On proposed labour reforms: As the Union government comes out to say that the suspension of labour laws not reform of labour laws, read this very good, analytical piece that tells you why it wasn’t going to solve the problem any way. The binding constraint on the Indian economy are not its strict labour laws, so their removal at a time like this isn’t just insensitive and cruel, but plain unhelpful. First, even before the lockdown, it was not supply that has been responsible for India’s slowing growth, but sluggish demand. So the way to restart the economy is to boost demand - through cash transfers and income support.
Second, even if boosting production and supply is your concern, there are many more pressing issues. Read this on how operational constraints like the high costs of starting up and formalising businesses, enforcement of contracts and concerns with land-related issues need to be addressed much before you need to worry about labour laws.
Less than 5% of firms surveyed by the World Bank Enterprise Survey reported labour regulations as the biggest obstacle for their business.
Finally, if labour rights in India were so pro-labour, you'd imagine that workers’ share in output would increase over time. But it has not. See the graphic below from this piece that shows how the share of labour (wages) in the value of organised manufacturing has declined since the 1990’s, while that of profits has increased. (i.e. even as the value of what we produce has increased, this increased value has accrued disproportionately to owners of capital and not owners of labour).
How could they not know?: A really insightful, data rich piece here on India’s migrant population that addresses a question you may have had. How was the Indian government so incredibly ill-prepared for the migrant exodus that followed the lockdown? The answer lies in government data. This piece argues that unlike what government data thinks, migrants are not one homogenous group.
Short term migrants (seasonal workers, construction labour etc.) are more vulnerable, coming to cities not to make a better life for themselves but to survive. They are poorer, from disadvantaged groups (lower castes), more likely to migrate between states and are often at the mercy of a contractor. Long term migrants are much more stable, come from better-off backgrounds and have moved in search of better opportunities. The vast majority of these are women who have moved out of their village or town to get married. Government data (2011 Census) does not make this distinction.
It defines a migrant as a person who is at a different place from his or her “usual place residence" at the time of the Census enumeration. In doing so, it severely under counts the short-term migrants and may even completely miss the circular or seasonal migrant. The majority of work migrants according to the census are those who’ve lived away from their homes for more than 10 years.
I'm just aghast we go this so wrong in 2020.
So now what?: On possible solutions to this absence of data, read this piece here on how “bureaucratic imagination” can be used to find solutions and deliver benefits and cash transfers to those that have been left out, and this one on how India’s GST experience can help with the implementation of One Nation One Ration Card.
What does poverty look like?: This very interesting paper shows that over 90% of the world’s poor in developing countries do not have the capacity to protect themselves from Covid-19. Their living environments do not allow them to follow the prevailing WHO recommendations of washing, isolating, and treatment.
The numbers are all in the piece but let me introduce you to a nifty tool that can show you what being poor looks like. The brain child of the late Swedish academic Hans Rosling, Dollar Street is a tool to visualise different levels of deprivation. What do toilets look like at different level of income? Soap? Alcoholic drinks? Drinking water? Toys? You can toggle for different levels of income, regions and countries. I like to use it to put a face to the data. It’s also a great tool for presentations (the whole website is), or to show to your children when they’re being ungrateful.
Turn on the TV?: Folks at the Education Policy Institute of Bihar have put together an ATLAS of ICT access for government school students in India. They use ASER data to show that 63% of students in government schools in Bihar do not have access either a TV or a smartphone in their homes. They are therefore unlikely to benefit from Government of India’s One Channel for One Class Scheme to ensure education as schools remain closed. In Kerala on the other hand, only 4% of government school students face this constraint. The data demonstrates the need for a differentiated rather than a uniform strategy across States. The map below shows variations across Indian states.
You needn’t eliminate corruption, just do it right: Listen to this fascinating podcast with University of Michigan's Yuen Yuen Ang about how it not the level of corruption, but the nature of corruption that determines its impact on a country’s growth. For instance, did you know that both China and India have the same absolute levels of corruption (when measured on perception indices yes, but they do)? But because China’s corruption is one of “access” and not one of “speed” i.e. you pay a bribe to get access to productive resources and not to get your work done (faster) – it stimulates investment. Politicians can share in this growth and everyone benefits. In India on the other hand, corruption is mainly petty or speed money, which impedes growth. Local political economy does not allow the bureaucrat/ politician to ensure their stake in the success of a business and blocking progress is more lucrative. Dr Ang also talks about how it isn’t as if developed countries don’t have corruption – they are do but it just more sophisticated, and legalised. This is very interesting work and builds on Prof. Mushtaq Khan’s lectures I attended as a student at SOAS. You can watch him speak here on why governance reform (or reducing corruption) is not a pre-requisite for growth.
It's all good: Finally, in how-much-worse-can-it-get news of the week, a group of monkeys have snatched and run away with test samples of suspected C-19 patients in Meerut, Uttar Pradesh. There’s a viral video if you’d like to watch. There is nothing to worry of course because “the matter is being investigated”.