bank’s independence, macro- (Clement 2010). Clement traced the term’s
prudential measures (MPMs), and capital origins to a subsection titled “the ‘macro-
controls have intensified after the global prudential’ risks inherent in maturity
financial crisis (GFC) of 2007–08 (Haldane transformation in banks’ international
2021), each can be traced back to dec- business” in a Bank of International Set-
ades earlier. tlements (BIS) report (BS/79/44, dated
The world’s first legally independent November 1979). The use of quotation
central bank is probably the central bank marks in the title indicated to him that
of the United States (US), the Federal the term was regarded as somewhat new
Reserve (Fed). The Fed gained its inde- or novel. What was referred to as macro-
This article is third in the series of HT Parekh
Columns published in Vol 57, No 46,
pendence from the treasury with the prudential risk in that report is now com-
12 November 2022 and Vol 58, No 11, 18 March Treasury–Fed Accord of 4 March 1951 monly known as systemic risk, which
2023 issues. (Hetzel and Leach 2001). However, the can be broadly defined as the expected
Hasan Cömert (hasan.comert@trincoll.edu) widespread adoption of central bank losses resulting from the failure of a sig-
teaches economics at Trinity College, independence was born out of the Great nificant portion of the financial sector,
Hartford Connecticut, US. T Sabri Öncü Inflation of the 1970s (Haldane 2021), and leading to a reduction in credit availa-
(sabri.oncu@gmail.com) is an economist based its academic roots go back to the seminal bility and potential adverse effects on the
in İstanbul, Turkey.
articles by Kydland and Prescott (1977) real economy (Acharya and Öncü 2013).
Economic & Political Weekly EPW july 22, 2023 vol lViII no 29 43
PERSPECTIVES
The European Central Bank (ECB 2023) as a substitute for necessary macro- Securities (GDDS) auctions on 29 May
defines MPMs as those aimed at enhanc- economic adjustments (IMF nd). 1985. After launching the interbank money
ing the financial system’s resilience to Shortly after the publication of the market within its own structure on 2 April
identified systemic risks, a definition broad IMF’s institutional view, Hélène Rey (2013) 1986, the CBRT started conducting OMOs
enough to encompass a multitude of presented an article titled “Dilemma Not on 4 February 1987.
measures, potentially leading to a wide Trilemma: The Global Financial Cycle Initially, the CBRT relied on the fol-
range of approaches being called macro- and Monetary Policy Independence” at the lowing three main tools: (i) direct pur-
prudential. So, the ambiguity that Clement Jackson Hole, Federal Reserve of Kansas chases and sales; (ii) sale and repurchase
identified remains true to this day. City Economic Symposium in August 2013. agreements (repos) and purchase and
We discussed the liberalisation of capital In her article, Rey argued that whenever resale agreements (reverse repos); and
accounts that started in the 1980s in the capital is freely mobile, the global finan- (iii) required reserve ratios for deposits.
previous articles of the series (Öncü and cial cycle constrains the national monetary As discussed in the second article of
Öncü 2022; Cömert and Öncü 2023a). policies regardless of the exchange rate the series, the partial trade liberalisation
This liberalisation resulted in the re- regime and that the global financial cycle in 1984 allowed for holding foreign cur-
moval of capital controls in most coun- has transformed the well-known trilemma rency (FX) accounts at domestic banks.
tries, developed and developing alike. into a “dilemma.” Cömert (2016, 2019), This was facilitated through Decree Num-
According to the trilemma—a cornerstone following an evolutionary/institutional/ ber 30 on the Protection of the Value of
of international finance theory and mone- structural framework and, partly inspired Turkish Currency, issued on 7 July 1984.
tary economics—under a fixed exchange by Rey (2013), has argued that develop- With a significant increase in FX deposits
rate regime, domestic interest rates can ments since the 1980s have progressively following the implementation of Decree
be determined independently of world reduced central banks’ capacity to imple- Number 30, starting from 1 January
interest rates only through capital con- ment effective monetary policies, result- 1986, the CBRT extended the reserve re-
trols. In other words, the effectiveness ing in the progressive transformation of quirements to cover FX deposits in addi-
of monetary policy can only be achieved post-Bretton Woods central banking from tion to Turkish lira (TRY) deposits, which
by either abandoning capital mobility or a trilemma to dilemma. In contrast to had been subject to reserve require-
giving up the fixed exchange rate re- Rey (2013), Cömert (2013, 2016, 2019) ments since the CBRT’s establishment on
gime. Here, by effectiveness, we refer to also emphasises the role of central banks’ 30 May 1933.
the ability to reach the stated goals. policy choices and changes in local mar- These initial tools were later comple-
Although many unorthodox economists, kets as factors influencing the effective- mented by additional tools as the CBRT’s
such as Palley (2003), Grabel (2003), ness of national monetary policy. OMOs evolved. On 5 July 1999, the CBRT
and Vernango (2006), focused on the Scholarship on the dilemma rightly introduced intra-day liquidity facility
adverse effects of capital flows in devel- argues that financial flows can signifi- (IDLF) as the first lender of last resort
oping countries to argue that even under cantly influence the macro variables of facility to address urgent funding needs
floating exchange rate regimes, develop- developing countries through various in the banking system and alleviate
ing countries would have limited monetary channels. However, as demonstrated by congestion in payment systems. When
policy manoeuvrability without capital the example of Turkey, even in the the 2001 crisis arrived shortly after, it had
controls even before the GFC. And after absence of capital outflows, a sudden in- significant effects on central banking in
the GFC, the International Monetary Fund crease in domestic investors’ demand for Turkey. On the night of 21 February 2001,
(IMF) took action in 2012. In a policy foreign currencies and precious metals, a decision was made to transition from a
paper titled “The Liberalisation and such as gold, resulting from flight to safety crawling-pegged to a flexible exchange
Management of Capital Flows: An Insti- (Cömert and Öncü 2023b), constantly rate regime, following the outbreak of
tutional View,” the IMF claimed that threatens the effectiveness of central bank the currency crisis. Furthermore, start-
although capital flows are desirable policies in developing countries. With this ing from 29 March 2001, the CBRT initiat-
because they can bring substantial bene- understanding, let us now focus on the ed FX purchase and sale auctions to sup-
fits to recipient countries, they can also Turkish example.1 port the banks in meeting their short-
result in macroeconomic challenges and term foreign exchange liabilities. As part
financial stability risks (IMF 2012). The Monetary Policy before Çetinkaya of the IMF-supported structural reform
policy paper hesitantly proposed the The Central Bank of the Republic of programme, the direct financing of the
inclusion of capital flow management Turkey (CBRT) conducts its monetary government by the CBRT was prohibited,
(CFMs) measures, MPMs, and CFMs that policy not only through open market and in April 2001, the bank achieved
are also MPMs (CFM/MPMs) into the policy operations (OMOs) but also occasionally instrument independence.
toolkit, albeit in a limited manner (during utilises the “lender of last resort” role, On 28 March 2002, the CBRT intro-
inflow surges and disruptive outflows), although it stopped using the latter since duced another innovation by adding de-
and outlined the circumstances in which 1 June 2018. The foundation of the OMOs posit purchase and sale instruments—
they might be useful. However, it stressed infrastructure was established with the known as depos—to repos and reverse
that these measures should not be seen initiation of Government Domestic Debt repos. Additionally, from 1 July 2002,
44 july 22, 2023 vol lViII no 29 EPW Economic & Political Weekly
PERSPECTIVES
the CBRT implemented the late liquidity 15 November 2007, the CBRT did not uti- an amendment to the Regulation on
window (LLW/LON)2 as an overnight depo lise this instrument. Required Reserves, which was published
facility, operating within the framework At that time, due to the substantial in the Official Gazette on 12 September
of its function as the lender of last resort. liquidity generated through the bank 2011. The ROM gave the banks the option
Repos and depos are essentially collater- rescue operations guided by the IMF fol- to hold a fraction of their required re-
alised borrowing and lending instru- lowing the 2001 banking crisis, and the serves for TRY liabilities in dollar, euro,
ments,3 and apart from certain legal purchase of FX as capital flows redirected and standard gold, and on 4 November
details, accepted collaterals, and usages, inward in 2002 due to monetary expan- 2016, the option of maintaining required
they do not have significant operational sion in the United States (US), Europe reserves with scrap gold was also added
differences. The significance of depos and other advanced economies, the CBRT to the mechanism. The assumption
was that they broadened the set of ac- was a net borrower. To manage the excess was that the banks would react to the
ceptable collaterals beyond GDDS, which liquidity, liquidity securities were intro- volatility in capital flows by adjusting
were the only acceptable collaterals for duced as additional instruments to with- their ROM utilisation so that it would
repos. This expansion aimed to address draw it. However, the onset of the GFC act as an automatic stabiliser to smooth
the increased funding needs of banks and the subsequent reversal in capital the impact of capital flows on the
during the banking crisis that erupted flows reduced the necessity for their uti- domestic economy. Unfortunately, his-
on 19 February 2001. lisation. Indeed, with the substantial in- tory has shown that the ROM has not
From 2002 to 2005, the CBRT, in colla- crease in the size and volatility of capital behaved as expected during capital
boration with the government, embraced flows into developing economies follow- outflows; rather than decreasing their
an implicit inflation targeting policy. This ing the GFC, the CBRT transitioned into a ROM utilisation, banks did the opposite
policy involved setting inflation targets net lender position starting from 2010, (Aslaner et al 2015).
and maintaining instrument independ- which it continues to maintain to this The diversification of the tools we have
ence to attain those targets. After some day. Consequently, the overnight reverse summarised above was a natural conse-
minor changes in 2006, the implicit in- repo borrowing rate, which served as quence of the CBRT adding financial sta-
flation targeting regime took an explicit the lower bound of the corridor, lost its bility (and growth) as an objective to its
form of announcing inflation targets for effectiveness as the policy rate. price stability goal, in line with similar
the next three years and determining Following that, on 18 May 2010, the examples worldwide. The CBRT had no
the overnight interest rate in monthly CBRT introduced one-week term repo choice but to diversify its monetary pol-
monetary policy committee meetings. quantity auctions using the quotation icy tools to cope with the increased vol-
Similar to other inflation targeting prac- method and adopted the interest rate of atility in financial flows caused by the
tices, the CBRT relied on overnight inter- one-week term repos as the policy rate. monetary expansion policies associated
est rates and commitment to a flexible Subsequently, on 18 September 2010, the with the GFC, such as the quantitative
exchange rate regime as the fundamental CBRT transitioned to a wide interest rate easing policy of the Fed in developed
components of this policy framework. corridor encompassing the previous lower countries. Although the CBRT planned to
Within this framework, the CBRT began and upper bounds, with the new policy return to the inflation targeting regime
implementing an interest rate corridor rate positioned somewhere in the middle. after 2010, it has not been able to realise
in a narrow band. The corridor consisted The core concept of this framework in- this transition until today.
of the lower bound represented by the volved asymmetrically setting the width
overnight reverse repo borrowing rate of the interest rate corridor around the Monetary Policy from Çetinkaya
and the upper bound represented by the policy rate to attain a desired weighted to Kavcıoğlu
overnight repo lending rate. Effectively, average funding rate. This was achieved The AKP and its leader, Recep Tayyip
the lower bound became the policy rate. by actively managing funding through Erdoğan, adopted a policy of reducing
During the implementation of the one-week repo and overnight repo facili- interest rates from the early days of their
inflation targeting regime under the su- ties. This rate is called the CBRT weighted rule. This stance resulted in tensions
pervision of the IMF, significant reforms average funding rate. between president Erdoğan and the CBRT
were implemented in the financial sec- The reserve option mechanism (ROM) chairs, except for Şahap Kavcıoğlu, who
tor. Additionally, new independent reg- invented by the CBRT was the last mone- served as the CBRT chair from 20 March
ulatory bodies, including the Banking tary policy tool inherited by Çetinkaya 2021 to 9 June 2023. Çetinkaya was
Regulation and Supervision Authority from his predecessors. While the CBRT no exception. The reason why Kavcıoğlu
(BRSA), were established. referred to it as a monetary policy tool, did not have any conflicts with president
Further, through a regulation published it can also be regarded as an MPM, as it Erdoğan should be evident from Figure 1
in the Official Gazette on 5 October 2006, was designed to enhance the economy’s (p 46), which illustrates the CBRT weighted
the legal framework for issuing and resilience against the volatility of capital average funding rate in comparison to the
redeeming liquidity securities was estab- flows and external financial shocks Fed effective funding rate. While all the
lished. However, except for four issu- (Aslaner et al 2015). Effective 16 Septem- other CBRT chairs responded and aligned
ances made between 19 July 2007 and ber 2011, the ROM was introduced through with the monetary policy decisions of
PERSPECTIVES
Figure 1: CBRT Weighted Average and Fed Effective Funding Rates (daily data; %) This continued until the Fed initiated its
27 6 quantitative tightening in October 2017.
Fed effective funding rate (right axis) Subsequently, on 22 November 2017, the
24
5
CBRT transitioned to conducting all its
funding operations through the LLW
21
repo, a practice that remained in effect
4 until 31 May 2018. Through this approach,
18
the CBRT effectively transformed the LLW
15 3 repo lending rate into the policy rate
without an explicit acknowledgement,
CBRT weighted average funding rates (left axis)
12 simplifying the wide interest-rate corridor.
2 As depicted in Figure 1, it increased the
9 weighted average funding rate from 8.74%
1 on 16 January 2017 to 16.50% on 24 May
6 2018. Of course, this did not go unno-
ticed. In response to criticisms regarding
3 0
1/2011 1/2013 1/2015 1/2017 1/2019 1/2021 1/2023
the clarity, predictability, and effective-
ness of its monetary policy implementa-
Source: CBRT and Fed.
tion, the CBRT announced the formalisa-
the Fed, including its decisions on the nine moves, and initiated its quantita- tion of the simplification on 28 May 2018
quantitative easing programme, which tive tightening in October 2017, which through a press release. As of 1 June 2018,
are not shown in the figure, Kavcıoğlu continued until 31 July 2019 when it was the CBRT switched to a symmetric narrow
was the only CBRT chair who consistently brought to an end due to the repo mini- corridor of a 300 basis point width, with
lowered the CBRT policy rate even as the crisis that occurred in the US in the sum- the original lower and upper bounds, and
Fed was raising theirs. How Kavcıoğlu mer of 2019. the official policy rate—the one-week
was able to accomplish this is part and In the absence of capital controls, with repo lending rate—in the middle. The
parcel of the monetary policy experi- the ensuing capital outflows, Çetinkaya CBRT set the official policy rate to
ment that has been ongoing since the had no choice but to respond to the Fed. 16.50%. Shortly after, a crisis between
August 2018 currency crisis. And so he did, as can be seen in Figure 1. Turkey and the US flared up over an
We should mention also that a year However, he did it in a convoluted way American pastor imprisoned in Turkey
after Çetinkaya became the chair of the to partially satisfy Erdoğan. Shortly after since 2016. On 9 August 2018, the then
CBRT on 19 April 2016, with the 16 April the beginning of Çetinkaya’s tenure, US President Trump announced eco-
2017 referendum, Turkey transitioned from on 3 August 2016, the CBRT added the nomic sanctions against Turkey, leading
a parliamentarian regime to a presidential late liquidity window (LLW) repo facility to the exchange rate shock illustrated
one. Then, Erdoğan won the presidency in to its lender of last resort facilities. in Figure 2 (p 47), a 28% surge in the
the presidential and general elections on Although debates on simplifying the wide USD/TRY exchange rate from 9 August
25 June 2018, and gave himself the legal interest rate corridor, introduced in 2010, 2018 to 14 August 2018.
right to appoint and dismiss a long list of started in 2015 in earnest because of the In response to the exchange rate shock,
high-ranking civil servants, including communication problems it created, and the CBRT raised the policy rate from 17.75%
the high-ranking officers of the CBRT. Çetinkaya was in favour of simplification, on 9 August 2018 to 19.25% on 17 August
he further complicated it, at least at 2018. However, primarily due to persistent
Çetinkaya’s period: It is difficult to first glance. capital outflows by both non-residents
describe Çetinkaya’s tenure, as the chair On 16 January 2017, the CBRT initiated and residents, and initially to a lesser
of the CBRT, as fortunate. In addition to funding through the LLW repo facility, extent, a transition of residents from TRY
the referendum and general elections which had an interest rate higher than deposit accounts to FX deposit accounts in
mentioned above, the March 2019 local the overnight repo lending rate and local banks (deposit dollarisation), about
elections took place during his tenure, served as the fourth rate in the expand-
all of which resulted in significant pres- ed wide interest-rate corridor. This move
sure from Erdoğan to lower the rates in seems to be an effort to meet Erdoğan’s
order to ensure high economic growth expectations regarding interest rates, as available at
and low unemployment. In the mean- it enabled the CBRT to align with the Fed’s Verma News Agency
time, the Fed continued to raise its own interest rate hikes through its weighted 1890 Railway Road
interest rate corridor by 25 basis points average funding rate. By shifting most of Hisar 125001
that it started on 16 December 2015 from the funding to the LLW repo facility, the Haryana
0%–0.25% to reach 2.25%–2.50% by CBRT avoided raising the official policy Ph: 09813549996
20 December 2018 through a series of rate, the one-week repo rate.
PERSPECTIVES
Figure 2: Percent Change in the USD/TRY Exchange Rate from a Month Ago Figure 3: Foreign Currency Deposits in Local Banks (monthly data)
and the CBRT Weighted Average Funding Rate (monthly data) 275
30 25.000
August December 250
2018 2021 Total
25 Exchange 21.875 225
Exchange
Rate Shock Rate
20 18.750 200
Shock
Weighted average funding rate (right axis) 175
Billions of dollars
15 15.625
Percent change in the USD/TRY exchange 150
rate from a month ago (left axis)
10 12.500 125
Residents
5 9.375 100
75
0 6.250 Resident and non-resident banks
50
Non-residents
-5 3.125 25
-10 0.000 0
1/2011 1/2013 1/2015 1/2017 1/2019 1/2021 1/2023 12/2010 12/2012 12/2014 12/2016 12/2018 12/2020 12/2022
Source: CBRT. Source: CBRT and BRSA.
a month later, on 14 September 2018, measure should be labelled CFM/MPM or the CBRT’s toolkit during Çetinkaya’s
the rate was further increased to 24% in MPM/CFM in the IMF’s taxonomy is, of tenure. The first instrument is the foreign
order to stabilise the exchange rate course, debateable. Let us call it the exchange deposits against TRY deposits,
(Figures 2 and 3). BRSA swap measure. After the onset of introduced on 18 January 2017. The
A significant event that occurred at the COVID-19 pandemic and the accom- second instrument is the TRY-settled
the peak of the August 2018 currency panying financial instability in early foreign exchange forwards, added on
crisis was the announcement of a deriva- 2020, the BRSA swap measure was broad- 18 November 2017. Lastly, the third
tives transaction restriction on domestic ened and tightened to become even more instrument is the TRY currency swaps,
banks by the BRSA on 13 August 2018, restrictive to the extent that it effectively implemented on 1 November 2018. TRY
which the BRSA called an MPM. On that shut down the offshore TRY currency currency swaps play a significant role in
day, the BRSA announced that the total swap market. Table 1 illustrates the evo- the ongoing monetary experiment, as
notional principal amount of banks’ cur- lution of the measure over time. we will discuss later. Additionally, it is
rency swaps and other similar products worth noting that banks can create
(spot + forward FX transactions) with Uysal replaces Çetinkaya: Given that foreign exchange forwards to manage
foreign counterparties, where local banks president Erdoğan’s expectations from their currency risks by combining a spot
pay TRY and receive FX at the initial date, Çetinkaya were to maintain control over currency transaction with a currency swap
should not exceed 50% of the bank’s the exchange rate and avoid raising in- transaction, both with the CBRT, if they
most recent regulatory capital. Two days terest rates, Çetinkaya, despite success- choose to do so. The fourth instrument,
later, the BRSA reduced this percentage fully meeting the expectation of control- introduced on 18 June 2019, has been
to 25%. While the BRSA did not provide ling the exchange rate, failed to fulfil the liquidity facility provided to primary
an explicit explanation for the measure, the expectation of not raising interest dealer banks through overnight repo
it is evident that it limits the amount of rates. As a result, he was dismissed by transactions at 100 basis points below
TRY that non-resident speculators could presidential Decree Number 2019/159, the policy rate, aimed at supporting the
borrow for short selling, thus reducing published in the Official Gazette on 6 primary dealer system. This instrument
the exchange rate volatility. Therefore, this July 2019, citing his “failure to achieve was used during Uysal’s tenure and was
measure can be categorised as both an institutional goals.” On the same day, discontinued immediately after his re-
MPM and a CFM measure according to the the decree appointed Murat Uysal, one moval from office.
taxonomy of the IMF (nd). Whether this of the deputy chairs of the CBRT, as his Since it was known that Uysal, who
Table 1: BRSA Imposed Daily Derivative replacement. We should mention that assumed the CBRT chair on 6 July 2019,
Transaction Limits with Foreign Counterparties during Çetinkaya’s tenure, the debates worked in harmony with president
on Local Banks
on central bank independence in Turkey, Erdoğan, no tension regarding interest
TRY Sale at TRY Purchase at Initial
Initial Date Date (%) which have been ongoing since the begin- rates was expected between them. More-
(%) ning of the AKP reign, gained momentum, over, a few weeks after the beginning
Remaining Maturity – 7 Days 30 Days 1 Year
and his dismissal through a presidential of Uysal’s term, on 31 July 2019, the Fed
13 August 2018 50 – – –
decree citing “failure to achieve institu- ended its quantitative tightening and
15 August 2018 25 – – –
tional goals” played a significant role in initiated rate cuts. Furthermore, whether
9 February 2020 10 – – –
12 April 2020 1 1 2 10
shaping these debates. viewed as a curse or a blessing, the arrival
25 September 2020 10 2 5 20
Before delving into the Uysal period, of the COVID-19 pandemic and the accom-
11 November 2020 10 5 10 30 it is noteworthy to mention four new panying economic sudden stop in March
Source: BRSA. instruments that were incorporated into 2020 led the Fed to lower its policy rate to
PERSPECTIVES
Figure 4: Evolution of the USD/TRY Exchange Rate from the Beginning of Figure 5: CBRT FX Assets and Positions (monthly data)
2020 until Uysal’s Dismissal (daily data) 140
8.5
120
8.2
100
7.9 FX assets
80
Billions of US dollars
7.6 On balance sheet FX position
60
USD/TRY
7.3
40
7.0
20
6.7 Net FX position
0
6.4 1/2011 1/2013 1/2015 1/2017 1/2019 1/2021 1/2023
-20
6.1
-40
5.8
1/2020 3/2020 5/2020 7/2020 9/2020 11/2020 -60
0% and implement a massive quantitative today in the ongoing monetary experi- local banks were unable to fulfil their
easing programme. As a result, starting ment, was born during this period. reserve requirements, hedge their ex-
from 25 July 2019, Uysal gradually In the establishment of the CBRT– change rate risks, and meet their liquidity
reduced the inherited policy rate from BRSA–State Banks Complex, the BRSA needs through transactions with banks
Çetinkaya, which stood at 24%, to 8.25% took the lead as the first mover. Shortly and other institutions located abroad.
by 21 May 2020 in nine consecutive steps after the World Health Organization Consequently, during Uysal’s tenure, they
without encountering significant criti- (WHO) declared the COVID-19 outbreak a resorted to meeting these needs through
cism, at least initially. Indeed, by intro- public health emergency of international CBRT swaps and spot transactions with
ducing the above-mentioned primary concern on 30 January 2020, the BRSA the CBRT. It is noteworthy to mention
dealer overnight repo facility interest implemented a tightening of the swap that, to replenish its FX assets, the CBRT
rate into the interest rate corridor that measure on 9 February 2020, as shown in signed a swap contract worth $10 billion
Çetinkaya simplified, Uysal even reduced Table 1. Subsequently, on 11 March 2020, with the Central Bank of Qatar during
the CBRT weighted average funding rate when the WHO declared COVID-19 a pan- this period, on 20 May 2020.4
to 7.34% by 16 July 2020. Therefore, the demic, global financial markets experi- It was after these events, the fact that
COVID-19 pandemic can be viewed as a enced significant turmoil (Öncü 2020). the USD/TRY exchange rate remained al-
blessing for Uysal in this regard. During this period, the TRY depreciated most fixed at the level of 6.85 lira for a
However, the pandemic can also be by approximately 9% against the USD period of 42 days between 18 June 2020
viewed as a curse for him. Alongside from 11 March 2020 to 10 April 2020. and 28 July 2020, and the deteriorations
the economic instabilities and financial Responding to the volatility, the BRSA illustrated in Figure 5 in FX assets and
risks accompanying the pandemic, there took further action on 12 April 2020 by positions of the CBRT, because of the
was a continued decline in non-resident implementing its most substantial tight- rumours about their selling of FX from
ownership of TRY-denominated domestic ening of the swap measure, effectively the “back door” through state banks,
financial assets (both bonds and equities), closing down the offshore TRY swap started. Although neither the CBRT nor the
an intensified deposit dollarisation that market, as highlighted in Table 1. state banks or the Ministry of Treasury
began after the August 2018 crisis, as well However, the TRY depreciation contin- and Finance (MTF) have ever publicly
as a migration of deposits from local banks ued, reaching about 13% by 5 May 2020. acknowledged this, it is public knowledge
to offshore ones. Moreover, the rollover On that day, the BRSA moved again to that there is a protocol between the MTF
of short-term foreign debts became in- limit the total amount of TRY place- and the CBRT that allows the CBRT to
creasingly challenging, adding to the dif- ments, depos, repos, and loans that direct the state banks to sell foreign
ficulties faced by Uysal. Consequently, banks extend to financial institutions lo- exchange (Bloomberg 2023).
his grip on the exchange rate eroded, cated abroad, including their overseas Eventually, due to these rumours and
ultimately losing control over it. Figure 3 consolidated credit and financial institu- the rapid deterioration of the on-balance
illustrates the evolution of the USD/TRY tion affiliates, and branches, to 0.5% of sheet and net FX positions, Uysal, under
exchange rate from the beginning of the banks’ latest calculated regulatory heavy political pressure from the oppo-
2020 until president Erdoğan removed capital. These measures, along with the sition, foreign observers, and president
Uysal on 7 November 2020 with another aforementioned tightened swap measure, Erdoğan, abandoned the 42-day-long
presidential decree. What we refer to as effectively made the CBRT the FX dealer hard currency peg depicted in Figure 4.
the CBRT–BRSA–State Banks Complex, of the last (and almost only) resort for the And as of 24 September 2020, he began
that is, the firm coordination among local banks. As a result of these MPMs, to raise the policy rate, perhaps uninten-
these institutions in the conduct of the which also serve as capital flow manage- tionally, signing his own demise. Before
monetary policy, which is still operational ment measures imposed by the BRSA, his dismissal, Uysal not only raised the
PERSPECTIVES
policy rate from 8.25% to 10.25% but lasted just 132 days, the second shortest but closed the week around 16.80 liras
also introduced further complexity to in the history of the CBRT. after the intervention of the CBRT. How-
the simplified interest rate corridor in- ever, on Monday, 20 December 2021, it
herited from Çetinkaya. He accom- Monetary Policy under Kavcıoğlu reached another historical record, hitting
plished this by reintroducing the LLW On 20 March 2021, Kavcıoğlu started his its highest level at 18.36 liras. As depicted
overnight repo interest rate into the cor- term as the CBRT chair. As mentioned in Figure 1, the monthly percentage
ridor and shifting a majority of the fund- earlier, Kavcıoğlu is the only chair among change in the USD/TRY exchange rate
ing to the LLW overnight repo facility. As former CBRT chairs during the AKP reign was 21.9% in August 2018, while it esca-
a result, he raised the weighted average who managed to persistently lower the lated to 28.6% in December 2021, indi-
CBRT funding rate to 14% in a disguised policy interest rate without increasing cating that the FX shock in December
manner.5 And failing to meet president it ever. Perhaps due to the increased 2021 was more severe than the one in
Erdoğan’s expectations of maintaining vulnerabilities in global financial markets August 2018.
control over the exchange rate and caused by the COVID-19 pandemic and The response of the CBRT–BRSA–State
avoiding raising the policy rate, he was the volatility in exchange rates following Banks Complex to this shock was the
removed from his post by a presidential Ağbal’s dismissal, president Erdoğan did much-debated conversion to TRY FX
decree and replaced by Naci Ağbal on not insist on a rate cut during the ongoing Protected Deposit (FXPD) accounts from
7 November 2020. COVID-19 lockdown period. Kavcıoğlu FX deposit accounts. On 20 December
adhered to the simplified interest rate 2021, after the conclusion of the cabinet
Ağbal’s short tenure: Ağbal was the last corridor during his time as the CBRT meeting, president Erdoğan announced
finance minister during the first presi- chair and maintained the policy interest the FXPDs, which were promptly an-
dency of Erdoğan, prior to the transfor- rate at 19%, inherited from Ağbal, until nounced to the press by the CBRT on 21
mation of the finance ministry into the August 2021. December 2021. The FXPDs that the CBRT
MTF in his second term following Tur- As the transition from the COVID-19 announced were for conversion from
key’s transition from a parliamentary lockdown period to normalisation ap- USD, EUR, GBP, or gold to TRY. Three days
system to a presidential one in 2017. As proached its end, on 5 August 2021, pres- later, on 24 December 2021, the MTF
of the latest presidential election held on ident Erdoğan’s expected message ar- announced the introduction of treasury
28 May 2023, Erdoğan has won three rived. Although Kavcıoğlu did not lower FXPD accounts, designed to prevent the
presidential terms and is currently serv- the interest rate in the policy meeting on conversion of TRY deposits into FX de-
ing his third term. Notably, Ağbal is a 12 August 2021, he initiated a marathon posits by residents. Lastly, on 31 Decem-
well-known advocate of the free market, of interest rate cuts starting from the ber 2022, the MTF moved again and is-
and observers anticipated a return to meeting on 23 September 2021. The in- sued a directive as an amendment to the
orthodox policies under his leadership, terest rate decisions taken by the CBRT CBRT export circular requiring that, ef-
contrasting the unorthodox approach under Kavcıoğlu’s leadership from Sep- fective 3 February 2022, at least 25% of
adopted by the CBRT under Uysal’s lead- tember 2021 to May 2023 are shown the export proceeds attached to the ex-
ership and Erdoğan’s pivot towards con- in Table 2. port proceeds acceptance certificate
ventional policies. Table 2: Interest Rate Decisions of the CBRT (EPAC) or the foreign exchange purchase
And Ağbal returned to orthodox poli- under Kavcıoğlu certificate (FEPC) must be sold to the bank
Percent
cies. First, he reinstated the interest rate that issued the EPAC or FEPC.6 Hence,
Before December 2021 FX shock
corridor that had been simplified under 3 September 2021 18.0
the CBRT–BRSA–State Banks Complex
the previous leadership of Çetinkaya. 21 October 2021 16.0 transformed into the CBRT–BRSA–State
Second, he implemented significant policy 18 November 2021 15.0 Banks–MTF complex.
rate hikes, raising it from 10.5% to 15% 16 December 2021 14.0 Before proceeding further, let us com-
on 19 November 2020, and further to 17% After December 2021 FX shock pare the August 2018 and December 2021
on 24 December 2020. These rate hikes 18 August 2022 13.0 crises first. In 2018, non-resident owner-
led to a decline in the USD/TRY exchange 22 September 2022 12.0 ship of domestic government bonds
rate, bringing it down to around 6.90 20 October 2022 10.5 (although significantly lower than its
24 November 2022 9.0
liras from the inherited level of about peak of 23.2% in 2012) remained at 14%,
23 February 2023 8.5
8.50 liras. However, the USD/TRY ex- relatively high compared to other devel-
change rate started to climb again in late Before the September 2021 meeting, oping countries during that period. Non-
February 2021. In response, Ağbal raised the USD/TRY exchange rate, which was resident ownership of equities had not
the policy rate to 19% on 18 March 2021, around 8.50 liras, surpassed 10 liras deviated from its peak of 65.6% in 2014
marking the end of his tenure as the prior to the November meeting, and and was still around 65%. Therefore,
CBRT chair. On 20 March 2021, by a pres- reached as high as 14.50 liras before the non-resident investors holding TRY assets
idential decree similar to the one that December meeting. One day after the had not yet left. Additionally, prior to
appointed him, he was dismissed and meeting, on Friday, 17 December 2021, the the August 2018 crisis, the BRSA had not
replaced by Kavcıoğlu. Ağbal’s tenure USD/TRY exchange rate exceeded 17 liras yet imposed its derivatives trading and
PERSPECTIVES
FX lending restrictions that ease the TRY assets to buy FX. Additionally, by a deposit account in the local currency to
speculative attacks by non-residents on 2021, the BRSA had closed the offshore a deposit account in an FX at the request
TRY. Non-residents who were able to swap market and restricted domestic of a customer, it creates FX risk because
obtain TRY, by the means we just bank lending to the non-residents. As a the liabilities on FX are generated without
described, started selling it to buy FX. result, the CBRT had become the sole FX any corresponding assets. However, if
Simultaneously, the residents started dealer for domestic banks, with the state the FX deposits are created through the
buying FX assets, leading to a deposit banks also involved. Therefore, it was extension of FX credits or the purchase
migration from local banks to the offshore not possible for non-residents to obtain of FX assets, there is no FX risk involved.
banks. Due to this heavy selling pressure sufficient amounts of TRY for a specula- The FX risk arises only when the liabili-
on TRY, although the transition of the tive attack on the domestic currency. ties are created without corresponding
residents from TRY deposit accounts to Furthermore, through amendments to assets, and vice versa.
FX deposit accounts (in hard currencies Decree Number 32 on the Protection of When the transition of residents from
and gold) within local banks also played the Value of Turkish Currency mentioned TRY deposit accounts to FX deposit ac-
a role in the August 2018 crisis, this as- in Cömert and Öncü (2023a), which also counts intensified after the 16 December
pect went unnoticed. regulates foreign payments and offshore 2021 rate hike by the CBRT, it resulted in
By 2021, non-resident equity owner- money transfers, as well as through a rapid increase in demand by local
ship had fallen below 40%, and it was official verbal intimidation, the migra- banks for FX to hedge their FX risk. How-
known that a significant portion of this tion of FX deposits from local banks to ever, the CBRT–BRSA–State Banks com-
remaining 40% actually belonged to offshore ones was taken under control. plex failed to meet the demand quickly
non-resident Turkish nationals. Non-res- So, what could have been the culprit for enough. As the banks turned to other FX
ident ownership of government bonds the December 2021 FX shock? sellers, the USD/TRY exchange rate sky-
dropped below 4% in 2020 and, towards The answer to this question lies in rocketed, leading to the occurrence of a
the end of 2021, was around 3%. In other the intensified transition of residents shock. Subsequently, the FXPD interven-
words, there were no significant num- from TRY deposit accounts to FX deposit tion took place on 20 December 2021.
bers of non-resident portfolio investors accounts. As detailed in Cömert and We discussed the FXPD accounts in
who could create a crisis by selling their Öncü (2023b), when a local bank converts detail in Cömert and Öncü (2023b). Let
Money, Banking & Finance

June 3, 2023
Some Contemporary and Classical Issues of Money and Finance —Partha Ray
Monetary Growth, Financial Structure, and Inflation: The Post-Pandemic New Normal — C Rangarajan, Dilip Nachane, Partha Ray
Taming Inflation by Anchoring Inflation Expectations — Sitikantha Pattanaik, G V Nadhanael, Silu Muduli
Monetary Policy in the Midst of Cost-push Inflation — Zico Dasgupta, Indranil Chowdhury
Credit Portfolio Assessment of Domestic Systemically Important Banks — Richa Verma Bajaj, Sagarika Rastogi,
Rhythm Kumar
Do Foreign Banks Affect Market Power, Efficiency, or Stability in India? — Pradyot Kumar Das
RBI’s ‘Financial Stability Reports’ and Stress Testing Methodologies: A Commentary — Amulya Neelam
Retail Investment in India: During and after the Pandemic — Tirthankar Patnaik
Understanding Sovereign Ratings and Their Implications for Emerging Economies — Rahul S Chauhan, Ilisa Goenka,
Kaushalendra Kishore, Nirupama Kulkarni,
Kavya Ravindranath, Gautham Udupa
For copies write to:
Circulation Manager,
Economic & Political Weekly,
PERSPECTIVES
us conclude this section by mentioning is also debatable. What happens during Cömert, Hasan (2013): Central Banks and Financial
Markets: The Declining Power of US Monetary
the last important tool introduced by the the third presidential term of Erdoğan Policy, Cheltenham and Northampton: Edward
CBRT–BRSA–State Banks–MTF complex, that started just a few weeks ago, only Elgar Publishing.
along with the previously discussed time will tell. However, it is our firm be- — (2016): “İmkânsız Üçleme’den İmkânsız İkilem’e:
Bretton Woods Dönemi ve Sonrası Para
tools, which enabled Kavcıoğlu to con- lief that the Turkish monetary policy ex- Politikası,” Hacettepe Üniversitesi İktisadi ve
tinue lowering the policy rate after the periment we tried to outline in this se- İdari Bilimler Fakültesi Dergisi, Vol 34, No 1,
pp 115–36.
December 2021 FX shock, without trig- ries, an almost controlled laboratory ex- — (2019): “From Trilemma to Dilemma: Mone-
gering another FX shock before the 14 periment that could not have been con- tary Policy after the Bretton Woods,” Finance
Growth and Inequality: Post-Keynesian Per-
May 2023 presidential and parliamenta- ducted without an authoritarian regime, spectives, Louis-Philippe Rochon and Virginie
ry general elections. Termed as another would help policymakers and ordinary Monvoisin (eds), Cheltenham and Northampton:
Edward Elgar.
macro-prudential measure, the CBRT people alike in both developed and devel- Cömert, Hasan and T Sabri Öncü (2023a): “Mone-
implemented this tool in three stages. oping countries to better evaluate the tary Policy Debates in the Age of Deglobalisa-
First, on 23 April 2022, the CBRT extend- ongoing monetary policy debates in the tion: The Turkish Experiment—II,” Economic &
Political Weekly, Vol 58, No 11, pp 10–13.
ed reserve requirements, which were age in which deglobalisation has be- — (2023b): “İkili Açmaz Çerçevesinden Türkiye’de
previously applicable only to the liability come a buzzword. Yakın dönem Merkez Bankacılığı ve Kur Krizler-
ini Anlamak,” ODTÜ Gelişme Dergisi, Vol 50,
side of the balance sheets, to also No 1, pp 115–169.
include the asset side for some loans. Notes ECB (2023): “Macroprudential Measures,” Europe-
an Central Bank, https://www.ecb.europa.eu/
Second, on 10 June 2022, in line with the 1 Since the rest of the article will mainly rely on pub/financial-stability/macroprudential-
BIS (2013) liquidity coverage ratio (LCR) the information from Cömert and Öncü measures/html/index.en.html.
(2023b), we will continue without repeatedly Forder, James (1998): “The Case for an Independ-
proposal, which ensures that banks referencing it and the references therein to ent European Central Bank: A Reassessment of
maintain sufficient unencumbered high- maintain a smoother flow. Evidence and Sources,” European Journal of
quality liquid assets that can be easily 2 LON is the abbreviation of “Late Overnight.” Political Economy, Vol 14, No 1, pp 53–71.
3 According to the law, the CBRT cannot engage Grabel, Ilene (2003): “International Private Capital
and immediately converted into cash in in borrowing or lending transactions with a Flows and Developing Countries,” Rethinking
private markets, banks were required to maturity longer than 91 days. Development Economics, Ha-Jong Chang (ed),
4 The CBRT had also signed swap contracts with London: Anthem Press.
establish high-quality long-term fixed-rate Haldane, Andrew G (2021): “Central Bank Inde-
the central banks of China, the United Arab
TRY-denominated government securities Emirates, and South Korea, and opened a pendence: What We Know and What We Don’t,”
as additional collateral for FX reserves depo account with the Development Fund of Norges Bank, https://www.norges-bank.no/
Saudi Arabia to replenish its FX assets as time bankplassen/arkiv/2021/central-bank-inde-
to support its deposits. Last, on 20 August progressed. pendence-a-practitioners-perspective/.
2022, the CBRT replaced the reserve 5 The CBRT interest rate corridor became the Hetzel, Robert L and Ralph F Leach (2001): “The
most complex towards the end of his tenure, Treasury-Fed Accord: A New Narrative Ac-
requirement for loans it imposed on count,” Federal Reserve Bank of Richmond,
consisting of five interest rates.
23 April 2022, with the establishment of 6 Effective 18 April 2022, the MTF raised this Economic Quarterly, Vol 87, No 1, pp 33–55.
IMF (2012): “The Liberalization and Management
long-term fi xed-rate TRY-denominated requirement to 40%.
of Capital Flows: An Institutional View,” Inter-
government securities as collateral. national Monetary Fund, https://www.imf.org/
en/Publications/Policy-Papers/Issues/2016/12/
References 31/The-Liberalization-and-Management-of-
Conclusions Acharya, Viral and T Sabri Öncü (2013): “A Propos- Capital-Flows-An-Institutional-View-PP4720.
It was with all these bells and whistles, al for the Resolution of Systemically Important — (nd): “Review of Institutional View on the Lib-
Assets and Liabilities: The Case of the Repo eralization and Management of Capital Flows
consisting of some MPMs and some CFM Market,” International Journal of Central Bank- Faqs,” International Monetary Fund, https://
measures that are also MPM in the ing, Vol 9, No 1, pp 291–351. www.imf.org/en/About/FAQ/capital-flows.
Aslaner, Oğuz, Uğur Çıplak, Hakan Kara and Kydland, Finn E and Edward C Prescott (1977):
taxonomy of the IMF (nd), that the CBRT, “Rules Rather than Discretion: The Inconsist-
Doruk Küçüksaraç (2015): “Reserve Option
under the leadership of Kavcıoğlu, was Mechanism: Does it Work as an Automatic Sta- ency of Optimal Plans,” Journal of Political
Economy, Vol 85, No 3, pp 473–92.
able to maintain control over the exchange bilizer?” Central Bank Review, Vol 15, No 1.
Barro, Robert J and David B Gordon (1983): “Rules, Öncü, T Sabri (2020): “Triggering a Global Financial
rate and lower the policy rate to meet Discretion and Reputation in a Model of Mone- Crisis: Covid-19 as the Last Straw,” Economic &
president Erdoğan’s expectations until the tary Policy,” Journal of Monetary Economics, Political Weekly, Vol 55, No 11, pp 10–12.
Vol 12, No 1, pp 101–21. Öncü, Ahmet and T Sabri Öncü (2022): “Monetary
14 May 2023 presidential and parlia- Policy Debates in the Age of Deglobalisation:
Benlialper, Ahmet and Hasan Cömert (2016):
mentary general elections. The AKP and “Implicit Asymmetric Exchange Rate Peg
Waiting for Deglobalisation—I,” Economic &
Political Weekly, Vol 57, No 46, pp 10–12.
its associated coalition won the parlia- Under Inflation Targeting Regimes: The Case
Palley, Thomas I (2003): “The Economics of
of Turkey,” Cambridge Journal of Economics,
mentary general election on 14 May 2023 Vol 40, No 6, pp 1553–80.
Exchange Rates and the Dollarization Debate:
The Case Against Extremes,” International
with a majority in parliament, and on BIS (2013): “Basel III: The Liquidity Coverage Ratio Journal of Political Economy, Vol 33, No 1,
28 May 2023, Erdoğan won the second and Liquidity Risk Monitoring Tools,” Bank of pp 61–82.
International Settlements, https://www.bis. Rey, Hélène (2013): “Dilemma Not Trilemma: The
round of the presidential election to serve org/publ/bcbs238.pdf. Global Financial Cycle and Monetary Policy
his third term as the president of Turkey. Bloomberg (2023): “Turkey State Lenders Return to Independence,” Proceedings of Economic Policy
Although whether these bells and whistles Lira’s Defence After Sharp Drop,” https://www. Symposium, Jackson Hole, Federal Reserve of
bloomberg.com/news/articles/2023-06-08/ Kansas City Economic Symposium.
can solve Turkey’s structural problems, turkey-state-lenders-return-to-lira-s-defense- Vernango, Matías (2006): “From Capital Controls
which we discussed in the second article after-sharp-drop. to Dollarization: American Hegemony and the
Clement, Piet (2010): “The Term ‘Macroprudential’: US Dollar,” Monetary Integration and Dollari-
of the series at length, is debatable. Origins and Evolution,” BIS Quarterly Review, zation, Matías Vernengo (ed), Cheltenham and
Whether the CBRT is independent or not March, pp 59–67. Northampton: Edward Elgar Publishing.
BOOK REVIEW
in simple, direct and often ‘coarse’ people to him” (p 81). Periyar was, in all deserve more attention than we have
Tamil. His speeches were in ordinary other words, a skilled rhetor adept at given them. We should embrace the
language, and were often noted for reaching a range of audiences for a roles and positions he encumbered in all
their kochaithanam, or ‘vulgar quality’” range of different purposes. the different persuasive forums and con-
(p 23). This speech was calculated in texts that he found himself in and not be
many cases to enrage the targets he In Conclusion afraid of looking at Periyar as a rhetori-
wanted his audience to share. This was This book is an excellent starting point cal figure well-versed in persuasive sen-
an effective tactic, especially when for the complex activist and intellectual sitivity, and see in all of these threads
mixed with his very understandable that was Periyar. Manoharan has done and themes as a new contribution to the
style of argument. “What made Periyar an effective job showing the contours— political and philosophical discourses of
popular,” Manoharan judges, “was his and tensions—in Periyar’s thought, in- modern India.
ability to provoke controversy. What is troducing just enough unity and system-
even more likely is that his simple and aticity through the concept of “political Scott R Stroud (sstroud@austin.utexas.edu)
is an associate professor of communication
direct language, his ability to deliver his atheism” to allow one to place a useful
studies at the University of Texas at Austin,
speeches in a lively and dialogic man- framework around this nuanced thinker where he also serves as programme director
ner in public forums, and his sense of with which to begin further engage- of media ethics for the Center for Media
humour and acerbic wit, drew more ment. Periyar’s work, activism, and life Engagement.
and Periyar had been a very deep one,

Contradictions within the Practices belying the artificiality that often charac-
terises political relationships. It was that
of a People’s Party of a son and a father (Thanthai) and the
rift between them was seen as a rupture
within the familial traditions. The split
Raj Sekhar Basu evoked a lot of tear drops (Kanneer thu-
ligal) and Periyar himself derided the
I
n the 1950s and 1960s, the growing Rule of the Commoner: DMK and the Formations DMK as the Tear Drop Party (Kanneer
popularity of Dravidian movement of the Political in Tamil Nadu, 1949–1967 thuli katchi) (p 2). The real reason
evoked a series of public responses, by Rajan Kurai Krishnan, Ravindran Sriramachandran and might not have been Periyar’s marriage
V M S Subagunarajan, Cambridge: Cambridge University
which still continue to find favour among Press, 2022; pp xviii + 299, `895. but something more to do with his
a section of the population. The authors efforts to find a partner who would not
of this particular book are also a part only be a trustworthy successor, but
of a generation that had witnessed the on the intersectionalities of caste, class, would help in streamlining the organi-
successes and failures of the Dravida gender, and nation. sation and leading the movement. Per-
Munnetra Kazhagam (DMK) in the elec- The Tamil case has always remained haps, it shocked Annadurai more, since
toral politics of Tamil Nadu. The seeds of an enigma because it resonates through he had all along represented himself as
this emotive aspect of Tamil nationalism a cultural renaissance that was represented the foster son of Periyar, who would be
had been sown in the decades between the through countless numbers of literary texts the carrier of his legacy and a crusader
1920s and 1940s, when E V Ramaswamy and through a zeal to combine the “real” for the Dravida Kazhagam.
Naicker, popularly referred to as Periyar, and the “unreal” through films. Between Periyar and Annadurai, despite their
emphasised on the racial divide be- 1949 and 1975, non-Brahmin scriptwriters closeness, did have some political dif-
tween Tamils and the Hindi-speaking like Karunanidhi and matinee idols like ferences. Periyar described the day of
people from the north. The difference M G Ramachandran, through their creativ- Indian independence as thukkanal (a day
between these two linguistic or social ity, reminded the Tamil masses of their pri- of mourning) affirming North India’s
groups was couched in the terminology mordial belonging. The authors need to be supremacy over South India. On the other
of Aryan and non-Aryan races. The complimented for bringing out the story of hand, Annadurai preferred to take a
ubiquitous spirit of non-Brahminism the DMK, particularly in the initial decades, “moderate” if not a softer stand on the
expressed through an alliance between when the “former lieutenants” of Periyar issue. Violence and the communal con-
the so-called non-Brahmin privileged were able to decentre the very notions of flagrations emerging from the anti-
castes and the underprivileged castes, the Indian nation state. Hindustani upsurges and the public flog-
actually coalesced to create a new ging of Hindu popular idols might have
politico-cultural community. In course Raising the Curtain convinced to opt for a more thought-out
of nearly a century, debates on “Dra- The split within the Dravida Kazhagam strategy for establishing Tamil identity
vidianism” had hinged around several in September 1949 was indeed a painful vis-à-vis the Brahmin casteist hegemony.
issues and possibilities, provoking debates affair. The bonding between Annadurai As a political pragmatist and a gifted
BOOK REVIEW
orator, Annadurai was vitriolic in his with emotions, but also harboured “rabble order based on Vedic texts, Dharma-
criticism against Brahmin hegemony. rousing tendencies.” The DMK’s “cultural shastras, and Sanskrit Puranas was fre-
But this hardly reifies his stature as a politics” led to the assimilation of play- quently raised by Periyar and later by
radical anti-nationalist favouring sepa- wrights, film scriptwriters and actors Annadurai to rally the non-Brahmin
ration of Tamil Nadu from the Indian un- within its organisational fold. This castes who had been marginalised, be-
ion. While the Dravida Kazhagam and helped the party to intrude into the pop- cause of their Dravidian lineage. Peri-
the DMK were political opponents, Anna- ular level, where the subaltern masses, yar and his lieutenants like Ramana-
durai and his political followers refrained by actively consuming cinema on the than, who provided the ideological mu-
from using strong words against Periyar big screen, could relate their quotidian nitions for the Self-Respect Movement,
and instead dedicated their electoral experiences with the sufferings of the found the negative imagery of the Brah-
successes to him. Annadurai was equally characters enacted by charismatic Tamil min civilisation to be a useful tool in
at ease with K Kamaraj, whom was film actors. sustaining their counter hegemonic
described by him as a leader who could This does not mean that the DMK was struggles against a blatantly casteist/
satisfy the aspirations of the Tamil mass- totally devoid of the political wisdom racist order. Annadurai’s Aryan Allure
es and also convey their feelings to the and ideology required for mobilising the consciously or unconsciously borrowed
Congress leadership in Delhi. poor and the underprivileged. Despite ideas from the writings of men like
The authors have meticulously un- the communist party’s attempts to build Rev T B Pandian, Iyothee Thoss,
earthed the political dynamics that mass movements, by focusing solely on M Masilamani and Maraimalai Adigal.
emerged from DMK’s politics in the class inequalities, the DMK could easily This tract questioned the rationale of
years between 1949 and 1967. There stave off their challenge. The DMK the Hindu zealots to posit their religio-
has been an attempt to resolve the and the communists occasionally came cultural traditions over the Dravidian
differences emanating from the question closer to one and another, something population. Drawing heavily from court
of self-governance and that of sover- dictated by their mutual dislike for the judgments, Annadurai succeeded in
eignty. This distinction has been very Congress. But, such alliances proved to establishing the point that Brahmins
pithily depicted in terms such as be too short-lived. The authors believe and non-Brahmins lived afar in terms
becoming “sovereign” and that of “be- that the DMK never ideologically allied of their belief systems, norms and
coming of people.” From a theoretical with the poor, because its populist style world views.
standpoint, the DMK was a replica of of politics was overtly responsible for The term Dravidian was something
the people, especially by favouring making compromises with the capitalist synonymous to a subnationalism that
a left-of-the-centre approach. But, it class and the exploitative relationships would insulate the Tamils from the for-
could only sell its dream of a sover- of production. cible imposition of Hindu dharma and
eign when the public support for the Hindu nationalism. Annadurai’s concept
M Bhaktavatsalam-led Congress min- The Past Recreated of a Dravidian republic was not an ex-
istry waned beyond all imagination. In Tamil Nadu, the term “Dravidanadu” pression of secession from the Indian
The most important question that has was used in a rather emotive spirit to Republic. But, it was a reiteration of the
been raised is how the DMK, which mean a federation of four South Indian view that Andhra, Tamil Nadu, and Kerala,
claimed itself to be a party of the people, linguistic states that supposedly shared historically, culturally and geographically
could dismantle the Indian National a common Dravidian identity. The story different from the territories lying north
Congress enjoying the support and of Aryan migration and that of the forci- of the Vindhyas, should be “independent
patronage of the privileged sections ble imposition of a Hindu hierarchical units” within the Indian federal structure.
of the society.
The DMK’s success has been attributed
to several factors. The party leadership Note to ReadersI
was quick in comprehending that despite
their anathema for a unified civilisational Dear Readers,
history of India, the espousal of a distinct
Dravidian–Tamil cultural history would We have made some changes to our online access policy.
lead to tremors within the nascent Indian
The full text of the content published in the Economic & Political Weekly will be available to
nation state. Moreover, mobilisation based
simply on caste lines would ruin the pos- read on the website only for paid subscribers. However, the editorials and “From the
sibilities of governance, since it would Editor’s Desk” column in the latest issue each week, and all content on Engage will continue
guarantee the ascent of the “uneducated to be free for all to access.
and uncultured” to positions of power
and authority. In its quest to gain political We hope that you will support the Economic & Political Weekly by purchasing a subscription
acceptability, the DMK adopted a range plan. Details can be found here: https://www.epw.in/subscribe.html
of rhetorical strategies not only replete
BOOK REVIEW
The authors believe that backing out of addressing issues related to cultural Annadurai took to literature to mobilise
of the separatist line possibly might subordination and material inequalities. the people on the basis of their common
have been dictated by populist concerns, Subsequently, the new Tamil cinema acted Tamil ancestry, which was opposed to
premising more on the political task as a bridge between the petty bourgeois both Aryanism and Brahminism. This
of construction of the Dravidian–Tamil urban classes and the vast mass of under- very aspect of cultural politics led to the
people. Such a constructed homogeneous privileged and unemployed rural popu- reinterpretation of classics at the popu-
non-Brahmin identity was part of a lation. Karunanidhi as a scriptwriter lar level, thereby raising the political
deliberate strategy for hiding caste and sought to create an imagined cultural credentials of the DMK.
class divisions. space where issues of caste, class and that The authors of this book have quite
The trajectories of non-Brahmin poli- of linguistic identity could all be recon- candidly argued that this new literary
tics alongside their penchant criticism of ciled. M G Ramachandran (MGR) who tradition did not have much place for
caste hegemony could barely be kept acted as the hero in most of these films Brahmins and their cultural traditions.
separate from the emotive sensibilities played subaltern characters engaged in They rich–poor divide was not only dis-
centring on devotion to Tamil. In fact, less respectable occupations, but con- cussed within a non-Brahmin space, but
throughout the early 20th century, Tamil stantly challenging the hegemony of the there was also a disenchantment over the
publicists, whether Neo-Saivites or the rich and the propertied classes. The ma- prevailing status quo. But, it is doubtful
Self-Respecters, had tried to reconcile jority of women cinemagoers visualised whether issues of economic deprivation or
the apparent differences and common- MGR as a messiah of the poor and the de- social inequalities were really addressed
alities between language and caste hier- fender of women’s chastity. The huge by the DMK leadership.
archies in the region. Visualisation of dose of socialist rhetoric with the lustrous
Tamil as mother was not the only factor symbolism of the DMK flag made many In Conclusion
that sustained the DMK’s support base wonder whether the DMK was veering While it is true that Annadurai, Karunani-
overwhelmingly petty bourgeois in terms towards communism. dhi, and MGR carried forward the socially
of its social orientation. Indeed, had it The alliance between the DMK and the radical gospel of non-Brahminism through
been so, the marginalised social catego- communists looked imminent in the ear- an overdose of Tamil rhetorics, the ques-
ries would not have voted for it over a ly years of India’s nationhood. Anna- tion remains whether the constructed
period of more than six decades. Taking durai also indicated that the DMK would category of the people had remained
a cue from the authors, it could be argued be well-contented to adopt a left-of-the- unhindered by the changes in time and
that DMK’s political philosophy repre- centre approach. But, the communists, space. The constant ideological/political
sented a cacophony where socialism, despite their short-term electoral alli- dissensions between the non-Brahmin
communism and revolution could be in ances, misjudged the political appeal of and Adi Dravida ideologues vindicate
the same melting pot, thereby erasing the DMK. The communist myopia towards that the imagery of the “people” is
the separate existence of all castes and political realities was responsible for the too often beset with fissures. The DMK
classes. Influenced by Laclau, the authors depiction of Nehru as the representative leadership had always been put to test in
profess that DMK’s populism, emphasising of the Baniya–Parsi capital very much reconciling the dichotomies that existed
the need for a collective political entity, like Rajagopalachari and Periyar who in the relationships between the power
was contingent on those very discursive supposedly represented the interests of elites and those in the subordinate posi-
processes through which “a people” the Chettiar capital. While the Marxists tions. Politics in Tamil Nadu privileges
could be constructed for political pur- viewed DMK as a political outfit heavily itself on generic caste identities, thereby
poses (p 58). In this imagined casteless/ dependent on the petty bourgeois lead- preventing the chances of dismantling
classless Tamil social order, all men and ership and the support from a minuscule this constructed non-Brahmin identity
women who spoke in Tamil were believed section of the rich, there is little to deny through the ballot box. The assumption
to be one and the same, constituting that it was better suited to represent the that DMK’s political existence has been
the “public.” interests of the poor, underprivileged made possible by the redefinition of
and the commoner. the political by the social represented
Search for a New Path through the “passive revolution of the
The intrusive character of the Indian Fictions and Counter Narratives capital” requires a bit more of introspec-
nation state intensified debates within the Annadurai sought to liberate the Tamil tion. However, this book will definitely
Dravidian political circles in the 1940s mind from the influence of the Sangam have a long life in the shelf, prompting
and 1950s. The despair and uncertainty literature, alleging that it was a cultural researchers to look into Tamil politics
led to the revival of the anti-Hindustani imposition that virtually had no through a much more intense reading of
movement and attacks on North Indian resonance in the south. Taking a dig at the not-too-distant past.
business establishments. Annadurai and Kamban, the author of the southern ver-
Karunanidhi were keen on utilising this sion of Ramayana, he found that there Raj Sekhar Basu (rajsekharbasu2001@gmail.
antagonism for the construction of a were not only inappropriate references com) teaches at the Department of History,
new Tamil/Dravidian identity, capable but lewd depictions of the female body. University of Calcutta, Kolkata.
Revealing the Complexities non-Brahmin movement to demonstrate
his still-coalescing thoughts on self-
of Periyar respect and equality. Beyond this con-

textualisation, Periyar is compared to
Socrates and Rousseau in an effort to
engage him as more than a historical
Scott R Stroud figure that no longer speaks to us, or
that cannot transcend the regional poli-
I
t takes a certain courage to envision book reviewS tics he is enmeshed in. Reading these
and compose a book on E V Ramasamy, pages, we start to see the contours of
or Periyar, as he is most commonly Periyar: A Study in Political Atheism by Karthick the point of the book—as Manoharan
known. This is undoubtedly due to the Ram Manoharan, Hyderabad: Orient BlackSwan, 2022; puts it, Periyar is an “anti-philosopher
pp xi + 133, `225.
reformer’s courage, perhaps more ac- who can be philosophically read, a non-
curately captured as a mix of icono- theoretician from whose thoughts a
clasm and enigmatic assertiveness dis- discrimination. While many note the theory can emerge” (p 31).
tributed unevenly through a myriad of tense relationship, soon to fray, between
printed and spoken texts, and over the Periyar and Gandhi and the Congress, Periyar as a Political Theorist
course of so many years of life. Periyar Manoharan’s prescient account notes Periyar: A Study in Political Atheism is
(1879–1973) is one of the most well- the accompanying development of a brave book precisely because it an-
known reformers to emerge from mod- Periyar as a compelling and powerful nounces that it will try to extract a phi-
ern Tamil Nadu, and one of the most speaker during the 1920s. As he puts it, losophy and a theory out of a thinker
difficult to fully grasp. In Periyar: A Periyar’s “speeches were filled with opti- who seemed to explicitly or implicitly
Study in Political Atheism, Karthick Ram mism, pathos when required, and most resist producing such unified or hermet-
Manoharan engages this important but importantly, humour” (p 7). ically sealed intellectual products. Over
challenging project of giving a system- I will return to this aspect of Periyar the course of the middle chapters of this
atic account of a thinker who was often as a persuasive speaker—as a rhetor, as work, Manoharan constructs a vision of
less-than-systematic about his causes, those in my area of study call eloquent Periyar’s political theory: “Periyar’s anti-
arguments, and positions. The resulting speakers—in a bit, but here it is enough brahminism was a political atheism that
work is a concise but very usable inves- to note that this book is unique insofar sought to critique, demystify and dis-
tigation of a leading voice in the non- as it gives a significant amount of its fo- mantle the political theology of Brah-
Brahmin movement in India. Periyar’s cus to Periyar’s ability to construct and minism” (p 32). For Periyar, Brahminism
ideas are often described in partial deliver powerful statements of critique. was the predominant interpretation of
form for argumentative engagement by In the 1920s, Periyar begins his habit of Hinduism that led to caste inequality
a critic, Manoharan does an admirable making pointed, and some might say in- and the oppression of so many catego-
job presenting them here in a fairly flammatory, comments about religious ries of people around him and all over
unified fashion so readers can construct icons and deities; in the Vaikom strug- India. Social hierarchy was the root of
a picture, albeit imperfect, of this mer- gle, it involved him turning against the the problem, and it only became more
curial thinker. For its scope amid its worthiness of the god in the temple giv- pernicious as it was internalised as a
brevity, this book serves as a reward- en the location’s conditions of discrimi- form of self-depreciation. Self-respect
ing read into what he calls Periyar’s nation against would-be “untouchable” became the sustained bass note of his
“political atheism.” worshippers. Such trenchant religious life, a value that became inflected in
critique put him at odds with other Con- different ways as Periyar explored vari-
Contextualising Periyar gress leaders, thus starting the split with ous courses of advocacy in his activism
Manoharan’s book begins by contextual- the party that would be largely finalised against Brahminism.
ising Periyar as an activist and a thinker. when he walked away from that organi- Manoharan brings out these tensions
It does this by tracing what the author sation in 1925. in his thought—different emphases or
calls the “formation of a blasphemer,” an In surveying his newspaper and speak- even directions, depending on what
apt characterisation of Periyar’s rather ing activity, the first portion of this book Periyar was engaging—by comparing
atavistic rhetoric aimed at sacred reli- begins to make its general point: Periyar Periyar’s political atheism to that of
gious ideals of Hinduism throughout is not simply a reformer from Tamil the anarchist critic of religion, Mikhail
his life. Manoharan starts with Periyar’s Nadu, but, instead, he is a figure with a Bakunin, in addition to comparing his
early activism, especially the formative larger, more universal message of equality thought to that of classical Marxist cri-
role he played in the Vaikom temple- and self-respect. Accordingly, Manoharan tiques of theology. While Manoharan
entry struggle that aimed at ending caste places Periyar amid other members of the points out the moments of interest in
BOOK REVIEW
Marxism evinced by Periyar, he describes religions he was inclined towards, namely that I have learned when dealing with
the reformer as closer to Bakunin’s anar- Islam and Buddhism. anti-caste activists and intellectuals like
chism insofar as both placed more faith The book concludes by surveying Ambedkar and Periyar: they are highly
in the erosion of religious oppression Periyar’s engagement with Islam, an rhetorical figures, and ignoring this fact
than its replacement by any quasi-state engagement that seems motivated by its renders their thought tougher to grasp
power like the dictatorship of the prole- political usefulness for groups such as than need be. What do I mean by rhe-
tariat. The relationship of Periyar to the Tamils primarily because of its force- torical? With this term, I harken back to
Marxism will surely not be settled by fulness and equality. Periyar criticised the sense bandied about in the Western
this book, but that is part of the inherit- the religion, according to Manoharan, rhetorical tradition, from the sophists
ance of a richly complex thinker like on its prevailing treatment of women. through Cicero and Quintilian, of human
Periyar who eschewed mindless and Beyond the political efficacy of Islam for political agents artfully adapting and
doctrinal consistency in all utterances restoring self-respect and resisting caste contextualising their utterances to fit
for more nuanced, even if bombastic, hierarchies, rested Periyar’s interest in specific audiences and persuasive needs.
appeals to the needs of the situation. Buddhism. As Manoharan’s book discusses, This need not be a sense of “mere soph-
Periyar, like Bakunin, emphasised the Periyar and Bhimrao Ambedkar, both istry,” as common (and unread) dismiss-
power to think and to rebel as the most fellow travellers in the battle against als of the term “rhetoric” might lead us
valuable human traits. Periyar’s ration- caste and Brahminical orientations, met to believe.
alism becomes more than mere reaction, at the third conference of the World Fel- Seeing Periyar as a rhetor, or an agent
however, insofar as he constructively lowship of Buddhists, held in Burma in practising the art of rhetoric, would
pairs it with projects such as women’s December 1954. Ambedkar was said to attune us to how certain arguments or
liberation and social equality. For Periyar, have tried to convince Periyar to convert styles of argument function in light of
“rationalism” was “intertwined with revo- to Buddhism, but Periyar indicated that specific audiences. Manoharan’s analy-
lution” (p 55). This was a personified it would blunt too much of his political sis, while not drawing on the concept or
rationalism, though, as Periyar was force in his reform efforts. He did, how- tradition of rhetoric, does get some mile-
addressing his readers and audience ever, fully support Buddhism insofar as age out of reflecting on how and why
members as agents who could, like him, it was a “religion” that resisted the Periyar spoke in different ways to differ-
be part of this reformist blow against harmful things associated with most ent audiences. Whether this makes his
Brahminism. While Manoharan acknow- religions—certainty in dogma, valuing of positive statements towards Islam and
ledges that others will read Periyar’s the divine over the human, and an inevi- his negative critiques of religion coher-
relationship to Marxism differently, he table tendency towards differential val- ent is a debate that will not be settled in
does an admirable job of providing a clear uing of classes and groups. Manoharan this book. The point we must sense here
picture of what sense could be made of places Buddhism closer to the heart of is that taking Periyar as a rhetorical fig-
Periyar as a revolutionary figure outside Periyar’s “political atheism” than Islam, ure relieves us of the assumption that
of constraints and commitments to an but reserves a role for the appeals to every utterance of a thinker must fit to-
overwrought allegiance to theory. Periyar convert to Islam as an efficacious politi- gether into some contradiction-free men-
was a man of this world, and this world cal manoeuvre itself. Periyar conceptu- tal tapestry resident in their head. Instead,
held concrete problems which demanded alised, according to Manoharan, “the we ought to engage him, and figures like
different actions often in tension with ‘Muslim’ identity primarily as a political Ambedkar, as thinkers with some sus-
the solutions to other situations. identity that was casteless and different tained commitments threading through-
from, and opposed to, a ‘Hindu’ identity out much of their advocacy, but as prac-
Periyar as Rhetor that valorised caste hierarchy” (p 108). tical agents trying to get things done
Manoharan’s book does an admirable By the end of the book, we are still left with words in often different situations.
job in providing a straightforward open- with a tension—why did Periyar engage Manoharan does a decent job pointing
ing into the complex figure that Periyar Islam if he was a political atheist as us to the power of communication and
represents. It does this while also ack- Manoharan maintains? Indeed, some rhetoric in Periyar. For instance, he notes
nowledging the existing interpretative might wonder about the problems of that “What made Periyar more popular
disputes surrounding this important using any religion in Periyar’s thought, was both the message and the medium.
thinker, but without getting mired in the given some of his virulent attacks on Periyar’s deceptively simple anti-brah-
details of such debates. Its mission is to religion per se and Brahminical Hinduism minism … appealed to diverse audiences
make a difficult-to-understand thinker in particular. Manoharan is not at fault in his time and retains relevance even
accessible to us in a way that facilitates for these remaining tensions, of course, today” (p 23). The book engages Peri-
our own processes of sense-making. One since these contradictions and different yar’s harsh treatment of the Hindu epic
of the important domains that Mano- directions seem built into the corpus of Ramayana, and frames it with this same
haran’s concise work excels at doing all writings and speeches that we use now evocative style that is shared by much of
of this concerns Periyar’s confl icting to gain access to Periyar the thinker. his rhetorical practice. Periyar, Mano-
and often difficult-to-discern views on And this is one of the biggest lessons haran explains, “conveyed his message
BOOK REVIEW
in simple, direct and often ‘coarse’ people to him” (p 81). Periyar was, in all deserve more attention than we have
Tamil. His speeches were in ordinary other words, a skilled rhetor adept at given them. We should embrace the
language, and were often noted for reaching a range of audiences for a roles and positions he encumbered in all
their kochaithanam, or ‘vulgar quality’” range of different purposes. the different persuasive forums and con-
(p 23). This speech was calculated in texts that he found himself in and not be
many cases to enrage the targets he In Conclusion afraid of looking at Periyar as a rhetori-
wanted his audience to share. This was This book is an excellent starting point cal figure well-versed in persuasive sen-
an effective tactic, especially when for the complex activist and intellectual sitivity, and see in all of these threads
mixed with his very understandable that was Periyar. Manoharan has done and themes as a new contribution to the
style of argument. “What made Periyar an effective job showing the contours— political and philosophical discourses of
popular,” Manoharan judges, “was his and tensions—in Periyar’s thought, in- modern India.
ability to provoke controversy. What is troducing just enough unity and system-
even more likely is that his simple and aticity through the concept of “political Scott R Stroud (sstroud@austin.utexas.edu)
is an associate professor of communication
direct language, his ability to deliver his atheism” to allow one to place a useful
studies at the University of Texas at Austin,
speeches in a lively and dialogic man- framework around this nuanced thinker where he also serves as programme director
ner in public forums, and his sense of with which to begin further engage- of media ethics for the Center for Media
humour and acerbic wit, drew more ment. Periyar’s work, activism, and life Engagement.
and Periyar had been a very deep one,

Contradictions within the Practices belying the artificiality that often charac-
terises political relationships. It was that
of a People’s Party of a son and a father (Thanthai) and the
rift between them was seen as a rupture
within the familial traditions. The split
Raj Sekhar Basu evoked a lot of tear drops (Kanneer thu-
ligal) and Periyar himself derided the
I
n the 1950s and 1960s, the growing Rule of the Commoner: DMK and the Formations DMK as the Tear Drop Party (Kanneer
popularity of Dravidian movement of the Political in Tamil Nadu, 1949–1967 thuli katchi) (p 2). The real reason
evoked a series of public responses, by Rajan Kurai Krishnan, Ravindran Sriramachandran and might not have been Periyar’s marriage
V M S Subagunarajan, Cambridge: Cambridge University
which still continue to find favour among Press, 2022; pp xviii + 299, `895. but something more to do with his
a section of the population. The authors efforts to find a partner who would not
of this particular book are also a part only be a trustworthy successor, but
of a generation that had witnessed the on the intersectionalities of caste, class, would help in streamlining the organi-
successes and failures of the Dravida gender, and nation. sation and leading the movement. Per-
Munnetra Kazhagam (DMK) in the elec- The Tamil case has always remained haps, it shocked Annadurai more, since
toral politics of Tamil Nadu. The seeds of an enigma because it resonates through he had all along represented himself as
this emotive aspect of Tamil nationalism a cultural renaissance that was represented the foster son of Periyar, who would be
had been sown in the decades between the through countless numbers of literary texts the carrier of his legacy and a crusader
1920s and 1940s, when E V Ramaswamy and through a zeal to combine the “real” for the Dravida Kazhagam.
Naicker, popularly referred to as Periyar, and the “unreal” through films. Between Periyar and Annadurai, despite their
emphasised on the racial divide be- 1949 and 1975, non-Brahmin scriptwriters closeness, did have some political dif-
tween Tamils and the Hindi-speaking like Karunanidhi and matinee idols like ferences. Periyar described the day of
people from the north. The difference M G Ramachandran, through their creativ- Indian independence as thukkanal (a day
between these two linguistic or social ity, reminded the Tamil masses of their pri- of mourning) affirming North India’s
groups was couched in the terminology mordial belonging. The authors need to be supremacy over South India. On the other
of Aryan and non-Aryan races. The complimented for bringing out the story of hand, Annadurai preferred to take a
ubiquitous spirit of non-Brahminism the DMK, particularly in the initial decades, “moderate” if not a softer stand on the
expressed through an alliance between when the “former lieutenants” of Periyar issue. Violence and the communal con-
the so-called non-Brahmin privileged were able to decentre the very notions of flagrations emerging from the anti-
castes and the underprivileged castes, the Indian nation state. Hindustani upsurges and the public flog-
actually coalesced to create a new ging of Hindu popular idols might have
politico-cultural community. In course Raising the Curtain convinced to opt for a more thought-out
of nearly a century, debates on “Dra- The split within the Dravida Kazhagam strategy for establishing Tamil identity
vidianism” had hinged around several in September 1949 was indeed a painful vis-à-vis the Brahmin casteist hegemony.
issues and possibilities, provoking debates affair. The bonding between Annadurai As a political pragmatist and a gifted
SPECIAL ARTICLE
Overlapping Marginalities
Digital Education and Muslim Female Students in Bhiwandi
Abdul Shaban, Ayona Datta, Sheema Fatima
The experience of the COVID-19 pandemic shows that OVID-19 is arguably the most significant global devel-
excessive reliance on digital technologies for delivery of
education can sharpen the inequalities in learning. In
Bhiwandi, both a metropolitan and a digital periphery in
C opment that revealed the uneven access to digital in-
frastructures across a number of scales and diverse
social groups. Several authors (Bailey et al 2021; Datta 2020a,
2020b; Milan et al 2021) have now written about the margin-
Maharashtra, such unequal learning opportunities alising effects of lack of access to or absence of digital infra-
further marginalised the citizens of the locality. Female structures that led to socio-economic and health crises across
families and social groups during and after COVID-19. In India,
students additionally faced several challenges. Among
a large part of this discussion was concerned with the migrant
the many freedoms upended during the pandemic was crisis, which emerged as soon as the lockdown was announced,
the spatial mobility, offered by the physical access to the while another significant aspect of the literature was the feminist
colleges. Where educational institutions failed to critique of the resultant rise in gender-based violence at home
and increasing domestic burdens imposed upon women
effectively adapt to the situation, undergraduate Muslim
through the impossibilities of “work from home” guidelines.
women experienced a lack of digital access and poor Within these discussions was the impact that the pandemic
quality of learning. had on access to education, particularly for young women in
low-income households. Their limited access to technology
combined with increased surveillance of their space and time
produced multiple marginalisations that were largely hidden
within the confines of the home (Datta 2022).
This study takes an intersectional approach to the gender-
ing of education during COVID-19. It aims to understand not
just the uneven access to education produced by the pandemic,
rather how this affected specific groups of women differently,
when their social location is defined by geography, class,
religion, generation, and gender. The focus of the study is
primarily on Muslim women living in the low-income housing
area in Bhiwandi—one of the most deprived industrial spaces
in the peripheries of Mumbai. Based on the survey of 302 female
Muslim students pursuing undergraduate college education,
we argue that the COVID-19 lockdown and the subsequent shift
to online classes exposed Bhiwandi’s student population to an
unprecedented crisis. The systemic marginalisation historically
The authors express their gratitude and appreciation for the time and experienced in the town was reinforced by social and cultural
effort of our respondents in completing the survey as well as marginalisation faced by Muslim female students. Following
participating in the face-to-face workshop. They also wish to thank the Ticktin (2021), the study argues for feminising the inter-
different colleges in Bhiwandi (especially Oneza Farid, principal at Aqsa sectional understanding of the crisis for appropriate policies
Women’s Degree College), which supported this research. Funding for
this research was provided by the British Academy Tackling Global
and effective initiatives.
Challenges programme.
Muslim Women’s Education and Digital Technologies
Abdul Shaban (shaban@tiss.edu) teaches at the School of
Development Studies, Tata Institute of Social Sciences, Mumbai. The fourth industrial revolution powered by information tech-
Ayona Datta (a.datta@ucl.ac.uk) teaches at the Department of Geography, nology (IT) is rapidly transforming not only how one acquires
University College London. Sheema Fatima (fatimasheema@gmail.com) information and consumes it, but also altering the ways of
is a postdoctoral fellow at the School of Development Studies, Tata governance and access to education, health, and life-support
Institute of Social Sciences, Mumbai.
services. Many argue that IT-enabled services (ITes) are leading
SPECIAL ARTICLE
to the death of geographies (Bates 1996; O’brien 1992; Kolko education is further undermined among Muslims and often
2000; Cairncross 2001) and giving birth to a distanciated give low priority to the education of women with a logic that
society (Henning 2007). One does not deny the socio-spatial it may not be beneficial for the family because they may not
transformative impact of the ITes and the massive advantage effectively enter the labour market and earn. And, given that
they have generated with regard to information flows; however, men discontinue their education early, it would be difficult to
like any technology, the social impact is also patterned as per find suitable grooms for relatively higher-educated women. In
the class, caste, religion, and geography. Studies have shown fact, several independent public committees (Sachar Committee
that the use of the ITs and ITes varies as per the economic af- 2006; Mahmoodur Rahman Committee 2013; Sudhir Com-
fordability, social acceptability, adaptability, and educational mission 2016) which investigated the socio-economic status
levels or skills of individuals and communities, even in the of the Muslims in India have, among others, pointed out the
areas where there may be ubiquitously developed IT infra- lack of education in the community and especially among
structure. Gender and generational access to technology also women. This is largely due to economic constraints, conserv-
shapes how it is used. In other words, despite rapidly decreas- ative attitudes of the parents, poor geographical access, early
ing the cost of IT and ITes, there are a number of factors marriages, and no expectation of economic returns from edu-
that determine their use. At the individual level, the inter- cation. Many studies have also pointed out that education
sectionality of class, gender, education, age, caste, and religion among Muslim women varies as per their community identity
have a determining role, while at the community level, space and geographical location. In many states, women are out-
and culture does reshape access. This creates a digital core performing men in the educational field (Shaban 2018, 2016).
and periphery both at the social and spatial levels. A study by Ram and Yadav (2021) shows that due to the
The educational institutions around the world were forced dominance of informal sector employment in the country, the
to shift to an online mode of instruction that had its own stress impact of the lockdown on the income of the families was
and strains. It had adverse consequences on the learning out- large. They estimate that about 150–199 million additional
comes of the students. While it also affected the financial people fell back to poverty due to the pandemic, especially the
health of educational institutions resulting in reduced salaries marginalised groups like the religious minorities, Scheduled
to teachers and related staff, this was much more acute in the Castes and Scheduled Tribes. Their computation shows that
metropolitan peripheries in India where educational access because of the social and economic marginalisation, 61% of
was already very limited. Economically poor institutions could the Muslims are at the risk of poverty in urban areas
not swiftly transition to the online mode, thereby having compared to 39% Hindus, and 30% Christians (Ram and Ya-
adverse consequences for the students enrolled. In India, while dav 2021: 8).
we do not have any public estimates of losses incurred by such
institutions, the first-hand interaction with local colleges in The Context: Bhiwandi
Bhiwandi highlight that they suffered massive losses due to In India, metropolitan areas remain at the core of the deve-
lack of government subsidies, non-payment of fees by students, lopment related to IT and ITes, while the satellite cities around
and increased expenses on digital technologies. them show enormous dualities in use and access to such
In India, though internet coverage is now growing, sharp infrastructure. Bhiwandi is one of the seven municipal corpo-
geographic, class, and gender divides exist. Niti Aayog data rations included within the Mumbai Metropolitan Region but
shows that in 2020–21, out of every 100 people, 55 had access is often considered a peripheral town. Historically, significant
to the internet (Krishnan 2021). A similar situation prevails in for its power looms and textile mills, today it faces rapid
other countries of South Asia. Chandasiri (2020) shows that in transformations in its industrial base and population. The
Sri Lanka, about 60% of the undergraduate students had no power loom and small-scale factories, which have provided
access to the internet, and the pandemic had an adverse im- employment to mig rants from other regional states in India,
pact on their mental health due to lack of the required educa- now face increased threats of survival due to the withdrawal
tional support system. of state subsidies and an increase in electricity tariffs
Rashid and Yadav (2020) argue that the pandemic exposed (Dalvi 2016). Today, most power loom owners find it difficult
the shortcoming of the current higher education system, which to run their looms at profit and this has affected the workers’
was even less equipped to handle such a crisis because of the wages and livelihoods.
lower technological adaptation, and the low share of informa- Bhiwandi, however, has remained a significant site for the
tion technology-trained teachers and staff. The move to online development of industries and godowns since the 1990s. As a
platforms of teaching had a negative impact on the psychology peri-urban space to the megacity of Mumbai, it has experi-
of both teachers and students. The adaptation for a majority of enced both physical and institutional peripheralisation. The
teachers and students was not easy (Khan 2021). The online city is dominated by migrant workers who have very little
mode also increased the disparities in learning among students stake in its development planning and growth. The downfall
(Zianuddin et al 2020). and moving out of power looms from the municipal boundaries
Several studies have vividly shown that a number of of Bhiwandi to adjacent villages has affected the financial
socio-economic factors undermine access to higher education capacity of the urban local body. On the other hand, since
for women. Hasan and Menon (2004) argue that access to the last decade, there has been an emergence of large-scale
SPECIAL ARTICLE
warehouses catering to the storage of Figure 1: Distribution of per Capita Annual Income and Expenditure per Month on the Internet
goods of global e-commerce businesses by Respondents (`)
× 10 -5
such as Amazon, Flipkart, and Nykaa 8
in the adjacent villages. It has provided 6
Density
another possibility for employment to 4
town dwellers and nearby villagers, 2
though largely in the informal sector. 0
0 2 4 6 8 10 12 14 16
The town suffers from enormous ine- Per capita annual income (`) × 10 4
qualities and lack of access to IT and × 10 -3
ITes and also underdevelopment of the 8
related digital infrastructure. 6
Density
If we look at the educational history 4
of the city, the native Konkani commu- 2
nity, which is better educated and com- 0

0 100 200 300 400 500 600 700 800
prised about one-fourth of the Muslim
Data recharge expenses (`) per month
population in the town in the 1970s Source: Authors' calculation.
(Momin 1978), has played a crucial role
in establishing several schools, junior colleges and institutions with the first phase of lockdown relaxation rules and one
in Bhiwandi. The Konkan Muslim Education Society (KMES), could meet in small numbers, with COVID-19 protocols followed.
established in 1927, has been running most of these education- The workshop helped us capture the participant’s excitement
al institutions in the city. Interestingly, the number of schools for being able to come out of their houses and have a day-long
and colleges run by KMES for women is more in number in discussion about their struggles with online education. A
comparison to those for men, because Konkani Muslims, second workshop was conducted a few months later in April
being a trading community, recognised the importance of 2022 when students were requested to write their perception
women’s education. However over the years, the number of of the city of Bhiwandi and how did they interact and partici-
educational institutions has not multiplied as has the increas- pate in the public spaces. In these sessions, it was observed
ing migrant population in the town. Female access to educa- how digital mediums are being used to break spatial barriers
tion was exacerbated during COVID-19 due to economic, infra- for interactions.
structural, and cultural factors. The majority of those living
in Bhiwandi were employed in the informal sector jobs and Social Background of the Students
hence suffered from lockdown and the resulting crash of Bhiwandi is a city of migrants with a large floating population,
income. There were several cases of migrants returning back which became more evident in the lockdown. We find the
to their native villages, which disrupted the education of their average family size is relatively larger here. The 302 families of
children, and it was difficult for colleges to trace them due to the respondents had 3,201 individuals, corresponding to mean
the poor digital connectivity. and median sizes of the family of 6.96 and 6.0, respectively.
Cumulatively, 14.2% of the total families in the sample had
Data and Methodology four or fewer members, 57.6% of the families had six or fewer
This paper is based on a sample survey of 302 female Muslim members, 78.1% of the families had eight or fewer members
students in the age group of 17 to 20 years, belonging to different and the remaining had more than eight members. The family
castes and communities (within the Muslims), enrolled in the size is higher not because of the higher number of children per
local colleges of Bhiwandi. The survey was conducted from family but because the majority of them live in extended and
October 2021 to November 2021 through the use of Google joint families. If we look at the general socio-economic profile
forms online. The study mainly relied on online forms for the of the communities in the city, they are engaged in informal
survey, which meant that only those students who had access business set-ups related to the power loom or ancillary sectors
to the internet and the required gadgets, like a mobile, laptop, or are working as informal labourers. Therefore, given the pre-
desktop or tablet, could participate. Therefore, it is not an ab- carious nature of the labour market, and low earnings, espe-
solute representation of the situation but is well representative cially for lower-income socio-economic groups, it makes eco-
of the given cohort. The questionnaire was structured under nomic sense to live in joint families and hence share the kitch-
three broad headings. The first was the basic socio-economic en and the burden of daily expenses.
profile, the second was related to access to gadgets and internet The yearly per capita income based on surveyed families is
connection, and the third was related to the monetary aspect also skewed towards the lower end with a long tail (Figure 1)
of the digital interface in terms of average expenditure on showing that a large number of individuals fall into income
phone recharge and other modes of access to internet data. lower than `10,000 per capita per annum. In 2011–12, the
Apart from the survey, we also conducted two face-to-face urban poverty line income was `1,134 per month, and the
workshops with the respondents in the local colleges. It same, when adjusted to the consumer price index for 2021–22
was conducted with select participants in December 2021, (RBI 2021), would be `1,863 per month or `22,356 per capita
SPECIAL ARTICLE
per annum. This means 88.4% of the persons belonged to poor belong to them, while 32.5% respondents used phones that
families in the town. belonged to other family members. They had to often share it
Though all the surveyed families had access to electricity, with their siblings, and it was also used even during the classes
toilet, and piped water, the ownership of other assets is moderate to receive and make calls by parents, thus interrupting the
to poor. Only 13.6% of the families owned a car, 55.0% had a period of instruction.
motorcycle or a scooty, 41.4% had a television, 63.2% had a
washing machine, and 77.2% used a gas stove. These assets Quality of the Mobile Phone
were not always new but also included second-hand purchase Out of the total students interviewed, 93.7% had android
(Table 1). phones while 3.3% had no phones (Table 2). Further, 50% of the
Table 1: Percentage of Surveyed Families Owning Major Assets in Bhiwandi respondents had phones with a storage capacity of less than 32
Annual Per Capita Income Categories Total gigabyte (GB), while another 33.8% had a 64 GB storage cap-
<=2,500 2,501– 5,001– 7,501– 10,001– 15,001– 20,001– >=25,001
5,000 7,500 10,000 15,000 20,000 25,000
acity. Only 2.3% of the respondents had smartphones with a
Television 4.0 5.0 4.0 8.3 8.3 4.3 1.0 6.6 41.4
256 GB storage capacity. This shows that there is an over-
Gas stove 5.0 8.9 11.3 15.9 16.2 9.3 3.0 7.6 77.2 whelming use of cheaper version of android mobile phones with
Motorcycle/scooty 4.6 4.0 7.6 12.6 10.6 6.6 1.7 7.3 55.0 lower storage capacities. It is important to note that as the pan-
Car 1.3 1.7 0.7 2.0 2.6 2.6 0.7 2.0 13.6 demic emerged and classes shifted to online mode, 30.1% of
Washing machine 5.6 6.6 8.6 13.9 11.3 7.6 2.3 7.3 63.2 the students were given new phones for attending classes by
All surveyed families had access to piped water, electricity, and toilet within the house. their families.
Source: The sample survey by authors.
In terms of the quality of the phone, which meant at least a
Bhiwandi is a historic town famous for its handloom from as functioning camera and microphone, only 14% of the students
early as the 19th century. In the later decades, it evolved into a reported that they had a mobile phone, but they did not have a
power loom centre. These looms were part of the everyday life functioning camera. It hindered their overall participation in
of a majority of families in the early 20th century. Traditionally, the online classes.
the structural design of the looms was such that the ground
floor was used for the manufacturing purpose while the side Networks and Connectivity
rooms or the first or second floors were used to house labou- In a city like Bhiwandi, peripheral to Mumbai, regular supply
rers and their families. Over the years, many neighbourhoods of electricity and lack of uninterrupted internet availability are
with such mixed-land use have remained the same. As a result, major hindrances to the digitalisation process. The settlement
we see very few only residential apartments, except in new pattern in most of the neighbourhoods is dense with many be-
extensions of Bhiwandi city like Millat Nagar and other ing categorised as slums or slum-like habitation, which makes
upcoming areas on the Bhiwandi–Nashik Highway. it difficult to lay down cables in many areas. Further, given the
networks of mobile towers are also not dense, there are many
Digital Access places that remain in a mobile signal shadow. The survey data
The study reveals that out of 302 students interviewed, 95.0% shows that 71.9% of the students are dependent on mobile
were using only mobile phones for their classes, presentation, networks for internet, while 20.5% have access to cable networks
and assignments; 1.3% (four students) used a laptop; one student and Wi-Fi. Some of those using Wi-Fi also use their neighbours’
had a desktop, and 1.7% (five students) used both laptops, connection and they constitute 7.6% of the sample. This
desktops along with mobile phones (Table 2). A total number shows that a sense of cooperation to help those without inter-
of five-students (1.7%) had no access to any of the devices. net also exists in the town, and it did help a sizeable share of
Some of the students reported that the phone they use did not the students to access online classes during the COVID-19
Table 2: Percentage Distribution of Ownership of Phones and Its Type by Income Category lockdown. The Wi-Fi sharing becomes possible
Per Capita Income Possession of Android Mobile with New Size of Mobile Phone Storage (GB) because of families living in a close proximity to
Category Mobile Phone Phone Camera Phone 32 64 128 256 Do Not each other. In several cases, this sharing of data is
Personal Using But Not Know/Do done with mutual consent, and some of the stu-
Phone a Personal Not Have
dents also shared the cost of Wi-Fi. There were
Phone
also several instances where students used Wi-Fi
<=2,500 6.6 0.7 6.6 5.6 2.3 4.3 1.7 0.3 0.0 1.1
without the consent of the owners.
2,501–5,000 5.7 5.8 10.3 10.6 1.3 6.3 3.0 1.2 0.0 1.0
Only about 58.3% of the total students remain
5,001–7,500 9.9 2.7 14.6 10.9 2.6 10.7 2.5 0 1.0 0.7
satisfied with the quality of internet speed on
7,501–10,000 14.8 6.4 19.5 19.9 7.6 11.3 7.0 2 0.3 0.7 their mobile, while the rest categorise it as bad or
10,001–15,000 12.8 7.6 19.5 17.2 7.0 7.9 9.5 2.3 0.0 0.7 irregular. About 45.7% of the student used Jio
15,001–20,000 6.6 4.9 11.6 11.6 5.3 4.0 6.3 1.3 0.7 0.0 network, followed by Airtel (that is, 37.1% of the
20,001–25,000 2.9 0.7 3.0 2.6 0.7 1.7 0.7 1.2 0.0 0.0 students), while the rest used Vodafone–Idea. To
>=25,001 3.9 4.7 8.6 7.3 3.3 3.2 3.2 1.6 0.3 0.3 safeguard themselves from the weaker mobile
Total 63.2 33.5 93.7 85.8 30.1 49.7 33.8 9.6 2.3 4.6 networks, families kept the alternative of Wi-Fi or
Source: Sample survey by authors. cable connections. But in the case of the student
SPECIAL ARTICLE
respondents in the study, it was not the case. As discussed that the access was interrupted because they needed to share
above, a large number of them came from economically weak- the same phone with their siblings who also had to attend
er sections and the average monthly income made expenditure their classes.
on internet and Wi-Fi unaffordable. Students mainly used Only 47.7% students had access to phones at any time of the
phones as a learning device. However, the small screens made day to listen the recorded lectures. The rest reported access
reading and typing assignments very difficult. Additionally, the when the younger or the elder siblings did not have their
quality of internet created challenging situations for students. classes. About 22.2% of the respondents said it was only during
The monthly expenditure and usage of data increased for the early morning hours when they could use the phone. This
each family during the pandemic. The data consumption shows that they had to adjust their study hours as per the
during online classes was generally very high, which meant availability of the device, and hence it was impossible for a
that the students could not attend all the classes and had to majority of them to follow the college schedule regularly and
make a choice of excluding a few. Further, they also had to attend all the classes.
share the same device and internet with their siblings, thereby As they were not able to attend all the classes, the students
bringing down their share of data. The internet expenses for had to borrow the lecture notes from their classmates. A
each student was `232.5 per month. More than 88% of the majority of the students—86% of them—borrowed class
users spent less than `300 per month on data. Even though notes on mobile phones when they missed attending. Many
the data cost was cheaper—about `200 for a 28 days’ pack of teachers during the discussion informed about providing
1.5 GB data per day—students had to ensure a modest use to class notes regularly to the students who were not able to at-
be able to extend it for one month of classes. A large number tend the classes. Given the grim situation, there were some
of students were from the economically weaker sections and parents, around 5% of them, who felt that their daughters will
had larger families. Therefore, it was not possible to attend be better off quitting education.
all the classes, and had to make a judicious use of data-pack Although there was lower access to the internet in the loca-
sharing with other siblings. lity, mobile phones are being increasingly used for booking
Table 3: Percentage Distribution of Internet Expenses by Income cooking gas cylinders (60.3%), tickets (22.2%), recharging/
Annual Per Capita Internet Data Expenses (`) paying telephone bills (18.2%), paying property taxes (20.9%),
Income (`) <=100 101–200 201–300 301–400 401–500 >=501 Total (%) applying for a passport (11.3%), applying for voter card
<=2,500 0.3 5.0 0.7 0.7 1.0 0.0 7.6 (24.2%), applying for admission in school and colleges
2,501–5,000 1.7 5.6 3.0 0.7 0.0 0.3 11.3 (56.6%), and searching employment opportunities (19.9%).
5,001–7,500 1.3 9.6 2.0 1.3 0.3 0.7 15.2 About 7.3% used the internet and mobiles to promote their
7,501–10,000 2.6 10.9 5.0 1.3 0.3 1.0 21.2 business, while 27.2% and 26.5% used them for shopping on-
10,001–15,000 1.3 11.9 4.3 0.7 1.0 1.0 20.2 line for non-food and food items, respectively.
15,001–20,000 1.3 5.6 4.0 1.0 0.0 0.3 12.3 Lack of access became more acute during university exams
20,001–25,000 0.0 2.3 1.0 0.0 0.0 0.0 3.3 when students needed unhindered network and mobiles or
>=25,001 0.3 4.3 3.6 0.7 0.0 0.0 8.9 laptops. The colleges had to make special arrangements for
Total (%) 8.9 55.3 23.5 6.3 2.6 3.3 100.0 the students to visit the campus in small groups to write their
Source: Sample survey by authors.
exams. The institutions were flexible enough to conduct the
Apart from attending classes, phones were also used for exams on different dates and also provided a longer time
recreation purposes like watching web series and videos frame for writing the exam through the day. As one of the col-
(about 11%) as well as for making videos (about 1%). Some lege teachers said,
reported to have taken to baking, cooking, or doing other But students didn’t understand this earlier, so we had to run after
crafts during the lockdown, or watching other such content them. University gave these students a second and third chance to
on the internet. They learned many skills through YouTube write their exams. The office and teachers were individually persuad-
and other online videos. ing the students. Here in Bhiwandi, people are laid back, their parents
are from the labour and working class, and they don’t have any idea
Only in 47.7% of the cases, families allowed their children to
about what is happening with the ward. Only 30% of parents keep
use mobiles whenever they wanted. While 22.2% of female track of their children’s’ education. Students keep changing phone
students used it in the morning and 25.2% in the afternoons, numbers so quickly that keeping a track was also becoming difficult.
mainly for classes and 5% used it at night when other family
members were not using the phone. Many of the students Women’s College as Safe Spaces
shared their father’s or brother’s phones when they were not It was observed that in some families, Muslim females were
going out for work. This meant that the women could have discouraged to use phones as it is widely assumed that it leads
access only at the early morning or late night when the working to moral corruption. One of the respondent said, “If a woman
members of the families were at home. When asked whether is seen speaking on the phone people will stop and ask,
they were able to attend all the classes online, only 38.1% ‘Are you speaking to your boyfriend?’” These narratives rein-
responded affirmatively. Around 27.2% of them could only force the idea of gender segregation and marginalisation of
attend important classes because of the data saving and the women through stereotypes. Another respondent stated that
phone sharing, and about 35% of the total respondents said “In Bhiwandi, these are males who are considered knowledgeable
SPECIAL ARTICLE
but that is because females don’t come forward and express data. Only 24.8% of the women said their phones were regu-
their feelings and ideas.” larly recharged as required, while the rest had to bargain and
In such a context, the colleges in the city act as an important negotiate with their parents every time. Many reported it
safe space for education and socialisation. It is the only public to be a big hurdle and often parents would ask them to wait
space where women were allowed to travel on their own for a few days.
every day and without strict controls. One of the students They also complained that though their parents can afford
highlighted, “College is the only place where I can go alone.” to install a Wi-Fi connection, they avoided doing so because
During the pandemic, they lost this little independence to they did not want them to have unrestricted and continuous
meet their friends. As one student shared, “When the lockdown access to the internet. The number of students who said they
started I was very happy that I will rest at home but soon I do not have the freedom to use the internet whenever they
was frustrated being because college was the only place we wanted was 35.4%. On the other hand, during the discussion,
would go.” Many expressed their concern that the new rou- many women reported that this was not the case with respect
tine of living in the household created challenges for their to their brothers who had comparatively free access to use the
physical movements and they would have to renegotiation internet. Women, whether teachers or students, also expressed
their mobility and social activities. the anxiety of using cameras for the fear of coming in contact
A respondent, enrolled in the science stream, wrote about with some unwanted person.
the patriarchal nature of the city (Bhiwandi) wherein a girl or Apart from parental monitoring of women and associating
a boy cannot be imagined as anything beyond siblings and the same with the notion of their security, the other reason for
friendship is seen with a suspicious gaze. She found this norm restricted use of the internet was the added responsibility of
very derogatory to her existence as it suffocated her independ- household chores. During the lockdown, when the entire fam-
ence. It is also true that digital platforms have redrawn these ily was confined to their home, it increased the amount of
boundaries, making interactions fluid between people. cooking, cleaning and washing chores for women. And invari-
However, access to the mobile phone did not necessarily ably, it was the female members who were expected to share
translate into freedom to use it as women wished. The biggest the workload. As discussed earlier, several of these students
hindrance was the limited financial support for purchasing reported managing household work along with their online
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SPECIAL ARTICLE
classes. These women shared that their parents at home did of intersectionalities in determining access to IT and ITes. The
not give much importance to class attendance and rather poorer sections are pushed towards online education without
expected them to prioritise household work. This experience appropriate digital infrastructures and technological support,
of managing all the housework and education at the same time which is, in turn, producing new social and material inequali-
was described by a student as, “The class lectures were like ties. Further, it emerges that not only the aspects of network
background music, we would be cooking, cleaning, or sweep- and connectivity, and access to devices, but average monthly
ing while listening to the teacher.” expenditure on data packs was also the defining factor in
It also meant that the additional burden of home-based online access to higher education during the pandemic. The
work and domestic labour increased not only for the mothers cooperation among the students in crisis situation was very
or wives but equally burdened the daughters. The gender divi- high and they used various modes of “sharing”—of class re-
sion of labour, especially among the working class women, cordings, notes and data packs—as a coping mechanism.
was bearing the whole burden of household work and attend- Notwithstanding all the challenges, the pandemic also pro-
ing classes as a side activity. While the women in normal cir- vided an opportunity for students to access higher education
cumstances also finished household work before they went to through the internet. With all its limitations, online education
school or college, giving them the much-needed respite, during may prove very beneficial in the long run, especially for stu-
the pandemic they were trapped in the monotonous and dents from the marginalised groups, as the internet penetra-
unending cycle of housework. tion grows and the technology cost comes down with growing
usage (Jena 2020). This may bridge the asymmetries of infor-
In Conclusion mation within society that drive inequities in wealth creation
The paper studies the limited access of Muslim female stu- and accumulation of knowledge. However, in the short run,
dents from the marginalised sections of the society to the the digital divide and gender gaps may further intensify the
technology-driven education. It further shows the importance existing socio-economic inequalities.
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SPECIAL ARTICLE
Exploring Abortion Laws

A Case Study of Bangladesh, India, Russia, and the United States
Pooja Kapoor
R
Abortion has long been a divisive issue in the rights eproductive rights need to be understood through the
debate particularly when it is presented as a conflict lens of human rights approach. They are based on the
idea that everyone has the right to access healthcare
between a woman’s right to choose and an unborn
and women should have the autonomy to make their own
child’s right to live. Unsafe abortion can lead to decisions. Unwanted and forced pregnancies due to lack of
long-term issues detrimental to woman’s health and family planning, fatalities during pregnancy and delivery,
psychological well-being, in addition to acute health complications from unsafe abortions, early marriages, and
coercive unsafe sex are examples of the abuse of reproductive
risks and even fatality. This paper offers a comprehensive
rights. Women’s intrinsic dignity and independence are denied
overview of current abortion laws and practices in because of the societal undervaluing of their fundamental
Bangladesh, India, Russia, and the US. While restrictive existence. Family members often make the most important
laws are often violated, few of them are appropriate for decisions impacting women’s health, education, property, and
marriage. In many cases they are arbitrarily denied the freedom
their intended purpose. It is important
to make their own decisions, thereby rejecting their personhood
to acknowledge that the right to make independent and autonomy, especially in the private domain.
decisions about her own body and reproductive In such a context, some women access abortion services
functions is at the very core of the fundamental covertly. But the enforcement of societal and legal restrictions
has hindered their right to safety and health. The ethical
rights of women.
standards regulating abortion have undergone change to
accommodate the historical and social situations in which
they were established. These standards have consistently been
aimed at satisfying societal requirements that do not acknowl-
edge women’s freedom to choose their sexuality, fertility, and
reproduction. Due to the moral and ethical questions it raised,
abortion has therefore occasionally been a contentious topic in
many countries. Abortion legislation and regulation are also
influenced by factors like the state’s pro- or anti-natalist policies,
concerns of inheritance, and patriarchy. Although it has frequently
been outlawed or otherwise restricted, it remains widespread
in many countries.
The ancient and early modern texts from Egypt, like the
Ebers Papyrus (1550 BC) and Kahun Papyrus (1850 BC), both
carry information on the contraceptive prescription. In the
Hindu Upanishads dating 1500 BC and in the ancient Chinese
medical literature, many methods of contraception are men-
tioned. This shows that the practice was widely prevalent in
every society (Mutneja and Arti 2023). Abortion was also
supported by the Greek philosophers like Plato and Aristotle
under certain conditions.
According to the English Common Law, abortion was illegal
if the foetus was already formed but not yet quickened. Opting
for abortion after foetal movement or “quickening” was penal-
ised as homicide. With the adoption of liberalising laws in
Pooja Kapoor (pooja.kapoor@bennett.edu.in) teaches at the School of Colorado in the United States (US), the abortion reform move-
Liberal Arts, Bennett University, Greater Noida.
ment had its first success in 1967 in the country. The Model
SPECIAL ARTICLE
Penal Code (MPC) served as the foundation for the law. The According to the Bangladesh Penal Code 1860 (Sections 312 to
provisions of the MPC, permitting abortion in situations other 316), an induced abortion is not permitted unless it is necessary
than those where only the mother’s life was in danger, were to save a woman’s life. But since 1979, Bangladesh’s national
accepted in whole or in part by around one-third of the states family planning programme has included menstrual regulation
between 1967 and 1973 (Conger 1973). (MR), which is a method to normalise the menstrual cycle in its
In the Roe v Doe judgment in 1973, the court noted that Texas absence for a short interval of time. Even though MR services
and Georgia’s abortion-related laws interfered with a woman’s are accessible, many women choose to have illegal abortions,
right to decide termination of pregnancy. The judgments were some of which are perilous (Nasrin 2020).
based on the conclusion that a woman’s right to personal privacy The constitutional provisions of the Bangladesh under
under the 14th Amendment protected her decision to carry a Article 15 (a) says that it is the chief obligation of the state to
pregnancy to term. In Roe v Wade (1973), the US Supreme guarantee medical treatment or care as a rudimentary need of
Court ruled that all state laws prohibiting abortion in the life. Further, Article 18 of Bangladesh’s superlative law remarks
first trimester were unconstitutional. Additionally, it permit- the state’s responsibility to improve nutrition, public health
ted states to strictly prohibit third-trimester abortions unless and well-being of its citizens. The primary component of the
doing so would be in the woman’s best interests in terms of her right to life is accessibility to healthcare and medical care.
bodily or psychological health. It also allowed states to control These requirements must be met to ensure another basic
abortion in the second trimester without outrightly forbidding right that is stated in Article 32—right to life and individual
it (Conger 1973). liberty—even if they are not considered fundamental rights. In
addition to being a signatory to international declarations like
Global Legislative Practices the Beijing Declarations, Alma Ata, the International Conference
Abortion in medical terminology means ending of pregnancy. on Population and Development, and the Millennium Devel-
In 2021, there were around 24 countries where abortion was opment Goals, Bangladesh has ratified numerous regional and
banned. Around 90 million women, which is about 5% of the international agreements and obligations. These include the
total world population, of reproductive age reside in Asia, International Covenants relating to political, civil, economic,
America, and Africa. According to the Centre for Reproductive and social rights. Even after signing these conventions, the
Rights (Washington, US), there are five categories of abortion implementation of governmental plans and programmes for the
laws that we find across the globe. betterment of health of pregnant women are still underrated.
In the first category are countries that totally prohibit abor- The Hussain Muhammad Ershad v Bangladesh (2005) case is
tions. These include Senegal, Mauritania, Egypt in Africa, notable because the court was of the opinion that the interna-
Laos and Philippines in Asia, El Salvador and Honduras in tional human rights obligations cannot be overlooked. It stated,
Central America, and Poland and Malta in Central Europe. “if the domestic laws are ambiguous or if there is nothing
The second category consist of 42 countries where abortion is therein, the national [Court] should draw upon the principles
permitted if the woman’s life is in danger. Countries like Syria in the international instruments” and that when the local laws
and UAE permit abortion on the grounds of spousal and paren- are clearly unreliable with the international human rights prin-
tal authorisation or notification. Whereas in Chile, Mexico ciples, the court will draw the attention of the lawmakers to
and Indonesia, rape or fetal impairment are accepted as rea- such discrepancy. On 18 August 2020, the high court panel
sons to abort. There are 51 countries in the third category that led by judges Tariq-ul-Hakim and S M Kuddus Zaman issued
permit abortion based on health or therapeutic grounds. The a ruling in which they questioned why the Penal Code of 1860’s
more accommodating is the fourth category which includes abortion-related sections should not be declared unlawful be-
13 countries that allow abortion on social or economic grounds cause they conflict with fundamental rights guaranteed by the
and some of them are Great Britain, Hong Kong, India, Japan, constitution of Bangladesh in 1972. The unlawful route to abor-
Taiwan, Zambia, etc. Lastly, there are countries where abortion results in a wide range of problems that endanger both the
tion is permitted on request (gestational limits vary). Despite a woman and the unborn foetus, leading to suicide, societal shame,
broad range of limits on its use, abortion is legal in majority of and many forms of physical and emotional traumas in some
the European nations. With Vatican City, Liechtenstein, San cases. The archaic Penal Code’s provisions date back to the
Marino, Malta, Andorra, and Poland being the only exceptions, colonial era (Sedgh 2016).
abortion is either outlawed or severely restricted in these places.
India: Even though India was one of the first nations in the
Country-wise Look at the Policies world to develop legal and policy frameworks conferring
access to abortion and contraception, women still face many
Bangladesh: Criminalising abortion means making it illegal by barriers in the decision-making process and access to health-
levying legal constraints. The Penal Code of Bangladesh, how- care services. Abortion is permitted, till 20 weeks of pregnancy
ever, forbids abortion even when the mother’s life is in danger. to married women. The Medical Termination of Pregnancy
Healthcare providers are not permitted to treat those who do (MTP) Act went into effect in 1971, allowing for the termination
not meet the legal standards if the limits are imposed. Women of a pregnancy. The conditions for exercising this right could
experience distressful procedures with such restrictions. be reasons such as therapeutic or medical termination for
SPECIAL ARTICLE
protecting the life of the mother or if she is suffering from car- disabilities, or lunacy. The Bombay High Court’s decision in
diac diseases with a history of decomposition in the previous Nikhil D Datar and Others v Union of India (2008) on disability-
pregnancy. Other reasons include hypertensive crisis, cervical linked abortion has a bearing on the right to life of person
cancer or ductal carcinoma, diabetes, eye disease, down syn- with disabilities.
drome, adult onset of Huntington’s disease, and so on. Unin- On 29 September 2022, India took a giant leap in abortion
tended pregnancies brought on by the failure of any kind of rights. India’s top judiciary gave a landmark judgment ensur-
contraception also come under this category since they may ing the right to safe abortion. The bench headed by Justice
result in major health problems for the woman if denied access D Y Chandrachud noted that the marital status of a woman is no
to abortion. ground for depriving her right to abort an unwanted pregnancy.
The MTP Act, 1971 is deemed to be a progressive statute. The new judgment permits abortion to all women till 24 weeks
The features can be categorised by numerous sections like of pregnancy. Importantly, marital rape will also be consid-
the Section 3 of this act created authorised pregnancy termi- ered as a ground similar to rape and assault to terminate the
nation. A registered doctor may end a pregnancy up to unwanted pregnancy (Datta 2022). This is a huge develop-
20 weeks along with a pregnancy up to 24 weeks with the ment because this means that India’s top court has given primacy
help of at least two other doctors, if there is a threat to the to constitutional rights and right to health of women in drafting
mother’s health. Moreover, the failure of birth control meth- the judgment (Stillman 2014). The liberal understanding of
ods and rape as a source of conception have been linked to the abortion laws would be pertinent not just to cis-women but
mental trauma. It further states that if the unborn child is also other gender identities, including the LGBTQ+ community
going to be born with a severe disability, abortion can be and gender-diverse people. Moreover, the courts noted that
performed under Section 3(4), which requires the woman’s inequality in access to abortion violates the right to equality
consent in all other cases and the guardian’s approval in before the law.
cases where a minor is involved. However, it is pertinent to In the tragic case of the death of Savita Halappanavar, a
mention here that Section 3 of the MTP Act, 1971 is silent 31-year-old Indian dentist living in Ireland, was 17 weeks preg-
about the conditions which will be considered as substantial nant when she faced a medical emergency. When her husband
risk. Section 3(20) of the amended law, which took effect in rushed her to the hospital and requested for an abortion, the
2020, adds a medical board made up of a gynaecologist, a hospital administration categorically told them that being a
paediatrician, a sonologist or radiologist, and more members, Catholic country abortion was not a possibility. After waiting
which the official gazette notifies. Section 5(A) holds the right for six days in pain, her condition had worsened, and she was
to privacy of the information of abortion. diagnosed with sepsis, suffering major multiorgan failure. The
The new Medical Termination of Pregnancy (Amendment) case generated a lot of debate around the abortion laws in India
Act, 2021 allows the access to safe and legal abortion services and Ireland (Suroor 2012).
on therapeutic, genetic, humanitarian, and social grounds,
protecting universal access to all-inclusive treatment. The act Other landmark judgments: The Supreme Court of India in
permits the medical termination of pregnancy at 22 weeks if the Justice K S Puttaswamy (Rtd) v Union of India and Ors
she suffers from numerous abnormalities. It thus reiterated the (2017) case considered that the right to privacy is absolute un-
commitment to the sustainable development goals that aims to der fundamental rights of the Constitution. There is no sepa-
bring down the maternal mortality rate as well as provide uni- rate provision for abortion rights, hence it is only the Right to
versal access to sexual and reproductive health rights. A mar- Privacy and Liberty under Article 21 of the Indian Constitution
ried woman can undergo an abortion without the consent of which says that “no person shall be deprived of his life or per-
her husband. The husband cannot force a woman to endure an sonal liberty except according to procedure established by
abortion. In the case of coercion, a case for domestic violence law.” In the B K Parthasarathi v State of Andhra Pradesh (2000),
can be filed under IPC Sections 312/313, for causing miscar- the court observed that
riage. The new act permits the time period of abortion up to 20 The right to make a decision about reproduction is essentially a very
weeks of pregnancy upon the advice of one doctor and in the personal decision either on the part of the man or woman. Necessarily,
case of certain special categories of women (rape survivors, such a right includes the right not to reproduce. The intrusion of the
victims of incest, the differently abled and minors) between state into such a decision-making process of the individual is scruti-
nized by the Constitutional Courts both in this country and in America
20 and 24 weeks with two doctors as advisors. No medical
with great care.
professional can reveal the name of any woman who wishes to
terminate according to the provisions of the 2021 act. Live-in relationship was legalised in India after the verdict
One cannot deny the existence of several problems in the act of the Supreme Court in D Velusamy v D Patchaiammal (2014)
after carefully examining its provisions. With the legal and and Indra Sarma v V K V Sarma (2014) wherein it stated, “live
medical support, women who do find out about foetal abnor- in relationship is allowed if the couples are major, unmarried
malities after the 20th week of pregnancy, had the right to end and also they should be heterogeneous sex.” Though live-in rela-
their pregnancy. This gestational restriction, however, is only tionship was not legal when the MTP Act, 1971 was enacted, the
applicable to rape victims, incest victims, and women who court has now accepted this relationship. Hence, the MTP Act
have serious medical or mental illnesses including physical needs to be amended considering this new development.
SPECIAL ARTICLE
Murugan Nayakkar v Union of India (2017) tried to push for- Existing restrictive laws include gestational limits, targeted
ward the upper limit for termination to 24 weeks of pregnancy, regulation of abortion provider (TRAP) laws that enforce many
in critical situations like rape of a minor girl. conditions on abortion and limitations on the coverage under
private insurance policies (Guttmacher Institute 2015). The
Russia: Every time a political head of the state has changed in differences in access to this crucial reproductive health treat-
Russia, the legal system has oscillated between being permis- ment are a troubling part of the present situation in the US.
sive and being restrictive. In 1920, the Bolshevik government Where a woman resides should not affect her right to abortion.
permitted women the right to abortion. This right was then Women from more affluent origins have easier access to abor-
limited under Stalin’s regime in the early 1930s, and eradicated in tion treatment. In addition to having the social and financial
1936, mainly in the name of advocating population growth. resources to take time off from their work, locate and pay for
The abortion was again legalised after Stalin’s death in 1955 quality day care, and travel to another state if required, they
and has remained legal since (Agadjanian 2002). Soviet Russia are likely to have more complete health insurance (Connell
had one of the most liberal abortion laws in the world prior to 1987). Access limitations, particularly TRAP laws that might
its fall. Abortion was lawful under any situation in the first force clinics or whole clinic systems to close, are especially
trimester, and for all medical and certain non-medical grounds pernicious in the burden they inflict on women from the eco-
in the second trimester. Bill No 567, which established 13 nomically weaker section of society.
“social conditions” in which a woman might have an abortion The Roe v Wade decision on abortion, which was overturned
between the 12th and 22nd week of pregnancy, was enacted by by the US Supreme Court in a 6:3 vote on 24 June 2022, is ex-
the Russian government in 1996. Abortions were permitted pected to have a significant impact on the nation. The court
under this bill in some instances, such as when one parent was said that when Roe and the 1992 ruling in Planned Parenthood
unemployed, or the family already had three or more chil- v Casey, which supported Roe, was overturned, “the subject of
dren (Stewart 2004). The first serious abortion restrictions in abortion must be before the people’s elected representatives.”
Russia were put in place after 2003, when late-term abortions States can now determine whether to outlaw abortion, when
performed for social reasons other than medical ones, such as to do so, and in what situations (Lakshman 2022). “Trigger
homelessness and poverty, were made illegal. In January 2016, laws” that take effect once the Roe v Wade is overturned have
a bill in parliament attempted to “outrule the habit of unre- been passed by 13 states. Others, including Arkansas, Idaho, Mis-
stricted use of pharmacological drugs designed for pregnancy sissippi, Missouri, North Dakota, Oklahoma, Texas, Utah, and
termination.” It would have prohibited retail sales and re- Wyoming, have ancient laws still on the books that prohibited
stricted the groups that could purchase medical abortion pills abortion before 1973; these laws might again be reinstated
in bulk. Moreover, it would have prohibited abortions in for- (Jiménez and Bogel-Burroughs 2022).
profit facilities and barred public insurance programmes from Dobbs v Jackson Women’s Health Organization (2022), a deci-
covering their cost (International Campaign for Women’s sion by the Supreme Court, has split the country between states
Right to Safe Abortion 2016). who grant the right to abortions and those who do not. Women
Today, abortions in Russia are legal and are part of compulsory with unintended or undesired pregnancies, particularly ones
medical insurance coverage. Until twelve weeks, pregnancy that can jeopardise the mother’s life or are the consequence of
can be aborted at will. Late-term abortions are allowed only in rape or incest in certain jurisdictions, may have little choice
cases of abuse like rape or for medical reasons. The present but to seek medical care in other states. Many women will be
government is of the opinion that it is better to provide safe forced to resort to illegal, risky abortions closer to home due to
abortions to avoid illegal abortions. a lack of services and support systems (Luna 2020).
United States: Today, abortion is one of the most contentious In Conclusion

topics in the US. A democracy must view itself as being in Since sex determination tests are forbidden in India, many
grave danger when it repeals a constitutional right that has women opt for diagnostic testing, which is executed unlaw-
been in force for over 50 years. When Jane Roe, then 22 years fully by sex selective rackets. The only way to stop the issue
old, filed a lawsuit against the state of Texas in 1970 she of female feticide in the garb of abortion, which is so complicated,
believed the state had violated her constitutional right to is to address its core causes. Besides, men should also receive
abort her pregnancy. One of the most divisive Supreme Court health education on safe sex practices and prevention of
rulings in the US, Roe v Wade, was won by Roe (Sharma domestic abuse.
2022). The court concluded by a 7:2 margin in 1973 that “a The regressive anti-abortion laws not only violate women’s
woman’s decision whether or not to terminate her pregnancy” constitutional and reproductive rights, but also have detri-
is protected by the “right of privacy ... founded in the Four- mental effects on their physical and emotional health. Making
teenth Amendment’s idea of personal liberty and constraints them go through a full-term pregnancy against their choice is
upon state intervention.” unethical in a greater majority of catastrophic circumstances.
However, today there are a much higher number of state Due to unsafe abortion methods which are illegal, major life-
laws restricting abortion in a wide range of ways, and the threatening complications can arise. Legalising abortion
trend towards restrictive legislation seems to be accelerating. will make safe abortion practices possible and allow for the
SPECIAL ARTICLE
appropriate training of medical professionals, which will even- safe health services and sociocultural shift in the attitude
tually help to decrease or even halt these maternal fatalities. towards abortion. Moreover, it is important to treat it as any
Political will and policy commitment in the form of proper other form of medical care. The primary necessity is a
budget allocation, training, and infrastructural support, ground-based strategy in India. Abortion access must be pro-
followed with social inputs based on women’s needs, are tected by law. It must be equally accessible and everyone
essential prerequisites for effective programme implementa- should have full access to effective contraception. It is impor-
tion on abortion rights. Decriminalising abortion includes tant to have medical professionals with culturally competent
amending laws or any related policies and rules to achieve care training.
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nation of Pregnancy Act [Act No 34, 1971],” 110(9) Bombay Law Reporter 3293.
Agadjanian, V (2002): “Is ‘Abortion Culture’ Fading
Government of India, New Delhi. Pallikadavath, Stones W (2006): “Maternal and
in the Former Soviet Union?” Studies in Family
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Barua, A and H Apte (2007): “Quality of Abortion Targeted Regulation of Abortion Providers,” India: A Population-Based Study,” International
Care: Perspectives of Clients and Provides in Washington, DC, US. Family Planning Perspectives, Vol 32, No 3,
Jharkhand,” Economic & Political Weekly, Vol 42, Indra Sarma v V K V Sarma (2014): All India pp 120–25.
No 48, pp 71–80. Reporter 2014 SC 309. Sedgh, Gilda, J Bearak, Susheela Singh, Akirinola
B K Parthasarathi v Government of Andhra Pradesh International Campaign for Women’s Right to Safe Bankole et al (2016): “Abortion Incidence
& Ors (2000): (1) ALD 199, 1999 (5) ALT 715, Abortion (2016): “Russian Federation: Draft Between 1990 and 2014: Global, Regional, and
https://indiankanoon.org/doc/708608. Law in Russia Proposing Abortion Restrictions.” Subregional Levels and Trends,” Lancet,
Cates, W, D A Grimes and K F Schulz (2003): “The Jiménez, J and N Bogel-Burroughs (2022): “What pp 258–67.
Public Health Impact of Legal Abortion: 30 Are Abortion Trigger Laws and Which States Sharma, Nalini (2022): “Roe v Wade, the Case
Years Later,” Perspectives on Sexual and Repro- Have Them,” New York Times, 24 June. Overruled by US Supreme Court after 50 years,”
ductive Health, Vol 35, No 1, pp 25–28. Justice K S Puttaswamy (Rtd) v Union of India & Ors India Today, 25 June.
Chandrasekhar, Sripati (1994): India’s Abortion Expe- (2017): 10 Supreme Court Cases. Srivastava, Rai R K, S Saxena, S K Roy Chaudhary,
rience 1972-1992, University of North Texas Press. Khan, M E, S Barge and N Kumar (1999): “Abortion H K Singh (2013): “Unsafe Abortion: A Study in
Cohen, S A (2007): “Repeat Abortion, Repeat Unin- in India: Current Situation and Future Chal- a Tertiary Care Hospital,” Journal of Indian
tended Pregnancy, Repeated and Misguided lenges,” Implementing a Reproductive Health Academy of Forensic Medicine, July–September,
Government Policies,” Guttmacher Policy Review, Agenda in India: The Beginning, Pachauri S Vol 35, No 3, pp 71–73.
Vol 10, No 2, pp 8–12. (ed), Population Council, New Delhi, pp 507–29. Stewart, Meghan (2004): “Curbing Reliance on
Conger, J (1973): “Abortion: The Five Year Revolution Lakshman, S (2022): “US Supreme Court Overturns Abortion in Russia,” Human Rights Brief, Vol 11,
and Its Impact,” Ecology Law Quarterly, Vol 3, No 2, pp 51–54.
Landmark Roe V Wade Ruling on Abortion
No 2, pp 311–47.
Rights,” Hindu, 24 June. Stillman, M et al (2014): “Abortion in India: A
Connell, R W (1987): Gender and Power, Stanford, Literature Review,” Stillman, December, New
CA: Stanford University Press. Luna, Z (2020): Reproductive Rights as Human
Rights: Women of Color and Fight for Repro- York: Guttmacher Institute.
Datta, S (2022): “How Has the Supreme Court
ductive Justice, New York: New York University Suroor, Hasan (2012): “Indian Woman Dies after
Expanded Abortion Rights?” Hindu, 2 October.
Press. Being Refused Abortion,” Hindu, 15 November.
Devereux, G (1967): A Typological Study of
Abortion in 350 Primitive, Ancient and Prein- McBride, Dorothy E (2007): “Abortion in the United The Murugan Nayakkar v Union of India (2017):
dustrial Societies, Boston, US: Beacon Press, States: A Reference Handbook,” Santa Barbara: Supreme Court Cases Online SC 1092.
pp 97–152. CA: ABC-CLIO. Times of India (2022): “Abortion Laws around the
D Velusamy v D Patchaiammal (2014): AIR 2011 SC 479. Mutneja, Anu and Arti (ed) (2023): Gender World,” 25 June.
Foster, D G and K Kimport (2013): “Who Seeks Justice Extremity of Justice: Indian Perspective, Zampas, C and J M Gher (2008): “Abortion as a
Abortions at or after 20 Weeks?,” Perspectives Chhattisgarh, India: Orange Book Publication. Human Right: International and Regional
on Sexual and Reproductive Health, Vol 45, Nasrin, D S (2020): “Abortion–Offence or a Right?” Standards,” Human Rights Law Review, Vol 8,
No 4, pp 210–18. Daily Star, 30 May. No 2, pp 249–94.
W EPWRF India Time Series

NE
(www.epwrfits.in)
Wage Rates in Rural India
The EPW Research Foundation has added a module on Wage Rates in Rural India to its online database, EPWRF India Time Series
(EPWRFITS).
This module provides average daily wage rates, month-wise, in rupees, for various agricultural and non-agricultural occupations in
Rural India for 20 states starting from July 1998 (also available, data for agricultural year July 1995–June 1996). Additionally, it presents
quarterly and annual series (calendar year, financial year and agricultural year), derived as averages of the monthly data.
The wage rates for agricultural occupations are provided for ploughing/tilling, sowing, harvesting, winnowing, threshing, picking,
horticulture, fishing (inland, coastal/deep-sea), logging and wood cutting, animal husbandry, packaging (agriculture), general agricultural
segment and plant protection.
The non-agricultural occupation segment presents wage rates for carpenters, blacksmiths, masons, weavers, beedi makers, bamboo/cane
basket weavers, handicraft workers, plumbers, electricians, construction workers, LMV and tractor drivers, porters, loaders, and sweeping/
cleaning workers.
The data have been sourced from Wage Rates in Rural India, regularly published by the Labour Bureau, Shimla (Ministry of Labour
and Employment, Government of India).
With this addition, the EPWRFITS now has 32 modules covering both economic (real and financial sectors) and social sectors.
For subscription details, visit www.epwrfits.in or e-mail us at its@epwrf.in
CURRENT STATISTICS EPW Research Foundation
Wholesale Price Index Foreign Trade

The year-on-year (y-o-y) WPI-based infl ation rate declined to -4.1% in June The trade deficit narrowed down to $20.1 bn in June 2023 compared to $22.1 bn
2023 from 16.2% reported a year ago and -3.5% a month ago. The index registered a year ago. Exports contracted by (-)22.0% to $33.0 bn from $42.3 bn a
for primary articles decreased by (-)2.8% against 18.6% registered a year year ago and imports by (-)17.5% to $53.1 bn from $64.4 bn. Oil imports stood lower
ago and -1.8% a month ago. The rate of inflation for food articles reduced at $12.5 bn and non-oil imports at $40.6 bn compared to $18.9 bn and $45.4 bn,
to 1.3% from 13.7% a year ago. The index for fuel and power declined by respectively, reported a year ago. During April–June 2022–23, cumulative exports
(-)12.6% against 51.0% a year ago and the index for manufactured products declined by (-)15.1% to $102.7 bn and imports by (-)12.7% to $160.3 bn from their
was down by (-)2.7% compared to 9.4%. respective values of $121.0 bn and $183.5 bn registered a year ago.
Consumer Price Index Index of Eight Core Industries

The CPI-inflation rate decreased to 4.8% in June 2023 from 7.0% reported a The ICI grew by 4.3% in May 2023 compared to 19.3% registered a year ago.
year ago but was higher than 4.3% a month ago. The consumer food price Growth in electricity generation declined to -0.3%, coal segment to 7.2%,
index grew by 4.5% compared to 7.8% a year ago. The CPI-rural inflation rate crude oil to -1.9% and natural gas to -0.3% from their respective growth rates
reduced to 4.7% and the urban inflation rate to 5.0% from 7.1% and 6.9%, of 23.5%, 33.5%, 4.6% and 7.0% a year ago. Production of petroleum refi nery
respectively. According to Labour Bureau data, the CPI for agricultural products grew by 2.8%, steel by 9.2% and cement by 15.5% against 16.7%,
labourers (CPI–AL) stood at 6.0% in May 2023 compared to 6.7% a year ago and 15.1%, 26.2%, respectively. Growth in the fertiliser segment stood at 9.7%
the CPI for industrial workers (CPI–IW) at 4.4% against 7.0%. compared to 22.9% a year ago.
Movement of WPI-Inflation Rate January 2022–June 2023 Merchandise Trade June 2023
Year-on-Year in % June 2023 Over Month Over Year April–June
($ bn) (%) (%) (2022–23 over 2021–22) (%)
60
Exports 33.0 -5.7 -22.0 -15.1
Imports 53.1 -7.0 -17.5 -12.7
40 Trade Balance -20.1 -9.0 -8.8 -7.9
Data is provisional. Source: Ministry of Commerce and Industry.
Fuel and Power Primary Articles
20 Trade Balance January 2022–June 2023
$ billion
0 7
Manufactured -2.7%
Products -2.9%
0
-12.6%
-20
Jan F M A M J J A S O N D Jan F M A M June* Non-oil Oil -$7.0 bn
2022 2023 -7
* Data is provisional; Base: 2011–12 = 100.
-14
-$13.2 bn
Trends in WPI and Its Components June 2023* (%)
Financial Year (Averages) -21
Weights Over Month Over Year 2020–21 2021–22 2022–23 -$20.1 bn
All commodities 100 -0.4 -4.1 1.3 13.0 9.4 -28
Primary articles 22.6 0.6 -2.9 1.7 10.2 10.0 Total Trade Balance
-35
Food articles 15.3 2.1 1.3 3.2 4.1 7.3 Jan F M A M J J A S O N D Jan F M A M June
Fuel and power 13.2 -1.7 -12.6 -8.0 32.5 28.1 2022 2023
Oil refers to crude petroleum and petroleum products, while non-oil refers to all other commodities.
Manufactured products 64.2 -0.5 -2.7 2.8 11.1 5.6
*Data is provisional; Base: 2011–12=100. Source: Ministry of Commerce and Industry.
Movement of Index Values of Components of IIP January 2022–May 2023
Index Value
Movement of CPI Inflation January 2022–June 2023
210
Year-on-Year in % Electricity
201.6
15 168
142.3
12 126
128.1
Consumer Food 84
9 Manufacturing Mining
5.2% 42
6
CPI Miscellaneous 0
Jan F M A M J J A S O N D Jan F M A May*
3 2022 2023
4.8% * May 2023 are quick estimates; Base: 2011–12=100.
4.5%
0
Index for Eight Core Industries May 2023* (%)
-3
Jan F M A M J J A S O N D Jan F M A M* June* Weights Over Over Financial Year (Avgs) in %
2022 2023 Month Year 2021–22 2022–23
* Data is provisional. Source: National Statistical Office (NSO), Ministry of Statistics and Programme Implementation,
Base: 2012=100. Infrastructure industries 40.27@ 3.5 4.3 10.4 7.7
Coal 10.3 3.9 7.2 8.5 14.9
CPI: Rural and Urban June 2023* (%)
Latest Over Over Financial Year (Avgs) Crude oil 9.0 5.0 -1.9 -2.6 -1.7
Month Index Month Year 2021–22 2022–23 Natural gas 6.9 6.3 -0.3 19.2 1.6
CPI Combined 179.0 0.51 4.25 5.5 6.7 Petroleum refinery products 28.0 6.3 2.8 8.9 4.8
Rural (2012 = 100) 179.7 0.50 4.17 5.4 6.8 Fertilisers 2.6 16.4 9.7 0.7 11.3
Urban (2012 = 100) 178.1 0.39 4.27 5.6 6.4 Steel 17.9 -0.7 9.2 16.9 8.9
CPI: Occupation-wise# Cement 5.4 -0.2 15.5 20.8 8.7
Industrial workers (2016 = 100) 134.7 0.4 4.4 5.1 6.1 Electricity 19.9 3.6 -0.3 8.0 8.9
Agricultural labourers (1986–87 = 100) 1186.0 0.5 6.0 4.0 6.8 (Base: 2011–12=100); *Data is provisional; @ The revised eight core industries have a combined weight of 40.27% in the IIP.
* Provisional; # May 203; Source: NSO (rural and urban); Labour Bureau (IW and AL). Source: Ministry of Commerce and Industry.
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.
India’s Quarterly Estimates of Final Expenditures on GDP
2020–21 2021–22 2022–23
` Crore | At 2011–12 Prices Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Private final consumption expenditure 1548901 (-22.9) 1857460 (-7.4) 2188868 (1.5) 2229267 (6.7) 1822102 (17.6) 2121839 (14.2) 2426098 (10.8) 2333501 (4.7) 2182357 (19.8) 2298123 (8.3) 2478700 (2.2) 2399515 (2.8)
Government final consumption expenditure 412664 (9.2) 310074 (-25.9) 331300 (-4.2) 424184 (24.0) 403808 (-2.1) 346501 (11.7) 350565 (5.8) 474406 (11.8) 411243 (1.8) 332450 (-4.1) 348329 (-0.6) 485284 (2.3)
Gross fixed capital formation 669321 (-44.1) 1075997 (-1.6) 1164824 (2.6) 1345547 (13.6) 1077836 (61.0) 1209609 (12.4) 1179221 (1.2) 1412108 (4.9) 1297588 (20.4) 1325580 (9.6) 1273453 (8.0) 1538071 (8.9)
Change in stocks 2689 (-90.1) 4154 (-84.6) 4159 (-84.1) 4758 (-83.1) 28895 (974.6) 31402 (655.9) 29902 (618.9) 33964 (613.8) 31050 (7.5) 30591 (-2.6) 29868 (-0.1) 35954 (5.9)
Valuables 3791 (-91.4) 52366 (18.4) 50926 (37.2) 100936 (157.0) 22035 (481.3) 134378 (156.6) 73595 (44.5) 48751 (-51.7) 34959 (58.7) 108206 (-19.5) 45595 (-38.0) 37330 (-23.4)
Net trade (Export–Import) 6136 -28799 -120133 -167871 15631 -46285 -91258 -65580 -86460 -146624 -97506 -6264
Exports 523787 (-25.5) 660856 (-6.3) 646358 (-8.5) 725835 (3.9) 765031 (46.1) 826729 (25.1) 825929 (27.8) 888144 (22.4) 915111 (19.6) 927872 (12.2) 917492 (11.1) 994047 (11.9)
Less imports 517651 (-41.0) 689655 (-17.7) 766491 (-5.0) 893707 (12.0) 749401 (44.8) 873014 (26.6) 917188 (19.7) 953723 (6.7) 1001571 (33.6) 1074495 (23.1) 1014998 (10.7) 1000311 (4.9)
Discrepancies 80521 (18.2) 75478 (-17.0) 40637 (-5061.5) 18963 (-92.0) -59256 (-173.6) -145787 (-293.2) -117350 (-388.8) -124790 (-758.1) -126452 (113.4) -70326 (-51.8) -55812 (-52.4) -128375 (2.9)
Gross domestic product (GDP) 2724023 (-23.2) 3346731 (-5.6) 3660581 (1.7) 3955784 (3.5) 3311050 (21.6) 3651659 (9.1) 3850772 (5.2) 4112360 (4.0) 3744285 (13.1) 3878000 (6.2) 4022625 (4.5) 4361515 (6.1)
India’s Overall Balance of Payments (Net): Quarterly

2021–22 ($ mn) 2022–23 ($ mn) 2021–22 (` bn) 2022–23 (` bn)
Item Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 04 Q1 Q2 Q3 Q4
Current account 6559 -9734 -22167 -13424 -17964 -30902 -16832 -1356 484 [0.9] -721 [-1.3] -1661 [-2.6] -1010 [-1.5] -1387 [-2.1] -2466 [-3.8] -1384 [-2.0] -111.6 [-0.2]
Merchandise -30715 -44511 -59750 -54483 -63054 -78313 -71337 -52587 -2266 -3298 -4477 -4099 -4867 -6249 -5864 -4326.1
Invisibles 37275 34777 37583 41059 45090 47411 54505 51231 2750 2577 2816 3089 3480 3783 4481 4214.5
Services 25808 25579 27809 28319 31069 34426 38713 39075 1904 1895 2084 2130 2398 2747 3182 3214.5
of which: Software services 25136 26781 28356 29266 30692 32681 33541 34370 1854 1984 2125 2202 2369 2608 2757 2827.4
Transfers 19013 18991 21312 21132 22874 24773 28467 24762 1403 1407 1597 1590 1766 1977 2340 2037.1
of which: Private 19222 19212 21447 21350 23065 24991 28641 25080 1418 1423 1607 1606 1780 1994 2354 2063.2
Income -7547 -9792 -11538 -8392 -8853 -11788 -12675 -12606 -557 -726 -865 -631 -683 -941 -1042 -1037.1
Capital account 25392 39622 22500 -1707 22055 1461 28887 6540 1873 [3.7] 2936 [5.2] 1686 [2.7] -128 [-0.2] 1702 [2.6] 117 [0.2] 2375 [3.4] 538.0 [0.7]
of which: Foreign investment 11956 12575 -1283 -1439 -1238 12741 6641 4691 882 932 -96 -108 -96 1017 546 385.9
Overall balance 31870 31189 465 -16024 4595 -30379 11069 5579 2351 [4.6] 2311 [4.1] 35 [0.1] -1205 [-1.8] 355 [0.5] -2424 [-3.7] 910 [1.3] 459.0 [0.6]
Figures in square brackets are percentage to GDP.
Foreign Exchange Reserves Variation

7 July 8 July 31 March Month Year Financial Year So Far Financial Year
Excluding gold but including revaluation effects 2023 2022 2023 Ago Ago 2022–23 2023–24 2018–19 2019–20 2020–21 2021–22 2022–23
` crore 4527619 4250651 4340297 47800 276968 13034 187322 68050 668976 590416 302585 102680
$ mn 547203 536101 528083 3943 11102 -23514 19119 -14168 56831 94535 21435 -31532
Monetary Aggregates Variation

Outstanding Over Month Over Year Financial Year So Far Financial Year
` Crore 2023 2022–23 2023–24 2020–21 2021–22 2022–23
Money supply (M3) as on 30 June 23428425 415298 (1.8) 2387849 (11.3) 546847 (2.7) 1084665 (4.9) 2044615 (12.2) 1649151 (8.8) 1850031 (9.0)
Components
Currency with public 3234403 -53750 (-1.6) 152308 (4.9) 46406 (1.5) -42033 (-1.3) 402080 (17.1) 283860 (10.3) 240747 (7.9)
Demand deposits 2590448 268315 (11.6) 399440 (18.2) -21984 (-1.0) 269850 (11.6) 257428 (14.8) 217872 (10.9) 107606 (4.9)
Time deposits 17524894 191222 (1.1) 1816488 (11.6) 521802 (3.4) 855928 (5.1) 1376262 (10.9) 1136326 (8.1) 1482362 (9.8)
Other deposits with RBI 78680 9512 (13.8) 19613 (33.2) 623 (1.1) 919 (1.2) 8844 (23.0) 11093 (23.4) 19317 (33.1)
Sources
Net bank credit to government 7193043 -121535 (-1.7) 791265 (12.4) -75852 (-1.2) 27510 (0.4) 890012 (17.9) 627256 (10.7) 687903 (10.6)
Bank credit to commercial sector 15131378 384894 (2.6) 2000730 (15.2) 514128 (4.1) 701742 (4.9) 629822 (5.7) 948054 (8.1) 1813116 (14.4)
Net foreign exchange assets 4975197 -14371 (-0.3) 231791 (4.9) -110656 (-2.3) 129891 (2.7) 777810 (20.5) 275216 (6.0) -8756 (-0.2)
Banking sector’s net non-monetary liabilities 3901885 -166100 (-4.1) 638179 (19.6) -218790 (-6.3) -225115 (-5.5) 253594 (8.4) 202475 (6.2) 644504 (18.5)
Reserve Money as on 7 July 4363556 -21545 (-0.5) 268774 (6.6) 25896 (0.6) -23203 (-0.5) 570276 (18.8) 468904 (13.0) 317873 (7.8)
Components
Currency in circulation 3365805 -42841 (-1.3) 140833 (4.4) 91256 (2.9) -12715 (-0.4) 406451 (16.6) 279953 (9.8) 244804 (7.8)
Bankers’ deposits with RBI 923629 15520 (1.7) 110448 (13.6) -63545 (-7.2) -6848 (-0.7) 154979 (28.5) 177859 (25.4) 53751 (6.1)
Other deposits with RBI 74121 5775 (8.4) 17493 (30.9) -1816 (-3.1) -3640 (-4.7) 8844 (23.0) 11093 (23.4) 19317 (33.1)
Sources
Net RBI credit to Government 1249527 -72780 (-5.5) 122840 (10.9) -323909 (-22.3) -201599 (-13.9) 107495 (10.8) 350910 (31.9) 530 (0.0)
of which: Centre 1224123 -79959 (-6.1) 115017 (10.4) -339867 (-23.5) -226253 (-15.6) 106606 (10.8) 352627 (32.2) 1403 (0.1)
RBI credit to banks & commercial sector -170685 -11800 (7.4) 61601 (-26.5) 311415 (-57.3) -76242 (80.7) -168464 (83.9) -174344 (0.0) 449258 (0.0)
Net foreign exchange assets of RBI 4767660 37337 (0.8) 323161 (7.3) 2020 (0.0) 180305 (3.9) 608998 (17.0) 243079 (5.8) 144876 (3.3)
Govt’s currency liabilities to the public 30925 443 (1.5) 2474 (7.1) 438 (1.6) 639 (2.1) 565 (2.1) 1100 (4.1) 2273 (8.1)
Net non-monetary liabilities of RBI 1513871 -25254 (-1.6) 241302 (19.0) -35931 (-2.7) -73694 (-4.6) -21682 (-1.6) -48160 (-3.5) 279065 (21.3)
Scheduled Commercial Banks’ Indicators ( ` Crore) Variation

Outstanding Over Month Over Year Financial Year So Far Financial Year
(As on 30 June) 2023 2022–23 2023–24 2020–21 2021–22 2022–23
Aggregate deposits 19159901 457362 (2.4) 2198730 (13.0) 495858 (3.0) 1115987 (6.2) 1546019 (11.4) 1351801 (8.9) 1578601 (9.6)
Demand 2449123 267163 (12.2) 397801 (19.4) -21425 (-1.0) 268692 (12.3) 244190 (15.1) 211554 (11.4) 107684 (5.2)
Time 16710778 190199 (1.2) 1800928 (12.1) 517283 (3.6) 847295 (5.3) 1301831 (10.9) 1140247 (8.6) 1470916 (10.2)
Cash in hand 113854 -453 (-0.4) 5907 (5.5) 22021 (25.6) 23591 (26.1) 3487 (4.0) -4822 (-5.3) 4337 (5.0)
Balance with RBI 871167 18924 (2.2) 77450 (9.8) 110280 (16.1) 61260 (7.6) 6507 (1.2) 140744 (25.9) 126470 (18.5)
Investments 5673323 65573 (1.2) 713522 (14.4) 230853 (4.9) 258175 (4.8) 715177 (19.1) 266422 (6.0) 686200 (14.5)
of which: Government securities 5672567 65632 (1.2) 713569 (14.4) 230819 (4.9) 258245 (4.8) 722935 (19.3) 266547 (6.0) 686143 (14.5)
Bank credit 14391693 383096 (2.7) 2008901 (16.2) 491477 (4.1) 716458 (5.2) 578649 (5.6) 1044027 (9.6) 1783920 (15.0)
of which: Non-food credit 14363787 391943 (2.8) 2018412 (16.3) 509071 (4.3) 708457 (5.2) 569159 (5.6) 1050270 (9.7) 1819026 (15.4)
Capital Markets 14 July Month Year Financial Year So Far 2022–23 End of Financial Year
2023 Ago Ago Trough Peak Trough Peak 2020–21 2021–22 2022–23
S&P BSE SENSEX (Base: 1978–79 = 100) 66060.90 (23.7) 63228.51 53416.15 (1.0) 59106.44 66060.90 51360.42 63284.19 49009 (63.7) 57362 (18.4) 58992 (0.7)
S&P BSE-100 (Base: 1983–84 = 100) 19941.55 (22.3) 19177.33 16305.97 (0.9) 17644.91 19941.55 15562.65 19137.18 14689 (68.2) 17423 (20.1) 17602 (-0.7)
S&P BSE-200 (1989–90 = 100) 8433.42 (21.1) 8103.55 6965.58 (1.1) 7406.09 8433.42 6602.62 8144.55 6211 (71.1) 7412 (20.9) 7389 (-2.0)
CNX Nifty-50 (Base: 3 November 1995 = 1000) 19564.50 (22.7) 18755.90 15938.65 (0.5) 17398.05 19564.50 15293.50 18812.50 14507 (67.9) 17153 (19.7) 17360 (-0.6)
CNX Nifty-500 16765.45 (22.4) 16084.05 13702.65 (0.3) 14601.95 16765.45 12950.75 16003.95 12149 (73.7) 14652 (22.2) 14558 (-2.3)
Figures in brackets are percentage variations over the specified or over the comparable period of the previous year. | (-) = not relevant | - = not available | NS = new series | PE = provisional estimates
Comprehensive current economic statistics with regular weekly updates are available at: http://www.epwrf.in/currentstat.aspx.
Secondary Market Transactions in Government Securities and the Forex Market—Weeks Ending 7 and 14 July 2023
1 Settlement Volume of Government Securities (G-Sec) Transactions (Amount in ` Crore)
Week Ended 14 July 2023 7 July 2023 15 July 2022 2023–24* 2022–23**
Number Volume Number Volume Number Volume Number Volume Number Volume
of Trades of Trades of Trades of Trades of Trades
Outright 23028 302225 17535 263679 17234 196812 306005 4350327 231017 3006713
Repo 5646 803080 5235 774851 4091 673074 73981 12400550 54577 9016538
TREP 4680 1510886 4800 1551000 6403 1791955 66930 21179381 93746 27042406
Total 33354 2616192 27570 2589530 27728 2661840 446916 37930258 379340 39065656
Daily Avg Outright 4606 60445 3507 52736 3447 39362 4435 63048 3254 42348
Daily Avg Repo 1129 160616 873 129142 818 134615 973 163165 700 115597
Daily Avg TREP 936 302177 800 258500 1281 358391 881 278676 1202 346698
2 Instrument-wise Outright and Repo Details (Amount in ` Crore) 3 Top 7 Traded Central Govt Dated Securities (14 July 2023)
Security Description Trades Value (` Crore) % Value to Total
Outright Repo Outright Repo Outright Repo
7.26% GS 2033 13270 136945 51.26
Central Government 267151 615503 192411 584539 163898 422284
7.41% GS 2036 3524 41875 15.67
State Government 7638 158859 9717 152469 8648 122463 7.06% GS 2028 1252 17477 6.54
Treasury Bills 27435 28718 61550 37843 24266 128326 7.38% GS 2027 1061 12592 4.71
Total 302225 803080 263679 774851 196812 673074 7.17% GS 2030 582 9334 3.49
4 Category-wise Buying/Selling Activity (Market Share %) (14 July 2023)
Outright Reverse Repo Repo TREP Lending TREP Borrowing NDS-Call Lending NDS-Call Borrowing Forex
Category Buy Side Sell Side Buy Side Sell Side Buy Side Sell Side Buy Side Sell Side Buy Side Sell Side
Cooperative Banks 2.17 2.23 0.18 0.89 0.28 1.52 47.17** 3.05** 0.35 0.36
Financial Institutions 1.13 0.00 0.23 0.00 3.93 5.08 - - 0.29 0.30
Foreign Banks 21.40 19.45 29.93 29.43 1.19 8.22 0.96 0.88 40.94 41.45
Insurance Companies 3.88 2.16 1.66 0.00 13.06 0.00 - - - -
Mutual Funds 8.03 6.46 43.39 0.00 69.95 1.55 - - - -
Others 6.05 5.62 0.03 1.44 9.45 2.97 - - - -
Primary Dealers 15.48 22.92 6.19 45.78 0.00 6.57 0.00 71.93 - -
Private Sector Banks 24.83 26.13 8.73 11.74 0.91 22.44 27.37 6.52 32.54 32.95
Public Sector Banks 17.04 15.04 9.67 10.73 1.21 51.66 24.50 17.61 25.88 24.94
5 Trading Platform Analysis—Trading Value (Amount in ` Crore) (14 July 2023)

Week Ended OTC NDS-OM Brokered Deals
Number Volume Market Number Volume Market Number Volume Market
of Trades Share (%) of Trades Share (%) of Trades Share (%)
Central Government 879 41827 16.16 20575 216942 83.84 90 6010 2.32
State Government 217 4690 67.32 231 2277 32.68 42 1874 26.90
Treasury Bills 157 12844 40.99 463 18494 59.01 37 4390 14.01
Total 1253 59361 19.98 21269 237714 80.02 169 12274 4.13
6 Settlement Volume of Forex Segment

Segment 14 July 2023 7 July 2023 15 July 2022 2023–24* 2022–23**
Number Volume Number Volume Number Volume Number Volume Number Volume
of Deals ($ mn) of Deals ($ mn) of Deals ($ mn) of Deals ($ mn) of Deals ($ mn)
Cash 1452 21869 1528 27236 1686 24896 23104 367288 25030 380663
Tom 1932 27439 1590 23689 2176 29544 29742 422905 32796 459052
Spot 100630 87544 93322 94419 79166 81356 1324515 1301150 1243277 1372793
Forward 500 5043 500 6292 794 8853 63517 574085 55584 578771
Total 104514 141894 96940 151636 83822 144649 1440878 2665427 1356687 2791279
Average 20903 28379 24235 37909 16764 28930 21831 40385 19951 41048
7 Tenor-wise Forward Trades
Tenor 14 July 2023 7 July 2023 15 July 2022

Number Value % to Total Number Value % to Total Number Value % to Total
of Deals ($ mn) Value of Deals ($ mn) Value of Deals ($ mn) Value
< 30 days 61 1498 30 124 4674 74 66 1777 24
> = 30 Days & <= 90 Days 87 1817 36 38 621 10 169 4136 27
> 90 Days & <= 180 Days 34 644 13 37 318 5 78 1146 18
> 180 Days & <= 360 Days 46 960 19 28 435 7 68 1677 25
> 1 year 22 124 2 23 244 4 16 117 6
Total 250 5043 100 250 6292 100 397 8853 100
* Data pertain to 1 April 2022–14 July 2023; ** Data pertain to 1 April 2021–15 July 2022.
(i) Tables 1 to 5 relate to Securities Segment, and (ii) Tables 6 and 7 relate to Forex Segment.
Source: Clearing Corporation of India Limited (CCIL).
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LETTERS

T he country will remember the tragic

Notes for Contributors

Papering over the Cracks

Others»» Hindi & English Editorial, Employment News, Malayalam Newspapers

Type in Search box of Telegram @LBSNEWSPAPER And

Politics in a Desperate Need for Dialogue

Reforming the Goods and Services Tax

Amid a Legal Conundrum and employment potentials, which created

For copies write to:

school, INSEAD, in collaboration with

the Government of India to achieve Figure Innovation

cators coincides with higher innovation

outcomes, which could be viewed as

high innovation efficiency. In both cases,

account of the poor representation of in-

dicators used in constructing the index

robustness of the index in representing

the innovation process at work in the

ment firmly upholds the direct bearing

of innovation on development outcomes

correlation coefficient between the inn-

BR the global innovation and human devel-

UP Similar estimates of rank correlation

TS tion index at the state level.

0 5 10 15 20 ficient between the innovation input

KL score is five points higher than the ena-

seen as cases of extreme innovation effi-

PB ciency. Yet, considering their position

BR association (Figure 4). The rank correla-

10 12 14 16 18 significance of 5%, which suggests weak

(Trow 1973) by the last decades of the

units in the 2012 edition. The other source

200 200 200

-200 -200 -200

C&L Crude C&L Crude C&L Crude

it to Mark Juergensmeyer, a reputed

or both. The QE undertaken has resulted

QE in millions of dollars fund

INSTITUTE OF ECONOMIC GROWTH

Monetary Policy Debates in and Barro and Gordon (1983). They

the Age of Deglobalisation rules rather than have discretion because

Money, Banking & Finance

and Periyar had been a very deep one,

of Periyar respect and equality. Beyond this con-

and Periyar had been a very deep one,

Abdul Shaban, Ayona Datta, Sheema Fatima

related digital infrastructure. 6

of the city, the native Konkani commu- 2

nity, which is better educated and com- 0

EPWRF India Time Series

Exploring Abortion Laws

United States: Today, abortion is one of the most contentious In Conclusion

W EPWRF India Time Series

Wholesale Price Index Foreign Trade

Consumer Price Index Index of Eight Core Industries

India’s Overall Balance of Payments (Net): Quarterly

Foreign Exchange Reserves Variation

Monetary Aggregates Variation

Scheduled Commercial Banks’ Indicators ( ` Crore) Variation