1. Four Questions About Corruption and Development in India
Robert Klitgaard defines corruption as “where a market enters where society says it shouldn’t.” Corruption turns certain decisions into illicit transactions, which, as per societal rules, ought to be taken on the basis of some other criteria. Since 2011, corruption has been a central issue in India’s political economy, and certain enforcement actions have been taken as part of a broader anti-corruption strategy. This essay considers data on anti-corruption enforcement under India’s main anti-corruption law and places it in the broader context of draconian laws coupled with moderate state capacity, to raise certain questions regarding the efficacy of India’s anti-corruption strategy and the possibility of unintended consequences. Read it to get a perspective on an issue that may be shaping the behavior of the government bureaucracy in India.
2. A Big Picture View of Income Tax Disputes in India
In her speech presenting the budget for 2019-20, Finance Minister Nirmala Sitharaman invoked the Tamil Sangam era poet Pisiranthaiyar’s allegory for government-taxpayer relations: “A few mounds of rice from paddy, that is harvested from a small piece of land, would suffice for an elephant. But what if the elephant itself enters the field and starts eating? What it eats would be far lesser than what it would trample over.” This essay shows that, for more than a decade, the elephant has been rampaging in the field (even though some of these years have been times of poor harvest), and what makes it worse is that hardly any of the crops the elephant takes actually make it to its stomach. Read it to understand an important aspect of changing state-capital relations in India.
3. Agricultural Marketing Laws Prevent Agricultural Markets from Developing
The union government’s farm laws died a sad death, but their repeal speaks loudly about the entrenched inefficiencies in the agricultural market and the interests that benefit from them. This essay contrasts what an ideal agricultural market should look like for an entrepreneurial farmer and describes how the existing system looks nothing like it—the monopsonies of APMCs, the lack of adequate marketing infrastructure, the absence of contract farming, and the fear of stock limits under the Essential Commodities Act. As a consequence, the Indian farmer is barely a free agent. Read it to understand how agriculture is one of the few product markets that continues to be shackled by the government in India.
4. Can Regulatory Fees Harm Markets? Analyzing the Proposals of India’s Bankruptcy Regulator to Increase its Fees
It seems strange to analyze the process by which regulators fix fees for their regulated entities. After all, an independent regulator has to find sources through which it can finance its activities and retain its independence from the government. Moreover, charging regulated entities a fee for regulating them is common across regulators. But what about a case where the regulator proposes to increase annual fees for some entities eight times in one go and to collect 20 percent of revenue as annual fees from other entities? Is this still fair, or could the regulator cannibalize its market in the process? Read this essay to chew over why these are important questions for regulatory governance.
5. Looking at Lucas’s Question After Seventy-five Years of India’s Independence
In a paper published in 1988, Robert Lucas wrote: “Is there some action a government of India could take that would lead the Indian economy to grow like Indonesia's or Egypt's? If so, what, exactly? If not, what is it about the ‘nature of India' that makes it so? The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else.” Taking this quote as a point of departure, this essay gives an overview of India’s GDP per capita since independence from a comparative perspective. Read it to understand India’s journey towards prosperity—where it has come from, where it is, and where it needs to go.
6. Land Pooling: The Unanticipated Benefit of Reforming Land Acquisition Law
Industrialization and urbanization are at the heart of India’s development agenda. Urban planners since independence have been preoccupied with the question of how to deploy land to enable cities to develop. The path that they have predominantly taken has been to use land acquisition law to plan and develop cities or to develop industry. In 2013, reforms to land acquisition law made acquisition much more expensive. This essay explains how one of the main consequences of this reform was the move to lessen coercive methods of land use, including land pooling. Read it for yet another example of unintended consequences of policy change.
7. The Gloss in the Gross Domestic Product Estimate
India’s GDP growth estimates since 2021 are being widely cited to suggest that the Indian economy has recovered well from the economic crisis induced by the pandemic and the policy responses to it, and that it is doing better than other economies. This essay questions the validity of these assertions by comparing GDP in recent quarters with that in the pre-pandemic period, considering sector-wise performance since the pandemic, and placing the international comparison in perspective. Read it to understand the complexity of interpreting the data on economic output since the pandemic.