12152 - EAC or CEA: Know the difference between Bibek Debroy and Arvind Subramanian's role

EAC or CEA: Know the difference between Bibek Debroy and Arvind Subramanian's role

Key role of Economic Advisory Council is to analyse any issue, economic or otherwise, referred to it by the Prime Minister and advising him thereon. 

 Bibek Debroy (L) and Arvind Subramanian (R). Photo: IANS

By Hitisha Jain

Updated: Tue, Sep 26, 2017

05:19 pm

Mumbai, ZeeBiz WebDesk

Taking account of current economic situation, Prime Minister Narendra Modi on Monday formed Economic Advisory Council (EAC) which will be headed by current member of NITI Aayog, Bibek Debroy. 

Other members of the Council are Ratan Watal, former finance secretary, Surjit Bhalla, CMD, Oxus Investments, Rathin Roy, Director, NIPFP and Ashima Goyal, Professor, IGIDR. 

Key role of EAC is to analyse any issue, economic or otherwise, referred to it by the Prime Minister and advising him thereon. Also, to address issues of macroeconomic importance and presenting views thereon to the Prime Minister. This could be either suo-motu or on reference from the PM or anyone else, the statement said. 

PM Modi forms Economic Advisor Council, Bibek Debroy to be the Chairman

Interestingly, this move came in just after a week when the government decided to extend term of chief economic advisor to Government of India Arvind Subramanian, by one year. 

The question is: How the committee is different from Subramanian's role?

EAC is an independent body which will advise the prime minister on economic and related issues. 

Madan Sabnavis, Chief Economist, Care Ratings said that having more such think-tanks is always useful as it will lead to debate, discussion and decisions.

"Having an economic advisory council is useful as it would work as advisor to the PM, which is different from CEA who advises Ministry of Finance," he said. 

"The Niti Ayog is already there to carve out broader policies for the government while specific issues pertaining to the PM or FM would be taken up by the other two posts. The canvas for economic discussion is really large and there are fixed roles for various such outfits/positions," Sabnavis explained. 

Subramanian, was the mind behind the term "JAM trinity" (Jan Dhan, Aadhaar and Mobile numbers), pitched ideas to deal with "bad bank" as rise in bad loans severly affect the balance sheets of banks. Moreover, he also proposed the concept of Universal Basic Income. 

Now, it will be interesting to see what decisions EAC body takes to boost the economy. 

7915 - Niti Aayog to define development goals after reviewing 12th Plan - Hindustan Times

Niti Aayog to define development goals after reviewing 12th Plan

Brajesh Kumar, Hindustan Times, New Delhi| 

Updated: May 05, 2015 00:07 IST

The National Institution for Transforming India (NITI) Aayog will start working on formulating national developmental goals after it conducts the mid-term appraisal of the 12th five-year plan. Bibek Debroy, member of the newly-constituted Aayog, told HT in an interview that the national developmental goals would be worked out in consultation with the states once the commission finalises the mid-term appraisal of the 12th five year plan (2012-2017). “I think the focus of the Niti Aayog should be the social sector, medium and small scale industries and environment,” he said. Some goals such as Swachh Bharat, Make in India, Skill India and Clean Ganga have already been declared by Prime Minister Narendra Modi and the Aayog is expected to be the nodal agency to coordinate between different ministries and state governments to achieve the goals set under these programmes. India is unlikely to achieve the goals stipulated in the 12th plan but the appraisal exercise will be instrumental in framing the national developmental goals, a mandate of the Niti Aayog as per the cabinet resolution that junked the erstwhile Nehruvian era Planning Commission.

Debroy also said Aadhaar linked Direct Benefit Transfer (DBT) was a key in measuring the outcome of the government schemes and having a realistic subsidy regime. “Why a person has to mandatorily buy a cooking gas cylinder? The better way is to give him the money and let him decide how he wants to use it,” he said.

The government has set June 2015 as the deadline to bring all schemes under the DBT mode and provide an Aadhaar number to all beneficiaries.

Correct identification of the poor is key for ensuring desired outcomes of the scheme and for that, the economist suggested that it should be ‘decentralised’ by allowing the gram sabha to identify the poor.

Debroy also said India needed a district level template for to reduce poverty and rejuvenate agriculture — the subject of the two task forces set up by the commission — to have real impact.

“I am not suggesting more centrally sponsored schemes but a different framework,” he said, adding that the two task forces would submit their report by June end.

7799 - NITI Aayog plans subsidy regime revamp - Live Mint

FIRST PUBLISHED: FRI, APR 17 2015. 12 12 AM IST

NITI Aayog plans subsidy regime revamp

Planning body wants to use data from Aadhaar, Jan Dhan scheme and census to better target subsidy regime

Asit Ranjan Mishra  |  Ragini Verma 

Photo: Pradeep Gaur/Mint

New Delhi: NITI Aayog, the successor to the Planning Commission, proposes to marry data from the unique identity project Aadhaar, the Jan Dhan accounts opened by banks as part of the government’s eponymous financial inclusion drive and the socioeconomic and caste census to better target subsidies.

The plan has been inspired by the so-called JAM (Jan Dhan, Aadhaar, Mobile) trinity proposed by the finance ministry.

Once effected, this approach will provide a fillip to the direct transfers of food and fertilizer subsidies to their intended beneficiaries and eliminate intermediaries and leakages. Given recent statements, including by Prime Minister Narendra Modi, urging the rich to voluntarily give up subsidies, the creation of such a database may eventually make it easier for the government to not only better target subsidies but also restrict them.

In an interview, Niti Aayog member Bibek Debroy said that thus far, direct benefit transfers (DBT) have been confined to cooking gas subsidies and the transfers of pensions and student scholarships.

“We are trying to take stock of how and to what extent we can marry different sets of databases (to push the DBT agenda). The matching is difficult, but I am setting this out as a target. There is the Aadhaar database, there is the Jan Dhan Yojana database, there will be a database of the socio-economic survey,” Debroy said.

The JAM trinity was originally proposed by chief economic adviser in the finance ministry Arvind Subramanian in the Economic Survey 2014-15. A day later, finance minister Arun Jaitley said in his budget speech that the government would focus on the JAM trinity to implement DBT.

“The JAM Trinity will allow us to transfer benefits in a leakage-proof, well-targeted and cashless manner,” he said.

The estimated direct fiscal cost of both central and state government subsidies on products and services such as rice, wheat, pulses, sugar, kerosene, cooking gas, naphtha, water, electricity, fertilizer, and iron ore is about Rs.3.78 trillion, or about 4.2%, of gross domestic product (GDP).

A panel constituted by the Modi government under former food minister Shanta Kumar to overhaul the 50-year-old Food Corporation of India (FCI) has recommended direct cash transfers of food subsidy in the name of the female head of the family, linking it to Jan Dhan bank accounts and Aadhaar unique identity numbers.

The committee, which submitted its report in January, has estimated that this can save the government up to Rs.35,000 crore “which can be ploughed back to agriculture through investments in irrigation and building better roads and markets network”. The panel also suggested that the fertiliser subsidy be given directly to farmers in cash and the fertilizer sector be completely deregulated.

Debroy said implementation of the plan will take time as states are still verifying the socio-economic and caste census data.

The socio-economic and caste census has surveyed all rural households in the country to collect data on literacy, housing, assets and caste. Once done, data for each administrative region has to be presented before the gram panchayats (village councils), which need to verify it.

Still, the merger of the streams of data will be useful in expanding DBT to food and fertilizer subsidies as well as to areas such as issuing soil health cards and kisan credit cards, Debroy said.

Himanshu, an associate professor at Jawaharlal Nehru University, Delhi, and a Mint columnist, said while the concept is good, the data of the socio-economic and caste census need to be tested for beneficiaries of the National Food Security Act.

“It also needs to be remembered that the survey will only give you data, but will not tell you who is poor and who is not poor. The government needs set benchmarks to create the target groups,” he added.

Former Planning Commission member N.C. Saxena said one problem is that most of the Jan Dhan accounts that have been opened are not operational and bank branches are far from the villages, making it difficult for a large part of the rural population to access accounts. The socio economic and caste census is yet to be completed, he added.

“The methodology under which the survey is being carried out is faulty and hence if the government relies on these survey results, it will end up targeting the well-off,” Saxena said. .

More than 130 million Jan Dhan bank accounts have been opened and 757 million Aadhaar numbers issued in India, which has some 904 million mobile phone connections.

“It is possible to envisage that when the JAM trinity becomes linked, the goal of periodic and seamless financial transfers to bank accounts after identification through the Aadhaar number can be implemented with immeasurable benefits to helping the lives of the poor,” the Economic Survey said.

“Even as it focuses on second- and third-generation reforms in factor markets, India will then be able to complete the basic first-generation reforms. This will be the grand bargain in the political economy of Indian reforms,” it added.

The Economic Survey, critiquing the present subsidy regime, said cash-based transfers based on the JAM trinity offer possibilities to effectively target public resources to those who need it most. “Success in this area will allow prices to be liberated to perform their role of efficiently allocating resources and boosting long-run growth,” it said.

According to the survey, electricity subsidies benefit mainly the relatively wealthy 67.2% of households that are electrified and a large fraction of subsidies allocated to water utilities are spent on subsidizing private taps when 60% of poor households get their water from public taps.

The Economic Survey said that while at first glance, kerosene seems a good candidate for price subsidy as it is popularly conceived to be consumed mainly by the poor, 59% of subsidized kerosene allocated through the public distribution system (PDS) is actually consumed by households, with the remainder lost to leakages. Only 46% of total kerosene consumption is by poor households, it said.

“Even in the case of the food distributed via the PDS, leakages are very high (about 15% for rice and 54% for wheat, with most of these leakages concentrated in the above the poverty line segment),” the survey added.

7635 - Debroy panel for complete switching of Railway tracks - Financial Express

Debroy panel for complete switching of Railway tracks

By: Santosh Tiwari | New Delhi | March 21, 2015 5:23 am

The annual Railway Budget could be something of the past with the high-level committee, headed by NITI Aayog member Bibek Debroy likely to suggest this at its final meeting on Saturday. 

This could be the committee’s least revolutionary suggestion. The report will be submitted at the end of the month.

Sources told FE the committee is likely to suggest coming out with an upfront passenger fare subsidy — this was R34,928 crore in FY15 — and getting both the central and state governments to pay for this as they do for the annual electricity subsidy for agriculture right now. While the Centre will pay for all central railway lines, states like Maharashtra will pay for suburban train networks.

Subsidised tickets, the committee is of the view, must be linked to Aadhaar IDs, in keeping with the government’s overall philosophy on cutting leakages on subsidies. The Economic Survey had pointed out that the bottom 80% of households comprised only 28.1% of the total passenger traffic on the railways, making it clear that it is not the poor who get subsidised.

In addition, since private firms cannot run trains right now as the tracks and signalling are controlled by the railways, the committee has suggested this be transferred to an independent entity and, with a railway regulator in place, allow private firms to run both passenger and freight trains.

A person associated with the report said there would be no annual presentation of the Railway Budget and talk of dividend and gross budgetary support — the Union Budget, he said, will only mention the social obligation that will be borne by the Centre.

The committee has also suggested greater private entry into production of coaches and locomotives. All the production units in the railways would be made completely independent by turning them into holding companies. Rationalisation of zones and divisions; decentralisation of power to GM and DRMs; complete switch to commercial accounting for all the railway functions; and delinking of RPF, hospitals and schools are among the other steps outlined by the committee.

The Railway Board’s role in the whole scheme will be limited to what is actually run by the railways and the HR functions will also be revamped completely.

7582 - Building on Aadhaar - Indian Express

Building on Aadhaar

The UIDAI is a tool. That tool isn’t going to help identify below poverty line households, the beneficiaries of subsidies.

Written by Bibek Debroy | Updated: March 17, 2015 5:50 am

As of the first half of March, 786 million of those who are 18 and older have got Aadhaar numbers. The largest absolute numbers are in Maharashtra, Uttar Pradesh and West Bengal. There are two broad channels for Aadhaar enrolment — the Unique Identification Authority of India (UIDAI) itself and the Registrar General of India (RGI). For instance, in Lakshadweep, Dadra & Nagar Haveli, Tamil Nadu, West Bengal, Odisha, Nagaland, Manipur, Jammu and Kashmir, Mizoram, Arunachal Pradesh, Meghalaya and Assam, the enrolment responsibility is with RGI. The UIDAI is responsible for other geographical areas. One test of how enrolment is progressing is to gauge what percentage of the population has been covered. If you want to be statistically correct, this isn’t that simple.

The distribution of the 18-plus population is available for Census 2011, not 2015. One can extrapolate from those numbers to get the denominator. Or, the 2011 numbers can be used as a base, recognising that population growth will mean one may get more than 100 per cent enrolment. For trends, extrapolation seems unnecessary. One may as well use Census 2011 numbers. All enrolment numbers are public-domain information on the UIDAI website. There is also another issue, that of comparing residents to citizens. But that may not be quantitatively important.

For UIDAI-driven enrolment states/UTs, 86 per cent of the target population has been covered, from 127.6 per cent enrolment in Delhi to 46.3 per cent in Bihar. For RGI-driven enrolment states/UTs, 82 per cent of the target population has been covered, ranging from 108 per cent in Lakshadweep to 1.1 per cent in Assam. At that broad-brush level, the UIDAI’s track record is better than the RGI’s. This is clear from average daily enrolments too, running at about 9,40,000 for the UIDAI and 65,000 for the RGI. There are around 111 UIDAI districts where enrolment is still less than 50 per cent and 206 RGI districts where enrolment is less than 50 per cent. But these are stock numbers.

The increments or flows are more important. The story there is a sharp increase in enrolments in UP and a slowing down in Maharashtra, Karnataka, Rajasthan, MP and Gujarat, especially in the more difficult districts. 

Once people have got Aadhaar numbers, what next? 

Aadhaar and biometry only ensures there aren’t two individuals with identical names and identical biometry at the same address. It prevents multiplicity. Thereafter, it is a question of what use one makes of Aadhaar. To use technical jargon, Aadhaar must be seeded into assorted programmes. 

This means: 

one, beneficiary data must be digitised; 

two, if beneficiaries don’t possess Aadhaar numbers, they must be enrolled; 

and three, if they possess Aadhaar numbers, this must be matched with beneficiary databases. So far, the primary success has been in seeding bank accounts (old or new) with Aadhaar numbers.

The next step, which is where beneficiaries come in, is direct benefit transfers (DBTs). In August 2014, a study was undertaken by the then Planning Commission that matched beneficiary data for five schemes (post-matric scholarships for SC/ST/minorities, pensions, the MGNREGA, PDS, subsidised LPG connections) with UIDAI numbers in 300 districts. That exercise is a bit old, so one needn’t state precise findings. Suffice to say that there were major problems with the first point. To the extent digital beneficiary data existed, there were problems with points two and three. I am not aware of robust studies done after, in government or outside it. Anecdotally, that digitisation of the beneficiary database seems to be working better for LPG connections than for scholarships, pensions, the MGNREGA or PDS. Yet another issue makes it worse.

The UIDAI is a tool. That tool isn’t going to help identify BPL (below the poverty line) households, the beneficiaries of subsidies. 

This is a socioeconomic issue and is important in segments like LPG connections or PDS, where the “poor” aren’t self-identified. 

The NSS and poverty estimates based on NSS can’t work. The NSS is a survey, not a census. It can tell us what percentage of the population is below the poverty line in say, Maharashtra, regardless of how the poverty line is defined. It can’t tell us whether a specific household is poor or not.

That apart, NSS samples generally surface at intervals of five years. However, we have the rural development ministry’s Socio-Economic and Caste Census (SECC) of 2011. One of its three objectives is, “To enable households to be ranked, based on their socioeconomic status. State governments can then prepare a list of families living below the poverty line.” There can be errors of omission (excluding those who are poor) and commission (including those who are not poor). Therefore, suppressing the religion and caste bit, the rest of the information will be put up in: one, the panchayat office; two, another prominent location in the panchayat; or three, the office of the BDO.

That allows for errors of omission and commission to be taken care of through objections. Hence, there is a draft list. After objections are taken care of, there is a final list. Note that, “No changes would be allowed in the data for one year following the publication of the final list.” That may be operationally necessary. 

However, in March 2015, final lists are available for only 118 out of 640 districts. Draft lists are available in 541 out of 640 districts. If it takes such a long time to firm up BPL lists, how can DBTs work? Does a household’s status remain invariant for four years and more? 

None of Tamil Nadu’s districts figure in either the draft or final lists. But the process was supposed to be completed in June 2013, with initial enumeration over by September 2012. Tamil Nadu isn’t the only state with such a timelag. An inherently good idea (DBT) is still partly stuck in the pipeline of implementation.

The writer is member, Niti Aayog. Views are personal

First Published on: March 17, 201512:20 am

3458 - Aadhaar card: Compulsion by stealth - Economic Times

Aadhaar card: Compulsion by stealth

Bibek Debroy  

Thursday June 27, 2013, 09:24 AM

The Aadhaar card has been around for a few years now. If you go back and read pronouncements made by senior government functionaries when Aadhaar was launched, in 2009, many of them said Aadhaar isn't mandatory. UIDAI's website still proclaims this. Since the effective launch in 2010, 340 million Indians have voluntarily registered themselves for Aadhaar cards already. There can't be too many places in the world where such remarkably consistent choice has been exercised in favour of a government scheme. In the 4/5 years that have passed since launch, the tenor of pronouncements by senior government functionaries has changed. Initially, it was, Aadhaar isn't mandatory. Then it became, Aadhaar isn't mandatory. But it will be extremely difficult to obtain public goods and services without Aadhaar. Therefore, we won't make it mandatory. But we will force you to make a choice in favour of Aadhaar. Did you read about the decision taken by Jharkhand government a few days ago? Marriages won't be registered in Jharkhand without Aadhaar numbers. By the way, in May 2013, 49.49% of Jharkhand's population had Aadhaar numbers.

Marriage registration isn't compulsory in India. There is a Compulsory Registration of Marriages Bill floating around (since 2005). Though marriage registration has benefits, I think compulsory registrations is a bad idea, both because such provisions are difficult to enforce and because they impose additional transaction costs on the poor. So what about the non-enumerated 51.51% in Jharkhand? I guess the response will be that they will all eventually be enumerated and till then, marriages can be hold. I asked an UIDAI representative about Jharkhand government's decision and about the earlier May decision of Delhi government, making Aadhaar mandatory for property and marriage registration. (There is a PIL in Delhi High Court on this.) His response was that Aadhaar wasn't mandatory for Union public goods and services, though the Union had no control over what State governments did. That's easy, blame State governments, though this 2013 response is quite different from the 2009 response.

So I asked him about EPFO. Aadhaar has been made mandatory for EPFO, hasn't it? And EPFO can't be blamed on State governments. I was thereupon told that this is only for those who enrol in EPFO after March 2013 (I am not sure this is quite right) and therefore, Aadhaar isn't universally mandatory. 

That's a facetious argument. But whichever way you look at it. Aadhaar is gradually being made mandatory. That's understandable. A lot of people who take policy decisions have a 1984 kind of streak (I mean the Orwell novel) in them and probably love the Idea advertisement. Apart from transaction costs on poor, what bothers me about this is the non-transparent way government has gone about this. One might as well have said, right from the beginning, that Aadhaar was going to be mandatory. It would have raised some more hackles and caused a problem with the legislation. But it would have been honest and transparent.