tag:blogger.com,1999:blog-27399794421301097542024-03-19T17:25:47.628+05:30WritersBlockMainly links to my writing on law, policy and governanceKannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.comBlogger83125tag:blogger.com,1999:blog-2739979442130109754.post-20746689922537928382020-05-28T17:07:00.000+05:302020-05-28T17:07:08.943+05:30Who is that migrant labourer ?<div dir="ltr" style="text-align: left;" trbidi="on">
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We are nearing the end of May and lakhs of workers are still making their way every day across the country from the industrial metros to their villages in UP, Bihar, MP, Orissa, Bengal and other eastern states. <span style="-webkit-font-kerning: none;"></span></div>
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<span style="-webkit-font-kerning: none;">It is an incredible reverse migration, a movement of millions of people the likes of which we have not witnessed since independence. The exodus started when the lockdown was extended after 21 days in mid April. Since then, we have seen a continuous stream of workers on the highways with their meagre belongings, walking, or riding on cycles, motorbikes, autos and taxis, or hitching rides in tankers and trucks, even incredibly sailing in boats to reach their villages anywhere from hundreds to a couple of thousand kms away. </span></div>
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<span style="-webkit-font-kerning: none;">Belatedly, from May 1, the central government started point to point trains to transport workers home, but these have been sufficient only to meet a fraction of the demand. Getting a ticket on one of these trains involves negotiating a kafkaesque bureaucracy and for the worker is like winning a lottery ticket. The movement by road has continued unabated during May as many workers gave up on the trains after repeated attempts and decided to make the journey on their own.</span></div>
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<span style="-webkit-font-kerning: none;">How many workers have left so far? The government on May 23rd claimed that a total of 7.5 million workers had returned to their villages, 3.5 million by trains. The actual numbers are likely to be much higher. No government, at the centre or in the states, has an idea of the number of workers who are travelling making their own arrangements.</span></div>
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<span style="-webkit-font-kerning: none;">Who are these people so desperate to return?</span></div>
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<span style="-webkit-font-kerning: none;">The media terms them “migrant workers”. The term conjures up an image of people moving around “here and there”, from one work site to another for a short period before heading back home. Like seasonal labourers at a construction site who, come harvest, head back to their villages and fields.</span></div>
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<span style="-webkit-font-kerning: none;">But those on the road are not just construction labour, street vendors, brick kiln workers and the like who may have a seasonal cycle. There are Metal fabricators, machinists, carpenters, textile workers, diamond cutters, tailors, restaurant workers, security guards, taxi and auto drivers. They live in Mumbai, Delhi, Chennai, Bengaluru, Surat, Ludhiana and Jalandhar. They have been in the city for years, some for a decade or more.</span></div>
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<span style="-webkit-font-kerning: none;">These are workers of small and medium factories and enterprises. Some could be working even in large projects and for government through a contractor like the workers building “Namma Metro” or managing garbage for BBMP in Bengaluru. Others like the taxi drivers are self employed. </span></div>
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<span style="-webkit-font-kerning: none;">True they were born in some other state. True they do not have their own houses and stay in rented accommodation. True they have a certain attachment to their ancestral villages. But does any of this justify calling them migrants?</span></div>
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<span style="-webkit-font-kerning: none;">Switch for a moment to the famed software engineers of Bengaluru? Most of them have come from other places to work here, many stay in rented accommodation and may move to another city when they find it opportune. We do not refer to them as “migrant software engineers”, do we? Students come from all over India to study in Bengaluru? We don’t refer to them as migrant students do we? Then why the appellate “migrant” for workers from out of state?</span></div>
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<span style="-webkit-font-kerning: none;">What is so problematic with this terminology, one may ask?</span></div>
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<span style="-webkit-font-kerning: none;">The labelling of out-of-state workers as “migrant labour” allows the government to abdicate on its basic responsibilities to them as citizens. In Bengaluru for example, these workers despite working here for 8-10 years are not able to participate in local elections and do not have access to the public distribution system or any type of health insurance. Labour laws do no apply to them. In the eyes of the state, they have no individual identity except being part of collective “migrant labour”. </span></div>
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<span style="-webkit-font-kerning: none;">A worker who has thus been recast as “migrant labour” is easy prey for the would be employers who can take advantage of his low status and pay less for his labour. Businesses’s thrive on this labour. It is a cosy arrangement between employers and the state. After keeping money for basic expenses, workers send money home to their families. These workers have no savings.</span></div>
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<span style="-webkit-font-kerning: none;">For these workers, lockdown has meant loss of wages. Many have not been paid even for the work they did in March. The government has been content to appeal to employers to pay workers and landlords to not take rent but this expectedly has made no difference on the ground. With no access to rations, even food has become difficult. Workers feel abandoned by their employers as well as the state.</span></div>
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<span style="-webkit-font-kerning: none;">Stuck in an alien heartless country, all the workers want to do is make their way home. The common refrain is “We will die of hunger if we stay here any longer. We will make our way to our village and be with family. True, we may get infected with the virus on the way. But if we die, at least it will be in the presence of our loved ones”.</span></div>
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<span style="-webkit-font-kerning: none;">When the lockdown was extended in April, workers started coming on the streets, clashing with the police and making their desire to go home very clear. They initially had hope that the government would understand their plight and arrange trains or busses to get them home. Finding that there was no help forthcoming, many decided to take things into their own hands and started walking towards their villages.</span></div>
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<span style="-webkit-font-kerning: none;">In making the journey, workers have had to defy the lockdown, brave police persecution and hunger, suffer unimaginable physical hardship and literally put their life on the line. Many have perished on the road, some after reaching their destination.</span></div>
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<span style="-webkit-font-kerning: none;">Those making their own way on the highways travel through a hostile land. Villagers living in the vicinity of the highway are suspicious that they may be carrying the virus and are positively unwelcoming. State boundaries are a huge challenge. </span></div>
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<span style="-webkit-font-kerning: none;">In the words of Vikramjeet, a carpenter who made his way from Ahmedabad to his village in Uttar Pradesh some 1300 km away after walking for 13 days, “ borders are created within the country; people are moving like cattle; there are check-posts everywhere and all is uncertain now, like at the time of independence.” Before starting on his trek, he had spent 8 days visiting Ahmedabad railway station every morning to see if he could board a train home.</span></div>
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<span style="-webkit-font-kerning: none;">The central government has the keys to what the stranded workers desperately need - transport by trains to their home states. When it permitted workers to travel to their homes in early May, it could easily have organised trains on a continuous basis and provided access directly for workers like the way it has organised “Vande Bharat” missions to bring Indian Citizens from outside the country. </span></div>
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<span style="-webkit-font-kerning: none;">Instead, workers have been treated as if they were the sole responsibility of the state where they were working and the state where their village was located. The central government is content to be just a transport operator, providing rail service. A worker is able to travel only if he registers his need with two states, the two agree to a train service between them and he is lucky enough to be selected for a seat allotment by those taking the decision on who should travel. In the eyes of the central government, the worker appears to be a second class citizen.</span></div>
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<span style="-webkit-font-kerning: none;">As of this writing (May 27), the government claims that they are moving 3.5 lakh workers a day by trains. The numbers registered with the state governments show no signs of decreasing. It appears that the mass exodus will continue into June.</span></div>
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<span style="-webkit-font-kerning: none;">When the workers have eventually made their way to their homes - as they surely will - and the dust settles on this great migration, what will remain in many million minds is the memory of betrayal by employers, weeks of hunger, authorities devoid of humanity and a long march through a hostile country, an idea of India in tatters. Most deny that they will ever come back; poverty and unemployment will force some to change their resolve.</span></div>
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<span style="-webkit-font-kerning: none;">May 28 2010</span></div>
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Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com1tag:blogger.com,1999:blog-2739979442130109754.post-59105886606480704902020-04-21T13:02:00.000+05:302020-04-21T15:54:29.178+05:30Letter to a friend - Our perception of China<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="-webkit-font-kerning: none; color: #444444;">Dear friend,</span></div>
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<span style="-webkit-font-kerning: none; color: #444444;">Below is a quote from a recent mail of yours welcoming the Indian Govt. policy changes to make Chinese investment in India difficult:</span></div>
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<span style="color: #444444; font-style: italic;">“Important and welcome decision today!</span></div>
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<span style="color: #444444; font-style: italic;">For reasons I fail to understand China, our number one enemy always had an unfair advantage over Pakistan, our number two enemy!”</span></div>
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<span style="-webkit-font-kerning: none; color: #444444;">I will take up just a fragment from your quote, “....China, our number one enemy...”, for discussion below.</span></div>
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<span style="-webkit-font-kerning: none; color: #444444;">Is China our enemy, number one or otherwise? </span></div>
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<span style="-webkit-font-kerning: none; color: #444444;">It is not unreasonable to suppose that you are using the word ‘enemy’ in the context of the nation. The Oxford dictionary defines ‘the enemy’ in this context as a hostile nation or its armed forces in time of war. We are certainly not at war with China.</span></div>
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<span style="-webkit-font-kerning: none; color: #444444;">India and China do have an unresolved issue and that is the lack of a settled boundary. This problem is historical and dates back over a hundred years to the period of British Rule. On the boundary issue, a recent statement of the Government of India has this to say:</span></div>
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<span style="-webkit-font-kerning: none; color: #444444;">“The two sides have agreed to appoint Special Representatives to explore the framework for a boundary settlement from the political perspective of the overall bilateral relationship.The 20th round of the Special Representatives Talks on the India-China boundary question was held in New Delhi on 22 December 2017. The two sides are committed to seeking a fair, reasonable and mutually acceptable solution to the boundary question through dialogue and peaceful negotiations”</span></div>
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<span style="-webkit-font-kerning: none; color: #444444;">So both countries agree that there is a “boundary question” and that a mutually acceptable solution must be found through peaceful negotiations. In this situation, how can one justify referring to China as an enemy?</span></div>
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<span style="-webkit-font-kerning: none; color: #444444;">Neither country wants the boundary question to overshadow their “overall bilateral relationship”. What is this relationship about? The short answer is trade.</span></div>
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<span style="-webkit-font-kerning: none; color: #444444;">China is India’s largest supplier of goods (nearly 14% of all imports at $70 billion in 2018-19) followed by the US. It is the third largest consumer of Indian goods (5% of all exports in 2018-19). Only US and UAE import more Indian goods. China and US are India’s two main trading partners ( each roughly accounting for 10% of all trade). Overall trade with China has increased by 18 times between 2002-03 to 2018-19. </span></div>
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<span style="-webkit-font-kerning: none; color: #444444;">This trade bears looking into in greater detail. <a href="https://www.thehindubusinessline.com/economy/indian-importers-from-china-facing-coronavirus-heat-to-discuss-problems-with-govt/article30963576.ece"><span style="-webkit-font-kerning: none; color: #007aff;">Items imported from China</span></a> include components and parts for electronics, telecom and mobile products, active ingredients for pharmaceuticals and fertilisers. India’s exports include organic chemicals, mineral fuels, cotton and metal ores. The “telecom revolution” in India, the proliferation of smart phones, even the success of the Indian pharmaceutical industry are all tied to inexpensive parts and materials available from China. Our economy is significantly linked with that of China.</span></div>
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<span style="-webkit-font-kerning: none;"><span style="color: #444444;">While the principle of “free trade” itself can be debated, in the present circumstances where India has accepted and practices it, the rapid rise in trade with China has to be seen as being beneficial to both countries. A most recent example of this is the <a href="https://www.livemint.com/news/india/india-gets-6-50-000-coronavirus-testing-kits-from-china-ramps-up-global-hunt-for-more-11587058395732.html"><span style="-webkit-font-kerning: none; color: #007aff;">import of 650000 Covid test</span></a></span><span style="color: #5856d6;"> </span>kits (which arrived on Apr 16th) and the order for 15 million PPE kits from China at a time when India was facing a severe shortage of these items. Would India source test kits or China supply them if the two were “enemies”?</span></div>
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<span style="-webkit-font-kerning: none;">Is this trade relationship without its problems? The answer is of course no; India has an adverse balance of payments with China as its imports exceed exports by a huge margin. But this problem is not unique to India and these are issues that any country has to be prepared for it opts for “free trade”.</span></div>
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<span style="-webkit-font-kerning: none;">To summarise, China and India have a long-standing boundary issue for which they seek a mutually acceptable solution through dialogue; they are also partners in mutually beneficial trade that has been growing rapidly over the years. It makes no sense to see China as an “enemy”. Then , you may ask, do we look upon China as a “friend”?</span></div>
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<span style="-webkit-font-kerning: none;">In my view, all nation states today act in their own interest. Even a nation that appears to be a “friend” is probably acting in its own interest. Political system, religion or shared culture does not make nations “friends” necessarily. Nepal shares religion and culture with India as well as open borders. However, we have an ongoing boundary dispute and there was a crisis in relations between India and Nepal for six months in 2015-16 when Nepal alleged that India was blockading goods coming into the country. Numerous dictatorial regimes around the world are considered to be “friendly states” by the US. When it comes to defending its own trade interests, the US is ready to bulldoze its “natural allies” be it India or Europe, into submission.</span></div>
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<span style="-webkit-font-kerning: none;">China will pursue its own self interest and so must we. Being neither “friend” nor “enemy”, we can still be still good neighbours.</span></div>
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<span style="-webkit-font-kerning: none;">Sincerely,</span><br />
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<span style="-webkit-font-kerning: none;">X</span></div>
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Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-75369223306891994262019-02-01T17:08:00.000+05:302019-02-01T17:09:16.153+05:30PMFBY – providing business to corporate insurers or relief to stricken farmers?<div dir="ltr" style="text-align: left;" trbidi="on">
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<span id="docs-internal-guid-69f83665-7fff-1e49-c073-7a4ab0fd468d"><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"><i>This piece was first published in <a href="https://scroll.in/article/910611/heres-how-modis-crop-insurance-scheme-profits-private-insurers-far-more-than-it-does-farmers">Scroll.in</a> on 1/2/2019</i></span></span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The Modi government replaced the existing crop loss insurance schemes with the Pradhan Mantri Fasal Bima Yojana in 2016. The new scheme was</span><a href="http://pib.nic.in/newsite/PrintRelease.aspx?relid=134432" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">advertised</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> as incorporating the best features of the earlier schemes while removing all their shortcomings.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">But as the <a href="http://kkasturi.blogspot.com/2019/01/this-piece-was-published-in-scroll.html">first part</a> in this series reported, after the scheme’s introduction, crop insurance coverage shrunk, with a drop in the number of enrolled farmers.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The second part of the series takes stock of the extent of public funding for crop insurance and examines whether the funds are being utilised efficiently for the intended purpose.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">How was crop insurance funded in India in the past?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Just as any other insurance, crop loss insurance works on the idea of spreading risk across a large number of people exposed to the same risk – in this case, farmers.</span><a href="http://www.aicofindia.com/AICEng/General_Documents/Annual_Report/Annual_Report_2015-16.pdf" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span></a></div>
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<a href="http://www.aicofindia.com/AICEng/General_Documents/Annual_Report/Annual_Report_2015-16.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Insurers consider</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> the risk of crop damage in India to be high as there is a record of a significant loss of food grain production once in every three years. Unsurprisingly, premiums </span><span style="background-color: white; color: #333333; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">arrived at on actuarial considerations, that is, after a statistical analysis of past production figures,</span><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> are also high. The average across India was 10%-15% of sum assured for kharif or monsoon crops, with higher premiums in some areas and seasons. In 2016, for instance, it was between 19%-21% for kharif crops in Gujarat, Rajasthan and Maharashtra.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Such high premiums are unaffordable for small and marginal farmers who constitute 86% of the farmer population. The state needs to step in with public funds to make crop insurance work.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Two models for public funding of crop insurance have been tried in India. Before the launch of PMFBY, multiple insurance schemes were in operation using both these models.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">Trust model: </span><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Farmers pay premiums to a trust which manages the funds and compensation payouts. Premiums are set at levels affordable by farmers. When crop loss compensation claims exceed the capacity of the trust to pay, the state steps in and makes good the deficit. </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">This model was followed by the National Agricultural Insurance Scheme (NAIS). Premiums were fixed by the government at relatively low levels – averaging under 3.5% for kharif crops as a whole. A public sector entity, the Agriculture Insurance Company, acted as the trust which collected premiums and serviced claims. If claims exceeded the ability of AIC to pay, the government with central and state contributions made good the deficit. </span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">Insurance model: </span><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Here an insurance company collects premiums and pays compensation. Premiums are charged based on actuarial considerations that spread the risk across the insured, minimise the residual risk borne by the company and allow it to cover its overheads and make a profit. Farmers pay a portion of the premium and the state pays the rest. By paying actuarial rate premiums, the government together with the farmers have actually absorbed most of the risk.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">This model was used in two schemes – the Modified National Agricultural Insurance Scheme (MNAIS) and the Weather Based Crop Insurance Scheme. Premiums and claims were managed by insurance companies. Insurers charged actuarially determined premiums – averaging across India to 10-11% for kharif crops – which were paid partly by farmers and partly by the government with central and state contributions. In order to control its overall expenditure, the government defined caps for the premium subsidy (75% of the premium in the case of MNAIS) and premium rate (11% for kharif crops in MNAIS). Insurers setting premium rates higher than this cap had to reduce the sum assured so that government expenditure did not increase beyond the limit.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">How does PMFBY funding differ from earlier schemes?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">In 2015-16, the scheme based on the trust model, the National Agricultural Insurance Scheme, </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">accounted for 64% of the farmers and 70% of the sum assured. </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The other schemes based on the insurance model not only had a smaller footprint, most of the farmers enrolled in them had been compelled to take insurance along with public sector loans.</span><span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;"> </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The</span><a href="https://cag.gov.in/content/report-no7-2017-performance-audit-union-government-agriculture-crop-insurance-schemes" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">voluntary participation</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> was virtually non-existent in the Modified National Agricultural Insurance Scheme and less than 3% of farmers enrolled in the Weather-Based Crop Insurance Scheme.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">All three schemes were replaced by PMFBY in 2016. The PMFBY conformed to the insurance model with actuarially determined premiums – all India average of 12-15% for kharif crops. The government fixed the premium contributions to be paid by farmers at levels similar to the National Agricultural Insurance Scheme and paid the rest with central and state contributions. </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">From the insurer’s perspective, the PMFBY was made much more attractive than earlier schemes. The caps present earlier on sum insured as well as the ‘premium subsidy’ provided by the government were relaxed. This meant that insurers could look forward to a potentially larger business from higher sums assured as well as higher enrolment. Since premium paid by farmers was fixed at low levels, the government would be largely footing the bill.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">Where does money for crop insurance come from?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Even before PMFBY was introduced, crop insurance was largely funded by the state. In the last three years, more than 80% of the overall spending has come from public funds.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The table below shows the contribution of farmers and the government for the last five years. Government expenditure appears under two heads, premium contribution for all schemes and claims support for NAIS, the ‘trust model’ scheme that existed till 2015-16.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivymthgE77mjCb9hP7WES81RhJHW34yUqwOdPQucYZHpUJb1tozeH5uxL2B0DDVWWN-0alMEyLjlj1plf_rd7FA2gq5S_QP8KvjHHlLwgv98wS3g0EOMU6GtNISLNrrUxOLtsb5Tpg6yqx/s1600/Table+2.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="179" data-original-width="462" height="153" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivymthgE77mjCb9hP7WES81RhJHW34yUqwOdPQucYZHpUJb1tozeH5uxL2B0DDVWWN-0alMEyLjlj1plf_rd7FA2gq5S_QP8KvjHHlLwgv98wS3g0EOMU6GtNISLNrrUxOLtsb5Tpg6yqx/s400/Table+2.jpg" width="400" /></a></div>
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<span lang="EN-GB" style="font-family: "calibri" , sans-serif; font-size: 11pt; line-height: 115%; white-space: pre-wrap;">Data Sources: </span><span lang="EN-GB" style="font-family: "calibri" , sans-serif; font-size: 11pt; line-height: 115%; white-space: pre-wrap;">Lok Sabha (MoAFW 2018a, MoAFW 2018b, MoAFW</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"><span lang="EN-GB" style="font-family: "calibri" , sans-serif; font-size: 11pt; line-height: 115%;">2018c); Rajya Sabha (MoAFW 2018d)</span></span></div>
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<span style="font-family: "arial"; font-size: 11pt; white-space: pre-wrap;">It is surely in the public interest to ask if the funds are being utilised efficiently to achieve its objectives. One measure to look at is what portion of government expenditure actually reaches the intended beneficiaries.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">Where is the government money going?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Before 2016, insurers retained less than 12% of government funding for any season and the rest reached farmers. That situation changed dramatically with the advent of the PMFBY.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The chart below indicates the portion of government expenditure retained by insurers after settling claims of farmers during successive kharif seasons. Kharif season accounts for two-thirds of the sum assured over a year and data for this season is available till 2017 unlike for rabi or winter season. The portion shown as ‘routed to farmers’ is the flow of money to farmers over and above the premium amount collected from them.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1jUt4F6xqVrlKu6r2VE5cnnsCZ9pg2EhlX67Z-3oqmj-KlZhLa3kx-5lxs92h7pbjK9HKOE5tsYzO0EkFqlFSqEqFgDQRXgJw2A7tdrOc7X0EyrfyWdbNQw38owizufIwtcX8paSmZO1U/s1600/Chart3.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="384" data-original-width="572" height="267" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi1jUt4F6xqVrlKu6r2VE5cnnsCZ9pg2EhlX67Z-3oqmj-KlZhLa3kx-5lxs92h7pbjK9HKOE5tsYzO0EkFqlFSqEqFgDQRXgJw2A7tdrOc7X0EyrfyWdbNQw38owizufIwtcX8paSmZO1U/s400/Chart3.jpg" width="400" /></a></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"><span lang="EN-GB" style="font-family: "calibri" , sans-serif; font-size: 11pt; line-height: 115%;"><br /></span></span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"><span lang="EN-GB" style="font-family: "calibri" , sans-serif; font-size: 11pt; line-height: 115%;">Data Sources: </span><span lang="EN-GB" style="font-family: "calibri" , sans-serif; font-size: 11pt; line-height: 115%;">Agricultural Statistics at a Glance, 2016; Lok Sabha (MoAFW 2018a, MoAFW 2018c); Rajya Sabha (MoAFW 2018d)</span></span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Examining 2015, the year before PMFBY was implemented, is instructive. This was a major drought year. The bulk of claim payouts to farmers was under the NAIS, which accounted for 70% of the sum assured, where the government paid the major share of the claims as they exceeded AIC’s capacity to pay. This meant that almost all the money ploughed in by the government was paid to farmers.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">With the advent of the PMFBY, upwards of 80% of the actuarial rate premium is paid by the government to the insurers who have retained about 46% and 18% of it respectively in the last two kharif seasons. The amount retained by insurers has increased by an order of magnitude after the PMFBY was introduced in 2016. In two kharif seasons, 2016 and 2017, this amounted to Rs 9,300 crores.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">Is the PMFBY model superior to the NAIS model?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The Modi government has tried to respond to the criticism that it has allowed insurers to make windfall gains with the PMFBY.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The agriculture secretary</span><a href="https://timesofindia.indiatimes.com/india/crop-insurance-scheme-farmers-at-the-helm-of-benefits/articleshow/66913601.cms" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">claims</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> that the PMFBY model is superior to the NAIS model, as the government no longer carries the liability for claims which were “unlimited” earlier and could result in a huge payout in case of a major drought.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">This argument is naive to say the least. Insurance companies have far lower capacity to absorb risk than the government and must minimize the risk they carry. They use actuarial rates to decide premiums which allow risk to be spread across the insured – in this case farmers and the government which pays over 80% of the premium. High risk equates to high premiums.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">While in some specific year a situation can arise when the payout to farmers is higher than the premium collected, when cumulated over several years, premium collected on actuarial considerations must exceed the payouts to farmers and overheads to enable insurers to turn in profits. The government will spend more money over several years on actuarial rate premiums than if it just provided claims support when needed as in the NAIS.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The PMFBY with its actuarial rate premiums allows the participation of private insurers which is not possible in a scheme such as the NAIS operating on a trust model. Are there advantages for the farmer from this?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The usual argument in favour of private service providers is that because of competition they are more responsive to customers. This argument is not valid for the PMFBY as there is only one insurance provider in any area and the farmer has no choice. This means that competition is not driving improvement in service metrics. It is left to the government to cajole or</span><a href="https://timesofindia.indiatimes.com/business/india-business/insurance-cos-to-pay-12-interest-to-farmers-in-case-of-delay-in-settlement-claims/articleshow/65861500.cms" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">threaten</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> insurers for something as basic as timely settlement of claims.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The entire infrastructure used for insurance in rural India belongs to the public sector – from rural bank branches offering insurance and collecting premium to state machinery to determine crop yields and measure crop loss. Reports (</span><a href="https://thewire.in/agriculture/narendra-modi-crop-insurance-scheme" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">such as this</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">) suggest that private insurance providers have hardly any “boots on the ground” and farmers find it difficult to access these insurers for grievance redressal. It is not clear what value they add as an intermediary between the government and the farmers.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">Who benefits from PMFBY?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">To sum up, the government currently pays 80% - 85% of the premium to make insurance affordable to farmers. This means that the crop loss insurance program essentially runs on public funds. And the quantum of public expenditure is large, over Rs 47,000 crore in the last two years, during which only 25-30% of crop area has been covered.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Public infrastructure is almost exclusively used to advertise insurance, enrol farmers who have taken crop loans, collect premium from farmers and receive claims payment, specify sum to be assured for different crops and estimate crop loss.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">It stands to reason that using a trust to manage the crop insurance program will lead to a far more efficient use of scarce public funds than working through insurance intermediaries and paying for their overheads and profits. The utilisation of public funds in the PMFBY and the NIAS bears this out.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The question that is left with us is what was the main consideration of the Modi government when it designed the PMFBY – providing business to corporate insurers or relief to stricken farmers?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"><b>References</b>:</span></div>
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<span lang="EN-GB" style="font-size: 9.0pt; line-height: 115%; mso-bidi-font-family: "Times New Roman";">MoAFW (2018a): “Claims under crop
insurance”, 16<sup>th</sup> Lok Sabha, Unstarred question No 582, Ministry of
Agriculture and Farmers Welfare, 6 February, </span><span lang="EN-GB"><span style="font-size: 9.0pt; line-height: 115%; mso-bidi-font-family: "Times New Roman";"><a href="http://164.100.47.190/loksabhaquestions/annex/14/AU582.pdf">http://164.100.47.190/loksabhaquestions/annex/14/AU582.pdf</a></span></span></div>
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<span lang="EN-GB"><span lang="EN-GB" style="font-family: "calibri" , "sans-serif"; font-size: 9.0pt; line-height: 115%;"> (2018b): “Crop insurance schemes”,
16<sup>th</sup> Lok Sabha, Unstarred question No 956, Ministry of Agriculture
and Farmers Welfare, 24 July, </span><span lang="EN-GB" style="font-family: "calibri" , "sans-serif"; font-size: 11.0pt; line-height: 115%;"><span style="font-size: 9.0pt; line-height: 115%; mso-bidi-font-family: "Times New Roman";"><a href="http://164.100.47.190/loksabhaquestions/annex/15/AU956.pdf">http://164.100.47.190/loksabhaquestions/annex/15/AU956.pdf</a></span></span></span></div>
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<span style="font-family: "arial"; vertical-align: baseline; white-space: pre-wrap;"><span lang="EN-GB" style="font-size: 14.6667px; line-height: 115%;"> </span><span lang="EN-GB" style="font-size: 9pt; line-height: 115%;">(2018c): “Beneficiaries under PMFBY”, 16<sup>th</sup> Lok Sabha, Unstarred question No 3435, Ministry of Agriculture and Farmers Welfare, 7 August, </span><span lang="EN-GB" style="font-size: 11pt;"><span style="font-size: 9.0pt; line-height: 115%; mso-bidi-font-family: "Times New Roman";"><a href="http://164.100.47.190/loksabhaquestions/annex/15/AU3435.pdf">http://164.100.47.190/loksabhaquestions/annex/15/AU3435.pdf</a></span></span></span></div>
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<span style="font-variant-east-asian: normal; font-variant-numeric: normal; vertical-align: baseline; white-space: pre-wrap;"><span lang="EN-GB" style="font-size: 14.6667px; line-height: 115%;"><span style="font-family: "arial";"> </span></span><span lang="EN-GB" style="font-family: "calibri" , sans-serif; font-size: 9pt; line-height: 115%;">(2018d): “Crop insurance under PMFBY”, Rajya Sabha, Unstarred question No 521, Ministry of Agriculture and Farmers Welfare, 14 December</span></span></div>
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Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-84223487908234074322019-01-31T17:08:00.004+05:302019-02-01T16:12:27.849+05:30Crop insurance is losing credibility<div dir="ltr" style="text-align: left;" trbidi="on">
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<span id="docs-internal-guid-b73e1411-7fff-7b10-80da-c009bc97495e"><span style="font-family: "arial";"><span style="white-space: pre-wrap;"><a href="https://scroll.in/article/910087/modis-ambitious-crop-insurance-scheme-has-come-a-cropper-here-are-the-hard-facts">This piece</a> was published in scroll.in on 31/1/2019. Reproduced below with charts and tables</span></span></span></div>
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<span style="font-family: "arial"; font-size: 14pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">Is crop insurance losing credibility?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The Modi government replaced the existing crop insurance schemes with the Pradhan Mantri Fasal Bima Yojana in 2016. The new scheme was</span><a href="http://pib.nic.in/newsite/PrintRelease.aspx?relid=134432" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">advertised</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> as incorporating the best features of the earlier schemes while removing all their shortcomings. </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Unveiling the guidelines of the PMFBY, Prime Minister Narendra Modi</span><a href="https://www.thehindu.com/news/national/narendra-modi-unveils-guidelines-for-the-recentlylaunched-prime-ministers-crop-insurance-scheme-in-sehore/article8253104.ece" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">attributed</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> the low enrolment in crop insurance to farmers’ “lack of faith” in the earlier schemes. A rapid increase in enrolment was to be the hallmark of the PMFBY. The target was to cover 50% of the area under crops, about 98 million hectares, by 2018-19.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">But in 2017-18, the second year of the PMFBY, the enrolment numbers fell sharply, taking the coverage to below 2015 levels. Against the target of 50% for 2018-19, the coverage stands at less than 26% in 2017-18.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Why did the coverage shrink? This analysis takes a closer look at the Modi government’s failure at expanding insurance coverage for farmers and the governance issues that it reveals.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">What does the data show?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Prior to the introduction of the PMFBY in 2016-17, the number of farmers and crop area insured had been sequentially increasing. This trend continued through the first year of the implementation of the PMFBY. What is noteworthy is the sharp fall in numbers in 2017-18.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQRdxu5p592AQ7YqyV9qbl7hc_GyIZpveypn_g-YXcMxuktkUKkDDKriYB1QZ-6bhVwipSwh2AwvINQ03ly5Civ38DgECGtr9O1lzxYuKZvgR3WgZGUInKzuxHJUeQobLzZBXxbh7e7GQC/s1600/chart+1.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="271" data-original-width="483" height="222" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQRdxu5p592AQ7YqyV9qbl7hc_GyIZpveypn_g-YXcMxuktkUKkDDKriYB1QZ-6bhVwipSwh2AwvINQ03ly5Civ38DgECGtr9O1lzxYuKZvgR3WgZGUInKzuxHJUeQobLzZBXxbh7e7GQC/s400/chart+1.png" width="400" /></a></div>
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<span style="font-family: "arial"; font-size: 11pt; white-space: pre-wrap;">The government has been reluctant to put out 2018 kharif (monsoon crop) enrolment data even several months after the end of the season. The reason for this reluctance becomes apparent from a recent reply to an Right to Information query dated October 10, 2018. Enrolment as of date was down 10% from even 2017 levels. This data did not include enrolment in Bihar, but even after Bihar data gets included, 2018 kharif enrolment will fall short of 2017.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">Can increasing coverage be equated with insurance gaining popularity?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">In uninformed commentary, increasing coverage is equated with insurance gaining popularity with farmers. This is not necessarily true in the context of crop insurance in India because of the strong element of coercion exerted on farmers to take crop insurance cover.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Crop loans are given almost entirely by public sector financial institutions and cooperative banks which, following government directives, automatically deduct insurance premium from the loans they make to the farmer. </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Compelling farmers to take insurance offers dual benefits from the government’s point of view. First, it ensures a minimum number of captive customers to make crop insurance viable. Second, the insurance serves as collateral for the farmer’s loan, since any insurance payout in the event of crop loss is routed through the same financial institution. </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The government counts farmers whose insurance premium is deducted compulsorily from a crop loan as ‘loanee’ farmers and all others as ‘non-loanee’ farmers. </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">A rise in the number of crop loans or </span><a href="http://pib.nic.in/newsite/PrintRelease.aspx?relid=145457" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">government pressure on banks</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> for full compliance can result in a rise of ‘loanee’ farmers. But the real data of interest is the number of farmers who take insurance voluntarily. </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Farmers enrolling voluntarily could be those who have never taken loans or those who have taken in the past, but not in the current season. Those who have never taken loans</span><a href="https://www.financialexpress.com/economy/fasal-bima-yojana-farmers-still-unaware-of-modis-crop-insurance-scheme-details-survey-reveals-why/1286243/" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">face several obstacles</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> to enrolling, including access to insurers and the ability to produce documentation such as sowing certificates and land records. Those who have taken loans in the past presumably have access to all the above, and should not find it a problem to enrol voluntarily if they desire.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">Has there been a “quantum jump” in the voluntary enrolment of farmers?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">It appears that the government is extremely keen to show that the PMFBY is more popular with farmers than earlier schemes. The Agriculture Secretary</span><a href="https://timesofindia.indiatimes.com/india/crop-insurance-scheme-farmers-at-the-helm-of-benefits/articleshow/66913601.cms" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">recently claimed</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> that after the implementation of the PMFBY in 2016, there has been a “quantum jump” in voluntary enrolment. He was repeating a claim first made by the Ministry of Agriculture and Farmers Welfare on December 7, 2016 (</span><a href="http://pib.nic.in/newsite/archiveReleases.aspx" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">press release</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">). </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The Ministry claimed that the number of ‘non-loanee’ farmers which was only 1.5 million in </span><span style="font-family: "arial"; font-size: 11pt; font-style: italic; vertical-align: baseline; white-space: pre-wrap;">kharif</span><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> 2015 had jumped to 10.2 million in </span><span style="font-family: "arial"; font-size: 11pt; font-style: italic; vertical-align: baseline; white-space: pre-wrap;">kharif</span><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> 2016.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">But data available in the public domain tells a different story. The graph below is based on the CAG Audit of Agriculture Crop Insurance Schemes, 2017 (</span><a href="https://cag.gov.in/content/report-no7-2017-performance-audit-union-government-agriculture-crop-insurance-schemes" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">CAG report 2017</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">), barring the data for 2017 and 2018, which are taken from answers to queries posed in the </span><a href="http://164.100.47.190/loksabhaquestions/annex/15/AU3435.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Lok Sabha (7-8-2018)</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> and under the RTI Act (10-10-2018). Kharif accounts for roughly two third of the insured farmers and crop area.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7fbtOIEHxJ9L7RgJ9HEdwL-sDKRcdPD8V9GGp8-LRndK3LQ91-2PCbdr5m3DpqolzqZW5Brv_uTZb4HwwdHo00x1QJxNriYJRLhIkogRpHGhXH_JpERP3VEW2n9z6q0NNZxxaYLX3wqHd/s1600/chart+2.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="369" data-original-width="535" height="275" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7fbtOIEHxJ9L7RgJ9HEdwL-sDKRcdPD8V9GGp8-LRndK3LQ91-2PCbdr5m3DpqolzqZW5Brv_uTZb4HwwdHo00x1QJxNriYJRLhIkogRpHGhXH_JpERP3VEW2n9z6q0NNZxxaYLX3wqHd/s400/chart+2.jpg" width="400" /></a></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">There were 9.8 million ‘non-loanee’ farmers insured in kharif 2015 as per the CAG report. This is also confirmed by Ashok Gulati, former Chairman of the Commission for Agricultural Costs and Prices, in a</span><a href="http://icrier.org/pdf/Working_Paper_352.pdf" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">recent paper</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> where he attributes his data to industry sources.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The important takeaway from the chart is that ‘non-loanee’ numbers have barely changed since 2015, remaining in the range of 10-11 million. There has been no “quantum jump”.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">What explains the data discrepancy?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The numbers for 2015 reported in the agriculture ministry’s press release are completely at variance with numbers available in the CAG report. The CAG attributes its data to the Department of Agriculture Cooperation and Farmers Welfare. This means the Ministry has revised 2015 numbers after the implementation of the first season of PMFBY in 2016.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Clues as to the nature of revision are available in a recent RTI response from the Ministry dated October 10, 2018 which shows the number of ‘non-loanee’ farmers in Maharashtra to be under 0.2 million in 2015-16 instead of a number of 8.2 million</span><a href="https://www.downtoearth.org.in/news/agriculture/how-is-centre-tinkering-with-data-to-project-success-of-agri-insurance-scheme--56678" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">gathered</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> from Maharashtra government officials. </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">A 2005 </span><a href="https://www.cseindia.org/pradhan-mantri-fasal-bima-yojana-an-assessment-7778" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Bombay High Court judgement</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> prohibits the deduction of premium from farmers taking loans in Maharashtra without their consent. Farmers providing consent as well as those taking crop loans and insurance from different institutions all get reported as ‘non-loanee’ (voluntary) farmers by insurers.</span><a href="https://www.downtoearth.org.in/news/agriculture/how-is-centre-tinkering-with-data-to-project-success-of-agri-insurance-scheme--56678" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">According to Maharashtra government officials</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">, a very high percentage of insured farmers have been counted in the ‘non-loanee’ category in the state for many years.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Maharashtra typically accounts for more than half of the ‘non-loanee’ farmers across India in any year. It appears that the Ministry has changed the definition of ‘non-loanee’ as applicable to Maharashtra in a way that has resulted in the “quantum jump”. </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Questions about the numbers quoted in the agriculture ministry’s press release of December 2016 have been raised by the Centre for Science and Environment in its 2017</span><a href="https://www.cseindia.org/pradhan-mantri-fasal-bima-yojana-an-assessment-7778" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">report on PMFBY</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> and also</span><a href="https://www.downtoearth.org.in/news/agriculture/how-is-centre-tinkering-with-data-to-project-success-of-agri-insurance-scheme--56678" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">directly with government officials</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> with no answer forthcoming. If the figures supplied to the CAG were wrong and the ministry has revised it since then, does it not owe a public clarification?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">What does the sharp fall in enrolment in 2017 indicate?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">We now return to the issue of fall in coverage that was raised earlier. An acutely embarrassed government has gone to great lengths to dispel the idea that this could be attributed to farmers’ dissatisfaction with the PMFBY.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">It has</span><a href="http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1541534" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">advanced</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> two reasons. One is that when states announce farm loan waivers, farmers keep payments on old loans pending, making them ineligible for new loans. This would mean a lesser number of farmers applying for new crop loans. Two, the introduction of Aadhar seeding in the loan approval process has eliminated the earlier practice of some farmers taking multiple loans for the same crop. Both these reasons could account for the lower number of insurance policies linked to loans, that is, the lower number of ‘loanee’ farmers, it claims.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">An analysis of kharif data shows the number of insured farmers came down not only in Maharashtra and UP, which announced farm loan waivers, but in seven other states. These nine states account for more than 80% of the farmers insured for kharif 2016. </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Jharkhand, Orissa, Karnataka, Tamil Nadu and Telangana bucked the trend, but these accounted for only a little over 10% of the insured in that season.</span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjplcBRltuB0qz5RMyARgRRRO36RihLRGaT4T-IlRj386KBOCGMpuIMooUFPjWQV04LC0PjtoRP0pgEO_CvtqL5WsqalPgjSRdccvP_oG4FtA7E862aychO8LaP1Ozp5IzHD3iN7Kdr-jP2/s1600/table+1.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" data-original-height="285" data-original-width="349" height="325" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjplcBRltuB0qz5RMyARgRRRO36RihLRGaT4T-IlRj386KBOCGMpuIMooUFPjWQV04LC0PjtoRP0pgEO_CvtqL5WsqalPgjSRdccvP_oG4FtA7E862aychO8LaP1Ozp5IzHD3iN7Kdr-jP2/s400/table+1.jpg" width="400" /></a></div>
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<span style="font-family: "arial"; font-size: 11pt; white-space: pre-wrap;">The loan waiver related argument advanced by the government begs the question: why is it that the farmers who did not get loan-linked insurance (as they did not take loans) not voluntarily opt for insurance if this was to their benefit? </span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Rather than seeing an increase in ‘non-loanee’ enrolment, states such as MP, Maharashtra and West Bengal saw a significant fall. Other states saw negligible change.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Reports (</span><a href="https://www.outlookindia.com/newsscroll/farmers-agitation-hits-banking-ops-in-odishas-bargarh-dist/1324672" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">like this one</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">) in the media suggest that farmers are unhappy with the PMFBY because of delays in settlement of claims and the lack of avenues for redressal. There are even</span><a href="https://www.downtoearth.org.in/news/agriculture/farmers-confronting-banks-against-forceful-deduction-of-crop-insurance-premium-for-pmfby-56739" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">instances reported</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> of farmers taking collective action to oppose the mandatory deduction of insurance premium from their crop loan accounts because claims have not been settled for a previous season. The drop in 2017 enrolment may have more to do with this than the government cares to acknowledge.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; font-weight: 700; vertical-align: baseline; white-space: pre-wrap;">Has governance improved with PMFBY?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The quality and timely availability of data in the public domain is a window to the quality of supervision by the government. How does the government measure up on this account?</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">There are blatant errors in the data put out by the agriculture ministry. For example, the number of farmer beneficiaries in Rajasthan for kharif 2016 is indicated as 18.7 million in the</span><a href="https://pmfby.gov.in/" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">PMFBY website</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> while the total number of insured farmers in the state is only 10.1 million. The total number of kharif 2016 beneficiaries is shown as 25.8 million though the real number is around 10 million.This error has been repeated in a reply to a question raised in Parliament in Aug 2018. It appears that no one in the ministry even glances at the data.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Insurance premium paid for by (deducted from) farmers is almost exclusively handled by public sector financial institutions and service centres. Yet final kharif 2018 enrolment figures have not been released, though the official period for claims settlement is over. The government took 8 months after enrolment would have been completed to provide figures for rabi 2017-18 (</span><a href="http://164.100.47.190/loksabhaquestions/annex/15/AU3435.pdf" style="text-decoration-line: none;"><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Lok Sabha 7 Aug 2018</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">).</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">It is imperative for farmers that claims of crop loss for any season are settled before the start of the next season, and the PMFBY guidelines on claims settlement recognize this. Yet the government is unable to provide even provisional claims data for rabi 2017-18 when we are in the midst of rabi 2018-19, surely indicating that there are huge delays in settling claims. The delays are of course confirmed by</span><a href="https://indianexpress.com/article/business/economy/pradhan-mantri-fasal-bima-yojana-farmers-wait-up-to-18-months-for-claims-5347671/" style="text-decoration-line: none;"><span style="color: black; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> </span><span style="color: #1155cc; font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">reports</span></a><span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;"> from the ground.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">The delayed availability of data, frequent revisions and blatant errors all point to poor systems and oversight of the crop insurance program by the central government.</span></div>
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<span style="font-family: "arial"; font-size: 11pt; vertical-align: baseline; white-space: pre-wrap;">Farmers may have lacked faith in earlier insurance schemes, but the PMFBY has done nothing to restore it.</span></div>
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Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-71669931455609161042018-09-06T15:48:00.001+05:302018-10-20T12:20:33.278+05:30Changes in real incomes from paddy and wheat farming in the last 5 years<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span lang="EN-GB"><i>This was first published in <a href="https://thewire.in/agriculture/how-have-real-incomes-from-paddy-and-wheat-farming-changed-in-the-last-five-years">The Wire</a>. Reproduced below with data tables.</i></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span lang="EN-GB"><br /></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span lang="EN-GB">The Prime Minister spoke of his <a href="https://www.thehindu.com/news/national/prime-minister-narendra-modi-addresses-kissan-rally-in-bareilly-uttar-pradesh/article8292286.ece">“dream”
of doubling farmer’s</a> income by 2022 in a farmers rally in early 2016. Since
then, the government has been on a publicity overdrive to show that it is working
towards this goal</span><span lang="EN-GB">.
The goal was reiterated by the Prime Minister in his Aug 15 2018 speech. One is
naturally tempted to ask how incomes have changed in the recent past.</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span lang="EN-GB"><br /></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span lang="EN-GB">The
NITI Aayog has </span><span lang="EN-GB"><a href="http://niti.gov.in/writereaddata/files/document_publication/DOUBLING%20FARMERS%20INCOME.pdf">pointed out</a></span><span lang="EN-GB"> the difficulties in
estimating changes in the income of farmers in general. The problem becomes
tractable if one confines oneself to incomes from just two crops, paddy and
wheat whose importance for farmer’s income will be apparent shortly. This
analysis shows that real incomes from paddy and wheat farming have fluctuated
in a narrow band and in the case of paddy at levels lower than prevailing 5-6
years ago.</span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><span lang="EN-GB"><br /></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span lang="EN-GB">The
importance of paddy and wheat</span></b><b><span lang="EN-GB"><o:p></o:p></span></b></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Paddy occupies 23% of total cropped area
and is grown in most parts of India while wheat covers another 16%. So between
them paddy and wheat use nearly 40% of total cropped area (See <a href="https://eands.dacnet.nic.in/PDF/Agricultural_Statistics_2016.pdf">Agricultural
Statistics</a>). Paddy and wheat are also grown by the largest number of
agricultural households – 59% and 39% respectively – according to the <a href="http://mospi.nic.in/sites/default/files/publication_reports/KI_70_33_19dec14.pdf">NSSO
2013 survey</a>.</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Further, the government procures over 30%
of the total crop in both rice and wheat at the Minimum Support Price (MSP)
that it announces every year. Procurement on this scale at MSP should strongly
influence the prices in the APMC <i>mandis</i>.</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Income from paddy and wheat is thus of
interest both because of the number and spread of agricultural households who
depend on it and also because of the government’s ability to influence it.</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<b><span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Avenues
for increasing income<o:p></o:p></span></span></b></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Higher income can come from increased
earnings and increased productivity. Earnings are determined by how much the price
realized by the farmer exceeds the cost of cultivation. Productivity measures
the crop produced per hectare. Let us
consider the question of productivity first.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Productivity estimates for the current
decade (2010’s) are available in the latest Price Policy Reports of the <a href="https://cacp.dacnet.nic.in/">Commission for Agricultural Costs and Prices</a>
(CACP). The Compounded Annual Growth Rate (CAGR) of productivity in wheat is
negative at -0.63%. Wheat farmers need higher earnings just to hold on to the
same income levels. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The productivity of paddy is increasing,
but at a paltry CAGR of 0.9%. This amounts to a growth of 5.5% in 6 years, and,
as we shall see is not enough to compensate for falling earnings of paddy
farmers.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The hope of higher income therefore rests
on higher earnings. To estimate earnings on paddy or wheat we need to know the
average price realized by the farmer.</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><b><span lang="EN-GB">Average
prices realized by farmers</span></b><span lang="EN-GB"> </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The ‘average price’ we are looking for is
the total realization by paddy (or wheat) farmers in the country divided by the
quantity produced. It turns out that this data is embedded in the <a href="http://www.mospi.gov.in/publication/national-accounts-statistics-2018">NationalAccounts Statistics</a> (NAS). </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The NAS records the output value of each
major crop including paddy and wheat. Output value is calculated as the product
of price and quantity produced where the price is expected to capture as
accurately as possible the income that accrues to the producer. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The Central Statistical Organization (CSO)
determines output value at district level using production data and average wholesale
prices prevailing in APMC<i> mandis</i>
during the peak marketing season. District level output values are aggregated
to obtain state and national level values (<a href="http://mospi.nic.in/sites/default/files/publication_reports/sources_method_2012%20(1).pdf">National
Accounts Statistics Sources and Methods 2012</a>).</span></span></div>
<div class="MsoNormal">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span lang="EN-GB"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span lang="EN-GB">The output value of paddy (wheat) in NAS is
then an estimate of the total realization of paddy (wheat) farmers. The
‘average price’ can be calculated using production figures from the Ministry of
Agriculture and Farmers Welfare (MOAFW).</span><span style="font-size: 9pt; line-height: 115%;"><o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The charts below show the average price of
paddy and wheat realized by farmers along with the MSP announced by the
government. </span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhF6H5ppWivgQ_V0iTFxFv0J-yyW7H42fyJQT41ep1MCuXBDdfLyzTKAzr08WVz1BrmueJR3O_YWszJniBfuZXmrTQGeqQ49eloffSBcVAMaev-xpW6YSgwrlNpO3G_-k7u50Cbub7y2lDT/s1600/Untitled.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="303" data-original-width="630" height="192" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhF6H5ppWivgQ_V0iTFxFv0J-yyW7H42fyJQT41ep1MCuXBDdfLyzTKAzr08WVz1BrmueJR3O_YWszJniBfuZXmrTQGeqQ49eloffSBcVAMaev-xpW6YSgwrlNpO3G_-k7u50Cbub7y2lDT/s400/Untitled.png" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Source: NAS 2018, MOAFW, Author's calculation</td></tr>
</tbody></table>
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<div class="separator" style="clear: both; text-align: center;">
</div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHfvPXRWfu-6oE9Iq0kEdfPjOl2pfr_5VAN9ZigwVaz9dSZv3x3M4FRg6ZZMNZSmy97mefc0bdtqw1tnPqc2flfaiG6EWyNFcvuD0KF-Gq75qp-pG15nDnkxEvKn9P3X1aQsCV2po3ot1r/s1600/Untitled1.png" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="263" data-original-width="628" height="167" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgHfvPXRWfu-6oE9Iq0kEdfPjOl2pfr_5VAN9ZigwVaz9dSZv3x3M4FRg6ZZMNZSmy97mefc0bdtqw1tnPqc2flfaiG6EWyNFcvuD0KF-Gq75qp-pG15nDnkxEvKn9P3X1aQsCV2po3ot1r/s400/Untitled1.png" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Sources: NAS 2018, MOAFW, Author's calculations</td></tr>
</tbody></table>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br />The charts show what is expected, that the
MSP announced by the government indeed largely determines the average price
realized by wheat and paddy farmers. With the exception of 2011-12, the average
prices of both wheat and paddy have remained higher but within 6% of MSP.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">However, what really matters for farmers
are earnings rather than the average price or MSP itself. We first look at
earnings on sale at MSP as this provides a clearer picture of government policy
at work. </span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Nominal
and real earnings at MSP </span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Nominal earnings at MSP are obtained by deducting
the cost of cultivation (“A2+FL” costs in CACP terminology, available in their
‘Price policy reports’) from the MSP. Real earnings can be estimated by
adjusting nominal earnings for inflation.</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Paddy is brought to the market almost
throughout the year except the monsoon quarter. So the average Consumer Price
Index (rural) prevailing over the other 3 quarters (for example for 2016-17,
the average of Q4 2016, Q1 2017, Q2 2017) is used as the deflator of nominal
earnings to get real earnings at 2012 prices. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Chart 3 shows the nominal and real earnings
of paddy farmers who sell their produce at MSP. It is useful to remember that
30% of the total paddy produced is sold at MSP. The results are surprising to
say the least.</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhlgzw-gdvZYAVXndochZHXW5KDeHGq57_EArJOUpySPOkOGvhUAZmH_VIv04Fk_UgSaZW6SOKzbU5fk1ykvwi1mCnYrS02M37eohEPtAXO89KNu6T_6Y7FrtaLPi9dOhqyL4eJYPKV3Js4/s1600/Untitled2.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="290" data-original-width="561" height="206" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhlgzw-gdvZYAVXndochZHXW5KDeHGq57_EArJOUpySPOkOGvhUAZmH_VIv04Fk_UgSaZW6SOKzbU5fk1ykvwi1mCnYrS02M37eohEPtAXO89KNu6T_6Y7FrtaLPi9dOhqyL4eJYPKV3Js4/s400/Untitled2.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Source: MOSPI, MOAFW, CACP, Author's calculation</td></tr>
</tbody></table>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">First, the government actually let nominal
earnings of paddy farmers fall each successive year till 2013-14 by keeping
increases in MSP less than the increase in cost of production. The margins over
cost built into the MSP were reduced from 38% in 2011-12 to 27% in 2013-14. Fall
in nominal earnings lead to a steeper fall in real earnings because of
inflation. This was a deliberate policy of the government to lower earnings of
farmers selling at the government procurement price.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">In subsequent years, the government of the
day fixed MSP’s to increase nominal earnings every year but the increase was
just enough to compensate for inflation. Margins over cost built into the MSP
remained at 28-29%. Real earnings of farmers selling paddy at MSP barely
changed from 2013-14 levels. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Why did the government act as it did? </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">It had two major concerns in this period –
burgeoning stocks of cereals and inflation. The stocks of rice with the
government rose from 19.6 million tons in July 2009 to 31.5 million tons in
July 2013, far in excess of the stock norms. Higher stocks meant higher costs and
a higher subsidy bill for the government. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">MSP’s were held down for some years till
stocks of procured rice came down to more manageable levels - 21.7 million tons
by 2015. Subsequent pricing policy aimed at avoiding inflationary pressures
from any rise in cereal prices by keeping real earnings on paddy more or less constant.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Let us turn to wheat.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Chart 4 shows the nominal and real earnings
in wheat when sold at MSP. As wheat is
harvested in April-May, the average CPI (rural) prevailing in Q2 (for 2016-17
the average of Q2 2017) is appropriate as the deflator to get real earnings at
2012 prices.</span></span></div>
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<br /></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAw9_ClsAlVQWO9A2hUguc0snBOc6EItp3goLDNGSOXwr8nrjAIF0FeM4mcSZwoWSbjxPh326mKer5vTgRRjD30GfrzXCpQuqeAoMnuWXE9Jx5LoyxEBAKDfMevAOmc84irmwTJJMYMxIW/s1600/Untitled3.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="325" data-original-width="556" height="233" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAw9_ClsAlVQWO9A2hUguc0snBOc6EItp3goLDNGSOXwr8nrjAIF0FeM4mcSZwoWSbjxPh326mKer5vTgRRjD30GfrzXCpQuqeAoMnuWXE9Jx5LoyxEBAKDfMevAOmc84irmwTJJMYMxIW/s400/Untitled3.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Source: MOSPI, MOAFW, CACP, Author's calculation</td></tr>
</tbody></table>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The government set MSP’s for wheat at
levels which led to real earnings of farmers falling till 2015-16. The margins
over cost built into the MSP fell from 110% in 2011-12 to 94% in 2015-16.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Just as in the case of paddy, the motivation
for such pricing was the rise in the level of wheat stocks with the government.
Wheat stocks went up from 32.9 million tons in July 2009 to 49.8 million tons
in July 2012. The government engineered successive reductions in real earnings
by fixing low MSP’s until stocks reached a manageable level of 30.2 million
tons in July 2016.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Real
earnings at average prices<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">We can now return to a consideration of
real earnings at average prices which are indicative of the incomes of farmers
as a whole from paddy and wheat. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The procedure followed is the same as for
computing real earnings at MSP. Charts 5 and 6 show earnings up to 2016-17 using
NAS 2018 data and the author’s projections for 2017-18 earnings based on the
prevailing MSP.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
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<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjF6l5DvAasYkmt1l9V-zL8WtFMPlcXGlwJVIzA4ItuKGf1OxgTJrDKZBgxXM677yeOSlaaVI7wRk8u6PhE_pAs8iUGhsv88pCG5hrvBQ9VEPI7-Rez0_0Iw_035XYTcL31UWiwyht3HNuY/s1600/Untitled4.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="291" data-original-width="554" height="210" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjF6l5DvAasYkmt1l9V-zL8WtFMPlcXGlwJVIzA4ItuKGf1OxgTJrDKZBgxXM677yeOSlaaVI7wRk8u6PhE_pAs8iUGhsv88pCG5hrvBQ9VEPI7-Rez0_0Iw_035XYTcL31UWiwyht3HNuY/s400/Untitled4.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Sources: NAS 2018, MOSPI, CACP, MOAFW, AUthor's calculation</td></tr>
</tbody></table>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /> <table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgG0pW9YWYmJxf-D5icR4_LjGM64d1ZubGk8e2tAFXOBqYwTh7MgfsGBcRXylkhyB0SZ-aVPjnPxFj9t8GnPNVphzYMT5bErN3_HiLyulbDsNi3DmHU1LrTYFA3yaEM4VmvsgrSZpp7JpPM/s1600/Untitled5.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" data-original-height="291" data-original-width="586" height="197" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgG0pW9YWYmJxf-D5icR4_LjGM64d1ZubGk8e2tAFXOBqYwTh7MgfsGBcRXylkhyB0SZ-aVPjnPxFj9t8GnPNVphzYMT5bErN3_HiLyulbDsNi3DmHU1LrTYFA3yaEM4VmvsgrSZpp7JpPM/s400/Untitled5.jpg" width="400" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Sources: NAS 2018, MOSPI, CACP, MOAFW, Author's calculation</td></tr>
</tbody></table>
</span></span></div>
<div class="MsoNormal">
<span style="font-family: "arial" , "helvetica" , sans-serif;">After a steep drop till 2013-14, real
earnings in paddy have moved up and down in a narrow band. In the case of wheat
too, they have moved up and down in a small range. </span><span style="font-family: "arial" , "helvetica" , sans-serif;"> </span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">To sum up, an analysis of earnings on paddy
and wheat sold at MSP over the last 6 years reveals the government’s main
concerns while deciding increments in MSP. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">In the initial period, the concern was to
reduce stocks of grain with the government which had reached over 80 million
tons in 2012. The strategy employed was to fix MSP’s at levels which would help
bring down procurement and facilitate the sale of excess stocks in the market.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">After stocks came down to manageable levels
– around 55 million tons – in 2016, the main concern was to avoid stoking
inflation. MSP’s were fixed at levels that would ensure that nominal earnings
kept pace with inflation and real earnings remained at the same levels.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The governments hand in fixing MSP’s shows
up in how real earnings at average prices have moved over these years. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Earnings on both paddy and wheat have fluctuated
in a narrow band, and in the case of paddy, at levels lower than prevailing 5-6
years ago. Given that a large majority of farmers grow paddy and/or wheat and
that nearly 40% of cropped area is used for these crops, one has to conclude
that increasing farmer’s income has not been high on the government’s agenda at
least till this year. </span></span><a href="https://www.blogger.com/blogger.g?blogID=2739979442130109754"></a>
<br />
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span>
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">References to this article:</span></span><br />
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span>
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><a href="https://mumbaimirror.indiatimes.com/opinion/columnists/parth-mn/pms-income-plan-way-off-target/articleshow/66045578.cms">Mumbai Mirror piece - Oct 3, 2018</a></span></span><br />
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span>
<blockquote>
</blockquote>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-41799008816712263162018-05-21T11:24:00.001+05:302018-09-30T11:16:28.764+05:30Will corporate India come to the rescue of India’s farmers?<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif;"><i>This piece has been published in <a href="http://www.indiatogether.org/from-mandis-to-markets-agriculture">India Together</a> under the title "From mandi's to markets: Will this round be any better?"</i></span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">Farmers across the country are extremely
agitated.</span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">A quick scan of just the English language
media – which typically does not show much interest in rural India – reveals
the numerous protests in which they have taken part, among the recent being the
long march to Mumbai by tens of thousands of farmers. More protests are
expected in the coming days.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Common to all the protests are the demands
for a complete loan waiver and fair prices for farm produce. As an earlier
piece explains, the returns to the farmer are barely
sufficient to sustain him and often below the cost he incurs. At the same time,
wholesale traders bringing the farmer’s produce to the consumer enjoy hefty
margins unjustified by the value they add. The market has failed the Indian
farmer and this is at the root of the farm crisis.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">How is this situation to be remedied? There
are two diametrically opposing views.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">One view is that the state must accept <span style="background: white;">responsibility for the well being of the
farmer</span> and weigh in on the side of the farmer to compensate for the
fundamental asymmetry in the economic standing of farmers and traders.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The other view derives from an unquestioning
belief in the efficacy of the free market. It is useful to consider this in
some detail because of the influence it has on policy makers.</span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The
free market vision <o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">‘Free marketers’ believe that state
interventions and controls in the agriculture market have distorted prices. Freed
from these, the market itself would enable true price discovery and improve the
terms of trade for farmers. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The specific interventions that India’s
free marketers would like to see ended are the state declaring Minimum Support
Prices (MSPs), procuring grains and pulses, regulating wholesale trade with
farmers, controlling stocks with traders and controlling exports.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">But this is not all. The free marketers
would like the state to “free” land markets too so that farm land can be sold
or leased freely. This would enable aggregation (by buying or renting) of farm
land into large farms. An <a href="https://www.livemint.com/Opinion/gSYRo9belsuk97BKh4dxcK/Indian-farmers-call-for-free-markets.html">editorial</a>
in Livemint (Mar 21, 2018) lays out the wish list of the free marketers in
full.<span class="MsoEndnoteReference"> </span></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The United States is possibly the
inspiration for these free marketers. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The US has 2.1 million farms compared to
India’s 90 million. Just 8% of farms that are >1000 acres in size account
for 70% of overall farmland (<a href="https://www.agcensus.usda.gov/Publications/2012/Online_Resources/Highlights/Farms_and_Farmland/Highlights_Farms_and_Farmland.pdf">US
Census of Agriculture</a>). The large farm sizes are possible because 40% of
farmland is leased. In the US, the agricultural supply chain is dominated by
massive companies such as Cargill, ADM and Bunge whose operations range from
global trading in agricultural commodities to transforming crops into packaged
products for supermarket shelves.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">In the world of agriculture envisioned by
the free marketers, India would have far fewer farmers and a large fraction of
agricultural land consolidated into large farms. Corporations trading in and
processing food would be directly able to deal with farmers and the government
would have no influence or control on the price of agricultural commodities. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">But how would the farmers ousted from agriculture
find alternate livelihoods when there are no jobs even for the youth entering
the labour force? The free marketers will not be bothered by such questions.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">While the present Indian government does
not want to give up its ability to influence price and availability of
agricultural commodities (by doing away with MSP, procurement and export
controls), it has bought into the prescriptions of the free marketers to dismantle
existing regulations governing wholesale purchases from farmers. Before delving
into how this is driving policy, a brief introduction to the existing
agriculture supply chain structure will be useful.</span></span></div>
<div class="MsoNormal">
<b><span style="font-family: "verdana" , sans-serif;"><i><span lang="EN-GB"><br /></span></i></span></b></div>
<div class="MsoNormal">
<b><span style="font-family: "verdana" , sans-serif;"><i><span lang="EN-GB">Mandis</span></i><span lang="EN-GB"> and their
regulatory capture <o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif;">The wholesale purchase of produce from
farmers in India is governed by the Agricultural Produce Marketing Committee
(APMC) Act. Agriculture is a state subject and each state has its own version
of the law based on the template put out by the centre.</span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">According to the APMC Act, wholesale
transactions between farmers and traders must take place in designated market
yards (<i>mandis</i>) and follow certain
rules. These yards have been established throughout the country in agricultural
production centres. The yards are managed by an elected authority with
government supervision. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The concerns of this law can be better
understood when seen in the context of the 60’s and 70’s when the APMC’s were
set up. Small farmers were extremely vulnerable to being cheated by agents who
would purchase their produce locally in the village. In the APMC yards, farmers
got a better feel for the price. The sale of produce under public scrutiny
brought a level of protection against being cheated on weights and measures and
price. The APMC markets were clearly an advance on the situation prevailing
earlier. Most trading shifted to the regulated <i>mandis</i> though there is still a significant fraction that takes place in the
villages.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Over time, traders have established their
control over the regulated markets. That this has happened is not hard to
understand if one takes into account the huge asymmetry in the economic
standing of traders and farmers.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The market committees are elected bodies
and APMC elections too are fought with political affiliations. Traders with
their economic power and ties to the major political parties end up controlling
the committees. Government supervision is weak at best and cannot stand up to
the economic and political clout of traders. Traders can cartelize with ease
and set prices for agricultural produce right in the face of regulations meant
for farmer’s protection. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Farmers are unable to stand up to this
cartelization. They lack pricing power as suppliers. Added to this, they are
often beholden to traders who help them through the production cycle with short
term loans, transport and storage. Though aware that prices are fixed, they
have no option other than to play along.</span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Reforming
the <i>mandis</i> through competition<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The government acknowledges the
cartelization that happens in APMC markets right under state supervision.
However, it does not want to acknowledge this as a governance failure. Instead,
in line with the thinking of the free marketers, it argues that what is
necessary are alternate channels which can compete with the regulated APMC <i>mandis</i> for farmer’s produce. This
competition, it is claimed, will lead to farmers getting better prices and more
investment flowing into the agriculture supply chain. This is thinking is
behind the new (model) <a href="http://agricoop.nic.in/sites/default/files/APLM_ACT_2017_1.pdf">agricultural
produce and livestock marketing (APLM) Act of 2017</a> that the present central
government has unveiled. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The Prime Minister was <a href="https://www.livemint.com/Politics/M6HMO4jTZrn1iwwbypaEbL/Narendra-Modi-calls-for-swift-APMC-reforms-to-benefit-farmer.html">reported</a>
to have written to the chief ministers of states recently emphasising the need
to “swiftly undertake market reforms of our decades old and restricted
agriculture produce and marketing committee (APMC) architecture”. The
government is clearly in a hurry to get the states to adopt the new law which
will replace the APMC Acts.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The alternative channels to APMC markets for
farmers are to be privately managed markets and farmer-consumer markets. But
most importantly, large buyers such as firms engaged in food processing, large
scale retail or exports will be able to bypass the wholesale markets and buy
directly from the farmer.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Actually, all the above measures to “free”
the agricultural market are old hat. Back in 2003, the then BJP government put
together a ‘model’ regulation (APMC Act 2003) for allowing alternate channels
in agricultural marketing and the Congress government notified the rules to go
with the regulation in 2007. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">26 states have since carried out modifications to
their state specific APMC Acts in line with this model Act. Bihar has gone to the extent of getting rid of the APMC regulated
markets altogether to allow free private play.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">What has been the impact of these changes
on the markets?</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Private markets have been a non-starter.
While a number of licences have been issued in Maharashtra and a few in
Karnataka, Gujarat and Andhra, most licensees do not seem to be operating
markets on the ground.<span style="color: #3e3e3e;"> </span>It seems no one wants
to invest in setting up market yards just to earn the market fee of 2% of
transaction value. </span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif;"><span lang="EN-GB" style="color: #3e3e3e;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif;"><span lang="EN-GB" style="color: #3e3e3e;">Bihar too has seen no
investment in private market infrastructure. As </span><span lang="EN-GB"><a href="https://www.thehindubusinessline.com/opinion/apmcs-the-other-side-of-the-story/article6871346.ece">reported</a><span style="color: #3e3e3e;"> in the Hindu Business Line (Feb 8, 2015), trade happens
in informal makeshift markets that have no facilities and no competitive price
discovery; their only advantage seems to be the ease of access for farmers.</span></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="color: #3e3e3e;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="color: #3e3e3e;"><span style="font-family: "verdana" , sans-serif;">There are
farmer-consumer markets in several states – AP, Tamil Nadu, Punjab, Haryana –
variously named <i>rythu bazar</i>, <i>apni mandi</i>, etc. They have not made a
difference as a whole as few farmers can afford to take their produce to these
markets which need to be located near cities.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">What about the ‘direct marketing licences’
issued to large firms to procure directly from farmers? </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Maharashtra has been in the forefront
giving licences to many large firms including <span style="color: #3e3e3e;">Tatas,
Aditya Birla, Reliance, Big Bazaar, ITC, ADM Agro and Mahindra & Mahindra.
But as of 2016, their purchases represented only a tiny fraction of the total
purchases from farmers - 1000 crore annually against 60-75,000 crore
transactions in APMC <i>mandi’s</i> and
25,000 crore in village and other informal markets (</span><a href="http://indianexpress.com/article/india/india-news-india/national-agricultural-market-scheme-open-market-farmer-sell-in-open-market-apmc-act-2926522/">Indian
Express, July 21, 2016</a><span style="color: #3e3e3e;">). </span>Big retailers,
it appears, prefer to recruit existing middlemen as their agents and buy in the
APMC markets. This is not surprising, for which corporation would like to
directly deal with lakhs of small farmers?</span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Pinning
the hope on big corporations<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The government is acutely aware of the failure
of the previous reforms. There is no private investment flowing into public use
infrastructure that can benefit the farmers. Neither is there any movement
towards farmers getting fair prices. The government however argues that this is
because private firms wishing to set up alternate channels still do not have a
“level playing field”. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">With this argument, the APLM Act 2017 goes
beyond the earlier reforms to make things extremely attractive for private firms
wanting to <span style="background: white;">enter the agricultural
supply chain.<o:p></o:p></span></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;">Under
existing law, states are territorially divided into market areas and the market
committees constituted under the APMC Act exercise regulatory functions (such
as collecting market fees) over their respective market areas. This also places
certain constraints on the movement of agricultural produce across market area
boundaries. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;">The
new law confines the role of these market committees to within the publicly
owned <i>mandis</i>. Licensing and regulation
of private firms and traders is vested with the state government and licensed
entities can operate anywhere within the state. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;">The
government claims that the new law by allowing the farmer to sell anywhere in
the state and to whomever he chooses will help the farmer realize better
prices. The fact is that farmers have difficulty transporting their produce
even to the nearest market yard. It is the private firms and traders who will
now have the freedom to buy anywhere and profit from arbitrage. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;">Further,
while traders must still operate within private or public market yards, licensed
firms can make their purchases in front of the existing market yards without any
need for investing in private yards. They have to pay a market fee only 1/4<sup>th</sup>
of what is charged in the market yards. It is not clear by what logic this
number was arrived at. There are also no transparency requirements imposed on
them in respect of trades.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;">In
summary, the APLM Act 2017 goes all out to help corporations entering the food
chain to buy direct from the farmers by allowing them unfettered access to
aggregation centres (the existing market yards) throughout the state for a
token market fee, without having to invest in their own yards. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;">Will
the entry of a new class of buyers help farmer producers realize a better
price? <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;">The
fact is that the basic lack of pricing power among farmers does not change when
they deal with corporations instead of traders. The experience of the last 11
years shows that corporations tend to merge into the existing supply chain at
the last mile to the farmer. There is no reason to assume that the margins they
make because of bringing in greater efficiency in the supply chain will be
shared with farmers. Corporate India is not going to come to the rescue of
India’s farmers.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="background: white;"><span style="font-family: "verdana" , sans-serif;">The
2003 APMC reforms did not lead to any appreciable improvement in the lives of farmers;
neither will the APML Act 2017 being pushed by the present government. These
reforms are not about helping farmers realize better prices, but about opening
up more opportunities for corporate India.</span></span></div>
<a href="https://www.blogger.com/blogger.g?blogID=2739979442130109754"></a>
<br />
<blockquote>
</blockquote>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-87312435786657921882018-05-03T10:11:00.001+05:302018-06-29T16:14:07.339+05:30The market has failed the Indian farmer<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;"><i>This piece appeared in <a href="http://www.indiatogether.org/missing-market-for-agriculture-agriculture">India Together under the title "The missing market for agriculture".</a></i></span><br />
<span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span>
<span style="font-family: "arial" , "helvetica" , sans-serif;">India’s farmers face an existential crisis.
Dramatic protests, demands for loan waivers and mounting suicides are
symptomatic.</span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Fundamentally, the crisis stems from the routinely
low returns from agriculture even after a normal monsoon. Then there are risks
to even obtaining these low returns. While drought or pest attacks can decimate
returns, ironically, so can a bumper crop.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Markets are supposed to help find a price
that works for both the producer and the consumer. Economic theory presupposes
that a producer will produce something only if he can make a profit by selling
it in the market at the prevalent price. This does not seem to apply to the
Indian farmer. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">A few examples will illustrate.</span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The
struggle to recover cost<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Take Maharashtra, a hotbed of farmer’s
protests. The Indian Express (Apr 15, 2018) <a href="http://indianexpress.com/article/cities/mumbai/inadequate-loan-waiver-sliding-prices-why-farmers-are-protesting-again-5137869/">reports</a>
that in Maharashtra with the exception of Soyabean all commodities are trading
below the Minimum Support Price (MSP) fixed by the government.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Farmers sell their produce mainly in yards
of designated agricultural markets. The government run ‘agmarknet’ portal provides
price information from agricultural markets across the country on different
agricultural commodities. A visit to the <a href="http://agmarknet.gov.in/PriceAndArrivals/arrivals1.aspx">portal</a> shows
that the market price of food grains, oil seeds and pulses is routinely below MSP.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Tracking the details of a specific commodity
provides more insight. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Tur (Arhar) <i>dal</i>
is an important part of the diet in both South and North India. Production is
insufficient to meet local demand and India regularly imports Tur. Karnataka is
a major producer with Kalaburgi district accounting for most of the produce.
The harvest is brought to the wholesale markets starting January. The MSP has
been set at Rs 5450/quintal by the central government, while the state government
has fixed a higher support price of Rs 6000/quintal, making good the difference
from its resources. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Following a relatively good monsoon, the ‘modal’
prices registered at the wholesale market in Kalaburgi in Jan 2018 were in the
Rs 4100-4200 range. Transactions happen over a price spread around the ‘modal’
price and there will be many farmers getting lower than the reported ‘modal’
price. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">What does it mean to get a price below MSP?
</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The MSP declared by the government is based
on the recommendations of the ‘Commission on Agricultural Costs and Prices’
(website: <a href="https://cacp.dacnet.nic.in/">https://cacp.dacnet.nic.in/</a>
). The Commission is asked to recommend the MSP based on the total cost of
production including input costs, labour and capital employed as well as other
considerations such as demand and supply, inter-crop parity, etc. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">In the case
of Tur <i>dal</i>, the production costs for
2017-18 work out to Rs 4612/quintal and the recommended MSP is Rs 5450/quintal,
18% above production costs. When farmers get paid significantly less than the MSP,
they may not even be recovering the cost of inputs.</span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Why
the MSP provides no price support<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The government appointed ‘National
Commission on Farmers’ headed by the well known agricultural scientist, Dr Swaminathan
recommended way back in 2006 that MSP should be fixed at 50% above the cost of
production to allow for a decent margin for the farmer. The present government announced
in the 2018 budget that it would fix MSP’s according to this recommendation. There
is no clarity yet on how or when it will do it.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The MSP as it is currently fixed has barely
enough margins built in for a small farmer to survive. However, the central
government does not adequately support even this MSP. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Firstly, a commodity may have an announced
MSP, but will not be procured unless it is also a commodity distributed through
the PDS. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Secondly, the government places limits on
how much can be procured on certain crops and procures selectively in certain
regions. Returning to our example of Tur <i>dal</i>,
because of these restrictions, each farmer in Karnataka can sell only a maximum
of 20 quintals at MSP to the state agencies as <a href="http://www.thehindu.com/news/national/karnataka/toor-price-crash-leaves-farmers-traders-distressed/article22646819.ece">reported</a>
in the Hindu (Feb 3, 2018).</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Drilling further into government
procurement reveals some of these details. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The NSSO survey of farming households, ‘Key
Indicators of Situation of Agricultural Households in India, NSS 70<sup>th</sup>
round, Dec 2014’ (NSS70), <a href="http://mospi.nic.in/sites/default/files/publication_reports/KI_70_33_19dec14.pdf">reports</a>
the estimates of procurement by government and co-operatives at MSP and these
are captured in the table.</span></span></div>
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<b><span style="font-family: "arial" , "helvetica" , sans-serif;">Share of crop on sale procured by government and
co-operatives at MSP (Data from NSS 70th round, 2014)<o:p></o:p></span></b></div>
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<br /></div>
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<b><span style="font-family: "arial" , "helvetica" , sans-serif;">%age of crop<o:p></o:p></span></b></div>
</td>
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<b><span style="font-family: "arial" , "helvetica" , sans-serif;">%age of
farmer beneficiaries<o:p></o:p></span></b></div>
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<b><span style="font-family: "arial" , "helvetica" , sans-serif;">Sugarcane<o:p></o:p></span></b></div>
</td>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">52<o:p></o:p></span></div>
</td>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">39<o:p></o:p></span></div>
</td>
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<tr style="height: 15.0pt; mso-yfti-irow: 3;">
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<b><span style="font-family: "arial" , "helvetica" , sans-serif;">Wheat<o:p></o:p></span></b></div>
</td>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">19<o:p></o:p></span></div>
</td>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">3<o:p></o:p></span></div>
</td>
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<tr style="height: 15.0pt; mso-yfti-irow: 4;">
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<b><span style="font-family: "arial" , "helvetica" , sans-serif;">Paddy<o:p></o:p></span></b></div>
</td>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">14<o:p></o:p></span></div>
</td>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">4<o:p></o:p></span></div>
</td>
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<b><span style="font-family: "arial" , "helvetica" , sans-serif;">Maize<o:p></o:p></span></b></div>
</td>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">9<o:p></o:p></span></div>
</td>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">1<o:p></o:p></span></div>
</td>
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<tr style="height: 15.0pt; mso-yfti-irow: 6;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 15.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.7pt;" valign="bottom" width="69"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;">Cotton<o:p></o:p></span></b></div>
</td>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">7<o:p></o:p></span></div>
</td>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">5<o:p></o:p></span></div>
</td>
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<tr style="height: 15.0pt; mso-yfti-irow: 7;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 15.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.7pt;" valign="bottom" width="69"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;">Groundnut<o:p></o:p></span></b></div>
</td>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">3<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 137.05pt;" valign="bottom" width="183"><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">2<o:p></o:p></span></div>
</td>
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<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 15.75pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.7pt;" valign="bottom" width="69"><div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif;">Onion<o:p></o:p></span></b></div>
</td>
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<span style="font-family: "arial" , "helvetica" , sans-serif;">3<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 137.05pt;" valign="bottom" width="183"><div align="right" class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">1<o:p></o:p></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The table shows the relatively high procurement in sugarcane,
wheat and paddy. The procurement in commodities not appearing in the table
including Tur <i>dal</i> was 1% or less of
the total produce on offer for sale. These numbers provide an idea of
commodities with some price support and commodities where MSP is just a number.</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">There is another number of interest - the
percentage of farmers selling a particular commodity who are able to get the
benefit of sale at MSP to government. From the table, it can be seen that this
is always lower than the percentage of produce procured indicating that larger
farmers have better access to government procurement.</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The contrast between the percentage of
farmers selling to government agencies and percentage of produce procured is particularly
striking in the case of wheat, paddy, maize and onion. This is because
procurement in these crops is concentrated in regions with large scale
production where there are also large farmers specializing in the crop.</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Punjab
and Haryana currently account for nearly 50% of the paddy and 70% of the wheat
procured. This means that even for commodities with price support, the support
may be available only in some regions. In February 2018, both paddy and wheat were
selling below MSP in many markets of Karnataka.</span></span></div>
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<b><span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The unjustifiable
cost of intermediation<o:p></o:p></span></span></b></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">There is another revealing characteristic
of India’s agricultural markets. This is the huge spread between the price
realized by the farmers and the price paid by consumers. Returning to the
example of Tur dal, in Jan 2018, while farmers were getting paid Rs 41/kg,
consumers were paying almost double, Rs 79/kg in Bengaluru, according to the
state civil supplies price monitoring cell. </span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">This spread is not warranted by the value
added by the middlemen in the agricultural supply chain. It means that the
middlemen – primarily commission agents, traders and wholesale merchants – are
able to control prices paid to the farmers and prices charged from consumers to
their advantage. Farmer’s income falls well short of potential because of the
high cost of intermediation.</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Intermediaries corner the profits even when
market prices are high because of supply shortages, denying farmers most of the
upside in prices. Returning to the Tur example, following severe rainfall
deficit in 2015, in Jan 2016, the retail prices in Bengaluru climbed to 170/kg.
However the farmers with reduced quantities to sell were getting only a price
of between 90-98/kg in the Kalaburgi <i>mandi</i>.
</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The returns below MSP to the farmer along
with the high intermediation costs point to a market failure. The debt of the
Indian farmer is a consequence. NSS70 estimates that small and tiny farmers -
with 1 ha or less of land constituting nearly 70% of agricultural households -
on average earned income less than consumption expenditure. </span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Unsurprisingly, 52% of agricultural
households were indebted in 2013 with an average outstanding loan of Rs 47,000.
Across farmers, 40% of the borrowing was from non-institutional sources such as
money lenders, shop keepers etc, typically paying high interest.</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The debt incurred by farmers is for buying
seeds and fertilizer and other inputs, the working capital if you please, and
to meet consumption expenditure. The low returns on average means that the
farmer is never able to repay his debt. It also means that there is very little
investment in agriculture.</span></span></div>
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<b><span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></b></div>
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<b><span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Why the
market does not work for the farmer <o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">It does not require rocket science to spot
the reasons for this market failure. </span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The basic hypothesis of the ‘market’ is that
any producer will produce and sell only at a price where he makes profit. This
unfortunately is not true for India’s farmers.</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Firstly, there is the issue that is common
to agriculture everywhere in the world. Unlike in industry where producers get
continuous price signals and can react by stepping up (or down) production,
farmers have no control over production once they have sown the seeds. The
production cycle once set in motion has to be carried through till harvest
irrespective of what price their produce will eventually fetch. Decisions on
what to produce have to be made based on expectation of future price. If the
expectation proves wrong, the farmer is faced with losses.</span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Coming specifically to Indian agriculture,
there are tighter constraints. </span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">India’s 90 million agricultural households
(as of 2013) work tiny pieces of land - 85% work less than 2 hectares - mostly
lacking irrigation and dependent on rainfall. They have limited choice on what
they can grow under these conditions. Soil type, rainfall, climate are the
determinants. There are of course exceptions to this rule such as the farmers
who have irrigation in the Punjab or the sugarcane belt of UP. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Farmers do not have the option to stop farming
as they are mostly already in debt, there are no other job options available
and the income from farming is essential for survival. This means that farmers will
continue to produce the crops they have done season after season and in
particular, try to increase production as the only way known to them to maximise
income. At best, they will choose to grow crops (if they have do have a
choice), based on expectation of future prices. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The lack of access of farmers to storage
facilities means that on harvest, they have no other option but to sell even
their non-perishable crops at whatever price they get.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Farmers as a whole have no pricing power,
no ability to reduce production even if the sale of their produce is not
profitable. They are also often beholden to the very traders with whom they trade
for these traders would have helped them through the production cycle with
short term loans, transport and storage. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">In the backdrop of the fundamental
asymmetry in the economic standing of farmers and traders, regulations intended
to protect farmers interests do not work. Traders effectively control the
regulated <i>mandis</i>, cartelize with ease
and set prices. The farmers are aware of this but have no option but to play
along.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Do
farmers need out-of-the-box ideas?<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">How is this situation to be remedied? There
are two diametrically opposite views. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">In the view of what one may call the “free
marketers”, what farmers need are alternate channels to the regulated <i>mandis</i> to sell their crops. With full
freedom to sell to whomever they please, the claim is that farmers will be able
to get the best prices. The hopes for establishing these alternate channels are
pinned on big corporations. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The BJP government put together a ‘model’
regulation for allowing alternate channels in agricultural marketing in 2003
and the Congress government framed the rules to go with the regulation in 2006.
Most states adopted these changes in the following years. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">We will defer a detailed discussion to a
subsequent piece, but suffice it to say that 12 years after the wholesale
agricultural market was opened up to corporate India, there is no appreciable
change in the way the market functions or the returns that farmers get. </span></span></div>
<div class="MsoNormal">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span lang="EN-GB" style="background: white;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span lang="EN-GB" style="background: white;">The
fact is that the basic lack of pricing power among farmers does not change when
they deal with corporations instead of traders. Also, there is no reason to
assume that the margins that corporations make because of bringing in greater
efficiency in the supply chain will be shared with farmers. C</span><span lang="EN-GB">orporations are not going to bail out farmers.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">The state therefore must intervene! It needs to weigh in on the side of farmers
so that they have better pricing power. This requires the extension of MSP to
all major produce and active government procurement to ensure these price
floors hold. This is the safety net the farmers need. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">It requires small market yards and storage
facilities that are easily accessible to the farmers. It requires use of
technology and better governance of agricultural markets to inhibit cartels and
bring transparency. It requires supply chains in the public sector to compete
with the private supply chains. </span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">But all this is well known.</span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">Addressing policy planners at a recent
meeting organized by the agriculture ministry, the Prime Minister was <a href="https://www.hindustantimes.com/india-news/pm-modi-hard-sells-pro-farmer-budget-proposals-says-agri-credit-raised-to-rs-11-lakh-crore/story-o5NlkKsFzUrh0eDGOrWtEJ.html">reported</a>
calling for<span style="color: #212121;"> “hackathons” in the IIT’s for out-of-the-box
ideas to increase farm income. </span></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #212121;"><br /></span></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="color: #212121;">The ideas and schemes to further the interests
of India’s farmers outlined above have been around for a long time. What is
required is commitment of adequate resources and efficient implementation. That
may also be described as good governance.</span></span></span></div>
<div class="MsoNoSpacing">
<br /></div>
<a href="https://www.blogger.com/blogger.g?blogID=2739979442130109754"></a>
<br />
<blockquote>
</blockquote>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-80767942604948284572017-07-09T11:22:00.001+05:302017-07-09T11:33:31.402+05:30Air India privatization is not a "reform"<div dir="ltr" style="text-align: left;" trbidi="on">
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(Published in the <a href="http://www.epw.in/journal/2017/27/commentary/privatisation-not-reform.html">EPW issue</a> of 8th July 2017)<br />
<br />
The government appears to be on the fast track to privatise Air India (AI), the country’s flag carrier airline with the union cabinet giving its approval soon after a recommendation from the Niti Aayog. The chief executive officer (CEO) of the NITI Aayog revealed that it took only 15 days to come up with the report recommending total privatisation of the carrier. The Aayog did not see any need to consult the stakeholders of AI—employees, management or even the Ministry of Civil Aviation (MCA).</div>
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The last time a plan for privatisation of India’s public sector airlines had been mooted—only to be quickly abandoned—was during the tenure of the National Democratic Alliance (NDA) government of 2000–04 (PAC 2014: 154). The years following this were extremely traumatic ones for both the Indian Airlines and AI and after their merger in 2007, also for the merged entity, with a rapid deterioration of its finances.</div>
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In April 2012, the government signed a 10-year restructuring plan with the AI. Since then, as required by the plan, it has been continuously monitoring the performance of the airline. Repeated statements by the MCA in Parliament over the years, the last as recently as on 9 March, have testified that the government is largely satisfied that the AI is progressing as per the turnaround plan (MCA 2017a). Against this backdrop, the Minister of Finance Arun Jaitley’s highlighting of AI’s debt and market share as reasons to proceed with its privatisation, is to say the least, curious.</div>
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So what caused AI’s finances to deteriorate rapidly till 2012?</div>
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<b style="box-sizing: border-box;">The Making of a Crisis</b></div>
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AI and Indian Airlines had been running profitably till 2005–06. However, their future had already been compromised by then.</div>
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During the period 1998–2004, no new planes were ordered for AI or Indian Airlines. This was at a time when competition was increasing from private airlines which were rapidly expanding their fleet. The NDA government was keen on privatising Indian Airlines and did not take decisions on the proposals for fleet expansion by Indian Airlines and AI (PAC 2014: 141, 154).</div>
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Fleet expansion proposals were finally approved by the government (now of the United Progressive Alliance—UPA) in 2005–06. The orders for new aircraft would have been large ones considering that they came after a long interval. However, even here, the government interfered with the erstwhile AI to its detriment. An AI (pre-merger) board approved proposal for 28 aircraft in January 2004 which was revised to 68 aircraft by November 2004! The total estimated cost of the aircraft on order by the two airlines was over ₹41,000 crore and the only equity infusion planned was ₹325 crore for Indian Airlines. The acquisition was to be funded by debt to be repaid through revenue generation (CAG 2011: viii).</div>
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With the two airlines in a precarious situation, the government in its wisdom carried out their merger in 2007 at one stroke. The unions representing airline workers and staff were not consulted. From all accounts, it appears that it was an ill-thought-out act for it would have been difficult to find synergy in the two organisations. The two airlines flew different types of planes and hence the skills of pilots and engineers were different. They had different ticketing systems, and a different organisational culture. The merger imposed huge immediate financial costs and severely affected the morale of the employees.</div>
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Between 2007–08 and 2012, AI chalked up increasing losses each year. This along with loans taken to pay for the 111 planes on order added up to a huge debt. By April 2012, when the government finally signed on a turnaround plan for AI, the annual operational loss of the airline had increased to around ₹5,000 crore and its accumulated debt had reached nearly ₹43,500 crore. It was then operating on a capital base of ₹3,345 crore (AI 2012).</div>
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Even while the AI was struggling with aircraft shortage, the government went ahead and increased bilateral entitlements (including interior points of call in India) with West Asian countries much beyond the dictates of mutual traffic. At that time, the AI was not even able to utilise its existing quota on what were its most profitable routes. The West Asian carriers used sixth freedom traffic rights (the right to fly from one foreign country to another foreign country after stopping in one’s own country) to transport people from India to Europe and the United States (US) via their West Asian hubs, eating into AI’s share of passenger traffic in/out of India to these countries (CAG 2011: xii). The lack of planes to fly within India resulting from the delay in ordering new aircraft also had an effect on the AI’s passenger share within the country. The national carrier’s share of domestic passengers dropped from 23.1% in 2005–06 to 13% in 2011–12 (DGCA 2017).</div>
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<b style="box-sizing: border-box;">Work in Progress</b></div>
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As part of the turnaround plan, the government agreed to restructure some of AI’s debt to reduce the interest burden and also infuse capital to cover the cost of new aircraft. This was however conditional on AI meeting specific performance targets every year.<b style="box-sizing: border-box;"> </b>The infusion of capital, had it happened immediately, would have helped it in its turnaround initiatives. Instead, the government went for piecemeal recapitalisation on an uncertain schedule.</div>
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Subsidiaries were created for maintenance repair and overhaul (MRO) and ground handling services. An old criticism of AI was that it employed too many people and hence was inefficient. With the creation of the subsidiaries, the manpower employed per aircraft became comparable to other private airlines.</div>
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Between 2011–12 and 2015–16 (financial years), the last year for which official financial results are available, the airline showed a steady improvement in terms of its operational profit/loss as well as passenger load factor—the percentage of seats on offer that were filled. In 2015–16, the airline made a small operational profit, two years in advance of the turnaround milestone. Its low cost international airline subsidiary, Air India Express and its ground and cargo handling services company, AISATS also made profits (Table 1).<br />
<br />
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 192px;">
<colgroup><col span="3" style="width: 48pt;" width="64"></col>
</colgroup><tbody>
<tr height="20" style="height: 15.0pt;">
<td class="xl64" height="20" style="height: 15.0pt; width: 48pt;" width="64"><br /></td><td class="xl71" style="border-left: none; width: 48pt;" width="64"></td><td class="xl72" style="border-left: none; width: 48pt;" width="64"><br /></td></tr>
</tbody></table>
</div>
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<div style="box-sizing: border-box; margin-bottom: 10px;">
Table 1: Operational Parameters of Air India</div>
<div style="box-sizing: border-box; margin-bottom: 10px;">
Operational Passenger Load</div>
<div style="box-sizing: border-box; margin-bottom: 10px;">
Profit (` crore) Factor (%)</div>
<div style="box-sizing: border-box; margin-bottom: 10px;">
2011–12 -4,901 67.9</div>
<div style="box-sizing: border-box; margin-bottom: 10px;">
2012–13 -3,806 72.4</div>
<div style="box-sizing: border-box; margin-bottom: 10px;">
2013–14 -3,978 73.3</div>
<div style="box-sizing: border-box; margin-bottom: 10px;">
2014–15 -2,636 73.7</div>
<div style="box-sizing: border-box; margin-bottom: 10px;">
2015–16 105 75.6</div>
<div style="box-sizing: border-box; margin-bottom: 10px;">
2016–17 1,086* 76.4**</div>
<div style="box-sizing: border-box; margin-bottom: 10px;">
<br /></div>
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*Provisional estimate (MCA 2016a). **Estimate (MCA 2017b).</div>
<div style="box-sizing: border-box; margin-bottom: 10px;">
Source: Air India Annual Reports at http:www.airindia.in.</div>
</div>
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</div>
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<br />
AI’s financial results for 2016–17 are not officially available but indications are that there will be a significant improvement over the previous financial year in EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization) (Ghosh and Ghosh 2017). In answers to questions raised in the Lok Sabha, the MCA stated that AI was expected to improve its revenues in 2016–17 by 10%, revenue passenger km (RPKM) by 6.8% and passenger load factor by 6.2% (MCA 2017b). The provisional estimate for 2016–17 (financial year) was an operational profit of ₹1,086 crore and a net loss of 1,989 crore (MCA 2016a). Though AI continues to make a net loss because of interest outgo on debt which in 2015–16 was about ₹4,000 crore, the secretary, civil aviation, went on record in October 2016 to state that he expected a net profit by 2018–19, ahead of the turnaround plan which projects net profits only by 2021–22 (Mishra 2016). All information available publicly points to a continuing improvement in performance.</div>
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However, for AI to remain competitive in the longer term, steps need to be taken about its huge debt that has been a drag on the airline. Leaving aside low interest aircraft loans, the outstanding debt is around ₹30,000 crore, 90% of it is from public sector banks and financial institutions (MCA 2016b). The airline has prime real estate assets which it has found difficult to sell because of bureaucratic delays. If the government were to provide assistance in restructuring the debt, selling AI’s real estate assets and speed up infusion of the remaining capital of about ₹6,000 crore promised as part of the turnaround plan, the airline should be on a good wicket.</div>
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<b style="box-sizing: border-box;">Chequered History</b></div>
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The basic credo of supporters of privatisation is that the state should withdraw from the provision of all services (and production of all goods) which private corporations are able and interested in providing (producing). The only exception to this would be a “market failure” which render private players incapable of providing (or unwilling to provide) these services. The argument in support of such a belief is that state-controlled enterprises cannot function as efficiently as private corporations.</div>
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How does this argument stand up against the actual performance of India’s airlines over the last two decades?</div>
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Several early players such as Damania, Modiluft, Natural Energy Processing Company (NEPC) and EastWest folded up, some under a cloud. Air Deccan, the second largest airline in India in 2007, ran into losses and was ultimately taken over by Kingfisher Airlines. Kingfisher became defunct after borrowing ₹7,000 crore from public sector banks. Sahara was taken over by Jet Airways. Spicejet went close to bankruptcy in 2014–15 stopping operations and stranding passengers without notice and has come back only after a large equity infusion from a promoter.</div>
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In 2003–04, before the emergence of competition from low cost carriers, Jet Airways accounted for 44% and the public sector airlines together 43% of domestic passenger shares (DGCA 2017). An IMRB survey in October 2004 rated the Indian Airlines as the “most preferred airline”, above Jet (Sen 2009). The low cost carriers had a huge effect on the full service carriers of that period—IA (AI), Jet and Kingfisher. Kingfisher became bankrupt in 2012. Jet was able to survive only after equity infusion by Etihad of Abu Dhabi in 2013. The government appears to have played a role in the rescue by increasing the bilateral entitlements of Abu Dhabi (the number of passenger seats each way between India and Abu Dhabi), which coincided with the Jet–Etihad deal (Phadnis 2013). In 2017 till May end, Jet’s share of domestic passengers was 15.4% and AI’s was 13.3%, the rest being taken by low cost carriers (DGCA 2017). Jet and Indian Airlines (now Air India) have had a similar fall in share of passenger traffic within India after the entry of low cost carriers.</div>
<div style="background-color: white; box-sizing: border-box; color: #444444; font-family: Roboto, sans-serif; font-size: 15px; margin-bottom: 10px; text-align: justify;">
The finance minister has used the low passenger share to deride AI publicly to create public opinion in favour of its privatisation. The fact is that in 2015–16 compared to 2012–13, AI has flown 29% more passengers within India and increased its passenger load to 78.9% from 68.3%. During this period, the AI’s “available seat kilometres” increased only by 6% (DGCA 2017). What this points to is that its passenger share has been limited by the number of aircraft it has available to fly. As the MCA itself revealed in Parliament, there has been no capacity induction into the AI while private airlines have added substantial capacity. Between 2013–14 and 2015–16, AI’s capacity share in the domestic market came down from 17% to 15% (MCA 2016c). Its market share has come down because of decreasing capacity share. The government must own its share of responsibility for this situation.</div>
<div style="background-color: white; box-sizing: border-box; color: #444444; font-family: Roboto, sans-serif; font-size: 15px; margin-bottom: 10px; text-align: justify;">
If the measure of “efficiency” of an airline includes efficient use of capital and labour and providing services without disruption, then looking at the two decades of turmoil in the airline industry, it is hard to accept that private airlines in general have been necessarily managed efficiently.</div>
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<b style="box-sizing: border-box;">Unsustainable Debt</b></div>
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Extending the discussion of efficiency to India’s private corporate sector as a whole, it is useful to delve into what has been termed the “twin balance sheet problem.”</div>
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Over the years, India’s private corporations have borrowed heavily from banks to grow their businesses. Some of these businesses have failed and others are not generating enough revenue to service their debt. The banks who have lent them money have lost interest income and are in danger of having to write off their debts. It is estimated that three-fourths of all corporate lending could be from public sector banks (Chakravarty 2016).<span style="box-sizing: border-box; font-size: 11.25px; line-height: 0; position: relative; top: -0.5em; vertical-align: baseline;"></span>Public sector banks bear the brunt of the bad loan problem.</div>
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The government has stonewalled attempts to get the banks to name the bad debtors among private corporations. However, piecing together information from different sources, one finds that more or less all of India’s large industrial houses are involved.</div>
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A 2012 Credit Suisse report featured 10 large manufacturing houses—Lanco, Jaypee, GMR, Videocon, GVK, Essar, Adani, Reliance (Anil Ambani), JSW and Vedanta—with high levels of debt that they would find hard to service. A follow-up by Credit Suisse in 2015 found that the financial condition of these groups had deteriorated despite their attempts to sell assets to pare debts. These groups accounted for 27% of all corporate loans from the banking system (Sanjay 2015). In August 2016, the government stated in Parliament that the top 10 corporate groups owed public sector banks and financial institutions ₹5.7 lakh crore (PTI 2016). The businesses of these groups span areas extending from military hardware to steel, coal, power, oil and gas, roads, airports, railways and ports.</div>
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In June 2017, the Reserve Bank of India (RBI) identified companies of three groups from the list—Lanco, Essar and Jaypee—and nine other companies which together owed ₹1.75 lakh crore to banks to be dealt with under the bankruptcy code. It is estimated that at least half the debt will have to be written off by the banks.</div>
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In the telecom sector, the debt of India’s top seven telecom companies—Bharti Airtel, Vodafone, Idea, Reliance Communications, Reliance Jio and Tata Teleservices—increased by 20% in 2016–17 to ₹3.6 lakh crore and all the companies (except for the new entrant Reliance Jio) have problems servicing their debt (Sarkar 2017). The State Bank of India has the largest exposure to the industry and its chairperson has pleaded with the government to help the industry by deferring spectrum payments, providing duty waivers and reducing the goods and services tax (GST) rate in order to prevent its loans from imminently becoming non-performing assets (NPAs) (TNN 2017). While the incumbent operators blame Reliance Jio for their debt servicing problems, the latter points out that these companies were working with insufficient equity, relying too much on debt financing (PTI 2017).</div>
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A recent example from the power sector involves three large corporate houses—Tata, Adani and Essar. All of them won competitive bids based on tariff and set up power plants in Gujarat using imported coal. Their contracts have no provisions to link tariff with coal prices and the companies are running at a loss after coal prices increased and are unable to service their debt. The government is reportedly putting together a rescue package where the companies will be brought under state ownership (Dutta 2017).</div>
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The above examples do not capture the enormity of the bad debt problem. During the period 2013–15, public sector banks wrote off ₹1.14 lakh crore of debt (Mathew and Narayan 2016). Several additional lakh crore will likely be written off in the coming years. Eventually, the banks will have to be “bailed out” by the government through capital infusion.</div>
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The unsustainable debt of so many private corporations across a swathe of sectors periodically requiring government rescue—including debt write-off by public sector creditors—hardly speaks well about the innate superior efficiency of the private sector.</div>
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<b style="box-sizing: border-box;">Timing of Privatisation Decision</b></div>
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Why has the government announced the decision to privatise AI—a decision taken in great haste—just at a time when the airline is on the verge of becoming profitable?</div>
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The decision comes at a time when the government’s “reform” credentials are coming under question. These “reforms” which were eagerly anticipated by business leaders and foreign investors have got derailed and include making land acquisition easy, relaxing labour regulations for large factories and doing away with the obligations of banks to lend to the “priority sector” (farmers, small businesses, etc). The government’s inability to make a major dent in the “twin balance sheet problem” has severely affected new lending by banks to the private corporate sector. All this has affected the sentiment of business towards the government.</div>
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The announcement of the privatisation of the AI, considered a “soft target” by the government, is perhaps aimed at reversing this state of affairs. As a business newspaper editorialised,</div>
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(T)he privatization of Air India will boost investor sentiment in a big way as it demonstrates the government’s willingness and ability to take the reforms process forward. (<i style="box-sizing: border-box;">Mint</i> 2017)</div>
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<b style="box-sizing: border-box;">Case against Privatisation</b></div>
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Private investors are interested in the AI because it is an operationally profitable airline with a large fleet of mainly new aircraft, a profitable low cost international carrier like Air India Express, a profitable ground handling services venture, valuable immovable assets in land, offices, hotels and hangers; skilled human resources in the form of a large number of pilots and engineers; the only MRO set-up in India, prime slots at airports in the country and around the world, membership of Star Alliance, etc. The AI is also the largest Indian carrier of passengers across the country’s borders.</div>
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The privatisation of AI is only possible if the government writes off a significant part of its debt. This debt accumulated for the large part until 2012 has acted as a millstone around the airline’s neck and delayed its return to profitability. There are various proposals being mooted to once again restructure AI to make its main business—that of flying passengers—attractive to potential buyers. Whatever restructuring is done, there is no getting away from the fact that its debt has to be written off.</div>
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The responsibility for this debt rests squarely with the government and is due to its many omissions and commissions in the past—delayed acquisition of aircraft, late capitalisation of the airline, interference in decisions related to aircraft acquisition, the ill-thought-out merger of the AI and Indian Airlines and not providing a level playing field to the national carrier on international routes.</div>
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If the government extends the same benefits to the public sector airline (that it wants to for a possible private owner by writing off part of its debt), it will be able to forge ahead. However, given that the airline is close to becoming profitable, it appears that even assistance with restructuring of its debt to public sector banks and sale of its properties will help it to reach profitability and manageable levels of debt.</div>
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Publicly owned airlines can also be run efficiently. Singapore Airlines is an example. An efficiently run public carrier can bring stability to air transport services and provide the right competition to private airlines. It can also fulfil objectives that are not dictated by the exigencies of maximising profit—like providing essential coverage to underserved areas or unscheduled services to the Indian diaspora during an emergency— as it does now.</div>
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The corporate business press is lauding the government’s privatisation decision, hailing it as the resumption of “reforms” which will consist of more disinvestment and privatisation. It is hard to understand how mismanaging public assets and then selling them is “reform.” Only those who see opportunities for profit in such sales can pretend that these are reforms.</div>
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The real reform that India needs is in the manner that public sector enterprises are managed. This reform must ensure at a minimum that there are well-defined policy guidelines for these enterprises available in the public domain, that the enterprises are compensated for costs incurred in implementing specific government policies not in line with their commercial objectives, that there is professional management in place and that this management is shielded from interference from politicians and bureaucrats.</div>
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The present government came with the claim of providing “good governance.” There is no reason why this should not extend to the management of public sector enterprises.</div>
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<strong style="box-sizing: border-box;">References</strong></div>
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PTI (2016): “Top 10 Corporate Groups Owe ₹5.73 Lakh Crore to Lenders,” <i style="box-sizing: border-box;">Times of India</i>, 2 August, <a href="http://timesofindia.indiatimes.com/business/india-business/Top-10-corporate-groups-owe-" style="background: transparent; box-sizing: border-box; color: #e21a2c;">http://timesofindia.indiatimes.com/business/india-business/Top-10-corpor...</a>₹-5-73-lakh-crore-to-lenders/articleshow /53507056.cms.</div>
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Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-82412700620820939392017-02-11T14:21:00.001+05:302017-07-09T12:27:58.070+05:30Modi government's solar policy - 2 :<div dir="ltr" style="text-align: left;" trbidi="on">
<h2 style="text-align: left;">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">Is
the government’s overly aggressive solar thrust in public interest?</span></span></b></h2>
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<span style="font-family: "verdana" , sans-serif;"><span lang="EN-GB"><span style="font-family: "times" , "times new roman" , serif;"><br /></span></span>
<span lang="EN-GB"><span style="font-family: "times" , "times new roman" , serif;">(This piece appeared in the Feb 11th issue of <a href="http://www.epw.in/journal/2017/6/commentary/governments-overly-aggressive-solar-thrust-public-interest.html">EPW</a> ; reproduced below)</span></span></span></div>
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<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
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<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Shortly after
coming to power the Modi government declared a fivefold increase in the 2022 target
for solar generation capacity in the country to an eye popping 100 GW.<span class="MsoEndnoteReference"> </span>Less than a year earlier, India’s electricity
establishment had estimated 100GW to be India’s solar potential till 2032 (MoP
2014:22)! To see the numbers in perspective, India’s current solar capacity is
less than 8 GW.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The target has
been set without reference to the coal-fired capacity addition in progress and
at a time when capacity utilization of existing thermal plants is very low and there
is a large uncertainty on how electricity demand will develop in the next few
years (Singh 2016, Tongia 2016:6).<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The only argument
the government has offered in favour of its aggressive solar thrust is that
this would help India meet its international commitments on carbon emissions (GOI,
2015a). There have been questions raised about whether such a rapid build-up of
non-fossil fuel capacity is indeed necessary to meet these commitments (Tongia
2016:17). These have remained unanswered.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The government
estimates the investment requirement for 100 GW of solar generation to be of the
order of Rs 6 lakh crores. Globally, RE is a favourite of investors and the
government’s solar program has been enthusiastically received. Foreign
investors such as SunEdison, SkyPower, Fortum India and SoftBank and Indian
business houses including Adani, Tata and Mahindra have aggressively
participated in the large solar tenders. Competition is fierce and the Ministry
of New and Renewable Energy has had to hire large halls to accommodate all
interested players during pre-bid meetings (Kenning 2015)!<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">How will such an
aggressive solar program impact India’s electricity distribution companies? How
will it affect the cost, availability and quality of electricity for consumers?
Is the pace of solar adoption pushed by the government in public interest? These
are some questions that this paper attempts to answer.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<h3 style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><b><span lang="EN-GB">1.<span style="font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span></span><!--[endif]--></b><span lang="EN-GB"><b>Challenges
of renewable energy on the grid</b><o:p></o:p></span></span></h3>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The thrust of
the government is entirely on grid connected solar energy. A little background
is useful to understand the challenge this poses for electricity distribution. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Electricity
demand typically varies round the clock. For example, the all India average
pattern shows a higher demand during the day than at night with a sharp late
evening peak (PGCIL 2012: 57). It is a basic requirement of a stable
electricity grid that demand and supply be “balanced”, or in other words,
matched at all times and over different time scales.</span></span><br />
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<h4 style="line-height: normal; margin-bottom: 0.0001pt; text-align: left;">
<b><span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Balancing
demand and supply</span></span></b></h4>
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<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">There are
several options for balancing. On the supply side, the output of power plants can
be controlled to follow demand. On the demand side, the options can be to store
energy when there is excess supply and to curtail demand forcibly or through
economic disincentives when there is a deficit.<b><o:p></o:p></b></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Conventional
power plants – such as coal, gas-fired and reservoir based hydro power - are
amenable to output control to varying extents. Their use in balancing is
determined by their operational “flexibility” - the range over which their output
can be changed and the rate at which the change can be made. The capacity
available for flexible use is termed “balancing capacity”.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The output of
gas-fired and hydro power plants with reservoirs can be changed rapidly and
over a large range to handle changing load. These plants are high in flexibility.
The old (“subcritical”) coal-fired plants were designed to provide a steady
output. Output changes in these plants happen relatively slowly and over a
smaller range and frequent output changes can lead to wear and tear with
attendant costs. These plants are low on flexibility. Newer “supercritical”
coal-fired plants are by design more flexible and resilient than the older
subcritical plants (PGCIL 2012: 120-124).<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Currently, demand
is typically assessed from load profiles from the past (previous day, same day previous
week or year) which can give an indication of the load variations to be
expected. Conventional generators are scheduled to match the expected load. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The intra-day
variation in demand is addressed mainly by varying output of reservoir based
hydro plants. Coal plants provide the “base load” and their output is varied
only in a small range (PGCIL 2012:125). In recent years, this range has been
expanding steadily indicating need for increasing balancing capacity (MoP
2016b: 28). The use of gas-fired plants in balancing has been discouraged by
non-availability of gas and high price. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">When there is
insufficient supply, “load shedding” is resorted to. The Indian grid has hardly
any storage capacity available as the need for storage solutions has not been
acutely felt in the past.</span></span><br />
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<h4 style="line-height: normal; margin-bottom: 0.0001pt; text-align: left;">
<b><span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Implications
of renewable energy for balancing </span></span></b></h4>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The presence of
solar energy generators on the grid makes balancing more challenging for
several reasons. One is that electricity regulation in India incentivizes solar
energy by conferring a “must run” status on solar generators; their entire
output must be accepted into the grid. This makes solar power plants “inflexible”
from a balancing standpoint.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">A second is that
solar power is variable. Solar power plants produce power only in daylight
hours and their output varies with the movement of the sun, peaking at midday. Balancing
now needs to be carried out for load as well as supply variability. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">A third reason
is that solar output is dependent on weather. Cloudy or foggy conditions lower
output and introduce intermittency into the variations. The expected output
under such conditions, obtained from models using weather forecasting data, has
to be available sufficiently in advance to enable scheduling of conventional
generators for balancing. Since weather is not entirely predictable, actual
generation will show deviations from forecasts and these have to be handled in
real time.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Wind mills are
the other major source of renewable energy (RE) in the Indian context. Together
with solar, they account for over 90% (160 GW) of the RE target for 2022. These
plants also have a “must run” status and produce output that is variable and
influenced by weather conditions. From a balancing perspective, they have
issues similar to solar.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<h4 style="text-align: left;">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">Balancing
areas in India’s federal electricity setup</span></span></b></h4>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">There is another dimension to balancing
that derives from India’s federal electricity setup - electricity provisioning
is a state government responsibility. Each state has to maintain the supply-demand
balance in its own grid which becomes the “balancing area”. Access to balancing
capacity commensurate with the RE capacity planned is required in each
balancing area, that is, at the level of every state.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">The RE potential of a state depends on
various factors like the level of solar irradiation and wind conditions. Seven
states – Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Gujarat, Madhya
Pradesh and Rajasthan – are suitable for both wind and solar generation and
account for 70% of the aggregate wind and solar capacity planned across India (MNRE
2016). These have been termed “RE rich” states.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">As to generation, historically, states have
had their own dedicated power plants or shares in the capacity of central public
sector power plants. State distribution utilities procure a bulk of their power
requirements (89% in 2011-12) through long term power purchase agreements
(PPA’s) with these state owned plants and some private plants (NTPC 2012). The
remaining comes from generators with ‘untied’ capacity that are either recently
commissioned private plants that have not found long term customers or private
plants operating as merchant producers.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">Long term PPA’s pretty much fix the
generation resources and balancing capacity in the portfolio of a state. They also
come in the way of states pooling their balancing resources. A state looking
for additional balancing capacity outside of its fixed portfolio has to find it
from the limited pool of ‘untied’ generators.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">For these reasons, there can be a wide
mismatch between the balancing capacity in different states and the RE capacity
planned for them. <o:p></o:p></span></span></div>
<h4 style="line-height: normal; margin-bottom: 0.0001pt; text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><b><span lang="EN-GB"><span style="font-family: "times" , "times new roman" , serif;"><br /></span></span></b></span></h4>
<h4>
<span style="font-family: "verdana" , sans-serif;"><b><span lang="EN-GB"><span style="font-family: "times" , "times new roman" , serif;">The
experience of Tamil Nadu: </span></span></b></span></h4>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Tamil Nadu currently
has the highest RE capacity penetration among all states with RE (largely from
wind mills) accounting for 56% of its overall generation capacity. Its balancing
capacity is inadequate for this level of penetration (GIZ 2015: 54, 63-65). Use
of its limited reservoir-based hydro capacity for balancing is restricted by
irrigation release schedules and periods of high inflows into reservoirs when
hydro power generation cannot be curtailed. Neighbouring Karnataka and
Telangana, which are part of the Southern Electricity Region, are rich in hydro
power resources, but these are not available to Tamil Nadu. The state has no
flexible gas-fired plants and limited flexibility available in its old
coal-fired plants (CEA 2013:13).<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Till early 2016,
in the absence of capability for wind power forecasting, short term power
purchases were planned after making assumptions about wind generation. If wind
power generation was greater than expected, after exhausting its limited
balancing options, the state utility would have only two options - either back
down power from private coal plants contracted for short term power or cut off
wind power plants from the grid.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Either option
has been problematic for the utility - violating contract provisions in one
case and not respecting the “must-run” status accorded to wind generators in
the other. The dispute involving the state utility, coal-fired plants and the wind
power producers is now in the courts (Vaitheeswaran 2015). Legal issues aside,
there are negative economic consequences either way. Varying power from coal
plants means underutilization of capacity and higher costs related to wear and
tear. Backing down wind power means wasted energy.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<h3 style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><b><span lang="EN-GB">2.<span style="font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span></span><!--[endif]--></b><span lang="EN-GB"><b>Preparations
for RE</b><o:p></o:p></span></span></h3>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The central government’s
massive RE targets require a commensurate increase in balancing capability at
least in the RE rich states. Balancing resources can be augmented by dedicated transmission
corridors distributing RE across states, grid storage and additional flexible
generation – all long gestation infrastructure (PGCIL 2012:116). Besides
resources, accurate forecasting of RE generation is essential for balancing. What
follows is an assessment of the central government’s preparatory work in each
of these areas. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<h4 style="line-height: normal; margin-bottom: 0.0001pt; text-align: left;">
<b><span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Grid
Storage</span></span></b></h4>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Pumped storage
is not only the most widely deployed grid level energy storage technology, it also
the most flexible and competitive one (GIZ 2015: 80). Pumped storage hydro
electric plants store and generate electricity by moving water between
reservoirs at two different heights. While India has a very limited capacity of
operational pumped storage, the electricity establishment has identified a
number of hydropower projects that can be developed to support pumped storage
(CEA 2013: 39-43). The government however has just woken up to the need to
identify concrete projects and there is talk of setting up 10GW of pumped
storage (ET Bureau 2016).<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><span lang="EN-GB">Grid level battery
storage technologies</span> are evolving and in one estimate 3-8 times more
expensive than pumped storage (GIZ 2015:80). <span lang="EN-GB">There are
several vested interests active in promoting these technologies including the US
– India business council</span> and the government <span lang="EN-GB">seems to have
fallen for the hype created around them. The public sector Solar Energy
Corporation of India has put out tenders for solar capacity with storage
components potentially driving up the cost of solar electricity (Clover 2016).
The storage component is miniscule as of now and nowhere near the scale needed to
be practically useful to the distribution companies (DISCOMS).<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><span lang="EN-GB">It seems that storage
can be safely discounted as an option for balancing in the run up to 2022. </span><o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<h4 style="line-height: normal; margin-bottom: 0.0001pt; text-align: left;">
<b><span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Forecasting
and Dispersing RE</span></span></b></h4>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; tab-stops: 323.35pt; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;"> <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Renewable energy
management centres (REMC’s) are to be set up in at least all the RE rich states
with the responsibility for state wide forecasting of RE. The costs incurred in
managing the uncertainty in predicting renewable generation will not be part of
its purchase cost; these costs are to be “socialized” among grid users (CERC
2015). Till mid 2015, there was no centralized forecasting for renewable
generation anywhere in India (GIZ 2015:60). Tamil Nadu has inaugurated its REMC
recently (Srikanth 2016).<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><span lang="EN-GB">Transmission
corridors (termed “Green Energy Corridors”) providing RE clusters in RE rich
states access to neighbouring states were a part of the 12<sup>th</sup> plan.
The corridors are under implementation with an enlarged scope to include
connectivity to the "ultra mega solar parks" </span><span style="color: #222222;">and </span><span lang="EN-GB">will enable RE generators to disperse
electricity in a wider geography with more balancing resources than available
in the RE rich states </span><span style="color: #222222;">(MoP 2016b:42)</span><span lang="EN-GB">.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Both the forecasting
and transmission infrastructure are early work in progress and there is no
visibility into when they will be ready. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<h4 style="line-height: normal; margin-bottom: 0.0001pt; text-align: left;">
<b><span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Flexible
generation</span></span></b></h4>
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<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">There is little
chance of capacity addition in gas-fired thermal plants in the 2022 time frame
with existing gas-fired plants running at partial capacity because of the cost
of gas which has to be imported. Hydro power projects totalling over 12 GW are
under construction (CEA 2015). Possibly less than half of this capacity will be
amenable to flexible use. Most projects are many years behind schedule because
of environmental related standoffs and opposition from local populations. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Old coal-fired
plants can be made more flexible through retro-fitting. This will require
capital expenditure and there are no signs that governments (who own most of
these plants) are seriously considering this option. A total of 73 GW of coal
capacity is under construction of which supercritical plants account for 50 GW (CEA
2016, MoEFCC 2015:72). <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">One can conclude
that coal-fired plants, in particular super-critical ones, will be the mainstay
of RE balancing. With conventional capacity addition far lower than planned RE
capacity addition (of 130 GW), India’s overall “balancing potential” – the
ratio of balancing capacity to RE capacity – is set to decrease in the run up
to 2022.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<h4 style="line-height: normal; margin-bottom: 0.0001pt; text-align: left;">
<b><span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Market
for balancing capacity</span></span></b></h4>
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<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The mere
existence of flexibility in generation will not translate to flexible
operations as the later has negative financial implications for the operator.
For instance, in the case of coal-fired plants, these are due to wear and tear
reducing the life of the plant, higher maintenance costs and costs associated
with capacity underutilization and lower efficiency. The government is
therefore moving to incentivize flexible operations. There is already a
regulation to compensate generators for holding capacity in reserve for
responding to grid management requests in real time. A framework for market
based pricing for balancing capacity is just down the line.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Will market
based incentives solve the problem of making adequate balancing capacity
available in the RE rich states? <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">There are some
constraints. Firstly, the generation capacity available in the electricity
market untied to PPA’s is currently limited, though it is slated to rise with
the commissioning of new plants. Secondly, inter-regional transmission
constraints can come in the way of RE rich states using flexible capacity from
regions other than their own. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">The later
problem is illustrated by the Southern Electricity Region which has been facing
a generation capacity deficit for several years. Coal-fired generators in the Western
Electricity region are unable to provide power to the Southern Region because
of transmission bottlenecks and their capacity lies underutilized. Market based
pricing for electricity has not solved the problem of electricity deficit in
the southern region in five years; electricity prices at the Indian Electricity
Exchange have remained significantly higher for the southern region compared to
the western region from 2011 onwards (Kasturi 2016:24). <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Two years after
announcing massive RE targets, the government still does not have an assessment
of the actual balancing capacity available with the RE rich states or how this
will grow in future! It appears to believe that the market for balancing
capacity will somehow solve all problems.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<h3 style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;"><b><span lang="EN-GB">3.<span style="font-stretch: normal; font-variant-numeric: normal; line-height: normal;"> </span></span><!--[endif]--></b><span lang="EN-GB"><b>The
real cost of solar</b><o:p></o:p></span></span></h3>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">State utilities
are generally strained financially and will not be keen to purchase RE as long
as it is relatively expensive. To make RE more attractive, the central government
has worked out ways of subsidizing it at the cost of public sector companies in
the power or fuel sector. Inter-state transmission charges for solar
electricity have been waived at the cost of the PGCIL. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">NTPC contracts
for solar power from producers and sells it to DISCOMS after subsidizing it in
the following way. It “bundles” solar power with low cost power from its coal-fired
plants and offers utilities power at a rate which is lower than its purchase
price for solar electricity (Upadhyay 2015). This bundled price has to approach
“grid parity” – the average price of electricity contracted by utilities - for
NTPC to be able to find willing buyers. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span lang="EN-GB"><span style="font-family: "verdana" , sans-serif;">Of course, even
if solar prices reach grid parity it does not mean that solar has become cost
effective compared to other sources of energy. The cost of balancing variability
in generation through flexible capacity held in reserve must also be attributed
to solar power. To this must also be added the cost of infrastructure for
forecasting RE and the costs arising from errors in forecasting. The government
has not even hazarded a guess at these costs yet.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0cm; mso-layout-grid-align: none; text-autospace: none;">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">As subsidies alone are not enough to
make solar power attractive, the government has also taken recourse to coercion.
The new tariff policy calls for high RE purchase obligations for DISCOMS with the
target for solar alone being 8% of non-hydro power consumed by every utility by
2022 (MoP 2016a). To make sure that states comply with the RPO targets, such
compliance has been made part of the conditions associated with the ‘Ujwal
Discom Assurance Yojana’ (UDAY) that provides relief to indebted state DISCOMS
(GOI, 2015b).<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<h4 style="text-align: left;">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">Negative
consequences of force feeding RE</span></span></b></h4>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">Forcing DISCOMS to absorb RE beyond
their ability to handle it will have consequences for the health of the DISCOMS
and the cost and quality of electricity supply. A key assumption behind UDAY is
that power costs will come down with lower cost of coal and help DISCOM
finances. Rapid solar penetration will push up the cost of power. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">Utilities are already hard put to handle
load variation even today. They lack accurate load forecasting, flexibility in
conventional generation, balancing resources such as pumped storage and
generation reserves to handle different eventualities on the grid (MoP 2016b:
11). For customers, this has meant a regime of poor quality and unscheduled power
cuts. With high RE penetration and an expected further deterioration in balancing
potential, this regime is bound to continue in to the future. The government is
also preparing to use demand curtailment curtail for balancing by pushing for
large scale installation of smart meters that will allow setting time-of-day
tariff (MoP, 2016a). <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">Public interest will be better served if
the pace of solar (and wind) capacity build up is compatible with the balancing
capacity available with the states and their ability to manage RE variability.
The government must pay as much attention to capacity building in
inter-regional transmission, pumped storage and highly flexible generation as
it is doing to solar generation. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">Renewable energy targets based on these considerations
rather than impetuous declarations will be sustainable and allow steady
decrease of carbon emissions. A slower adoption of solar generation will be
beneficial for yet another reason - solar power, as long term trends suggest,
will only get cheaper with time.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<h3 style="text-align: left;">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">References:</span></span></b></h3>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif; font-size: x-small;">CEA (2013): “Large scale grid
integration of renewable energy sources - Way forward”, Central Electricity
Authority, November, http://cea.nic.in/reports/others/ps/pspa1/large_scale_grid_integ.pdf<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif; font-size: x-small;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif; font-size: x-small;">- (2015): “Hydro electric projects under
execution”, Central Electricity Authority, November, http://www.cea.nic.in/reports/monthly/hydro/2015/hydro_execution-11.pdf<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: "times" , "times new roman" , serif; font-size: x-small;"><span lang="EN-GB" style="font-family: "verdana" , sans-serif; line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB" style="line-height: 115%;">- (2016): “Monthly report on broad status of
thermal projects in the country”, Central Electricity Authority, July, </span><span lang="EN-GB"><a href="http://www.cea.nic.in/reports/monthly/broadstatus/2016/broad_status-07.pdf"><span style="line-height: 115%;">http://www.cea.nic.in/reports/monthly/broadstatus/2016/broad_status-07.pdf</span></a></span><span lang="EN-GB" style="line-height: 115%;">
<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: "times" , "times new roman" , serif; font-size: x-small;"><span lang="EN-GB" style="font-family: "verdana" , sans-serif; line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB" style="line-height: 115%;">CERC (2015): “Framework on Forecasting, Scheduling and Imbalance Handling for Variable
Renewable Energy Sources (Wind and Solar): Statement of Reasons”,
Central Electricity Regulatory Commission, </span><span lang="EN-GB"><a href="http://www.cercind.gov.in/2015/regulation/SOR7.pdf"><span style="line-height: 115%;">http://www.cercind.gov.in/2015/regulation/SOR7.pdf</span></a></span><span lang="EN-GB" style="line-height: 115%;"><o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: "times" , "times new roman" , serif; font-size: x-small;"><span lang="EN-GB" style="font-family: "verdana" , sans-serif; line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB" style="line-height: 115%;">Clover, Ian (2016): “India: storage to
be included in 100 MW tranche of Andhra Pradesh 750 MW solar tender”<span style="border: none windowtext 1.0pt; mso-border-alt: none windowtext 0cm; padding: 0cm;">, <i>PV Magazine</i>, 15 March,<span class="apple-converted-space"> </span></span></span><span lang="EN-GB"><a href="http://www.pv-magazine.com/news/details/beitrag/india--storage-to-be-included-in-100-mw-tranche-of-andhra-pradesh-750-mw-solar-tender_100023702/#axzz4Hs5QeTPR"><span style="line-height: 115%;">http://www.pv-magazine.com/news/details/beitrag/india--storage-to-be-included-in-100-mw-tranche-of-andhra-pradesh-750-mw-solar-tender_100023702/#axzz4Hs5QeTPR</span></a></span><span lang="EN-GB" style="line-height: 115%;"><o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: "times" , "times new roman" , serif; font-size: x-small;"><span lang="EN-GB" style="font-family: "verdana" , sans-serif; line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB" style="line-height: 115%;">ET Bureau (2016): “India readies plan to
improve renewable power storage”, <i>Economic
Times</i>, 22 August, </span><span lang="EN-GB"><a href="http://economictimes.indiatimes.com/industry/energy/power/india-readies-plan-to-improve-renewable-power-storage/articleshow/53802021.cms"><span style="line-height: 115%;">http://economictimes.indiatimes.com/industry/energy/power/india-readies-plan-to-improve-renewable-power-storage/articleshow/53802021.cms</span></a></span><span lang="EN-GB" style="line-height: 115%;">
<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: "times" , "times new roman" , serif; font-size: x-small;"><span lang="EN-GB" style="font-family: "verdana" , sans-serif; line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB" style="line-height: 115%;">GIZ (2015): “Report on Forecasting,
Concept of Renewable Energy Management Centres and Grid Balancing”,</span><span style="line-height: 115%;"> Deutsche Gesellschaft für Internationale
Zusammenarbeit (GIZ) </span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span style="line-height: 115%;">GmbH</span><span lang="EN-GB" style="line-height: 115%;">, May, </span><span lang="EN-GB"><a href="http://mnre.gov.in/file-manager/UserFiles/draft-report-fscb-remcs.pdf"><span style="line-height: 115%;">http://mnre.gov.in/file-manager/UserFiles/draft-report-fscb-remcs.pdf</span></a></span></span></div>
<div class="MsoNormal">
<span style="font-family: "times" , "times new roman" , serif; font-size: x-small;"><span lang="EN-GB" style="font-family: "verdana" , sans-serif; line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB" style="line-height: 115%;">GOI (2015a): “Revision of cumulative targets under National Solar Mission from 20,000
MW by 2021-22 to 100000 MW”, Government of India, 17 June,
http://pib.nic.in/newsite/PrintRelease.aspx?relid=122566</span><span lang="EN-US" style="line-height: 115%;"><o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: "times" , "times new roman" , serif; font-size: x-small;"><span style="font-family: "verdana" , sans-serif; line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span style="line-height: 115%;">GOI
(2015b): “UDAY (Ujwal DISCOM Assurance Yojana) for financial turnaround of
Power Distribution Companies”, Government of India, </span><span style="line-height: 115%;">5 November, </span><span lang="EN-GB"><a href="http://pib.nic.in/newsite/PrintRelease.aspx?relid=130261"><span style="line-height: 115%;">http://pib.nic.in/newsite/PrintRelease.aspx?relid=130261</span></a></span><span lang="EN-GB" style="line-height: 115%;"><o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif; font-size: x-small;"><br /></span></span></div>
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<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif; font-size: x-small;">Kasturi, Kannan (2016):
“Private Thermal Power in a Liberal Policy Regime<i>”, Economic & Political weekly</i>, Vol 51, No 10, pp 22-26<o:p></o:p></span></span></div>
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<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB" style="line-height: 115%;">Kenning Tom (2015): “India’s cutthroat
solar auctions – behind the hype”,<i> PVTECH</i>,
22 Dec, </span><span lang="EN-GB"><a href="http://www.pv-tech.org/features/indias-cutthroat-solar-auctions-behind-the-hype"><span style="line-height: 115%;">http://www.pv-tech.org/features/indias-cutthroat-solar-auctions-behind-the-hype</span></a></span><span lang="EN-GB" style="line-height: 115%;">
<o:p></o:p></span></span></div>
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<span style="font-family: "times" , "times new roman" , serif; font-size: x-small;"><span lang="EN-GB" style="font-family: "verdana" , sans-serif; line-height: 115%;"><br /></span></span></div>
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<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB" style="line-height: 115%;">MNRE (2016): “Tentative State wise break-up
of Renewable Power target to be achieved by the year 2022 so that cumulative
achievement is 175000 MW”, Ministry of New and Renewable Energy, </span><span lang="EN-GB"><a href="http://mnre.gov.in/file-manager/UserFiles/Tentative-State-wise-break-up-of-Renewable-Power-by-2022.pdf"><span style="line-height: 115%;">http://mnre.gov.in/file-manager/UserFiles/Tentative-State-wise-break-up-of-Renewable-Power-by-2022.pdf</span></a></span><span lang="EN-GB" style="line-height: 115%;">
(Sept 21, 2016)<o:p></o:p></span></span></div>
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<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span style="line-height: 115%;">MoEFCC
(2015): “First Biennial Update Report to the United Nations Framework
Convention on Climate Change”, </span><span style="line-height: 115%;">Ministry of
Environment, Forest and Climate Change, December, </span><span lang="EN-GB"><a href="http://unfccc.int/resource/docs/natc/indbur1.pdf"><span lang="EN-IN" style="line-height: 115%;">http://unfccc.int/resource/docs/natc/indbur1.pdf</span></a></span><span lang="EN-GB" style="line-height: 115%;"> </span><span style="line-height: 115%;"><o:p></o:p></span></span></div>
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<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif; font-size: x-small;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif; font-size: x-small;">MoP (2014): “Perspective Transmission
Plan for twenty years (2014-2034)”, Ministry of Power, August, http://www.cea.nic.in/reports/committee/scm/allindia/notices/3rd_report.pdf<o:p></o:p></span></span></div>
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<span style="font-family: "times" , "times new roman" , serif; font-size: x-small;"><span lang="EN-GB" style="font-family: "verdana" , sans-serif; line-height: 115%;"><br /></span></span></div>
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<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB" style="line-height: 115%;">MoP (2016a): “Resolution, Tariff
Policy”, Ministry of Power, </span><span style="line-height: 115%;">Gazette of India,</span><span style="line-height: 115%;"> 28 January<o:p></o:p></span></span></div>
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<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif; font-size: x-small;"><br /></span></span></div>
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<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif; font-size: x-small;">MoP (2016b): “Report of the Technical
Committee on Large Scale Integration of Renewable energy, Need for Balancing,
Deviation Settlement Mechanism and associated issues”, Ministry of Power,
April,
http://powermin.nic.in/sites/default/files/uploads/Final_Consolidated_Report_RE_Technical_Committee.pdf<o:p></o:p></span></span></div>
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<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif; font-size: x-small;"><br /></span></span></div>
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<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif; font-size: x-small;">NTPC (2012): “Annual Report, 2011-12”,
National Thermal Power Corporation,
http://www.ntpc.co.in/annual-reports/720/management-discussion-and-analysis-2011<o:p></o:p></span></span></div>
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<span style="font-family: "times" , "times new roman" , serif; font-size: x-small;"><span lang="EN-GB" style="font-family: "verdana" , sans-serif; line-height: 115%;"><br /></span></span></div>
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<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB" style="line-height: 115%;">PGCIL (2012): “Transmission Plan for
Envisaged Renewable Capacity, Vol 1”, Power Grid Corporation of India Limited,
July, </span><span lang="EN-GB"><a href="http://www.powergridindia.com/_layouts/PowerGrid/WriteReadData/file/ourBusiness/SmartGrid/Vol_1.pdf"><span style="line-height: 115%;">http://www.powergridindia.com/_layouts/PowerGrid/WriteReadData/file/ourBusiness/SmartGrid/Vol_1.pdf</span></a></span><span lang="EN-GB" style="line-height: 115%;"><o:p></o:p></span></span></div>
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<span style="font-family: "verdana" , sans-serif; font-size: x-small;">Singh,
Sarita (2016): “Power demand may be lower by 15% for five years starting FY18”,
<i>The
Economic Times</i>, 25 <span style="border: 1pt none windowtext; padding: 0cm;">Apr, </span><span lang="EN-GB"><a href="http://articles.economictimes.indiatimes.com/2016-04-25/news/72598691_1_power-ministry-power-demand-electric-power-survey"><span lang="EN-IN" style="border: 1pt none windowtext; padding: 0cm;">http://articles.economictimes.indiatimes.com/2016-04-25/news/72598691_1_power-ministry-power-demand-electric-power-survey</span></a></span><o:p></o:p></span></div>
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<span style="font-family: "verdana" , sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB" style="line-height: 115%;">Srikanth, R (2016): “Tangedco sets up
centre to tap renewable energy”, <i>The
Hindu</i>, 26 March, </span><span lang="EN-GB"><a href="http://www.thehindu.com/news/national/tamil-nadu/tangedco-sets-up-centre-to-tap-renewable-energy/article8398352.ece"><span style="line-height: 115%;">http://www.thehindu.com/news/national/tamil-nadu/tangedco-sets-up-centre-to-tap-renewable-energy/article8398352.ece</span></a></span><span lang="EN-GB" style="line-height: 115%;">
<o:p></o:p></span></span></div>
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<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif; font-size: x-small;"><br /></span></span></div>
<div class="MsoNormal">
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif; font-size: x-small;">Tongia, Rahul (2016):
“India’s Updated (2016) Renewable Energy ‘Guidelines’: Bold targets, but can we
meet them?”, <i>Brookings India IMPACT
Series</i>, No. 082016-2.0<o:p></o:p></span></span></div>
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<span style="font-family: "times" , "times new roman" , serif; font-size: x-small;"><span class="lede-headlinehighlighted"><span lang="EN-GB" style="background: white; font-family: "verdana" , sans-serif; line-height: 115%;"><br /></span></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span class="lede-headlinehighlighted"><span lang="EN-GB" style="background: white; line-height: 115%;">Upadhyay, Anindya (2015): “India's
Modi Tells Coal Power Plants to Subsidize Solar”, <i>Bloomberg</i>, 7 </span></span><span lang="EN-GB" style="line-height: 115%;">September, </span><span lang="EN-GB"><a href="http://www.bloomberg.com/news/articles/2015-09-07/india-tells-coal-power-plants-to-subsidize-15-gigawatts-of-solar"><span style="line-height: 115%;">http://www.bloomberg.com/news/articles/2015-09-07/india-tells-coal-power-plants-to-subsidize-15-gigawatts-of-solar</span></a></span><span lang="EN-GB" style="line-height: 115%;"><o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: "times" , "times new roman" , serif; font-size: x-small;"><span style="font-family: "verdana" , sans-serif; line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span style="line-height: 115%;">Vaitheesvaran,
Bharani (2015): “</span><span style="line-height: 115%;">Wind
or conventional power? Tamil Nadu power producers battle it out in court”,</span><span style="line-height: 115%;"> <i>The
Economic Times</i></span><span style="line-height: 115%;">, 26 A<span style="border: none windowtext 1.0pt; mso-border-alt: none windowtext 0cm; padding: 0cm;">ugust, </span></span><span lang="EN-GB"><span style="line-height: 115%;"><a href="http://articles.economictimes.indiatimes.com/2015-08-26/news/65886398_1_must-run-status-wind-power-wind-mills">http://articles.economictimes.indiatimes.com/2015-08-26/news/65886398_1_must-run-status-wind-power-wind-mills</a></span></span></span><span lang="EN-GB" style="border: none 1.0pt; font-family: "times new roman" , "serif"; font-size: 10.0pt; line-height: 115%; padding: 0cm;"> </span><span style="font-family: "times new roman" , "serif"; font-size: 10.0pt; line-height: 115%;"><o:p></o:p></span><br />
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB"><br /></span></span>
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB"><br /></span></span>
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB">Links:</span></span><br />
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB"><br /></span></span>
<span style="font-family: "verdana" , sans-serif; font-size: x-small;"><span lang="EN-GB"><a href="http://energy.economictimes.indiatimes.com/news/power/indias-outdated-electricity-grid-needs-major-upgrade-says-expert/59485958">India's outdated electricity grid needs major upgrade says expert</a></span></span></div>
<a href="https://www.blogger.com/blogger.g?blogID=2739979442130109754"></a>
<br />
<blockquote>
</blockquote>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com1tag:blogger.com,1999:blog-2739979442130109754.post-84717109745263988892017-01-17T19:17:00.001+05:302017-01-18T10:23:14.397+05:30Financial Inclusion: Do the poor benefit from banking ?<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: left;">
<span style="font-family: "verdana" , sans-serif;">The conditions attached to exchanging old
notes that came with the<i> notebandi</i>
from November 8th 2016, the subsequent scarcity of cash, and the current
government campaign for cashless transactions have put intense pressure on the
unbanked to open bank accounts and transact with banks.</span></div>
<div class="MsoNormal" style="text-align: left;">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span>
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">Bringing the working poor into the fold of
banking - presented as a welfare initiative with its terminology of “financial
inclusion” - has been an ongoing project in India. In the current phase, it has
become extremely coercive. </span></span></div>
<div class="MsoNormal" style="text-align: left;">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal" style="text-align: left;">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">The standard narrative (see for example a recent
<i>Live Mint</i> piece titled “<a href="http://www.livemint.com/Opinion/54Iw3H6lWE616iSgrouvmI/How-moving-money-to-the-bank-helps-the-poor.html">How
moving money to the bank helps the poor</a>”) is that certain obstacles prevent
the working poor from accessing banks, but once these are removed, they will be
able to save more, derive additional income and avail of credit on favorable
terms.</span></span></div>
<div class="MsoNormal" style="text-align: left;">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<h3 style="text-align: left;">
<b><span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">The
problem of access</span></span></b></h3>
<div>
<b><span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif;"><span lang="EN-US">The biggest obstacle – the problem of
access to a bank for rural customers - has been acknowledged by the government
for many years. </span><span lang="EN-US">The Regional Rural Banks (RRB’s) – focused on rural geographies - were
first thought to be the answer. With their limitations becoming apparent, the
idea of banking correspondents (BC’s) was put forward in 2006. I</span><span lang="EN-US">ncluding BC’s, there are still too few banking outlets in rural
India, particularly in less developed districts.</span><span lang="EN-US"><o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">Take Karnataka for example. While in urban Bengaluru,
there are 24 bank branches and 77 ATM’s per lakh population, when it comes to districts
such as Yadgir, Bidar and Koppal, this falls to 9-11 branches, 6-8 ATM’s and
5-8 banking correspondents per lakh population (Data culled from the <a href="https://www.rbi.org.in/scripts/QuarterlyPublications.aspx?head=Quarterly%20Statistics%20on%20Deposits%20and%20Credit%20of%20Scheduled%20Commercial%20Banks">RBI</a>,
<a href="http://www.thehindu.com/todays-paper/tp-national/tp-karnataka/ATM-coverage-20-districts-in-State-below-national-average/article16961733.ece">a
report</a> in the <i>The</i> <i>Hindu</i> and the <a href="http://slbckarnataka.in/">State Level Bankers Committee, Karnataka</a>). Given
that population density is much lower in these districts compared to Bengaluru,
people have to travel much longer distances than their urban counterparts to
avail of banking and the bank offices that service them deal with far too many customers.</span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">Access to banking is not only about
physical access. </span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">The working poor in both rural and urban
areas are often illiterate or versed in only the local language. They have to
contend with the complexities of banking in the presence of unsympathetic bank
officials. The recent incident of demonetized notes being deposited and then
withdrawn the same day from the accounts of <a href="http://www.ndtv.com/india-news/after-jan-dhan-money-laundering-in-mnrega-accounts-a-view-from-punjab-1635749">250
MNREGA workers in Rajo Majra village</a> of Punjab, all without their knowledge
shows how the poor can be exploited. The workers apparently expected government
transfers into their accounts and signed bank forms that they could not read.</span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">A large number of the working poor are migrants
who move from one work site to another. Accessing their accounts – which would
be with a bank branch near home – presents many problems for these workers;
opening multiple bank accounts also makes no sense.</span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">Leaving aside the obstacles in accessing
formal banking services, will the poor reap benefits once forced (as in the
current situation) into the formal financial system?</span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<h3 style="text-align: left;">
<b><span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">Do
bank deposits make sense?</span></span></b></h3>
<div>
<b><span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">Take the question of savings. A recent
large sample national household survey <a href="http://www.livemint.com/Politics/AvHvyHVJIhR0Q629wkPS5M/Indias-richest-20-account-for-45-of-income.html">reported
in <i>Live Mint</i></a> shows that the
difference between income and routine consumption expenditure of households in
the bottom two quintiles of income is under Rs 2000. This is the monthly saving
potential of 40% of households in India. In case of unforeseen expenses such as
a medical emergency, this money will have to be accessed quickly. How would it
make economic sense for these households to deposit these savings in a bank?
The paltry interest that can be earned will not justify the costs of banking –
the time and expenses on travel.</span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">The lack of savings potential in the poor
is ironically demonstrated by the “Jan Dhan Yojana” (JDY), a scheme promoted by
the government to bring the unbanked into the fold of banking. Under this
program 266 million accounts had been opened till the first week of Jan 2017
with the help of some inducements such as free insurance, free debit card and
some overdraft facility.</span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">About a quarter of these accounts, 65
million, still have zero balance. The <a href="http://pmjdy.gov.in/ArchiveFile/2016/10/26.10.2016.pdf">average deposit
in the accounts with money</a> was less than Rs 2300 before <i>notebandi</i>.<span class="MsoEndnoteReference"> </span>By the first week of January (after the
expiry of the deadline for depositing old notes) this had gone up to Rs 3400.
Most JDY account holders who have been brought recently into the banking system
clearly did not have much in the nature of financial assets in cash. </span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">Bank accounts then do not make sense as a
savings instrument for the poor not only because of the difficulties of
accessing a bank but also because the poor hardly have any savings.</span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<h3 style="text-align: left;">
<b><span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">The false
promise of credit</span></span></b></h3>
<div>
<b><span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">What about access to credit? Banks with
their commercial objectives can obviously provide credit only to those with
predictable earnings or having assets such as land or housing that can serve as
collateral. The <a href="https://rbi.org.in/Scripts/AnnualPublications.aspx?head=Basic%20Statistical%20Returns">reserve
bank statistics on the credit extended by banks</a> is revealing.</span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">There were a total of 137 million
individual credit accounts in the Indian banking system in 2015. Individuals
could have more than one credit account – for example one for a vehicle loan
and another for a housing loan. So the number of people with access to credit
from the banking system is lower. For comparison, the number of
eligible voters in 2014 was about 814 million.</span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">These 137 million borrowers can be divided
into petty borrowers whose credit limit is 2 lakhs and large borrowers with a
higher credit limit. There were 29 million large borrowers and their average
borrowing was nearly Rs 6 lakhs each. These borrowers would typically belong to
the top quintile of household income earners and avail credit for housing,
vehicles, education, etc. </span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">On the other hand, the average borrowing of
108 million petty borrowers was only Rs 50,000. These would be typically farmers
and self other employed persons. These numbers show up the limits of access to
credit from the banking system for poor households. </span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">Anecdotal evidence suggests that even the farmers
who have access to credit borrow from informal channels as the institutional
credit available does not meet their requirements. For the self employed
without assets and for informal wage workers, credit from informal sources at
high interest is the only recourse. For the typical vegetable cart vendor who
requires credit on a daily basis, the wholesaler in the <i>mandi</i> serves the function as no bank would be able to fulfill his
need.</span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<h3 style="text-align: left;">
<b><span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">The
real motivation for “financial inclusion”</span></span></b></h3>
<div>
<b><span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif;"><span lang="EN-US">The poor when provided access to banking
save little and can avail of only limited credit small; they cannot be
important for the profits of the banks. In the <a href="https://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=1010">words of the
former RBI governor Raghuram Rajan</a>, banking is not easily available to the
poor “</span><span lang="EN-US">not
just because the financial system is underdeveloped, but because they are hard
to service profitably”.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif;"><span lang="EN-US">The economic non-viability of making the poor transact with banks -
the BC model too may have run its course as recent studies </span><span lang="EN-US"><a href="https://thewire.in/33272/twenty-crore-bank-accounts-opened-where-does-jan-dhan-yojana-go-from-here-an-explainer/">reported</a></span><span lang="EN-US"> in <i>The Wire</i> indicate - has
pushed the government to promote ever newer models of service providers to
carry forward the financial inclusion project, the latest being the Payments
Bank. The latter can open accounts, hold small deposits and process payments
but is barred from providing credit. The thinking behind the Payments Bank
concept is that with relaxed regulatory requirements, it will be able to make
profits from transactions of poor account holders where regular banks are
unable to.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">What accounts for the persistence of the
government with financial inclusion when neither the banks nor the poor account
holders benefit? </span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;">The answer could lie in the fact that a
bank account for every worker is an essential requirement for moving India’s
massive informal economy - that supports 90% of livelihoods - in the direction
of formalism. The informal economy effectively shuts out corporate India from a
large part of the domestic market and the government from potential revenue.
Government policy has long favored the growth of the formal/corporate economy. </span></span></div>
<div class="MsoNormal">
<span lang="EN-US"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "verdana" , sans-serif;"><span lang="EN-US">“Financial inclusion”</span><span lang="EN-US"> then is not so much
about benefiting the poor as it is about creating the infrastructure for
formalizing the informal economy. In this project, if the poor have to bear
some costs, that is just collateral damage.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<br /></div>
<a href="https://draft.blogger.com/blogger.g?blogID=2739979442130109754"></a>
<br />
<blockquote>
</blockquote>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-44878836659096783732016-06-01T10:18:00.001+05:302016-06-01T10:21:16.888+05:30Public Infrastructure: A misplaced emphasis on highways and expressways<div dir="ltr" style="text-align: left;" trbidi="on">
<h2 class="article-titletop" style="background-color: white; font-family: verdana, arial, helvetica; font-stretch: normal; font-weight: normal; line-height: 1.5; margin: 7px 0px 3px; text-align: left;">
<span style="font-size: small;">
(The following piece appeared in <a href="http://indiatogether.org/a-misplaced-emphasis-on-highways-government">India Together</a> ; reproduced below )</span></h2>
<div class="article-leader" style="background-color: white; color: #333333; font-family: verdana, arial, helvetica; font-size: 12px; font-stretch: normal; line-height: 1.4 !important; margin-bottom: 7px; text-align: justify;">
<br /></div>
<div class="article-leader" style="background-color: white; color: #333333; font-family: verdana, arial, helvetica; font-size: 12px; font-stretch: normal; line-height: 1.4 !important; margin-bottom: 7px; text-align: justify;">
<i>Why does the government continue with its blind focus on highways and expressways when infrastructure for water supply, waste management and mass transit system is in desperate need of attention? Kannan Kasturi criticises the government's prioritization and says there is more to public infrastructure than just highways and expressways.</i></div>
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<div class="article-published-at" style="float: left; font-family: Arial, helvetica; margin-right: 5px;">
<span style="font-family: "arial" , "helvetica"; line-height: 1.5;">Highways have occupied an exalted place in central government spending on infrastructure ever since the first NDA government. The 2016-17 allocation for the Ministry of Road Transport and Highways is no exception. At Rs 58000 crore, it is 23% higher than the previous year and most of it is budgeted for developing National Highways. In comparison, the Ministry of Water Resources, River Development and Ganga Rejuvenation has a budget of Rs 5500 crore, half of which is for the ‘Namami Gange’ program to clean up the Ganga.</span></div>
<div class="article-published-at" style="float: left; font-family: Arial, helvetica; margin-right: 5px;">
<span style="font-family: "arial" , "helvetica"; line-height: 1.5;"><br /></span>
<span style="font-family: "arial" , "helvetica"; line-height: 1.5;">Developing a national highway network is no doubt the responsibility of the state. However there is more to public infrastructure than just highways and expressways. For instance, infrastructure for water collection, storage and distribution across the country needs urgent attention. Our cities are crying out for waste disposal and mass transit systems. Developing water supply, waste management and mass transit infrastructure is equally state responsibility.</span><br />
<span style="font-family: "arial" , "helvetica"; line-height: 1.5;"><br /></span></div>
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<br /></div>
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<br /></div>
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<br /></div>
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<br />
<span style="line-height: 1.5;">The usual economic justification for investing in highways is that they will have a “multiplier effect”. The argument is along these lines: highways will lead to greater efficiencies in trade and industry by allowing faster transport of goods. On the other hand, investment in “social infrastructure” – such as water or waste management - may not offer immediate benefits to the economy.</span></div>
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The government’s lopsided emphasis on highways is not entirely without support. It has the approval of a section of the car owning public that has discovered the joys of fast inter-city travel without the constraints imposed by public transport. But more significantly, it has had the approval of corporate India for whom it opened up another area of business.</div>
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<strong style="font-family: Arial, helvetica;">Creating “non-performing” assets</strong></div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
Corporate involvement in highways was initially limited to executing government contracts. Setting itself ambitious targets for highway addition, the government came up with a new form of “Public Private Partnership” (PPP) that allowed corporations to invest in and own public highway infrastructure and earn toll income. The justification of this form of PPP – the “build operate and transfer” (BOT) toll model - was that it would bring in private investment into infrastructure and thus make possible infrastructure addition at a faster rate than would be possible with the government’s own resources.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
The BOT toll model became popular very quickly. The government had in parallel made changes to policy that made it easier for banks to finance infrastructure. Corporate investments were made on the back of large scale borrowing from banks, exploiting the banking norms that allowed up to 70% debt financing for infrastructure.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
Under government prodding, public sector banks who were the major corporate financiers (they account for 73% of all lending by banks in India) channeled national savings reserved for lending to infrastructure disproportionately to highway projects. According to RBI data, outstanding bank loans to the roads sector is Rs 1.8 lakh crore as of Mar 2016. 80% of bank lending for infrastructure is in just two areas - roads and power. The remaining 20% is shared between infrastructure for telecom, airports, ports and “social infrastructure”.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
In the last few years, private ownership has turned the spotlight on the economics of highways. A large number of projects are unable to service their debt taken mainly from public sector banks. They have become non-performing assets (NPA’s) for the banks and this is reflected in the statistic that <a href="http://indianexpress.com/article/india/india-news-india/infrastructure-slowdown-credit-off-take-continues-on-downward-spiral-road-sector-the-only-silver-lining/" style="color: #0088cc; font-family: Arial, helvetica; text-decoration: none;" target="_blank"><span style="background-color: transparent; color: #1155cc; text-decoration: underline; vertical-align: baseline;">50% of bank NPA’s are in the infrastructure sector</span></a> which is largely just roads and power. The major role of public investment even in the BOT toll model stands exposed. The government will ultimately have to pay for the non-performing ‘highway assets’ held by the public sector banks, one way or another.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
While delays in land acquisition and environmental clearance leading to cost overruns are commonly held to be the cause for non-performance, many of these <a href="http://www.thehindu.com/business/Industry/roads-of-trouble/article5876823.ece" style="color: #0088cc; font-family: Arial, helvetica; text-decoration: none;" target="_blank"><span style="background-color: transparent; color: #1155cc; text-decoration: underline; vertical-align: baseline;">projects have not had the expected initial traffic or traffic growth</span></a> at the rates envisaged during planning. In particular, goods traffic growth on toll roads has been abysmal. This has resulted in toll collection – despite yearly increase in rates – falling short of debt servicing requirements. The poor traffic growth shows up the specious nature of the economic multiplier argument for highways.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
The unattractive revenue from toll has pushed the government in recent times to resort to forms of engagement with private corporations where the revenues of the private partner are independent of toll collected. The contract model is once again in vogue. The government is also pushing various “annuity” models where the infrastructure companies cover the investment requirements fully or with government participation, build and operate a highway and receive an agreed amount as annual income.</div>
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In this arrangement, the government collects the toll and bears the traffic risk. In other words, the government is back to encouraging “risk free capitalism” in the roads sector. The need for these forms of engagement is telling; private corporations do not see economic justification in these highways but the government will nevertheless build them.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
A recently completed mega highway project – the Yamuna Expressway - for which detailed information is available in the public domain, corroborates the general picture of the performance of recent highway projects in India. It also illustrates an alternate model of financing – “land value capture” - that has been used to build grandiose economically unviable highways.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
<strong style="font-family: Arial, helvetica;">The Yamuna Expressway – a case study</strong></div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
The Yamuna Expressway project connecting Noida (on the outskirts of Delhi) to Agra was initiated in 2001 by the BJP Government in UP lead by Rajnath Singh. It was to be a six lane access controlled highway. The economic justification provided for the project was typical: besides encouraging tourism, the highway would “open up avenues for industrial and urban development” of the region.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
The Jaypee Group, one of only two bidders, was selected for the project during Mayawati’s tenure as CM of UP. The private partner would make the entire investment and have rights to the toll. Anticipating that toll revenues would be inadequate, the government came up with a scheme where the builder could recover his investment in the expressway through “land value capture”.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
The government would acquire land along the expressway and pass this on to the builder for developing urban townships. The value of the land was expected to go up for several reasons - the change in land use from agricultural to urban (residential, commercial, industrial) decreed by the government and the speedy access to Delhi and Agra via the expressway from these pockets.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
<a href="http://www.cag.gov.in/sites/default/files/audit_report_files/Uttar_Pradesh_4_2014.pdf" style="color: #0088cc; font-family: Arial, helvetica; text-decoration: none;" target="_blank"><span style="background-color: transparent; color: #1155cc; text-decoration: underline; vertical-align: baseline;">A CAG audit of the partnership agreement</span></a> carried out in 2012 was extremely damning. It found that the government of the day accepted the cost and revenue projections of the developer without any independent analysis. It also recorded that the government allowed the developer to actually select the location of the land parcels! Nearly three fifths of the 2500 hectares of the land selected was in the National Capital Region. 500 hectares was prime real estate in Noida.</div>
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It took till 2007 for the UP Government to decide on the alignment of the expressway after which the newly formed Jaypee Infratech began project execution. The project was completed ahead of time and what is touted as India’s most advanced highway was opened to traffic in Aug 2012.</div>
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As is the case with most highway projects, the traffic projections for Yamuna Expressway turned out to be wild. <span style="background-color: transparent; color: #1155cc; font-family: "arial" , "helvetica"; text-decoration: underline; vertical-align: baseline;"><a href="http://www.livemint.com/Politics/Ta57HTbTPMNEc2qrkyYWfJ/Lenders-to-Jaypee-Infratech-take-control-of-more-land-parcel.html" style="color: #0088cc; font-family: Arial, helvetica; text-decoration: none;" target="_blank">An average of 16490 vehicles used the highway per day in 2014-15</a> </span>against the expected 100,000. The annual revenue from toll for that year was only Rs 168 crore on a highway on which the <a href="http://www.cag.gov.in/sites/default/files/audit_report_files/Uttar_Pradesh_4_2014.pdf" style="color: #0088cc; font-family: Arial, helvetica; text-decoration: none;" target="_blank"><span style="background-color: transparent; color: #1155cc; text-decoration: underline; vertical-align: baseline;">company claimed to have invested Rs 9962 crore</span></a>. (For comparison, the <a href="http://timesofindia.indiatimes.com/business/india-business/Railways-needs-massive-investment-Suresh-Prabhu/articleshow/52209770.cms" style="color: #0088cc; font-family: Arial, helvetica; text-decoration: none;" target="_blank"><span style="background-color: transparent; color: #1155cc; text-decoration: underline; vertical-align: baseline;">annual investment in the railways which transports 13 million passengers a day is now around Rs 40,000 crore</span></a>.)</div>
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True to the general pattern, the project expenses were met mainly through borrowing from banks. <a href="http://www.livemint.com/Companies/zw01oaqeIvijLypZqY8yhL/Axis-Bank-takes-over-Jaypee-Groups-HQ.html" style="color: #0088cc; font-family: Arial, helvetica; text-decoration: none;" target="_blank"><span style="background-color: transparent; color: #1155cc; text-decoration: underline; vertical-align: baseline;">Jaypee Infratech’s debt stood at more than Rs 8700 crore as of Sept 2015</span></a>.</div>
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The low traffic indicates that the hopes of the access controlled “world class” expressway spurring economic development in the region were misplaced. Some of the reasons for the low traffic are related to the very conception and design of the highway. Access control has meant that people of towns and villages along the Yamuna banks cannot use the highway and will not reap the benefits of faster travel and transport to the metros. The high toll on the expressway has kept potential users away despite heavy congestion on the alternative NH 2.</div>
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Even the Taj tourist does not seem to have benefited greatly. While the 165 km length of the expressway can be negotiated in 100 minutes, the congested roads from Delhi to Noida (where the expressway begins) and the drive through Agra to the Taj bring home the reality of roads in urban India.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
<strong style="font-family: Arial, helvetica;">Financing highways through land capture</strong></div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
The land along the course of the expressway is fertile canal irrigated three crop farmland. Farmers co-operated with the government when land was being acquired for the highway. However the government’s move to acquire land to hand over to the company for urban enclaves met with resistance. The government used time tested methods to harass farmers – disconnecting electricity supply, stopping cultivation and implicating them in false cases.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
The government agency acquiring land has the high sounding name of “Yamuna Expressway Industrial Development Authority” (YEIDA). It has plans of ‘developing’ much more land along the Expressway - a draft master plan of Feb 2011 shows no less than <a href="http://www.ndtv.com/india-news/yamuna-expressway-masterplan-gives-raw-deal-to-farmers-455992" style="color: #0088cc; font-family: Arial, helvetica; text-decoration: none;" target="_blank"><span style="background-color: transparent; color: #1155cc; text-decoration: underline; vertical-align: baseline;">58000 hectares earmarked for development!</span></a> Among the first acts of ‘development’ of YEIDA was acquiring and transferring 2500 acres of land in Greater Noida to the Jaypee Group for a race course and a “sports city".</div>
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</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
In the run up to the inaugural Formula 1 race at the racecourse built on their land, farmers in the villages of Bhatta & Parsaul at the outskirts of Delhi protested demanding that their land be returned. Clashes took place between farmers and the police in which four people lost their lives. Subsequently, <a href="http://www.timesnow.tv/Bhatta-Parsaul-NHRC-slams-UP-police/articleshow/4374184.cms" style="color: #0088cc; font-family: Arial, helvetica; text-decoration: none;" target="_blank"><span style="background-color: transparent; color: #1155cc; text-decoration: underline; vertical-align: baseline;">the government let loose a reign of terror on the hapless villagers</span></a>. Thus was acquired the land which would pay for the expressway.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
Farmers were paid an average of Rs 35 lakh/acre by the government for the 6175 acres of land acquired along the expressway. The <a href="http://www.cag.gov.in/sites/default/files/audit_report_files/Uttar_Pradesh_4_2014.pdf" style="color: #0088cc; font-family: Arial, helvetica; text-decoration: none;" target="_blank"><span style="background-color: transparent; color: #1155cc; text-decoration: underline; vertical-align: baseline;">expressway builder paid the government on average Rs 44 lakh/acre</span></a>. By 2013, the company had <a href="http://articles.economictimes.indiatimes.com/2013-05-24/news/39502164_1_jaypee-group-yamuna-expressway-gaursons" style="color: #0088cc; font-family: Arial, helvetica; text-decoration: none;" target="_blank"><span style="background-color: transparent; color: #1155cc; text-decoration: underline; vertical-align: baseline;">sold a 300 acre piece of this land lying near the race track to a real estate company at Rs 5 crore/acre!</span></a></div>
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Fifteen years after the project was conceived even the urban enclaves along the expressway have not materialized, let alone industry. However, the rural agricultural economy has been made poorer with the loss of large tracts of fertile irrigated land.</div>
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<strong style="font-family: Arial, helvetica;">Why not social infrastructure?</strong></div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
The overall experience of highway development in India over the last 15 years is of low traffic volumes and slow traffic growth. Toll revenues do not provide an adequate return on the investment in these highways. Low traffic growth also exposes the specious nature of the “economic multiplier” argument. </div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
The question that presents itself is this: why does the government continue with its blind focus on highways and expressways despite this negative experience?</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
There is no shortage of infrastructure outside highways that is in desperate need of attention. The low priority for water infrastructure has made the country extremely vulnerable to vagaries of nature. This is seen in the terrible scarcity of even drinking water affecting a large part of the country today. The lack of adequate waste management has polluted all the lakes and rivers near our urban areas and is rapidly making our cities unlivable.</div>
<div style="font-stretch: normal !important; line-height: 1.5 !important; margin-bottom: 9px;">
The central government cannot absolve itself of responsibility by claiming that “social infrastructure” is in the domain of the states. It is high time it changes priorities from “world class expressways” that will benefit only corporate interests to infrastructure that has an immediate impact on the life of the average citizen.</div>
</div>
<a href="https://www.blogger.com/blogger.g?blogID=2739979442130109754"></a>
<br />
<blockquote>
</blockquote>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-12906056647938146652016-03-03T19:58:00.002+05:302016-03-03T19:58:33.016+05:30How private thermal projects have fared?<div dir="ltr" style="text-align: left;" trbidi="on">
<div>
<i>This piece appeared in <a href="http://www.epw.in/journal/2016/10/commentary/private-thermal-power-liberal-policy-regime.html">EPW.</a> Reproduced in full below. The figures and tables have been copied from EPW.</i></div>
<div>
<i><br /></i></div>
<h2 style="text-align: left;">
Private Thermal Power in a
Liberal Policy Regime</h2>
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<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">The Electricity Act, 2003 and the
National Electricity Policy, 2005 put in place a highly liberal policy regime
for private thermal electricity generators.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Licensing was done away with. Techno-economic
clearance from the Central Electricity Authority was no longer necessary. Generators
were provided open access to the transmission network, owned with but a few
exceptions by state and central utilities. They could supply power to any part
of India. Generators were also freed from having to enter into long term (12-25
year) power purchase agreements with distribution companies which limited
profit margins. They could opt for shorter term contracts as well as sell in the
power markets through traders and power exchanges.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">The liberal regime resulted in an
explosion of interest from private companies. This paper follows the
development of private thermal power projects over a decade to determine the
major impacts of this policy regime and to critique it.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Sources
of data<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Comprehensive data on private thermal
projects is not available from a single source. With the end of the licensing
regime, the Central Electricity Authority (CEA) has stopped monitoring projects
except when they are close to becoming operational. Power projects however have
to obtain Environmental Clearance (EC) and the Ministry of Environment, Forest,
and Climate Change (MoEF) keeps track of projects that have begun the process
leading to EC. Even before starting the EC process, companies typically sign a
Memorandum of Understanding (MOU) with the government of the state where their
project is located. Additionally, companies intending to access the inter-state
transmission network register access requests with the central transmission
utility. A composite picture of projects in different stages of development can
be pieced together from all this disparate data.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">It is a painstaking task to obtain clean
summary data from the MoEF database. The task can be simplified by limiting it
to a subset of all India data. The choice of the subset is explained below.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">India is divided into five regions in
the context of electricity generation and distribution – the Southern,
Northern, Western, Eastern and North Eastern Regions - defined by a
transmission infrastructure that allows power generated in any state in a
region to be conveyed to any other state in the same region. Electricity generated
in any of these regions is largely consumed within the same region. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">The highest build up of private thermal
capacity in the period from 2008 (about when the earliest thermal plants
conceived in the new regime would have become operational) to 2015 has been in
the Western Region - composed of the states of Chhattisgarh, Madhya Pradesh,
Gujarat, Maharashtra and Goa - accounting for over 57% of the all India
addition to private thermal generation capacity (Table 1).This justifies the
use of data limited to the Western Region for the analysis in this paper.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><img src="http://www.epw.in/system/files/KannanK_Table1.jpg" /></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">The
great thermal power rush<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">The extant of private interest in
thermal power projects can be gauged from the number of projects with EC.
Companies with EC for a project would have tied up with the state government
for public land and water and have a plan for fuel supply. They would also have
completed the mandatory “public hearing” in the project area – a gathering that
is often an outlet for public opposition to a project. Only serious players
would have obtained EC for their projects. (Kasturi, 2011:10)<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">There are two things noteworthy about private
thermal projects that have obtained EC in the Western Region.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">One is the sheer magnitude of the capacity
planned - 79 private thermal power projects, with a combined generation
capacity of 92 GW (Table 2). The latter figure can be better appreciated if it is
kept in mind that all India addition of private thermal generation in the 11<sup>th</sup>
plan (2007-2012) was 19 GW and the Planning Commission deemed 64 GW of thermal
power addition (private and public included) during the 12<sup>th</sup> plan
period (2012-2017) sufficient to meet the requirements of the country with GDP
growing at nine percent (Planning Commission, 2012:1.4.1)! The government of
the day appears to have been fully aware that many of these proposals would not
fructify.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><img src="http://www.epw.in/system/files/KannanK_Table2.jpg" /></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Second is the bunching of proposals
between 2006 and 2010 (Table 2). The interest in projects rapidly peaked and
had all but petered out by 2011. There has been no fresh private interest in
thermal plants in the Western Region since 2011 (with but one or two exceptions
who do not have EC yet). The negative consequences of this bunching are briefly
touched upon later. The changing interest in thermal power strongly relates to
the rapidly changing economics of thermal power production of this period.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">With permission to sell electricity in
the market, captive generators made good profits in the prevailing conditions
of electricity scarcity, early on under the liberal regime established by the
Electricity Act, 2003. Jindal Steel and Power (JSP), a captive generator itself,
went on to establish a thermal plant in 2007 operating exclusively as a
merchant supplier without any long term power purchase agreements (PPA’s) and
made super profits during the period 2007 to 2010 (Joshi, 2009). The success of
merchant producers and JSP in particular very likely attracted many entrants
into thermal power.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">From 2010, the situation turned
unfavourable. With the production of coal stagnating, the government stopped
giving long term coal linkages to power plants from 2011. International coal
prices increased rapidly all of 2010, peaking in early 2011 and importing fuel
was not a good option. The biggest dampener was that merchant electricity rates
dropped sharply during the second half of 2010 and thereafter stayed low in the
Western Region (Figure 1). Other regions with the sole exception of the
Southern Region also showed similar falling prices.</span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<img src="http://www.epw.in/system/files/KannanK_Figure1_0.jpg" /></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"><span lang="EN-GB" style="line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"><span lang="EN-GB" style="line-height: 115%;">Under these changed circumstances, many
thermal projects were put on hold and others abandoned.</span><span lang="EN-GB" style="line-height: 115%;"><o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"><b><span lang="EN-GB" style="line-height: 115%;"><br /></span></b></span></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"><b><span lang="EN-GB" style="line-height: 115%;">The
cost of stalled and abandoned projects</span></b><span lang="EN-GB" style="line-height: 115%;"><o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Chhattisgarh in the Western Region is a
case study of some of the excesses and “externalities” of the new policy regime.
The state advertised itself as the upcoming “power hub”, an exporter of
electricity to the rest of the country, and signed as many as 61 MOU’s for
thermal power. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">40 projects, two thirds of the number
proposed, have not completed the formalities needed for environment clearance
(Table 3). All these projects were announced many years ago and the overriding
reason for them not to have progressed appears to be the changed economics of
thermal power generation described earlier. Of the 21 projects with EC, 10 are
operational, mostly with only partial capacity on stream (Table 3). A few are
under construction but extremely delayed. A few others appear to be stalled. In
all, only about a quarter of the proposed thermal projects in Chhattisgarh may
materialize.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><img src="http://www.epw.in/system/files/KannanK_Table3.jpg" /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">For proponents of competition the
failure of some projects may not be of concern. The failed projects however not
just cost their investors. They come at great cost to the agricultural
communities amidst whom they are located. Almost all stalled projects with EC
have acquired all the land they would have needed and the land requirement for
thermal plants is substantial – 700 to 900 acres for every 1000 MW plant. At
least 17 of the projects that have not even obtained EC have acquired part or
all of the land for their proposed plants. The early land acquisition has been
encouraged by government itself in the past for providing coal linkages which
in turn was necessary for obtaining EC (Kasturi, 2011:11).<o:p></o:p></span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Skewed
addition of generation capacity<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Private thermal generation plants that
have proliferated under the new policy regime have aggravated the imbalance
between installed generation capacity and energy requirement in the different
regions (Figure 2). The Western Region has become relatively capacity surplus
while the North and South regions have a capacity deficit. Given that nearly
half of the increase in total all India generation capacity came from private
thermal plants and that nearly 64% of this was in the Western Region, this
region was bound to become relatively over endowed with generation capacity
(Table 1). <o:p></o:p></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<img src="http://www.epw.in/system/files/KannanK_Figure2.jpg" /></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">The surplus capacity in some regions and
capacity deficit in others may not be an issue if there is adequate
inter-regional transmission capacity. Starting from 2010, the market has
existed for export of electricity from Western Region to the Southern Region. The
relative electricity surplus in the Western Region (WR) and deficit in the
Southern Region (SR) is seen in the different prices registered for the two
regions at the IEX (Figure 1). The problems of inter-regional transmission are
illustrated by the WR-SR energy exchanges.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Actual imports from WR into SR increased
only marginally from 2010 through 2013, limited by the nominal transmission
capacity (Table 4). The nominal transmission capacity cannot be entirely
utilized in practice as margins need to be kept aside for technical reasons;
the table also shows actual imports.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><img src="http://www.epw.in/system/files/KannanK_Table4.jpg" /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Capacity enhancements happened in 2014
with the opening of the first of two 2100 MW links between Sholapur in
Maharashtra and Raichur in Karnataka. However, even with the much higher nominal
transmission capacity available, the average power transferred from Western to
the Southern region went up only by small amounts. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">The reason behind this is that power
transfers require end to end transmission capacity between generating centres
and load centres. Even if the inter-regional transmission capacity - which is
the capacity of links across the region borders – is adequate, there may be
bottlenecks elsewhere on the end-to-end corridor. In the present case, the
transmission capacity from WR generating clusters (such as those in Chhattisgarh)
to Sholapur and from Raichur to the SR load centres is lacking. In 2014-15,
only 1172 MW of power, equivalent to a capacity transfer of 1500 MW or about
0.6% of all India generation capacity for the year, could be transferred from
WR to SR.<span class="MsoEndnoteReference"> <a href="file:///D:/Work/writings/15-11-04%20Private%20thermal%20power%20projects%20in%20a%20liberal%20policy%20regime.docx#_edn2" name="_ednref2" title=""><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="line-height: 115%;">[2]</span></span><!--[endif]--></a></span> This
was far below Southern Regions requirement and Western Regions available
surplus (Figure 3).<o:p></o:p></span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Idle
generators amidst electricity scarcity<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">The skewed regional addition of
generation capacity in the new policy regime has its direct consequences. The plant
load factor (PLF) has serially decreased in the Western Region except for
Gujarat, and is now at 43% (Table 5).<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">While coal availability would have been
considered the problem some years back, it appears that it is no longer so. In
FY15, coal India production increased by 32 MT, more than the cumulative
increases in production in the previous four years. Coal stocks in state plants
have gone up. International coal prices have come down. The problem appears to
be that there are no customers for the power generated by these power
producers.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><img src="http://www.epw.in/system/files/KannanK_Table5.jpg" /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">The electricity distribution companies (discoms)
in the Western Region cannot absorb more power in their current situation. This
of course does not mean that electricity has reached every household in this
region or that there is round the clock supply. It only means that the discoms
have met their stated requirements – limited by their transmission network,
their distribution reach and their financial ability to buy more power. Export
to the Southern Region – where Karnataka is facing a severe electricity crisis
because of a deficit monsoon crippling its hydropower generation – is not
possible because of lack of transmission capacity. These power producers have
been stranded.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Issues
in developing generation and transmission capacity in step<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Before the advent of the new regime, electricity
generation in India was planned to keep each region self sufficient. States
developed their generation and transmission infrastructure in tandem. The
centre, while establishing new generating units in a state also developed the
inter-state and inter-regional transmission systems required to deliver the
power to the states allocated power from the unit. In addition, a few
transmission links were built by the centre across region boundaries
specifically to exchange power. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"><span lang="EN-GB" style="line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: Times, Times New Roman, serif;"><span lang="EN-GB" style="line-height: 115%;">The National Electricity Policy, 2005
declares that network planning and implementation should be based on the
transmission needs arising from the open access regime and not contingent on a
prior agreement with the users (MoP, 2005:5.3.2).</span><span class="MsoEndnoteReference"><span lang="EN-GB"> </span></span><span lang="EN-GB" style="line-height: 115%;">Considering
that generating units can target customers anywhere in the country and
transmission systems are expensive and have to be built with long term needs in
mind, this appears to be wishful thinking under present conditions of India. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Optimal design of transmission systems requires
knowledge of the location, capacity and time frame of commissioning of each new
generation plant as well as its intended customers. Multiple agencies must work
to enhance intra-state, inter-state and inter-regional networks in a
coordinated manner to ensure the required transmission capacity end to end (CEA
2012:7.4.2).<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Transmission planning has become
extremely difficult in the new regime as power plants are no longer required to
enter into long term PPA’s with distribution utilities. Many private generation
plants staking claims for long term access to the transmission network have not
specified end users for their power as they have not (on purpose) or could not
(because of lack of tenders) enter into long term PPAs with distribution
utilities. Further, they are not accountable for their schedule of commissioning
(PGCIL, 2010).<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">For the transmission utilities, as of
now almost entirely owned by the states and the centre, the above uncertainties
put at risk the investment in transmission infrastructure and can lead to a
situation where there is sub-optimal utilization of the network. Generation
plants on the other hand can be denied access because of congestion, as is
happening today (Planning Commission 2012:2.2.2).<o:p></o:p></span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Concluding
remarks<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">The extremely liberal regime ushered in
by the Electricity Act 2003 allowed the few existing private captive thermal
generators to make handsome profits. This attracted a large number of private
companies to venture into thermal power generation, particularly in certain regions
with perceived advantages in terms of availability of coal and water. The changing
economics of thermal power production however quickly lead to this interest
petering out.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">The majority of proposed projects were
abandoned, but not without cost to the communities of the area they were to be
located in. Of the rest, only a few are operational with partial capacity while
others are under construction with delayed schedules or have gone into limbo.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">The location of the functional plants serves
to further exacerbate the regional imbalance between demand and generation
capacity. Not being able to sell their electricity locally because of lack of
immediate demand and in power deficit regions because of the lack of adequate
transmission capacity to load centres, these plants idle or run at low PLF’s
even as parts of the country reel under severe electricity shortage. The
overall development of the private thermal power sector shows a far from
optimal utilization of national resources.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">There are yet other negative consequences
for the electricity sector which are not detailed in this paper. The rush to
build thermal plants created a spurt in demand for capital equipment that was
taken advantage of by foreign manufactures at the cost of domestic
manufacturing. This is apparent in the details of executing agencies and
equipment suppliers of private plants captured by CEA (CEA, 2015). State owned
banks, the main lenders to dysfunctional power projects are burdened with huge
non-performing assets (Acharya, 2012). This also makes it harder for newer
entrants into the power sector to obtain financing for their projects.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Each of these problems can be seen as
caused by a failure of coordination, adequate due diligence and so on. Taken
together, they point to the infirmities in the legal and policy framework. The
framework acknowledges the heavily capital intensive nature of the industry and
the need for a planned approach to electricity for the optimal utilization of
national resources to serve the economy. Yet it allows private generation
companies unfettered freedom to set up plants without reference to timing,
location or quantity all in the name of efficiency through competition. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">The present government meanwhile has shifted
its focus to solar energy. It is pushing humungous targets for solar generation
capacity addition - reminiscent of the previous governments push for thermal
energy - without addressing any of the issues that have severely impacted
thermal energy development.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">References<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></b></div>
<div style="box-sizing: border-box; color: #444444; font-family: Roboto, sans-serif; font-size: 14px; line-height: 20px; margin-bottom: 10px;">
<span style="background-color: white;">Acharya, Namrata (2012): <a href="http://www.business-standard.com/article/specials/banks-review-power-sector-exposure-112091500018_1.html">"Banks Review Power Sector Exposure,” <i>Business Standard</i>, 15 September</a></span></div>
<div style="box-sizing: border-box; color: #444444; font-family: Roboto, sans-serif; font-size: 14px; line-height: 20px; margin-bottom: 10px;">
<span style="background-color: white;">CEA (2012): <a href="http://www.indiaenvironmentportal.org.in/files/file/transmission_12.pdf">“Draft National Electricity Plan (Volume 2) Transmission,” Central Electricity Authority, Ministry of Power, February</a></span></div>
<div style="box-sizing: border-box; color: #444444; font-family: Roboto, sans-serif; font-size: 14px; line-height: 20px; margin-bottom: 10px;">
<span style="background-color: white;">— (2015): “Monthly Report on Broad Status of Thermal Projects in the Country, April 2015,” Central Electricity Authority, Ministry of Power, 29 May.</span></div>
<div style="box-sizing: border-box; color: #444444; font-family: Roboto, sans-serif; font-size: 14px; line-height: 20px; margin-bottom: 10px;">
<span style="background-color: white;">Kasturi, Kannan (2011): “New Thermal Power Clusters,” <i style="box-sizing: border-box;">Economic & Political Weekly</i>, 1 October.</span></div>
<div style="box-sizing: border-box; color: #444444; font-family: Roboto, sans-serif; font-size: 14px; line-height: 20px; margin-bottom: 10px;">
<span style="background-color: white;">MoP (2005): “National Electricity Policy 2005,” Ministry of Power, 12 February, available in <a href="http://pib.nic.in/archieve/others/2005/%20nep20050209.pdf" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; box-sizing: border-box; color: #111111; text-decoration: none;">http://pib.nic.in/archieve/others/2005/nep20050209.pdf</a>.</span></div>
<div style="box-sizing: border-box; color: #444444; font-family: Roboto, sans-serif; font-size: 14px; line-height: 20px; margin-bottom: 10px;">
<span style="background-color: white;">PGCIL, (2010):<a href="https://apps.powergridindia.com/POWERGRID/docs/OpenAccess/may2010/AGENDA%20chhatt-32.pdf"> “Agenda for Long-term Open Access of IPP Generation Projects in the Western Region,” PGCIL, 29 April</a></span></div>
<div style="box-sizing: border-box; color: #444444; font-family: Roboto, sans-serif; font-size: 14px; line-height: 20px; margin-bottom: 10px;">
<span style="background-color: white;">Planning Commission (2012): <a href="http://planningcommission.nic.in/aboutus/committee/wrkgrp12/wg_power1904.pdf">“Report of the Working Group on Power for the Twelfth Plan (2012–17),” Ministry of Power, January, New Delhi</a></span></div>
<div style="box-sizing: border-box; color: #444444; font-family: Roboto, sans-serif; font-size: 14px; line-height: 20px;">
<span style="background-color: white;">Joshi, Rishi (2009): “Merchant of Power,” <a href="http://www.businesstoday.in/magazine/features/merchant-of-power/story/4692.html"><i>Business Today</i>, 4th October</a></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: Times, Times New Roman, serif;">Notes:<o:p></o:p></span></span></b></div>
<div>
<!--[if !supportEndnotes]--><span style="font-family: Times, Times New Roman, serif;"><br clear="all" />
</span><hr align="left" size="1" width="33%" />
<!--[endif]-->
<div id="edn1">
<div class="MsoEndnoteText">
<span style="font-family: Times, Times New Roman, serif;"><a href="file:///D:/Work/writings/15-11-04%20Private%20thermal%20power%20projects%20in%20a%20liberal%20policy%20regime.docx#_ednref1" name="_edn1" title=""><span class="MsoEndnoteReference"><span lang="EN-GB"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="line-height: 115%;">[1]</span></span><!--[endif]--></span></span></a><span lang="EN-GB"> </span><span lang="EN-US">Average actual utilized capacity (MW) = (Actual transfer in a year (MU)) *
(1000/(24*365)) <o:p></o:p></span></span></div>
</div>
<div id="edn2">
<div class="MsoEndnoteText">
<span style="font-family: Times, Times New Roman, serif;"><a href="file:///D:/Work/writings/15-11-04%20Private%20thermal%20power%20projects%20in%20a%20liberal%20policy%20regime.docx#_ednref2" name="_edn2" title=""><span class="MsoEndnoteReference"><span lang="EN-GB"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="line-height: 115%;">[2]</span></span><!--[endif]--></span></span></a><span lang="EN-GB"> </span></span><span lang="EN-US"><span style="font-family: Times, Times New Roman, serif;">The equivalent generation capacity has been arrived at
by assuming a plant operating at 75% PLF to generate 1172 MW</span><span style="font-family: 'Times New Roman', serif; font-size: 8pt;"><o:p></o:p></span></span></div>
</div>
</div>
<a href="https://www.blogger.com/blogger.g?blogID=2739979442130109754"></a>
<blockquote>
</blockquote>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-52333850171886084502016-03-01T11:26:00.003+05:302017-02-11T16:43:08.953+05:30Modi Government's solar policy - 1:<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: "arial" , "helvetica" , sans-serif;"><i>(A piece I wrote on the Modi Government's solar plans that has been carried in</i><span style="color: #222222; font-size: 16.5px;"> </span><a href="https://thewire.in/23104/is-the-government-trying-to-pull-a-fast-one-with-its-solar-power-promises/" style="font-size: 16.5px;">The Wire</a> ; <i>reproduced below</i><span style="color: #222222;"><span style="font-size: 16.5px;"><i> </i>)</span></span></span></div>
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<h3 style="color: #1a1a1a; font-family: Lato, Arial, sans-serif; line-height: 1.1667; margin: 0px 0px 5px; text-align: left;">
<span style="font-size: large;">Solar Energy: Too much, too fast ?</span></h3>
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<span style="color: #1a1a1a; font-family: "lato" , "arial" , sans-serif; font-size: x-small; line-height: 1.1667;"><br /></span>
<span style="color: #1a1a1a; font-family: "lato" , "arial" , sans-serif; font-size: x-small; line-height: 1.1667;">India may be better served by a plan that looks at developing solar and other renewable energy generation in step with cost effective storage and flexible generation that is available to all states</span><span style="color: #222222; font-size: 16.5px;"> </span></div>
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The Narendra Modi government’s aggressive push for renewable energy, seeking to increase its share in the electric supply from the current <a href="http://d335hnnegk3szv.cloudfront.net/wp-content/uploads/sites/837/2015/06/Session-2-Arun-Kumar-Tripathi-Update-on-Solar-Development-in-India.pdf" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="7% to nearly 19%">7% to nearly 19%</a> by 2022, has been greeted with much enthusiasm all round. What is most striking is the target for solar capacity, which has gone up five-fold to an eye catching 100 GW. Till recently, 100 GW was the official estimate of <a href="http://www.erpc.gov.in/uploads/news_pdf/141207381720%20Yr%20Trans%20Perspective%20Plan.pdf" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="India's solar potential">India’s solar potential</a> in the “medium-term” – till 2032. As justification for its aggressive target, the <a href="http://pib.nic.in/newsite/PrintRelease.aspx?relid=122567" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="government points">government points</a> to the price of solar approaching “grid parity” and the international commitments it has made to increase the use of non-fossil-fuel sources of energy.</div>
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While energy generated without emissions is generally welcome, the rapid penetration of solar energy into the grid on the scale planned will present major problems for the state distribution utilities. In particular, it will make it difficult for them to meet another commitment made by the government to the people of India of providing “24 hours supply of <a href="http://powermin.nic.in/upload/pdf/Tariff_Policy-Resolution_Dated_28012016.pdf" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="adequate and uninterrupted power">adequate and uninterrupted power</a>”.</div>
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The problems associated with solar electricity on the grid stem from the variability of solar generation. The output of a solar power plant varies with the movement of the sun and follows a bell shaped curve with a peak around noon. Cloudy or foggy conditions lower output and moving clouds can cause rapid fluctuations.</div>
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The variability of solar generation (and more generally of all renewable energy generation) is something the utilities need to handle as they must maintain a balance at all times between electricity supply and demand on the grid. Balancing becomes more challenging with increasing penetration of renewable energy.</div>
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<b>Balancing supply and demand</b></div>
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Balancing is not a new requirement. Even if generation on the grid is not variable, balancing requirements will arise from daily variations in demand. The average <a href="http://www.powergridindia.com/_layouts/PowerGrid/WriteReadData/file/ourBusiness/SmartGrid/Vol_1.pdf" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="all India pattern of demand">all India pattern of demand</a> variation is a higher day time demand compared to the night time load and a sharp peak in the late evening. Load balancing is achieved by varying supply from conventional – coal, gas, hydro – power plants. These plants come with a range of characteristics which define their use in balancing.</div>
<div style="background-color: white; font-family: "Noto Serif", Georgia, serif; margin-bottom: 30px;">
Older subcritical coal-fired plants have low flexibility as they were designed to provide a steady output. Frequent output changes in these plants leads to wear and tear with attendant costs. Newer supercritical coal-fired plants are more flexible and resilient than the older subcritical plants by design. Gas-fired and hydro power plants with reservoirs are the most flexible and their output can be changed rapidly to handle changing load.</div>
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On an all India scale, coal-fired plants provide a steady output – to meet what is called the base load – while gas-fired plants and hydro plants with storage are managed to respond to variations in demand. With gas being expensive, hydro generators are used, wherever possible, to meet demand peaks.</div>
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<b>A problem for the states</b></div>
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However, it is at the state level that balancing problems come to the fore.</div>
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That is because in India’s federal structure, states (and utilities within the state) are responsible for balancing supply and demand on their own grid. For this, they require a mix of conventional generators with different levels of flexibility that is adequate to meet the variations in load and renewable supply on their grid. However, all states do not have access to the different resources in the right measure.</div>
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Tamil Nadu, which has a large wind power capacity, is a good case study. Balancing requirements arise from both load and supply variations. The uncertainty associated with wind power generation adds to the complexity. While the state has significant reservoir-based hydro capacity, its ability to use this for balancing is restricted by irrigation release schedules and periods of high inflows into reservoirs when hydro power generation cannot be curtailed.</div>
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When wind power generation is greater than expected, the state utility, lacking flexible balancing resources, has to back down power from coal plants or refuse wind power. Either option results in objections from the other party – violating contract provisions in one case and not respecting the “must-run” status in the other – and the <a href="http://articles.economictimes.indiatimes.com/2015-08-26/news/65886398_1_must-run-status-wind-power-wind-mills" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="dispute is now in the courts">dispute is now in the courts</a>. Legal issues aside, there are negative economic consequences either way. Varying power from coal plants means underutilisation of capacity and higher costs related to wear and tear. Backing down wind power means wasted energy.</div>
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<b>Are we prepared for large-scale renewable energy?</b></div>
<div style="background-color: white; font-family: "Noto Serif", Georgia, serif; margin-bottom: 30px;">
The different types of long gestation infrastructure needed to handle large scale penetration of renewable energy on the grid are known from government sponsored studies dating to <a href="http://www.powergridindia.com/_layouts/PowerGrid/WriteReadData/file/ourBusiness/SmartGrid/Vol_1.pdf" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="2012">2012</a> and <a href="http://www.npti.in/Download/Transmission/CEA%20Report%20on%20Grid%20Integration%20of%20Renewable%20Energy%20Source,%20Nov.%202013.pdf" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="2013">2013</a>. These are broadly inter-state transmission lines, grid level storage and adequate flexible generation resources.</div>
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Transmission corridors carrying renewable energy across state boundaries would bring balancing resources over a larger area into play. In storage, these studies identified pumped storage projects – where energy is stored in water pumped from lower reservoirs into upper reservoirs – as a good option as there were a number of potential sites in India. Additionally, these projects would also support flexible generation.</div>
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Based on 12th plan targets for capacity addition (which included 56 GW of renewable energy), it was estimated that by 2017 only <a href="http://www.powergridindia.com/_layouts/PowerGrid/WriteReadData/file/ourBusiness/SmartGrid/Vol_1.pdf" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="60% of the balancing power requirements">60% of the balancing power requirements</a> would be met by flexible generation from the planned pumped storage, hydro and gas plants. The remaining would have to be met using the less flexible supercritical coal plants. After steeply raising the renewable energy target to 175 GW by 2022, how is the government preparing the grid for it?</div>
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The only preparation underway is in the area of establishing inter-state transmission corridors (termed ‘Green Energy Corridors’). These were already under implementation for existing renewable energy sites in Tamil Nadu, Gujarat and Rajasthan and the present government has <a href="http://powermin.nic.in/upload/pdf/Annex-I-to-VII.pdf" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="enlarged their scope">enlarged their scope</a> to include its “ultra mega solar parks”.</div>
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There is no visible movement on augmenting pumped storage capacity. Among new grid-level storage technologies, electro-chemical technologies (batteries, capacitors) may be the most suitable for Indian requirements. These technologies are however still <a href="http://indiaenergy.gov.in/docs/Storage%20Documentation.pdf" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="five to ten years">five to ten years</a> from commercialisation and as yet <a href="http://www.energystorageexchange.org/projects?utf8=%E2%9C%93&technology_type_sort_eqs=Electro-chemical&technology_type_sort_eqs_category=Electro-chemical&technology_type_sort_eqs_subcategory=&country_sort_eq=&state_sort_eq=&kW=%3E+10%2C000+kW&kWh=%3E+4+Hours&service_use_case_inf=&ownership_model_eq=&status_eq=Operational&siting_eq=&order_by=&sort_order=&search_page=1&size_kw_ll=10000&size_kw_ul=&size_kwh_ll=4&size_kwh_ul=&show_unapproved=%7B%7D" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="only one">only one</a> large battery storage plant (>10 MW with 4 hrs supply) is in operation worldwide.</div>
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Even if the government projections for addition of flexible generation capacity hold, the planned growth in renewable generation will far outpace it. In fact, capacity addition is likely to fall short by a large margin with problems with both gas-fired plants and hydro plants – expensive imported fuel in one case and environmental issues in the other.</div>
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Given the above, flexible generation resources will be grossly inadequate to meet balancing requirements by 2022. Coal-fired plants, both supercritical and subcritical, will have to be used for balancing and utilities, lacking adequate flexibility to handle supply variations, will be forced to resort to supply interruptions and load shedding.</div>
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<b>The real cost of solar</b></div>
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Problems of balancing aside, there is also the issue of cost. Utilities are extremely price conscious and will not contract solar energy if it is more expensive than other sources. After solar producers offered to sell NTPC electricity at rates of Rs 4.63/unit in AP last year and at Rs 4.34/unit in Rajasthan early this year, the Minister of Power was <a href="http://timesofindia.indiatimes.com/business/india-business/SunEdison-makes-record-with-lowest-solar-tariff-of-Rs-4-63/articleshow/49663793.cms" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="quick to announce">quick to announce</a> that solar energy prices had reached “near grid parity”. This statement is misleading.</div>
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NTPC is able to sell this power to utilities only because it <a bundles="" cheaper="" href="http://www.bloomberg.com/news/articles/2015-09-07/india-tells-coal-power-plants-to-subsidize-15-gigawatts-of-solar" it="" power="" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="" with="">“bundles” it with cheaper power</a> from its old coal-fired plants and offers them power at the “bundled” rate lower than its purchase price for solar electricity. It is this bundled price that must approach “grid parity” – the average contracted price of electricity on the grid for the utility – for NTPC to be able to find buyers.</div>
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Then again, even after reaching “grid parity”, solar can prove to be expensive. Its true cost to the utility is not just the price at which it has been purchased. The cost of balancing – be it the cost of storage or the cost of coal capacity held in reserve – must also be attributed to solar generation.</div>
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<b>Future shocks</b></div>
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The government’s announcement of massive solar energy targets therefore appears to be an impetuous decision. States will be unwilling to allow high penetration of solar energy into their grids considering its cost and the problems of addressing its variability. That is why the central government is all set to force the issue by increasing renewable purchase obligations. The <a href="http://powermin.nic.in/upload/pdf/Tariff_Policy-Resolution_Dated_28012016.pdf" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="new tariff policy">new tariff policy</a> states that solar electricity must constitute 8% of non-hydro power consumed by every utility by 2022.</div>
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Forcing the issue will have consequences for the quality of electricity supply. The limited arsenal in their hands to deal with supply variability will make it difficult for state utilities to fulfil the commitment of adequate and uninterrupted power supply 24 hours a day. The central government anticipates the need for curtailing demand. That is why it is pushing for the <a href="http://powermin.nic.in/upload/pdf/Tariff_Policy-Resolution_Dated_28012016.pdf" rel="external nofollow" style="color: #c0392b; text-decoration: none; transition: all 0.3s ease-in-out;" target="_blank" title="large-scale installation">large-scale installation</a> of smart meters that can support time-of-day tariff and facilitate demand reduction.</div>
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Savings on carbon emission would come from capacity underutilisation of coal plants, an expensive strategy for India. With no storage available on the grid, coal plants will be needed as backup, and installation of new solar plants will not lower the requirement for new coal plants.</div>
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India may be better served by a plan that looks at developing solar and other renewable energy generation in step with cost effective storage and flexible generation that is available to all states. Such a combination would reduce carbon emission by reducing the need for new coal plants. If such a plan entails slower adoption of solar generation, that may not altogether be bad; solar plants, as long term trends suggest, will only get cheaper with time.</div>
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Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-29773922790674834882016-02-21T19:20:00.000+05:302016-02-24T15:53:52.415+05:30Idle Generators and power deficit<div dir="ltr" style="text-align: left;" trbidi="on">
<i>India Together published <a href="http://indiatogether.org/the-electricity-conundrum-economy">this piece</a> which deals with how thermal plants are idle in some parts of the country even while other parts are facing a severe power crisis. Reproduced below:</i><br />
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ELECTRICITY CONUNDRUM</h2>
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Idle generators in the midst of power deficit</h1>
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The Southern region of India is expected to face high energy deficit this year while the Western and Eastern region will have a surplus of energy generation. Kannan Kasturi explains why such regional skew in energy generation and energy consumption exists and what it will take to resolve it.</div>
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04 August 2015 <span style="font-weight: normal;">-</span></div>
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Southern India is expected to face a severe electricity shortage this year. The Central Electricity Authority (CEA) in its latest annual forecast anticipates the energy deficit in the southern electricity grid to be over 11 percent, equivalent to a generation capacity deficit of 4000 MW. For Karnataka and Telangana, the forecasted energy deficit is greater than 16 percent.</div>
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Historically, India has been divided into five regional grids from an electricity distribution perspective – the Southern, Northern, Western, Eastern and North Eastern. The CEA forecasts a small deficit for the Northern region and a surplus for the Western and Eastern regions. The North Eastern region, while accounting for only a tiny fraction of all India electricity consumption, is also expected to have a large deficit.</div>
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The annual forecast results from an exercise, in which the electricity requirement and the available power for each state is collected and vetted by the CEA. The sources of power considered are both the public sector plants (belonging to the central or state governments) and private plants; however the forecast takes into account only firm contracts that are already in place between power producers and the distribution companies.</div>
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Energy deficit states may improve their power availability in the short term by buying electricity from surplus states during the year. It is also possible that actual demand turns out to be lower than projected demand, leading to a lower deficit. The numbers as they stand, however, predict a reversal of three years of decreasing power deficit in the southern region.</div>
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Before proceeding further, some clarification about CEA demand projections is in order. These projections are ultimately obtained from the electricity distribution companies (discoms) in the states and do not capture the full extent of demand for the following reasons.</div>
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The projections made by discoms are based on actual current usage and a projected rate of growth of demand for each category of customer, based on past trends. They are made assuming the limitations of the existing distribution network. The latent demand from a population left without service by the existing network, or from areas provided limited energy due to network limitations, do not figure in the demand projections.</div>
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Another issue with the demand projections is that discoms are supposed to compensate for the lower current usage figures resulting from scheduled and unscheduled power cuts (for example, the curtailed supply to irrigation pump sets).</div>
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Discoms by and large are not transparent about the power cuts they impose and the power outages due to faults, making independent estimation of the ‘unconstrained demand’ – the likely demand in the absence of power outages – very difficult. The CEA demand and deficit projections for the different regions need to be understood in the light of the above.</div>
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<strong style="font-family: Arial, helvetica;">The regional skew in energy generation</strong></div>
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Why do some regions have energy deficit and others have an energy surplus? Historically, electricity generation capacity was planned to keep each region self sufficient. Each state had its own power plants and the central government, while building plants in any region, also built the transmission systems to distribute power to the states in the region. Inter-regional transmission systems came up only on a case by case basis, typically if a part of the power from a central generating unit located in one region had been promised to a state in a neighbouring region.</div>
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The following graphic shows how power generation capacity and energy consumption have changed in recent years across the regions. Rather than absolute numbers, generation capacity and energy consumption for each region are shown as fractions of the all India capacity and consumption.</div>
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This shows the increasing imbalance between generation and consumption in some regions. (Note: The generation capacity pertains to Dec 2009 and Mar 2015 respectively. The energy requirement for 2015-16 is as per CEA projection).</div>
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<img alt="" src="http://indiatogether.org/uploads/picture/image/2906/energyskew.jpg" height="299" style="border: 0px; display: block; font-family: Arial, helvetica; margin-left: auto; margin-right: auto; max-width: 100%; vertical-align: middle;" width="524" />The Eastern (including North East) and Western regions have a greater share of energy generation than their share of energy consumption. The opposite is true for the Northern and Southern regions. Moreover, this proportion (of electricity generated to electricity consumed) has significantly fallen in the southern region and significantly increased in the western region in recent years.</div>
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<strong style="font-family: Arial, helvetica;">The missing transmission</strong></div>
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Electricity surplus in some regions co-existing with electricity deficit in other regions points to problems in wheeling electricity between the surplus and deficit regions. The rapid build-up of generating capacity in the western region requires a simultaneous build-up of transmission capacity to evacuate the power to the energy deficient regions. That this has not happened will become clear from the price pattern of electricity traded in the market in the different regions.</div>
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Electricity producers sell their surplus electricity in the short term electricity market after they have met their long and medium term contractual obligations. Over 40 percent (2013-14 figures) of the electricity that is available for sale in the market is traded through the Indian Energy Exchange (IEX).</div>
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The graphic below shows the average price of electricity traded at IEX in the western region states of Maharashtra, MP and Gujarat and the southern region states of TN, Kerala and Pondicherry.</div>
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<img alt="" src="http://indiatogether.org/uploads/picture/image/2907/electricityprices.jpg" height="347" style="border: 0px; display: block; font-family: Arial, helvetica; margin-left: auto; margin-right: auto; max-width: 100%; vertical-align: middle;" width="551" />(Note: The units of the y axis are Rs/Mwh and not Rs/Kwh as incorrectly shown)</div>
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Since 2010, the prices in the southern region have ruled significantly higher than in the western region indicating that there are barriers to moving the electricity generated from the west to the south. The price in these western states has been range bound between Rs 2-4 /kwh from 2012 and below Rs 3/kwh since Nov 2014. The price in Chhattisgarh which is also part of the western electricity grid remains marginally lower. The range bound price over an extended period indicates that electricity supply may not be a constraint in this region.</div>
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IEX data shows that in the Northern region too, electricity tends to trade at a higher price than the western and eastern regions; however the price differences are not very large suggesting that the transmission capacity from east and west into the north may be nearly adequate. In fact, an examination of inter-regional flow data shows that power import into the northern region has been steadily increasing from an average 2800 MW in 2010-11 to 5300 MW in 2014-15, compensating for the deficit in energy generation capacity.</div>
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The power import into the southern region, on the other hand, has only marginally increased from an average 1200 MW to 1800 MW between 2009-10 and 2014-15 (This does not include about 1800 MW of power from an NTPC plant in Talcher, Orissa which is exclusively meant for the southern region and for which a dedicated transmission line exists).</div>
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The Central Government has periodically trumpeted the new inter-regional transmission capacity additions. Prime Minister Modi personally inaugurated the second of two Raichur-Sholapur transmission lines in August 2014. Together, the two lines were supposed to add 4200 MW of transmission capacity from the western to the southern region. As of June 2015, the increased capacity available has been less than a tenth of this at around 400 MW.</div>
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The reason behind this, it turns out, is that crucial transmission links from the generation clusters in the western region to its periphery with the southern region, which will allow the full utilisation of the Raichur-Sholapur lines, are delayed.</div>
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Other high capacity links from Chhattisgarh to Telangana and Tamil Nadu have also been stuck with the centre at the planning stage despite representations from the concerned states. The lack of urgency in implementing these projects, one suspects, may have something to do with political considerations.</div>
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After the government opened up power production to the private sector, the coal-bearing states of the western region – MP, Chhattisgarh, and Maharashtra – became the preferred destinations for private companies seeking to exploit the cost advantages of pit head power plants. This is the reason for the disproportionate build up of power generation capacity in the western region. The inability to deliver power to the load centres in the south has meant that many new plants are idling or operating much below capacity.</div>
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Even as the thermal (coal-based) generation capacity of private producers in these three states has gone up from 5.7 GW in April 2009 to 26.4 GW in April 2015, the Plant Load Factor (PLF) of these plants, the capacity usage indicator, has come down from 83.5 percent to 43.1 percent. Coal availability has not been an issue since 2014 because of higher production, adequate imports and low international prices. Low capacity utilisation is a consequence of the inability to sell the electricity.<br />
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The problem clearly is that generation capacity has increased without adequate expansion in transmission capacity connecting it to power deficit load centres. The greed of the private promoters who did not tie up their production in long term contracts with discoms, hoping instead to make quick profits through merchant sales, is partly to blame.</div>
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Merchant selling - sales against short term contracts - allows the producer to charge prevailing market prices for electricity. Some years back, independent merchant producers made a killing in an environment of scarcity. Long term contracts, however, are based on competitive bidding by different producers and will not yield such high margins. But long term contracts would have kept the focus on building the necessary transmission links.</div>
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The major part of the blame must fall on the central government. Plants unable to sell electricity translates to banks, mainly public sector ones, saddled with non-performing assets. Further, operational plants are only a part of the problem. In the coal-bearing states in the same region, work is at a standstill in many more plants that are in various stages of development, awaiting better prices for electricity.</div>
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The government has clearly failed in its responsibility of overall planning of the electricity network and allowed scarce national capital to be wasted in generation capacity that cannot be utilised.</div>
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Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-5921931127914460092016-02-21T17:53:00.000+05:302017-03-22T14:41:56.554+05:30Comparing Census and NSS data on employment and unemployment<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_DOtxXU4SIfCEexSlE837lj6uezSGkk5g1-0iCb21dO0O2TT3VQ6i5ZpBRq0dIk_YDsXteG8nq24Ni-1pqlw_DRuNTLhTsr5HsKOZP57YR55Smv2CwEdx_F5gKf6_1EtTuuYpf0qNJOn6/s1600/15-05-29+EPW+header.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="122" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_DOtxXU4SIfCEexSlE837lj6uezSGkk5g1-0iCb21dO0O2TT3VQ6i5ZpBRq0dIk_YDsXteG8nq24Ni-1pqlw_DRuNTLhTsr5HsKOZP57YR55Smv2CwEdx_F5gKf6_1EtTuuYpf0qNJOn6/s320/15-05-29+EPW+header.png" width="320" /></a></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Reproduced from my article in the Economic and Political Weekly May 30, 2015</span></div>
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<span style="font-family: "times new roman" , serif; font-size: 12pt; line-height: 115%;">Unemployment rates in
India are not particularly interesting. Available most frequently from the
National Sample Survey (NSS), they are relatively low and have barely changed over
the years.</span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Recently available
census data provides far higher estimates of unemployment than the NSS.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn1" name="_ednref1" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[1]</span></span><!--[endif]--></span></a>
Census unemployment numbers are especially high for youth aged 15 to 29 who are
new entrants to the labour force. Over forty million youth are seeking work and
the unemployment rate stands at above 15% and 30% for young men and women
respectively.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn2" name="_ednref2" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[2]</span></span><!--[endif]--></span></a>These
numbers make the case for a closer look at census and NSS employment and
unemployment data to understand why they differ and what they represent.<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">This article begins with
a brief discussion of the census and NSS methodologies to identify comparable
data from the two data sets. This is followed by a comparison of aggregated
employment, underemployment and unemployment data from the two sources to see
how well they agree and how that agreement has changed over time. The last
section looks at disaggregated data from the last census for clues to explain
the wide difference in unemployment estimates.<o:p></o:p></span></div>
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<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Areas of broad compatibility<o:p></o:p></span></b></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">For estimates from two
different data collection exercises to be comparable, they must at a minimum
work with similar concepts and have the same reference period<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn3" name="_ednref3" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[3]</span></span><!--[endif]--></span></a>.
The areas of broad compatibility between
the NSS and the census starting with the 1991 census are briefly captured below.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn4" name="_ednref4" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[4]</span></span><!--[endif]--></span></a>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Both the NSS and the
census divide the country into rural and urban areas for data collection in a
mutually consistent manner.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn5" name="_ednref5" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[5]</span></span><!--[endif]--></span></a>
The census uses a reference period of one year for employment data and the NSS
also provides data for such a period.<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">The census provides
only limited data on employment and unemployment. It separates the population
into ‘workers’ and ‘non-workers’ and provides estimates of the number of
‘workers’, the extent of underemployment among ‘workers’ and unemployment among
‘non-workers’. These then are the data of interest for a comparison between the
census and NSS.<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Both the census and the
NSS have similar criteria for identifying ‘workers’ and the ‘unemployed’. ‘Workers’
are persons engaging in ‘economic activity’ and the set of production related
activities accepted as ‘economic activity’ is almost the same in both exercises.
The ‘unemployed’ among the non-working population are identified by determining
if they are ‘seeking work or available for work if there is work available’. In
urban areas, this test requires a person to be making tangible efforts to
obtain work. In rural areas it is less stringent and only requires that a
person be available for work if work is available. Both exercises estimate
underemployment in workers and both identify students in the non-working
population. <o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Getting to the
specifics, Census B Series tables provide the count of ‘main workers’ - workers
who have worked six months or more in the last year and ‘marginal workers’ –
those who have worked less than six months.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn6" name="_ednref6" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[6]</span></span><!--[endif]--></span></a>
The broadest count of workers is obtained by adding the count of ‘main workers’
and the count of ‘marginal workers’. From among the rest termed the ‘non-workers’,
those who pass the test of ‘seeking or available for work’ make up the count of
the census unemployed.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn7" name="_ednref7" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[7]</span></span><!--[endif]--></span></a>
The census also measures underemployment among ‘marginal workers’ by applying
the above test. Non-workers are additionally categorised by ‘main activity’
including as ‘students’ and persons ‘engaged in household duties’.<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">In the NSS, a person’s
‘activity status’ can be ‘worker’, ‘unemployed’ or ‘not in the labour force’
during the reference period and the ‘principal status’ is determined by the ‘activity status’ in which relatively
longer time has been spent (also referred to as the ‘major time’ criteria).<a href="https://www.blogger.com/null" name="_Ref411175641"><span class="MsoEndnoteReference"> </span></a><a href="https://www.blogger.com/null" name="_Ref411277945"></a><a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn8" name="_ednref8" title=""><!--[if !supportFootnotes]--><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[8]</span><!--[endif]--></a>
The broadest count of workers with a 1 year reference period is obtained from
the tabulation referred to as ‘usual activity status (principal status +
subsidiary status)’ in the NSS “Employment and Unemployment Situation” reports.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn9" name="_ednref9" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[9]</span></span><!--[endif]--></span></a>
This includes persons whose ‘principal activity status’ is ‘worker’ as well as
persons whose ‘principal activity status’ is other than ‘worker’, but who have
worked for at least 30 days in the reference period. This tabulation also
provides the categorization of non-working persons as ‘unemployed’, ‘students’
and as those ‘engaged in domestic duties’. The NSS additionally provides
several indicators of underemployment among ‘workers’ which will be discussed
later.<o:p></o:p></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Worker population ratios<o:p></o:p></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Large sample surveys
are conducted every five years and the NSS large sample rounds closest to
census years have been selected for the comparison. Table 1 compares NSS and
census worker population ratios across 3 censuses. The female worker population
ratios in the NSS (1993-94) round show a large difference with the
corresponding ratios of Census 1991.<o:p></o:p></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Table 1. Workers in every 1000 persons aged 15 and above<o:p></o:p></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: 4.9pt; mso-border-alt: solid windowtext 1.0pt; mso-border-insideh: 1.0pt solid windowtext; mso-border-insidev: 1.0pt solid windowtext; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184;">
<tbody>
<tr style="height: 15.0pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td nowrap="" style="border-bottom: 1.0pt; border-color: windowtext; border-left: 1.5pt; border-right: 1.0pt; border-style: solid; border-top: 1.5pt; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td colspan="2" nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: solid windowtext 1.5pt; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Men<o:p></o:p></span></div>
</td>
<td colspan="2" nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: solid windowtext 1.5pt; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-right-alt: 1.5pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Women<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 1;">
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: 1.5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Rural<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Urban<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Rural<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Urban<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 2;">
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Census - 1991<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">825<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">726<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">406<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-right-alt: 1.5pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">136<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: 1.5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">NSS (1993-94)<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">864<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">768<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">486<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">223<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 4;">
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Census - 2001<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">810<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">720<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">463<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-right-alt: 1.5pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">167<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 5;">
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: 1.5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">NSS (1999-00)<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">841<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">752<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">452<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">197<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 6;">
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Census - 2011<o:p></o:p></span></div>
</td>
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<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">779<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">724<o:p></o:p></span></div>
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<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">430<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">202<o:p></o:p></span></div>
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<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: 1.5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">NSS (2011-12)<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">800<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">741<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">352<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">195<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Source: Census of India<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn10" name="_ednref10" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[10]</span></span><!--[endif]--></span></a>
and NSS ‘Employment and Unemployment Situation in India’ reports<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn11" name="_ednref11" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[11]</span></span><!--[endif]--></span></a><o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">A government committee
of experts that was privy to the 1991 census data attributed the differences in
census and NSS estimates to two main factors – a) differences in the set of activities
that constituted ‘economic activity’ and b) differences in the minimum time
spent working to be considered a ‘worker’.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn12" name="_ednref12" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[12]</span></span><!--[endif]--></span></a> <o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">More specifically, the
National Statistical Commission (also known as the Dr Rangarajan Commission)
was of the view that the exclusion of certain non-market
economic activities from the definition of work adopted in the census could be
the reason for the low female worker population ratios of Census 1991 in
comparison with the NSS 50th round.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn13" name="_ednref13" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[13]</span></span><!--[endif]--></span></a><o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;"><br /></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">The scope of non-market economic activities was expanded in Census 2001 by
treating persons engaged in cultivation and growing of crops solely for
domestic consumption and persons engaged in rearing of animals for production
of milk for their own use as ‘workers’.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn14" name="_ednref14" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[14]</span></span><!--[endif]--></span></a>
There is a dramatic improvement seen in the agreement between Census 2001 and
NSS female workforce ratios, possibly as a consequence of this change. The
differences in the male workforce ratios have also narrowed further compared to
Census 1991. <o:p></o:p></span></div>
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<br /></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">Census 2011 shows a further narrowing of differences with NSS workforce
estimates for rural men and urban men and women. The only spoiler is the count
of rural working women where there is a large difference.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn15" name="_ednref15" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[15]</span></span><!--[endif]--></span></a><o:p></o:p></span></div>
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<br /></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">The sharp fall in rural
female workforce ratios seen in both the NSS 66<sup>th </sup>round (2009-10)
and the NSS 68<sup>th </sup>round (2011-12) compared to NSS 61<sup>st</sup>
round (2004-05) without any accompanying increase in unemployment has puzzled researchers
following employment trends. There is an extensive literature attempting to throw
light on this phenomenon termed the “missing labour force”.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn16" name="_ednref16" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[16]</span></span><!--[endif]--></span></a>
If Census data is to be believed, much of the rural female labour force may not
have gone missing at all.<o:p></o:p></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
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<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">The next two sections
feature comparisons of underemployment and unemployment estimates. The
comparisons will be confined to Census 2001 and Census 2011 which have better
comparability with NSS data than Census 1991 for reasons stated earlier.<o:p></o:p></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Underemployment in workers<o:p></o:p></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">The census, as
mentioned earlier, counts the number of ‘marginal workers’ who are seeking or
available for work.This is a measure of underemployment in workers who have
worked for less than six months. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;"><br /></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">The NSS has several indicators of underemployment among usual workers.
Among them, the one with a liberal interpretation of underemployment, is the
one which measures </span><span style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">usual workers (</span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">principal status+ subsidiary status</span><span style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">) who were
without work for at least 1 month and who sought or were available for work on
at least some days during those month(s). </span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">Table 2 shows the underemployment numbers from the census and the range
provided by this NSS indicator.<o:p></o:p></span></div>
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<br /></div>
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<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">Table 2. Underemployed workers in every 1000 persons aged 15
and above</span></b><span style="font-family: "times new roman" , "serif"; font-size: 12.0pt;"><o:p></o:p></span></div>
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<td nowrap="" style="border-bottom: 1.0pt; border-color: windowtext; border-left: 1.5pt; border-right: 1.0pt; border-style: solid; border-top: 1.5pt; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td colspan="2" nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: solid windowtext 1.5pt; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Men<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: solid windowtext 1.5pt; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Women<o:p></o:p></span></div>
</td>
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<br /></div>
</td>
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<tr style="height: 15.75pt; mso-yfti-irow: 1;">
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: 1.5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Rural<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Urban<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Rural<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Urban<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 2;">
<td style="border-bottom: solid windowtext 1.0pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Census - 2001<o:p></o:p></span></div>
</td>
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<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">52<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">25<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">36<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-right-alt: 1.5pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">9<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 3;">
<td style="border-bottom: solid windowtext 1.5pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: 1.5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">NSS (1999-00)<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">183-203<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">67-75<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">93-112<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">19-25<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 4;">
<td style="border-bottom: solid windowtext 1.0pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Census - 2011<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">98<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">32<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">69<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-right-alt: 1.5pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">17<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 5; mso-yfti-lastrow: yes;">
<td style="border-bottom: solid windowtext 1.5pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: 1.5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">NSS (2011-12)<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">155-160<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">48-53<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">58-62<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt;" valign="bottom"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">15-16<o:p></o:p></span></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Source: Census of India
and NSS ‘Employment and Unemployment Situation in India’ reports<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn17" name="_ednref17" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[17]</span></span><!--[endif]--></span></a><o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">As the table shows, the
census generally underestimates underemployment when compared with this NSS
indicator. The probable reason for the wide margin of underestimation is that
the census does not test ‘main workers’ – those who have worked greater than
six months in the year - for underemployment. This means that the census
population for the underemployment test is far smaller than the NSS population
which includes all workers.<o:p></o:p></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Unemployment and underemployment in non-workers<o:p></o:p></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Table 3 compares census
figures of non-working persons ‘seeking work’ with the NSS numbers of ‘unemployed’
for the last two censuses. NSS figures show dramatically lower unemployment
than the census.<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Table 3. Non-workers seeking work in every 1000 persons aged
15 and above<o:p></o:p></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 4.9pt; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 359px;">
<tbody>
<tr style="height: 15.0pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td nowrap="" style="border-bottom: 1.0pt; border-color: windowtext; border-left: 1.5pt; border-right: 1.0pt; border-style: solid; border-top: 1.5pt; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 85.55pt;" valign="bottom" width="114"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td colspan="2" nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: solid windowtext 1.5pt; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 87.45pt;" valign="bottom" width="117"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Men<o:p></o:p></span></div>
</td>
<td colspan="2" nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: solid windowtext 1.5pt; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-right-alt: 1.5pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 96.0pt;" valign="bottom" width="128"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Women<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 1;">
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: 1.5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 85.55pt;" valign="bottom" width="114"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Rural<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.95pt;" valign="bottom" width="69"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Urban<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 44.05pt;" valign="bottom" width="59"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Rural<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.95pt;" valign="bottom" width="69"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Urban<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 2;">
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 85.55pt;" valign="bottom" width="114"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Census – 2001<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">44<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.95pt;" valign="bottom" width="69"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">84<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 44.05pt;" valign="bottom" width="59"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">54<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-right-alt: 1.5pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.95pt;" valign="bottom" width="69"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">106<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: 1.5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 85.55pt;" valign="bottom" width="114"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">NSS (1999-00)<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">15<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.95pt;" valign="bottom" width="69"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">35<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 44.05pt;" valign="bottom" width="59"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">5<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.95pt;" valign="bottom" width="69"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">12<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 4;">
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 85.55pt;" valign="bottom" width="114"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Census – 2011<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">48<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.95pt;" valign="bottom" width="69"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">61<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 44.05pt;" valign="bottom" width="59"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">79<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-right-alt: 1.5pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.95pt;" valign="bottom" width="69"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">94<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 5; mso-yfti-lastrow: yes;">
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: 1.5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 85.55pt;" valign="bottom" width="114"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">NSS (2011-12)<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">14<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.95pt;" valign="bottom" width="69"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">23<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 44.05pt;" valign="bottom" width="59"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">6<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.95pt;" valign="bottom" width="69"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">11<o:p></o:p></span></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Note: Census number
refer to non-workers seeking or available for work; NSS numbers are for those
termed ‘unemployed’<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Source: Census of India
and NSS ‘Employment and Unemployment Situation in India’ reports<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">The National
Statistical Commission noted many years back that NSS estimates of unemployment
were low because of the definitions and concepts
followed in its framework of employment and unemployment.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn18" name="_ednref18" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[18]</span></span><!--[endif]--></span></a>
<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">What are the
definitions and concepts in the NSS framework that makes its unemployment
estimates low compared to the census?<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">The NSS uses the ‘major
time’ criteria to decide if non-workers are ‘unemployed’ or outside the labour
force.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn19" name="_ednref19" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[19]</span></span><!--[endif]--></span></a>
Persons spending a major portion of their time in study or domestic duties are
considered to be outside the labour force. They do not add to the count of the
‘unemployed’ even if they are seeking work. <o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">In the census, on the
other hand, the test of ‘seeking work’ is applied to all non-workers without
any hard time criteria associated with it. Persons spending a major portion of
their time in study or household duties can still qualify the test and be
counted among the census unemployed.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn20" name="_ednref20" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[20]</span></span><!--[endif]--></span></a><o:p></o:p></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Students and unemployment<o:p></o:p></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">The above arguments, to
the extent that they involve the double counting of students among the
unemployed in the census, can be substantiated by examining age disaggregated
data on non-working men (Table 4). The discussion can be limited to men in the
age group 15-29 without compromising the analysis as this group accounts for 85%
of the census unemployed. <o:p></o:p></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Table 4. Age disaggregated profile of non-working men seeking
work gathered from Census 2011 and NSS 2011-12<o:p></o:p></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<table border="1" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; border: none; margin-left: 4.65pt; mso-border-alt: solid windowtext 1.5pt; mso-border-insideh: .75pt solid windowtext; mso-border-insidev: .75pt solid windowtext; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 504px;">
<tbody>
<tr style="height: 36.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="2" style="border-bottom: 1.0pt; border-color: windowtext; border-left: 1.5pt; border-right: 1.0pt; border-style: solid; border-top: 1.5pt; height: 36.75pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 75.1pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td colspan="4" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: solid windowtext 1.5pt; height: 36.75pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 237.8pt;" valign="bottom" width="317"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Census<o:p></o:p></span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: solid windowtext 1.5pt; height: 36.75pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-right-alt: 1.5pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 65.35pt;" valign="bottom" width="87"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">NSS<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 1;">
<td rowspan="2" style="border-bottom: solid windowtext 1.5pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: 1.5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 35.35pt;" valign="bottom" width="47"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" rowspan="2" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 39.75pt;" valign="bottom" width="53"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Age group<o:p></o:p></span></div>
</td>
<td nowrap="" rowspan="2" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 66.0pt;" valign="bottom" width="88"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Not working<o:p></o:p></span></div>
</td>
<td colspan="3" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 171.8pt;" valign="bottom" width="229"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Of which<o:p></o:p></span></div>
</td>
<td rowspan="2" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.0pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 65.35pt;" valign="bottom" width="87"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">‘Unemployed’<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 2;">
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 50.35pt;" valign="bottom" width="67"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Students<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 52.85pt;" valign="bottom" width="70"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Seeking work<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 68.6pt;" valign="bottom" width="91"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">* Students seeking work<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 3;">
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 35.35pt;" valign="bottom" width="47"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Rural<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 39.75pt;" valign="bottom" width="53"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">15-19<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 66.0pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">659<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 50.35pt;" valign="bottom" width="67"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">544<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 52.85pt;" valign="bottom" width="70"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">128<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 68.6pt;" valign="bottom" width="91"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">72<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-right-alt: 1.5pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 65.35pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">30<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 4;">
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 35.35pt;" valign="bottom" width="47"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 39.75pt;" valign="bottom" width="53"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">20-24<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 66.0pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">294<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 50.35pt;" valign="bottom" width="67"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">190<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 52.85pt;" valign="bottom" width="70"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">117<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 68.6pt;" valign="bottom" width="91"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">51<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-right-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 65.35pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">46<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 5;">
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: 1.5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 35.35pt;" valign="bottom" width="47"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 39.75pt;" valign="bottom" width="53"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">25-29<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 66.0pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">107<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 50.35pt;" valign="bottom" width="67"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">26<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 52.85pt;" valign="bottom" width="70"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">50<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 68.6pt;" valign="bottom" width="91"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">0<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 65.35pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">21<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 6;">
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 35.35pt;" valign="bottom" width="47"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Urban<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 39.75pt;" valign="bottom" width="53"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">15-19<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 66.0pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">768<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 50.35pt;" valign="bottom" width="67"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">651<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 52.85pt;" valign="bottom" width="70"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">140<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 68.6pt;" valign="bottom" width="91"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">76<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: .75pt; mso-border-color-alt: windowtext; mso-border-left-alt: .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-right-alt: 1.5pt; mso-border-style-alt: solid; mso-border-top-alt: 1.5pt; mso-border-top-alt: solid windowtext 1.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 65.35pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">33<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 7;">
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 35.35pt;" valign="bottom" width="47"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 39.75pt;" valign="bottom" width="53"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">20-24<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 66.0pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">430<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 50.35pt;" valign="bottom" width="67"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">295<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 52.85pt;" valign="bottom" width="70"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">161<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 68.6pt;" valign="bottom" width="91"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">68<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.0pt; mso-border-alt: solid windowtext .75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-right-alt: solid windowtext 1.5pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 65.35pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">70<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.75pt; mso-yfti-irow: 8; mso-yfti-lastrow: yes;">
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: solid windowtext 1.5pt; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-bottom-alt: 1.5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.5pt; mso-border-right-alt: .75pt; mso-border-style-alt: solid; mso-border-top-alt: .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 35.35pt;" valign="bottom" width="47"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 39.75pt;" valign="bottom" width="53"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">25-29<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 66.0pt;" valign="bottom" width="88"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">164<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 50.35pt;" valign="bottom" width="67"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">47<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 52.85pt;" valign="bottom" width="70"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">77<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.75pt; mso-border-alt: solid windowtext .75pt; mso-border-bottom-alt: solid windowtext 1.5pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 68.6pt;" valign="bottom" width="91"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">0<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.5pt; border-left: none; border-right: solid windowtext 1.5pt; border-top: none; height: 15.75pt; mso-border-left-alt: solid windowtext .75pt; mso-border-top-alt: solid windowtext .75pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 65.35pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">45<o:p></o:p></span></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Notes: Numbers are
ratios per 1000 population; * Lower bound on number of students seeking work<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Source: Census of India<a href="https://www.blogger.com/null" name="_Ref411179374"></a><a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn21" name="_ednref21" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[21]</span></span><!--[endif]--></span></a> and NSS “Employment and Unemployment
Situation in India” report<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">The census count of
those seeking work far exceeds the NSS count of ‘unemployed’ for each age group
as expected. Census numbers indicate that the bulk of non-working men of age
15-24 are students. Some of them can be expected to figure in the census count
of those seeking work. A lower bound on the number of students seeking work has
been computed and presented in Table 4 using the detailed breakup of
non-workers by ‘main activity’ published as part of the census.<a href="https://www.blogger.com/null" name="_Ref411175611"><span class="MsoEndnoteReference"> </span></a><a href="https://www.blogger.com/null" name="_Ref411263924"></a><a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn22" name="_ednref22" title=""><!--[if !supportFootnotes]--><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[22]</span><!--[endif]--></a><o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">The NSS count of male
‘unemployed’ agrees more closely with the census numbers after students seeking
work have been excluded from the latter. It needs to be re-emphasised that what
is listed in Table 4 is only a lower bound and exact numbers of students
seeking work, if available, will further improve the fit between census and NSS
data on unemployment among non-students. Even with the available data, it is
clear that the census unemployment is much higher than NSS unemployment in
males predominantly because it factors in students seeking work.<o:p></o:p></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Women engaged in domestic duties and unemployment<o:p></o:p></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Census figures indicate
that one must consider women between 15 and 39 to account for 80% of female
unemployment. Since disaggregated data is not available for this range from
both census and NSS, the discussion below is with aggregated numbers. Table 5
presents data from the census and NSS for non-working women aged 15 and above.
NSS data shows that these women are overwhelmingly students or engaged in
domestic duties according to the ‘major time’ criteria. <o:p></o:p></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Table 5. Profile of non-working women aged 15 and above
seeking work gathered from NSS 2011-12 and Census 2011<o:p></o:p></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 4.9pt; mso-padding-alt: 0cm 5.4pt 0cm 5.4pt; mso-yfti-tbllook: 1184; width: 512px;">
<tbody>
<tr style="height: 15.0pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td rowspan="3" style="border-bottom: solid black 1.0pt; border: solid windowtext 1.0pt; height: 15.0pt; mso-border-bottom-alt: black .5pt; mso-border-left-alt: windowtext 1.0pt; mso-border-right-alt: windowtext .5pt; mso-border-style-alt: solid; mso-border-top-alt: windowtext 1.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.0pt;" valign="bottom" width="63"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td colspan="5" style="border-left: none; border: solid windowtext 1.0pt; height: 15.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext 1.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 241.0pt;" valign="bottom" width="321"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">NSS<o:p></o:p></span></div>
</td>
<td colspan="2" nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: solid windowtext 1.0pt; height: 15.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid black 1.0pt; mso-border-top-alt: solid windowtext 1.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 96.0pt;" valign="bottom" width="128"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Census<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 15.0pt; mso-yfti-irow: 1;">
<td rowspan="2" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.25pt;" valign="bottom" width="63"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Not working<o:p></o:p></span></div>
</td>
<td colspan="2" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 95.3pt;" valign="bottom" width="127"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Of which<o:p></o:p></span></div>
</td>
<td rowspan="2" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.05pt;" valign="bottom" width="68"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">‘Unemployed’<o:p></o:p></span></div>
</td>
<td rowspan="2" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.4pt;" valign="bottom" width="63"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Women in DD
available for work^<o:p></o:p></span></div>
</td>
<td rowspan="2" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Seeking work<o:p></o:p></span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 15.0pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">of which<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 48.75pt; mso-yfti-irow: 2;">
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 48.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.7pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Engaged in domestic duties(DD)<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 48.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.6pt;" valign="bottom" width="63"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">Students<o:p></o:p></span></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 48.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">‘Non-students’ seeking work *<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.0pt;" valign="bottom" width="63"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">Rural<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.25pt;" valign="bottom" width="63"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">648<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.7pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">499<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.6pt;" valign="bottom" width="63"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">85<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.05pt;" valign="bottom" width="68"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">6<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.4pt;" valign="bottom" width="63"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">33<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">79<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">54<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 4; mso-yfti-lastrow: yes;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 13.5pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.0pt;" valign="bottom" width="63"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">Urban<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 13.5pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.25pt;" valign="bottom" width="63"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">806<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 13.5pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.7pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">611<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 13.5pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.6pt;" valign="bottom" width="63"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">122<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 13.5pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 51.05pt;" valign="bottom" width="68"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">11<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 13.5pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 47.4pt;" valign="bottom" width="63"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">41<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 13.5pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">94<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 13.5pt; padding: 0cm 5.4pt 0cm 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span lang="EN-GB" style="font-family: "times new roman" , serif; font-size: 12pt;">59<o:p></o:p></span></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Notes: Numbers are
ratios per 1000 population; ^ Estimate of the number of non-working women usually
engaged in domestic duties who are willing to take up regular full time work at
home;* Upper bound on the number of ‘non-students’ seeking work<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Source: Census of India<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn23" name="_ednref23" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[23]</span></span><!--[endif]--></span></a>
and NSS report “Participation of women in specified activities along with
domestic duties”<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn24" name="_ednref24" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[24]</span></span><!--[endif]--></span></a><o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">The census data allows
a rough division of the total number of women ‘seeking work’ between students
and ‘non-students’.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn25" name="_ednref25" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[25]</span></span><!--[endif]--></span></a>
Table 5 lists the upper bound on the number of ‘non-students’ seeking work. From
the NSS perspective, these non-students would almost entirely be women engaged in
domestic duties.<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_edn26" name="_ednref26" title=""><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 12pt; line-height: 115%;">[26]</span></span><!--[endif]--></span></a><o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Again from the NSS
perspective, non-working women who spend ‘major time’ in domestic duties would
not qualify as ‘unemployed’ even if they were seeking work. However, the NSS
recognizes this situation as a form of underemployment and provides several
indicators of its extent. One such indicator – the number of non working women,
engaged principally in domestic duties, that are willing to take up regular
full time work if offered such work at home – is also shown in Table 5. <o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span>
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">It can be seen that
there is a fair agreement between the census numbers of ‘non-students’ seeking
work and the aggregate of the NSS numbers of ‘unemployed’ and women primarily
engaged in domestic duties who are available for work at home full time. Too
much should not be read into the agreement as the NSS and census ‘tests’ of the
availability of women engaged in domestic duties for work are not quite the
same. <o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Nontheless, the
available evidence makes it clear that census unemployment in women is far
higher than NSS unemployment predominantly because it factors in students
seeking work as well as women, primarily engaged in domestic duties, seeking
work.<o:p></o:p></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Concluding remarks<o:p></o:p></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">The comparison of NSS
and census data reveals that the differences in employment estimates have
narrowed over the last three censuses, the only exception being the estimates
of rural women in Census 2011. This exception merits further study especially
because the NSS numbers have not been on expected lines.<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">The NSS provides
several indicators of underemployment among workers; however none of these are
strictly comparable with census data as the coverage of workers is different in
the two exercises.<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span>
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Census unemployment estimates
are far higher than the NSS estimates because they also include students and
persons primarily engaged in domestic duties who are seeking work. The desire
for work in students and in women primarily engaged in domestic duties is in
some sense a reflection of underemployment in these sections. The census unemployment
estimate, in this sense, is an aggregate estimate of the unemployed and
underemployed.<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">While the
underemployment among women engaged in domestic work is an ongoing part of NSS
employment studies, it has been left to the census, with its relatively crude
methodology, to uncover the extent of the latent Indian youth labour force. <o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">References:<o:p></o:p></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Census (2011), “Instruction Manual for Updating of Abridged House list and
Filling up of the Household Schedule”, <i>Census
of India</i>, (</span><span lang="EN-GB"><a href="http://censusindia.gov.in/"><span style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">http://censusindia.gov.in</span></a></span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">)<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Hirway, Indira (2012):
“Missing Labour Force, An
Explanation”, <i>Economic and Political
Weekly</i>, vol xlvii no 37, Sept 15, 2012 <o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">NSC (2001), “Report of
National Statistical Commission”, Sept 5, 2001, (</span><span lang="EN-GB"><a href="http://mospi.nic.in/"><span style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">http://mospi.nic.in</span></a></span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">) <o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">NSSO (2008), “Review of Concepts and Measurement Techniques in Employment
and Unemployment Surveys of NSSO”, <i>National
Sample Survey Organisation</i>, Dec 2008,</span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"> (</span><span lang="EN-GB"><a href="http://mospi.nic.in/"><span style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">http://mospi.nic.in</span></a></span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">)<o:p></o:p></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">NSSO (2014a), “Employment
and Unemployment Situation in India, NSS 68<sup>th</sup> round”, <i>National
Sample Survey Organisation</i>, Jan 2014, (</span><span lang="EN-GB"><a href="http://mospi.nic.in/"><span style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">http://mospi.nic.in</span></a></span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">)<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;"><br /></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">NSSO (2014b), “Participation of Women in Specified Activities along with
Domestic Duties”, NSS 68<sup>th</sup> round”, <i>National Sample Survey
Organisation</i>, Sept 2014, (</span><span lang="EN-GB"><a href="http://mospi.nic.in/"><span style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">http://mospi.nic.in</span></a></span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt;">)<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="MsoNormal">
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">Thorat Amit (2004),
“NSS Employment Surveys; Problems with comparisons over time”, October 2004,
Viewed on 10 Feb 2015</span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;"> (</span><span lang="EN-GB"><a href="http://www.macroscan.org/anl/oct04/pdf/NSS_Data_Critique.pdf"><span style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">http://www.macroscan.org/anl/oct04/pdf/NSS_Data_Critique.pdf</span></a></span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 12.0pt; line-height: 115%;">)<o:p></o:p></span></div>
<div>
<!--[if !supportEndnotes]--><br clear="all" />
<hr align="left" size="1" width="33%" />
<!--[endif]-->
<br />
<div id="edn1">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref1" name="_edn1" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[1]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">
Census 2011 tables containing data on workers were released in Sept 2014. The
Census estimate of unemployment in urban men aged 15 and above exceeds the NSS
estimate by a factor of 2.6. The factors for rural men and rural and urban
women are much higher.<o:p></o:p></span></div>
</div>
<div id="edn2">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref2" name="_edn2" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[2]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> Data
from Table B1, Census 2011<o:p></o:p></span></div>
</div>
<div id="edn3">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref3" name="_edn3" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif";"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[3]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif";"> The ‘reference
period’ is the period to which the data pertains<o:p></o:p></span></div>
</div>
<div id="edn4">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref4" name="_edn4" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[4]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> For
a brief historical overview of the problems of comparing NSS and census
employment data starting from the 1951 census, see Thorat (2004) <o:p></o:p></span></div>
</div>
<div id="edn5">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref5" name="_edn5" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[5]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> See
Sec 1.5 NSSO (2014a) for a description of survey sampling in rural and urban
areas<o:p></o:p></span></div>
</div>
<div id="edn6">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref6" name="_edn6" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[6]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">
Census B series tables for various years are available at the Census of India
website (</span><span lang="EN-GB"><a href="http://www.censusindia.gov.in/"><span style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">http://www.censusindia.gov.in</span></a></span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">)<o:p></o:p></span></div>
</div>
<div id="edn7">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref7" name="_edn7" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[7]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> The
census figures of ‘seeking or available for work’ are popularly interpreted as
unemployment figures though it must be pointed out that the census itself
refrains from using the term ‘unemployed’. <o:p></o:p></span></div>
</div>
<div id="edn8">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref8" name="_edn8" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[8]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> A
complete explanation of the ‘major time’ criteria may be found in Sec 2.21 of
NSSO (2014a)<o:p></o:p></span></div>
</div>
<div id="edn9">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref9" name="_edn9" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[9]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">
These reports are available at the Ministry of Statistics and Program
Implementation website (</span><span lang="EN-GB"><a href="http://mospi.nic.in/"><span style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">http://mospi.nic.in/</span></a></span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">)<o:p></o:p></span></div>
</div>
<div id="edn10">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref10" name="_edn10" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[10]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">
Ratios computed by author using population figures from the Table B1 for
various years <o:p></o:p></span></div>
</div>
<div id="edn11">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref11" name="_edn11" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[11]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> Data
is from the ‘usual activity status (ps+ss)’ table <o:p></o:p></span></div>
</div>
<div id="edn12">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref12" name="_edn12" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[12]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> Sec
10.1, NSSO (2008)<o:p></o:p></span></div>
</div>
<div id="edn13">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref13" name="_edn13" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[13]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> Sec
9.4.34 (xiv) , NSC(2001)<o:p></o:p></span></div>
</div>
<div id="edn14">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref14" name="_edn14" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif";"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[14]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif";"> See Metadata of
Census 2001 at Census of India Website<o:p></o:p></span></div>
</div>
<div id="edn15">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref15" name="_edn15" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[15]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> The
census and NSS have different minimum time criteria for categorising persons as
workers (30 days in NSS, none in census). Census data for 2011 shows that only
37 in 1000 rural women aged 15 and above were ‘marginal workers’ working less
than 3 months. Even if all of these were missed out by the NSS, it would account
for only a small part of the NSS underestimation.<o:p></o:p></span></div>
</div>
<div id="edn16">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref16" name="_edn16" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif";"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[16]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif";"> See Hirway (2012) for a summary of the various explanations attempted<o:p></o:p></span></div>
</div>
<div id="edn17">
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref17" name="_edn17" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif";"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[17]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif";"> NSS data for 2011 is
from Table 61 of NSSO (2014a). The table provides estimates of ‘</span><span style="font-family: "times new roman" , "serif"; mso-ansi-language: EN-IN;">usual
status workers (ps+ss)’ who were without work for at least 1 month and who
sought or were available for work on at least some days during those month(s).
This number (N) is regardless of the age of the workers, and may include some
workers below 15 years of age. ‘N’ serves as an upper bound of this indicator
of underemployment among workers of age 15 and above. A lower bound is obtained
by subtracting the total number of ‘usual status (ps+ss)’ workers aged below 15
from N<o:p></o:p></span></div>
</div>
<div id="edn18">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref18" name="_edn18" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[18]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> Sec
9.4.27 (a) of NSC(2001)<o:p></o:p></span></div>
</div>
<div id="edn19">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref19" name="_edn19" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[19]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> See
note </span><span lang="EN-GB"><span style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">8</span></span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><o:p></o:p></span></div>
</div>
<div id="edn20">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref20" name="_edn20" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[20]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> Sec
6.166, Census(2011)<o:p></o:p></span></div>
</div>
<div id="edn21">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref21" name="_edn21" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[21]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> Raw
data is from Tables B1 and B13 of Census 2011. Authors computation of the number of students seeking work is
explained in note </span><span lang="EN-GB"><span style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">22</span></span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><o:p></o:p></span></div>
</div>
<div id="edn22">
<div class="MsoEndnoteText" style="margin-top: 12.0pt;">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref22" name="_edn22" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[22]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">
Table B1of the census provides the total number of non-workers seeking work
(U). Table B13 divides non-workers into categories by ‘main activity’ including
the categories of ‘students’ (S) and ‘others’ (O). According to the census
enumeration guidelines all ‘non-workers’ seeking work, other than students, are
placed in the category ‘others’. The ‘others’ category also includes some
persons who are not seeking work. (Sec 6.160, Census(2011)) ‘O’ is therefore an
upper bound on the number of non-students seeking work and (U-O) represents a
lower bound on the number of students seeking work <o:p></o:p></span></div>
</div>
<div id="edn23">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref23" name="_edn23" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[23]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> ibid<o:p></o:p></span></div>
</div>
<div id="edn24">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref24" name="_edn24" title=""><span class="MsoEndnoteReference"><span lang="EN-GB"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "calibri" , "sans-serif"; font-size: 10.0pt; line-height: 115%;">[24]</span></span><!--[endif]--></span></span></a><span lang="EN-GB"> </span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">Table
6 of NSSO (2014b) provides the fraction of women aged 15 and above, usually
(principal status) engaged in domestic duties and without subsidiary status
work, who are ready to accept work at home. Table 5 provides the fraction of
those willing to work at home (irrespective of subsidiary status) that are
ready to accept regular full time work. The estimate of ‘women in domestic
duties available for work’ is arrived at by applying these two fractions to the
estimate of women usually engaged in domestic duties and without subsidiary
status work (Table 2)</span><span lang="EN-US"><o:p></o:p></span></div>
</div>
<div id="edn25">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref25" name="_edn25" title=""><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-size: 11pt; line-height: 115%;">[25]</span></span><!--[endif]--></span></span></a><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"> See
note </span><!--[if supportFields]><span lang=EN-GB style='font-size:11.0pt;
font-family:"Times New Roman","serif"'><span style='mso-element:field-begin'></span><span
style='mso-spacerun:yes'> </span>NOTEREF _Ref411263924 <span style='mso-element:
field-separator'></span></span><![endif]--><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">22</span><!--[if supportFields]><span
lang=EN-GB style='font-size:11.0pt;font-family:"Times New Roman","serif"'><span
style='mso-element:field-end'></span></span><![endif]--><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><o:p></o:p></span></div>
</div>
<div id="edn26">
<div class="MsoEndnoteText">
<a href="file:///D:/Work/writings/15-03-11%20Comparing%20NSS%20and%20Census%20employment%20data%20-%20revised.docx#_ednref26" name="_edn26" title=""><span class="MsoEndnoteReference"><span lang="EN-GB"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span lang="EN-GB" style="font-family: "calibri" , "sans-serif"; font-size: 10.0pt; line-height: 115%;">[26]</span></span><!--[endif]--></span></span></a><span lang="EN-GB"> </span><span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">As
an example, after removing students from the rural ‘non-working’ women aged 15
and above, women engaged in domestic duties constitute nearly 90% of the rest
(Table 2, NSSO(2014b))</span><br />
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><br /></span>
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><br /></span>
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">Links:</span><br />
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;"><br /></span>
<span lang="EN-GB" style="font-family: "times new roman" , "serif"; font-size: 11.0pt;">Another paper analyzing the same data sets as above - <a href="http://www.livemint.com/Politics/xwxM6w3JYAuBPCQlkabU1N/Indias-rural-transformation-A-myth-or-reality.html">India's rural transformation: A myth or reality?</a></span><br />
<br />
Links to this article:<br />
1. <a href="http://www.ras.org.in/changes_in_indias_rural_labour_market_in_the_2000s">Changes_in_indias_rural_labour_market_in_the_2000s</a><br />
2. <a href="https://www.researchgate.net/publication/304149753_Positives_outweighing_negatives_the_experiences_of_Indian_crowdsourced_workers">Positives_outweighing_negatives_the_experiences_of_Indian_crowdsourced_workers</a><br />
3. <a href="https://www.researchgate.net/publication/281630015_Emerging_Trends_and_Patterns_of_India%27s_Agricultural_Workforce_Evidence_from_the_Census">Emerging_Trends_and_Patterns_of_India%27s_Agricultural_Workforce_Evidence_from_the_Census</a><br />
4. <a href="http://www.financialexpress.com/opinion/indias-unemployment-rate-conundrum/84732/">indias-unemployment-rate-conundrum</a><br />
5. <a href="http://www.nird.org.in/nird_docs/srsc/srsc261016-18.pdf">Changing Employment and Enterprise Structure in Gujarat: 1990-2005</a></div>
</div>
</div>
<a href="https://www.blogger.com/blogger.g?blogID=2739979442130109754"></a>
<br />
<blockquote>
</blockquote>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-88680657926576526812015-03-26T13:32:00.001+05:302015-03-27T16:34:54.165+05:30Jobs and FDI in manufacturing<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal">
<i><span style="font-family: Verdana, sans-serif;"><a href="http://indiatogether.org/fdi-in-manufacturing-and-make-in-india-jobs-economy">India Together</a> carried this piece, reproduced below with references </span></i></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;">The
‘Make in India’ campaign of the government with its promise of improving “ease
of doing business” has generated great excitement in corporate business circles.
After innumerable discussions on the
steps the government needs to take, there is now eager anticipation of action.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;"><br />
The campaign
is primarily aimed at attracting foreign capital into manufacturing in India. However,
domestic capital too hopes to benefit from any business friendly changes in
laws and regulations that are brought about, but perhaps even more so, from the
expected inflow of foreign investment.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;"><br />
While launching
the campaign at a gathering of top global CEO’s in New Delhi, the Prime
Minister made a strong pitch that investors should also create jobs in India
while taking advantage of cost effective manufacturing
(http://pmindia.gov.in/en/). ‘Make in India’, it seems, is a major part of the
government’s strategy to open employment opportunities for the growing numbers
of youth entering the workforce every year.<o:p></o:p></span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;">Attracting
foreign direct investment (FDI) into manufacturing has been the avowed
intention of government policy on foreign investment for several decades now
and an estimated $57 billion of FDI has come in into the manufacturing industry
in the period 2000 to 2012. It is therefore pertinent to ask what the
experience has been with FDI in manufacturing up till now.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;"><br />
First a
little background. FDI entering India broadly takes two forms. One is the
acquisition of shares in or a complete buyout of an existing entity, termed
‘brownfield’ investment. The second is investment in a new enterprise, termed
‘greenfield’ investment.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;"><br />
The
government portrays the main benefits for the country from FDI in manufacturing
as the creation of skilled manufacturing jobs and improvement in the balance of
trade (through reduced imports and increased exports). Only greenfield
investments expanding the manufacturing base can potentially bring these
benefits in the near term.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;"><br />
The
problem of identifying greenfield investments in FDI is however not
straightforward. Complex ways of structuring investment using shell companies
can provide the facade of a new enterprise to existing manufacturing entities.
The extent to which investment is going into new manufacturing capacity can be
determined only through a case by case examination of all investments, and this
is an exercise the government has not bothered to carry out.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;"><b><br /></b>
<b>Appetite for acquisitions<o:p></o:p></b></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;"><br />
Recent investigation into these questions at the
Institute for Studies in Industrial Development (ISID), New Delhi, provide some
much needed insights into FDI flows into manufacturing between 2004-05 and
2012-13 and these are detailed below.[1]<span class="MsoEndnoteReference"> </span>Incidentally,
2004 is the year that FDI inflows into India started to pick up.<o:p></o:p></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;">A key finding of the ISID study is that close to half
the FDI flows inward went towards acquisition of shares including complete
buyout of existing Indian manufacturing companies. The top three industries
that received FDI were drugs and pharmaceuticals, chemicals (other than
fertilizer) and auto and together, these three received nearly half of
manufacturing FDI. </span><br />
<span style="font-family: Verdana, sans-serif;"><br />
In the drugs and pharmaceuticals industry, 92% of FDI was
acquisition related! <span lang="EN-US" style="font-size: 11.0pt; mso-ansi-language: EN-US;">Prominent acquisitions in this space include Ranbaxy
Labs, Piramal Healthcare, Matrix Labs and Paras pharmaceuticals. </span>For chemicals and auto the corresponding shares of
acquisition related FDI were 60% and 18%.<o:p></o:p></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;">Industries can be classified by technology intensity
as ‘high’, ‘medium high’, ‘medium’ and ‘low’ technology industries. FDI in
technology intensive industries was the highest priority of government policy
while opening up the economy to foreign investment more than two decades back.
Ironically, it is precisely in high technology industry, to which drugs and
pharmaceuticals belong, where the share of acquisition related FDI is the highest
at 80%! Clearly, FDI has not contributed to capacity creation in high
technology industry.<o:p></o:p></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;">Acquisitions have also happened in the other
technology categories. For example, cement companies belonging to ‘medium low’
technology category – ACC and Ambuja - and ‘low’ technology packaged food
companies –Kohinoor Foods and MTR Foods - have been acquired.<o:p></o:p></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;">It may be argued that acquisitions can also be
beneficial as they put money in the hands of the Indian promoters which can be reinvested
in manufacturing. However, from available evidence it appears that the
promoters of the pharmaceutical companies mentioned earlier<span lang="EN-US" style="font-size: 11.0pt; mso-ansi-language: EN-US;"> have not invested
in manufacturing in India so far.</span><o:p></o:p></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;">Leaving aside FDI flowing into acquisitions, even the
FDI that goes into establishing new enterprises is not always used for setting
up full-fledged manufacturing facilities. The consumer electronics industry
also belonging to the high technology category is a case in point. Sony and
Samsung have invested in India, but their facilities are merely assembling
units. Sony imports all its products from Thailand, Malaysia, China and Japan.
Samsungs two plants in India assemble much of what it sells in the country. </span><br />
<span style="font-family: Verdana, sans-serif;"><br />
The barriers to imports are extremely low for electronic
parts and assemblies and assembling is currently more cost effective than
manufacturing. Reflecting this, the
adverse trade balance in electronics – the excess of electronics imports over
exports - has gone up from under $ 5 billion a decade earlier to $ 24 billion
in 2012-13.<o:p></o:p></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;">To summarise, the ISID study shows that less than a
third of FDI flows into manufacturing and close to half of what flows into
manufacturing is used in acquiring existing companies with established markets.
Even where new units are established, some of them may be assembling units
rather than manufacturing units. In particular, negligible manufacturing
capacity has been created by FDI in the high technology industries.<o:p></o:p></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<b><span style="font-family: Verdana, sans-serif;">Disinterest
in exports<o:p></o:p></span></b></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;">Additional insights into FDI in manufacturing can be
obtained by looking at the performance of the Special Economic Zones (SEZs). SEZs
came up during the same period that saw increased FDI inflows. They were
specifically meant to ease the process of setting up and operating export
oriented manufacturing units. <o:p></o:p></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;">Riding roughshod over people’s opposition, the
government of the day helped SEZ developers acquire vast tracts of land. SEZ’s
provide the infrastructure and make regulatory compliance easy for manufacturing
exporters. Units in SEZs enjoy generous tax concessions from the central
government and state governments have relaxed labour regulations in them.[2]<o:p></o:p></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;">In short, the SEZ’s address, for export units located
within their boundaries, all the issues that the present government promises to
address as part of its ‘make in India’ initiative. It is reasonable to expect
that SEZ’s would have been the preferred destination for FDI into new export
oriented manufacturing units.<o:p></o:p></span></div>
<div style="line-height: 12.15pt; margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;">The
development of SEZs over the last decade is instructive. <span style="color: #3b3a39;">Of the 566 formally approved SEZs, only 185 are in
operation, showing the general lack of interest. </span>About a 100 of these
are exclusively for IT and ITES services. Established Indian software,
pharmaceutical and auto ancillary and oil refining companies have moved
aggressively into SEZs. However, the expected deluge of foreign investment into
manufacturing units in SEZs has not happened. </span><br />
<span style="font-family: Verdana, sans-serif;"><br />
The depressed state of western
economies in recent years and the consequent high unemployment has put even existing
manufacturing exporters in trouble. They have been lobbying the government for customs
duty concessions on domestic sales and special tax concessions.[3] The reticence
of foreign manufacturers to set up export oriented units in India is related to
the global market rather than to the ‘ease of doing business’. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;"><b><br /></b>
<b>‘Ready to spend’
domestic markets</b></span></div>
<div class="body" style="background: white; margin-bottom: 10.15pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; mso-line-height-alt: 9.15pt;">
<span style="font-family: Verdana, sans-serif;"><br />
The obvious problems with external markets have lead
some economists to suggest that the focus of the ‘make in India’ campaign
should be the domestic market. Prominent among them is the RBI Governor quoted
below: <span style="background-position: initial initial; background-repeat: initial initial;">"I am counselling
against an export led strategy that involves subsidising exporters with cheap
inputs as well as an undervalued exchange rate, simply because it is unlikely
to be as effective at this juncture."<span class="apple-converted-space"> The
same idea was echoed by the OECD Chief Economist in India recently: </span>"the
country is already having a large domestic market which is ready to
spend......in my view, 'Make in India for India' should be the priority"
(PTI, Feb 19, 2015)</span></span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">In the past too, foreign
manufacturers have invested in new manufacturing facilities in sectors where
they found “a large and ready to spend market” and no suitable acquisition
targets - such as in consumer electronics, white goods and automobiles.</span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span>
<span style="font-family: Verdana, sans-serif;">Returning to the present, the market that has been opened up most
recently to FDI is the military procurement market. This definitely qualifies
as “a large and ready to spend domestic market” and finds all the major Indian
business houses scrambling for a piece of the pie. Foreign manufacturers are
also keen on joint ventures after FDI investment limits in Indian companies
have been raised to 49%. (ET Bureau, Mar 2, 2015)</span></div>
<div class="body" style="background: white; margin-bottom: 10.15pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; mso-line-height-alt: 9.15pt;">
<span style="font-family: Verdana, sans-serif;"><br />
The government is tom-toming this as a
great development and projecting its future benefits – the creation of lakhs of
new jobs and huge savings in the armaments import bill. The past experience
with FDI however cautions that these claims should be treated with scepticism.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Verdana, sans-serif;"><br />
The auto industry, among the top three industries in attracting
manufacturing FDI, and considered a success story for greenfield manufacturing
serves as a good benchmark. In the decade till 2012-13, while exports of the
industry increased from $ 1.3 billion to $ 18.4 billion, imports of the
industry also increased dramatically leaving a trade surplus of just over $ 1
billion. The industry created just over 6 lakh jobs over the period of a
decade.<o:p></o:p></span></div>
<div class="body" style="background: white; margin-bottom: 10.15pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; mso-line-height-alt: 9.15pt;">
<span style="font-family: Verdana, sans-serif;"><br />
Foreign manufacturers will demand their pound of flesh
for establishing military hardware manufacturing facilities.<span class="MsoEndnoteReference"> </span>The joint ventures
in this area could well turn out to be assembling units. In any case,
the number of jobs they create will be insignificant in comparison with the
need. The responsibility for generating employment for 12 million youth every
year cannot simply be outsourced!<o:p></o:p></span></div>
<div class="body" style="background: white; margin-bottom: 10.15pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; mso-line-height-alt: 9.15pt;">
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<div class="body" style="background: white; margin-bottom: 10.15pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm; mso-line-height-alt: 9.15pt;">
<span style="font-family: Verdana, sans-serif;">References:<o:p></o:p></span><br />
<span style="font-family: Verdana, sans-serif;"><br /></span></div>
<span style="font-family: Verdana, sans-serif;"><span lang="EN-US" style="font-family: Verdana, sans-serif; font-size: 11.0pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[1] “FDI into India’s
Manufacturing Sector via M&As: Trends and Composition”, K.S. Chalapati Rao,
Biswajit Dhar, K.V.K. Ranganathan, Rahul N. Choudhury and Vipin Negi ,
Institute for Studies in Industrial Development, New Delhi (http://www.isid.org.in)</span><a href="https://www.blogger.com/blogger.g?blogID=2739979442130109754"></a></span><br />
<span lang="EN-US" style="font-family: Verdana, sans-serif; font-size: 11.0pt; line-height: 115%; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;">[2] Gujarat amended the Industrial Disputes Act, 1947 for SEZs. <a href="http://ic.gujarat.gov.in/wp-content/uploads/2011/03/industrial_disputes_act2004.pdf">Amended Act</a></span><br />
<span style="font-family: Verdana, sans-serif;">[3] SEZ manufacturing units have been pressing government for duty concessions to sell in domestic market. See <a href="http://articles.economictimes.indiatimes.com/2013-10-16/news/43107211_1_eous-domestic-market-duty">this report</a></span><br />
<blockquote>
</blockquote>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-45285289301598420942014-12-19T12:01:00.001+05:302016-02-21T17:54:16.293+05:30Youth education and unemployment<div dir="ltr" style="text-align: left;" trbidi="on">
<span style="font-family: "verdana" , sans-serif;"><span style="line-height: 115%;"><i><a href="http://indiatogether.org/youth-unemployment-and-education-trends-india-economy">India Together</a> carried this piece. Reproduced below with references</i></span></span><br />
<span style="font-family: "verdana" , sans-serif;"><span style="line-height: 115%;"><br /></span></span>
<span style="font-family: "verdana" , sans-serif; line-height: 115%;">In a widely reported speech, the Prime
Minister recently claimed that the 21</span><sup style="font-family: Verdana, sans-serif; line-height: 115%;">st</sup><span style="font-family: "verdana" , sans-serif; line-height: 115%;"> century can belong to India
as it has three assets that no country has: ‘democracy’, ‘demand’ and ‘demographic
dividend’. ‘Demographic dividend’ has become a much bandied phrase in recent
years. </span><br />
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span>
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">The allusion is to India’s current demographic state where the ratio of
the working age population to the dependent population (the children and the
elderly) is near its peak, a situation that will last another 20 to 30 years.
Having a greater proportion of working age people in the population can mean
faster per capita economic growth, but only if their full potential is realised.
A look at the state of employment in the country shows that India is at a far
cry from deriving any advantage from its demographic dividend.</span></span><br />
<div class="MsoNormal" style="text-align: left;">
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">Data on employment in India is
provided by three different agencies - the National Sample Survey Organization
(NSSO), the Labour Bureau and the decadal Census. The three agree broadly on
the worker and student populations. It is in identifying the unemployed from
among the non-working population that they come out with widely varying estimates.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">There are several reasons for this. Among
them is the difficulty in determining if women engaged in housework, particularly
in rural India, are doing so under duress, being unable to find a job. Another
is in deciding if youth, nominally enrolled in educational institutions but
still looking for a job, are part of the labour force. Problems also arise in deciding
if workers who work in casual jobs for short durations are to be considered as
working or unemployed. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">The census with its count of those not
working (even part time) but “seeking or available for work” shows up a far
higher level of unemployment than both the NSSO and Labour Bureau sample
surveys of contiguous years. In the following discussion, the unemployment
numbers are from Census 2011 made available in Sept 2014. <o:p></o:p></span></span><br />
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span>
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">In 2011, over 56 million people aged 15 and above who were not working were seeking or available for work, putting the unemployment rate at 10.7%. This was however not the full extent of job seekers. Just short of a quarter of the work force consisted of “marginal workers” – workers who were able to find work for less than 6 months. Nearly half of the marginal workers were also “seeking or available for work” taking the count of job seekers to nearly 21% of the labour force.</span></span><br />
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span>
<br />
<div class="MsoNormal">
<b><span style="line-height: 18.399999618530273px;"><span style="font-family: "verdana" , sans-serif;">Youth and unemployment</span></span></b></div>
<div class="MsoNormal">
<span style="line-height: 18.399999618530273px;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<span style="line-height: 115%;"></span><br />
<div class="MsoNormal">
<span style="line-height: 18.399999618530273px;"><span style="font-family: "verdana" , sans-serif;">Further insights into unemployment may be gained by looking at the new entrants to the workforce. The transition from education to work happens between the ages of 15 and 29. As NSSO data shows, around 90% of children below 15 are enrolled in school while above the age of 30, the numbers attending educational institutions are miniscule.</span></span></div>
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span>
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyfdFfDl9R0rVD3bGiunHowdOY0JXnj8lJDHgVHNTDrC2nD9-DN7vQpWTV0N3CWWrVMOR-Fl-p6yCBNLJBAJXS7hwKJgiHjjtCBh5xrCxSO-pmiUCXuszZp21dmqEpq3PZnKwT7pGn9vXc/s1600/census-unemp.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="203" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyfdFfDl9R0rVD3bGiunHowdOY0JXnj8lJDHgVHNTDrC2nD9-DN7vQpWTV0N3CWWrVMOR-Fl-p6yCBNLJBAJXS7hwKJgiHjjtCBh5xrCxSO-pmiUCXuszZp21dmqEpq3PZnKwT7pGn9vXc/s1600/census-unemp.jpg" width="320" /></a></div>
<span style="font-family: "verdana" , sans-serif; line-height: 115%;">The accompanying chart shows unemployment rates derived from the 2001
and 2011 census for different age groups with a focus on new entrants to the
workforce. </span><span style="font-family: "verdana" , sans-serif; line-height: 115%;">Unemployment rates
across all age groups have increased between 2001 and 2011, a period of high
growth of the Indian economy! Jobs have clearly not kept pace with the increase
in job seekers.</span></div>
<div style="text-align: left;">
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span style="line-height: 115%;"><span style="font-family: "verdana" , sans-serif;">The age – unemployment
relationship is also striking. Unemployment is highest in the 15-19 age group
and decreases progressively for higher age groups. For youth aged 15-29 as a
whole, the unemployment rate is 21% (counting only those seeking or available
for jobs among the non-working) compared to 5% for people aged 30 and above. Young
men (15-29) account for nearly 85 % of total unemployment among men in 2011!
(Young women account for over 61% of total unemployment among women) The new
entrants to the workforce bear the brunt of unemployment.<o:p></o:p></span></span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;"><b><br /></b></span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;"><b>Education and
unemployment</b><o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<br /></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;">The other dimension of
youth unemployment that needs to be explored is its connection to education. <o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<br /></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;">A significant trend of
recent years is the increased proportion of boys and girls opting for higher
schooling as seen in the accompanying chart showing NSSO 2012 data. The trend
in favour of education also extends to young adults between 20-24 years who
would typically be enrolled in a college diploma or degree course. Over 25% of
young men in this age group were studying in 2012! The increased percentage of
youth attending educational institutions in 2012 (compared to 2005) was possible
because of a lower fraction going for work.<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<br /></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNKDzPeRNiVF0G8kuBZDkA8r717ybmP3mQPmqkmNZq1LxlItPyUsg3HgqYRb0zOEVi_XIA6UTQuNyeRDVEgD741UZvscZylfmY8-ZZpVYaN3TgQzvo2pBbF6LMpU0e0DO80l-KSb4liP7B/s1600/educ.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="197" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNKDzPeRNiVF0G8kuBZDkA8r717ybmP3mQPmqkmNZq1LxlItPyUsg3HgqYRb0zOEVi_XIA6UTQuNyeRDVEgD741UZvscZylfmY8-ZZpVYaN3TgQzvo2pBbF6LMpU0e0DO80l-KSb4liP7B/s1600/educ.jpg" width="320" /></a></div>
<span style="font-family: "verdana" , sans-serif;">A significant trend of recent years is the increased proportion of boys and girls opting for higher schooling as seen in the accompanying chart showing NSSO 2012 data. The trend in favour of education also extends to young adults between 20-24 years who would typically be enrolled in a college diploma or degree course. Over 25% of young men in this age group were studying in 2012! The increased percentage of youth attending educational institutions in 2012 (compared to 2005) was possible because of a lower fraction going for work.</span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">If enrolment in
education is increasing, what is happening to the composition of the new
entrants to the labour force? The accompanying chart shows the educational composition
of the youth (15-29) labour force and the youth unemployed in 2005 and 2012
using NSSO survey data. (While NSSO surveys underestimate unemployment compared
to the census, this is unlikely to affect the trends seen in the data.) </span></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<br /></div>
<div style="margin-bottom: .0001pt; margin: 0cm;">
<span style="font-family: "verdana" , sans-serif;">The comparison of the
situation in 2005 with that in 2012 outlines several trends.</span></div>
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6shC9N8vJg_OYqmOXi-614wQIhc7EQ10TWbIVFpb1CvfxygE8R7cdAQ3k0jEkSLAx2IkTyo_rKAym7whyia9yH91cwP-dgE_V9D7R11Cv_CBI-ZS8K4idmigfRzEtshUOOA3LnZOosjbC/s1600/education.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-left: 1em;"><span style="clear: left; float: left; font-family: "verdana" , sans-serif; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="337" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg6shC9N8vJg_OYqmOXi-614wQIhc7EQ10TWbIVFpb1CvfxygE8R7cdAQ3k0jEkSLAx2IkTyo_rKAym7whyia9yH91cwP-dgE_V9D7R11Cv_CBI-ZS8K4idmigfRzEtshUOOA3LnZOosjbC/s1600/education.jpg" width="400" /></span></a></div>
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<span style="font-family: "verdana" , sans-serif;">One is that the young entrant to the labour force is increasingly more educated. The second is that it is not the illiterate who are most likely to be unemployed. The relatively better educated youth – those with secondary and higher qualification – have a far greater share in total unemployment than in the labour force. In other words, unemployment is higher in more educated sections of youth. Finally, the share in unemployment of the most educated section, the youth with diplomas and degrees, is actually increasing over time.<o:p></o:p></span></div>
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<span style="font-family: "verdana" , sans-serif;">What makes it harder for youth with greater education to find jobs? Educated youth naturally have higher expectations from the job and clearly there are not enough jobs that can meet these expectations. The less educated youth, most likely from poorer families, are more likely to settle for just any job be it casual labour or poor quality self employment. The high unemployment among the educated youth in particular reflects the lack of growth of jobs in organized manufacturing and services sectors.</span></div>
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<br /></div>
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<span style="font-family: "verdana" , sans-serif;">In summary what is abundantly clear is that India faces a severe youth unemployment problem with the relatively better educated sections worse off than the rest. The problem has actually worsened in the decade between 2001 and 2011, with the economy unable to expand jobs for educated youth fast enough despite high GDP growth. With trends showing youth opting for longer years of education, the future entrants to the labour force are going to be relatively more educated and face greater employment challenges.<o:p></o:p></span></div>
<div style="margin: 0cm 0cm 0.0001pt;">
<br /></div>
<span style="line-height: 15.333333015441895px;"><span style="font-family: "verdana" , sans-serif;">Against this backdrop, there is absolutely no reason for optimism that India will benefit from its demographic dividend any time in the near future. Instead of empty talk, the government needs to present a concrete roadmap of the steps it is taking to promote employment intensive economic growth.</span></span><br />
<span style="line-height: 15.333333015441895px;"><span style="font-family: "verdana" , sans-serif;"><br /></span></span>
<b><span style="font-family: "verdana" , sans-serif;">Data Sources:</span></b><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">“Employment and Unemployment situation in India”, NSS report 554, NSSO, Jan 2014</span><br />
<span style="font-family: "verdana" , sans-serif;">“Report on third annual employment and unemployment survey (2012-13)”, Labour Bureau, Sept 2013</span><br />
<span style="font-family: "verdana" , sans-serif;">“Employment and Unemployment situation in India”, NSS report 551, NSSO, Sept 2006</span><br />
<span style="font-family: "verdana" , sans-serif;">Data on workers </span><span style="font-family: "verdana" , sans-serif;">(tables B1 and B13)</span><span style="font-family: "verdana" , sans-serif;"> from Census 2011 and Census 2001 available at http://www.censusindia.gov.in </span><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<b><span style="font-family: "verdana" , sans-serif;">Other articles on this subject:</span></b><br />
<span style="font-family: "verdana" , sans-serif;"><br /></span>
<span style="font-family: "verdana" , sans-serif;">“Unemployment in an era of jobless growth”, N Chandra Mohan, ISID working paper 159, Jan 2014</span><br />
<span style="font-family: "verdana" , sans-serif;">“Youth employment and unemployment: An Indian Perspective”, A Mitra & S Verick, ILO Asia Pacific Working Paper Series, Mar 2013</span><br />
<div>
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<a href="https://www.blogger.com/blogger.g?blogID=2739979442130109754"></a>
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<blockquote>
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Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-41217662638896857732014-11-14T15:07:00.000+05:302018-10-18T19:35:51.448+05:30Economic Notes: The imbalance between employment and growth<div dir="ltr" style="text-align: left;" trbidi="on">
<h2 style="text-align: left;">
</h2>
Close to half of employed Indians work in agriculture. The ‘value add’ in agriculture – the amount by which the value of output exceeds the value of intermediate inputs – is an indication of the health of the agricultural economy. In 2012, this was Rs 63,000 per agricultural worker, less than a fourth of the average figure for non-agricultural workers [1]. At about Rs 170 per day, this was barely higher than the minimum daily wage of unskilled agricultural labour in some states. It must be kept in mind that ‘value add’ is only an average figure and that different categories of agricultural workers - large farmers employing labour, small farmers tilling their own land and wage labourers - will have differing claims on the value added.<br />
<br />
For the millions trapped in agriculture the possibilities of escaping poverty depend on the rapid growth of agriculture and the availability of jobs in more productive sectors outside. There are major impediments to the former, chief among them being the fragmentation of land into very small holdings, making the mobilization of capital for development extremely difficult. The choice of the latter is contingent upon better more paying jobs being available outside agriculture for the ‘unskilled’ farm worker.<br />
<br />
The existential crisis faced by the Indian peasant is not unique. All across the world, the presently industrialized nations, had at some period in their history, a greater part of their workforce engaged in agriculture under conditions of low productivity in comparison with industry. Industrialization progressed with the help of labour migrating from agriculture. This migration in turn opened up the path for growth in agriculture through productivity increases, eventually narrowing the gap in productivity between agriculture and industry. The rapid change in these economies from agriculture accounting for the lions’ share of employment and gross domestic product (GDP) to industry taking its place has been termed a ‘structural transformation or shift’.[2]<br />
<br />
Structural shifts from agriculture to industry happened not only in the industrialized countries of the west, but also in Asia – in Japan, South Korea and Taiwan. In most countries after the shift, the share of manufacturing in employment increased to over 30%. In the industrial powerhouses Britain and Germany, this share reached 45% and 40% respectively, at its height. Since then, there has been a decline in the share of industrial employment in these countries. But it must be noted that second structural shift in employment, this time from industry to services happened only after industry had attained a share of about 50% in the GDP.[3][4]<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIa7MpBQi9MWFzGIg1SW0dCj301xvNGKSqbZHX6W7gNybvuCCXLc0lsqQ5XKBYtBotQyRXeWlFd4RV_EvNPuvG9nnb9Cgu9abBOymM6gDZE8XKNBYRRnGq7joxdeAr3RSE9xF4Gyd0nxo9/s1600/chart1.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="192" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhIa7MpBQi9MWFzGIg1SW0dCj301xvNGKSqbZHX6W7gNybvuCCXLc0lsqQ5XKBYtBotQyRXeWlFd4RV_EvNPuvG9nnb9Cgu9abBOymM6gDZE8XKNBYRRnGq7joxdeAr3RSE9xF4Gyd0nxo9/s1600/chart1.jpg" width="320" /></a></div>
<b>Data Sources:</b> GDP data [5] ; Employment data [6]<br />
<br />
Closer home, China too, it appears, is also on its way to a structural transformation with manufacturing accounting for about 33% of the GDP (industry for 46%).[7] India remains way behind in terms of the development of industry. Manufacturing had a share in GDP of 14.4% in 2011-12 and industry as a whole had a share of 26.7%. The above chart draws attention to the basic structural imbalances in the Indian economy – the great discrepancy between share of contribution to GDP and share of employment in different sectors of the economy. (The share of other non-manufacturing industries except for construction - such as electricity, gas and water distribution - has been clubbed with mining in the above chart)<br />
<br />
<h3 style="text-align: left;">
<b>Has a structural shift begun in India?</b></h3>
<br />
Claims have been made recently that a structural shift in employment out of agriculture, though greatly delayed, may finally be in progress in India too. The claim is based on the sharp 10% drop in the share of agriculture in total employment between 2004-05 and 2011-12, and the fact that the absolute numbers employed in agriculture have declined for the first time since 2004. [8] The chart below shows the relative share of employment of different sectors of the economy over the years. Employment in non manufacturing industries (other than construction) has been omitted as it is insignificant.<br />
<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjf7evboAwLsO7BH2DYTwyscHXFP0OC21ihT0cOFERQHjc7_96aeOX22CTLFXC_f_zrswm8lg1LzXSWR_xxyR5w86h9GNHx9uZpXSnVET2AAifVgQwOyc0j4LAw8XIRHZsYfTuoQE8E6tPw/s1600/chart2.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="178" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjf7evboAwLsO7BH2DYTwyscHXFP0OC21ihT0cOFERQHjc7_96aeOX22CTLFXC_f_zrswm8lg1LzXSWR_xxyR5w86h9GNHx9uZpXSnVET2AAifVgQwOyc0j4LAw8XIRHZsYfTuoQE8E6tPw/s320/chart2.jpg" width="320" /></a></div>
<b>Data Sources:</b> Authors calculation using employment numbers from Mehrotra et al (2014)<br />
<br />
The chart taken at face value seems to show that Indian peasants are moving out of agriculture at an accelerated pace since 2004. The increase in the share of employment has been mainly in construction sector and to a lesser extent in services. Employment share of manufacturing has increased only marginally. A closer examination of disaggregated NSSO data for agriculture throws more light on the shift out of agriculture.<br />
<h4 style="text-align: left;">
<b><br /></b></h4>
<h4 style="text-align: left;">
<b>Women are leaving the workforce</b></h4>
<br />
The chart below shows the decrease in recent years in the labour force participation rates (LFPR) - the number of people in a category who look for employment out of every 1000 - for rural and urban Indians aged 15 and above. (The same trends have continued into 2012-13 as per labour ministry surveys.)<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdtT7PCRPsM22dQbiiezhWvub8e8Gy9KLnZ6VZAmEyxijCv0xWu0pbyyN2vQ5zeuNGtIyw_Xr-Ksi6t5k7-Iy8xfZFh0TnDw-jBSCbC9KPQ6aaClvSdEpWzjsdBPcv2ZhFp8MWTxUq2LP4/s1600/chart3.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="178" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgdtT7PCRPsM22dQbiiezhWvub8e8Gy9KLnZ6VZAmEyxijCv0xWu0pbyyN2vQ5zeuNGtIyw_Xr-Ksi6t5k7-Iy8xfZFh0TnDw-jBSCbC9KPQ6aaClvSdEpWzjsdBPcv2ZhFp8MWTxUq2LP4/s320/chart3.jpg" width="320" /></a></div>
<b>Data Sources:</b> NSSO Surveys<br />
<br />
One reason for the decreasing LFPR is the increasing enrolment of youth between 15 and 24 in educational institutions. This affects both men and women and more or less accounts completely for the LPFR decrease among men. That still leaves the issue of women leaving the labour force.<br />
Over 80% of women leaving the labour force belong to rural India. The most plausible explanation for rural women leaving agriculture and retreating to household duties runs along these lines. Most of these women are from the poorest rural households. These are the households of marginal farmers and casual labourers from which the men have migrated out of the village for casual jobs in construction. Rural women traditionally work together with their men folk either as unpaid family workers or as casual labour and have stopped working as they can no longer accompany their men folk.[9]<br />
<br />
The falling LFPR, predominantly affecting rural India and thereby agriculture means that the fall in the employment share of agriculture is not entirely due to workers shifting to other sectors. A significant part is due to rural girls and women withdrawing from agriculture. Agricultural labour is not being ‘pulled’ to jobs in expanding manufacturing in industrial centres; rather it appears that it is being forced to take up seasonal casual work to avoid further deterioration in standard of living. The households of these migrant workers are still in the villages. For all these reasons, it is difficult to conclude that a structural transformation similar to that seen in industrialized countries is under way.<br />
<br />
<h3 style="text-align: left;">
<b>A jobless growth</b></h3>
<br />
Going by the historical experience of other countries, manufacturing jobs are the key to facilitating an employment shift out of agriculture. Is manufacturing job growth stagnant because of poor growth?<br />
<br />
The following table shows the average annual growth of jobs and value added (same as the contribution to GDP) in the different sectors of the economy in the most recent period for which both sets of data are available. Data for mining also includes all other non-manufacturing industries except for construction.<br />
<br />
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinvKZ-HnSz65Q6OoeX885s8f0ITyb7pxyGv0PqKXLzfbXi-cznQvdjN1mjod0s4uYN9gKI74NHrMivft5zSgoXt-3A1Mp2o_IjNwlOWFHa_q9OyiJ0TmeBmzBObF8E9F7IaY1YfVuD2wDj/s1600/table1.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="129" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinvKZ-HnSz65Q6OoeX885s8f0ITyb7pxyGv0PqKXLzfbXi-cznQvdjN1mjod0s4uYN9gKI74NHrMivft5zSgoXt-3A1Mp2o_IjNwlOWFHa_q9OyiJ0TmeBmzBObF8E9F7IaY1YfVuD2wDj/s320/table1.jpg" width="320" /></a></div>
From 2004-05 to 2011-12, India’s real non-agricultural GDP grew by an average 9.4% per annum, but employment grew only at 3.5%. Services and Manufacturing were the fastest growing sectors at 10.1% and 8.9% respectively. However they added jobs only at 2.5% and 1.5% respectively. Clearly, GDP growth encompassing both manufacturing and services did not translate into employment growth. The answer to why growth in manufacturing is practically jobless growth must be sought in the structure of Indian manufacturing and its markets and is beyond the scope of the present article.<br />
What is amply clear is that growth of the GDP variety is no guarantee of employment growth. A large part of the poverty ridden agricultural workforce waits the creation of factory jobs to transition out of agriculture. Any government that claims to represent the peoples’ best interests must aggressively focus on creating productive jobs in industry.<br />
<br />
<b>References:</b><br />
<br />
Binswanger-Mkhize (2013): “The Stunted Structural Transformation of the Indian Economy”, Hans P Binswanger-Mkhize, EPW, June 29, 2013<br />
Kannan et al (2012): “Counting and Profiling the Missing Labour Force”, Kannan K P and G Raveendran, EPW, February 11, 2012 <br />
Mehrotra et al (2014): “Explaining Employment Trends in the Indian Economy: 1993-94 to 2011-12”, Mehrotra S, J Parida, S Sinha and A Gandhi, EPW, August 9, 2014<br />
Rodrik (2013): “The perils of premature deindustrialization”, Rodrik D, Project Syndicate, <a href="http://www.project-syndicate.org/commentary/dani-rodrikdeveloping-economies--missing-manufacturing">http://www.project-syndicate.org/commentary/dani-rodrikdeveloping-economies--missing-manufacturing</a><br />
RUPE (2014): “A middle class India?, Aspects of India’s Economy, No 58, Sept 2014, http://www.rupe-india.org/58/introduction.html<br />
<br />
<b>Notes:</b><br />
<div class="MsoEndnoteText" style="text-align: left;">
<span style="font-family: "times" , "times new roman" , serif;"><span class="MsoEndnoteReference"><span class="MsoEndnoteReference"><span style="line-height: 115%;"><br /></span></span></span></span></div>
<div class="MsoEndnoteText" style="text-align: left;">
<span style="font-family: "times" , "times new roman" , serif;"><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="line-height: 115%;">[1]</span></span><!--[endif]--></span>
Agricultural ‘value add’ is <span lang="EN-US">obtained
by dividing the contribution to GDP (factor cost at current prices) of
agriculture by the number of people employed in it. The ‘value add’ of
non-agricultural workers as a whole was 284,000 in 2011-12.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: "times" , "times new roman" , serif;"><span class="MsoEndnoteReference"><span style="line-height: 115%;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="line-height: 115%;">[2]</span></span><!--[endif]--></span></span><span style="line-height: 115%;"> </span><span lang="EN-US" style="line-height: 115%;">See </span><span style="line-height: 115%;">Binswanger-Mkhize (2013) for a description of the
general characteristics of structural transformations in the industrialized
countries<o:p></o:p></span></span></div>
<div class="MsoEndnoteTextCxSpFirst" style="text-align: left;">
<span style="font-family: "times" , "times new roman" , serif;"><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="line-height: 115%;">[3]</span></span><!--[endif]--></span> A
discussion on the growth in employment in manufacturing during the structural
shift in the industrialized countries can be found in <span lang="EN-US">Rodrik (2013) and in Rodrik’s weblog <a href="http://rodrik.typepad.com/dani_rodriks_weblog/2013/10/on-premature-deindustrialization.html">http://rodrik.typepad.com/dani_rodriks_weblog/2013/10/on-premature-deindustrialization.html</a>
<o:p></o:p></span></span></div>
<div class="MsoEndnoteTextCxSpMiddle" style="text-align: left;">
<span style="font-family: "times" , "times new roman" , serif;"><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="line-height: 115%;">[4]</span></span><!--[endif]--></span> See
also<span lang="EN-US"> chapter 4 of RUPE (2014)
for a discussion on the structural transformation thesis and its applicability
to India<o:p></o:p></span></span></div>
<div class="MsoEndnoteTextCxSpLast" style="text-align: left;">
<span style="font-family: "times" , "times new roman" , serif;"><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="line-height: 115%;">[5]</span></span><!--[endif]--></span> <span lang="EN-US">GDP data is from the Central
Statistics Office press release, MOSPI website <a href="http://www.mospi.nic.in/">www.mospi.nic.in</a>
<o:p></o:p></span></span></div>
<div class="MsoNormal" style="text-align: left;">
<span style="font-family: "times" , "times new roman" , serif;"><span class="MsoEndnoteReference"><span style="line-height: 115%;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="line-height: 115%;">[6]</span></span><!--[endif]--></span></span><span style="line-height: 115%;"> </span><span lang="EN-US" style="line-height: 115%;">Employment data is based on estimates using unit level
NSSO data by Mehrotra et al (</span><span style="line-height: 115%;">2014)</span><span style="line-height: 115%;"><o:p></o:p></span></span></div>
<div class="MsoEndnoteText" style="text-align: left;">
<span style="font-family: "times" , "times new roman" , serif;"><span class="MsoEndnoteReference"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="line-height: 115%;">[7]</span></span><!--[endif]--></span>
<span lang="EN-US">See note 2<!--[if gte mso 9]><xml>
<w:data>08D0C9EA79F9BACE118C8200AA004BA90B02000000080000000E0000005F005200650066003400300033003500370030003800310038000000</w:data>
</xml><![endif]--> for numbers on China<o:p></o:p></span></span></div>
<div class="MsoNormalCxSpFirst" style="text-align: left;">
<span style="font-family: "times" , "times new roman" , serif;"><span class="MsoEndnoteReference"><span style="line-height: 115%;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="line-height: 115%;">[8]</span></span><!--[endif]--></span></span><span style="line-height: 115%;"> </span><span lang="EN-US" style="line-height: 115%;">Mehrotra et al (2014) write: “</span><span style="line-height: 115%;">Post
2004-05, for the first time in India’s post-Independence economic history, in
the five-year period, 2004-05 to 2009-10, as many as 23.7 million of India’s agricultural
workforce abandoned agriculture..... In fact, non-agricultural employment grew
by 25 million.... Between 2009-10 and 2011-12, non-agricultural employment increased
sharply – a 27 million increase in absolute terms, while at the same time the
numbers in agriculture fell by 13 million in a matter of two years. This is a
historically unprecedented development in India’s economic history.<o:p></o:p></span></span></div>
<div class="MsoNormalCxSpLast" style="text-align: left;">
<span style="font-family: "times" , "times new roman" , serif;"><span style="line-height: 115%;">This structural shift ..... is precisely the kind of progressive structural
change in employment that should accompany a structural change in output
between the primary, secondary and tertiary sectors in any developing economy.</span><span lang="EN-US" style="line-height: 115%;">”</span><span style="line-height: 115%;"><o:p></o:p></span></span></div>
<div style="text-align: left;">
<span style="font-family: "times" , "times new roman" , serif;"><span class="MsoEndnoteReference"><span style="line-height: 115%;"><!--[if !supportFootnotes]--><span class="MsoEndnoteReference"><span style="line-height: 115%;">[9]</span></span><!--[endif]--></span></span><span style="line-height: 115%;"> This is the conclusion drawn in Kannan et al (2012) based
on a detailed analysis of data between 2004-05 and 2009-10. The same trends appear to have have continued through 2011-12 and very likely through 2012-13 as well.</span></span></div>
<div>
<br />
Links:<br />
<br />
<a href="http://www.openthemagazine.com/article/india/farmer-entrapped">This article in open magazine extensively quotes from the above article</a><br />
<br /></div>
<a href="https://www.blogger.com/blogger.g?blogID=2739979442130109754"></a>
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Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-1475938341468280032014-05-09T13:02:00.002+05:302014-05-09T13:03:16.520+05:30Counting the Law<div dir="ltr" style="text-align: left;" trbidi="on">
How many central statutes are there in all? Bibek Debroy estimates in <a href="http://economictimes.indiatimes.com/opinion/comments-analysis/the-unorganised-sector-government-must-shake-out-old-laws-and-focus-on-new-ones/articleshow/34853603.cms">this ET piece</a> the number to be between 2500 and 3000. The oldest are the 'Bengal Districts Act' and 'Bengal Indigo Contracts Act' both dating to 1836! There are 140 laws that go back to the 19th century and another 200 that predate independence. No one has a count of state level statues. That means that there is no compendium of all the laws applicable at the state level.<br />
<div>
<br /></div>
<div>
So how do the law enforcement agencies keep track of this huge number? How many statues are actually enforced, even occasionally?<a href="https://www.blogger.com/blogger.g?blogID=2739979442130109754"></a>
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<blockquote>
</blockquote>
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Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-58967607693327410532014-04-28T17:00:00.001+05:302014-04-28T17:22:43.725+05:30How political parties can accept money without disclosing the source and spend without limit on the elections<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="text-align: left;">
<i>This piece was written in April 2009. Everything written here still holds good</i></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Fighting elections in <st1:country-region w:st="on">India</st1:country-region> has become extremely
expensive. According to an Election Commission (EC) representative, while an
estimated Rs. 4500 crores was spent for the 2004 Lok Sabha elections, this time
around, the expenditure will cross Rs. 10,000 crores. About 20% of this
constitutes government expense; the remaining will be spent by political
parties and their candidates. Though a huge sum, even this is in all
probability a conservative estimate. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The high election expenditure is not a reflection of the basic
cost of the campaign but rather an indication of the permissive environment that
has evolved over time where there is no limit for the amount of money that
political parties can collect and spend on elections. Political parties are neither
accountable nor transparent about their finances. The state machinery is unwilling
or unable to curb illegal expenditure by political parties allowing the
elections to become an outlet for huge quantities of black money. Such an
environment encourages political parties to outdo each other in spending in the
quest for political advantage. Politicians across the country have chartered as
many as 60 helicopters costing between Rs. 75,000 and 2 lakhs per hour for use
over a month (Hindustan Times, <st1:date day="21" month="4" w:st="on" year="2009">April
21, 2009</st1:date>). Profligate spending is no longer frowned upon. But this
was not always so.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>The law on election expenses<o:p></o:p></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The election related laws framed in 1950’s had the objective
that money should not be allowed to influence the outcome of elections. The
Representation of People Act, 1951 required every candidate to keep an account of
all election expenditure incurred or authorized by him. The expenditure was to
be kept within prescribed limits and subject to inspection by EC
representatives. Violating the limit was deemed a corrupt practice and
punishable by disqualification from contesting elections for a period up to 6
years. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The law did not set limits on the expense of political
parties and there was a reason for this. The Constitution of India did not even
recognize the ‘Political Party’ as a formal entity at that time; political
parties had no defined role to play, either in the elections or in the
formation of government. The law to limit expenses therefore only dealt with
the expenditure by the candidate; this was considered sufficient to curb
overall expenses on the elections. In time, political parties started
exploiting this loophole. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Did expense incurred by the sponsoring political party or by
the friends and supporters of a candidate towards his election in excess of
prescribed limits constitute a corrupt practice? This issue came up before the
Supreme Court in the case of Kanwarlal Gupta vs. Amar Nath Chawla (1974). Using
the occasion to expound on the objectives of the ceiling on spending by
candidates, the Supreme Court observed:</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
“It should be open to any individual or to any political
party, however small, to be able to contest an election on a footing of
equality with any other individual or political party, however rich and well
financed it may be, and no individual or political party should be able to
secure an advantage over others by reason of its superior financial strength.” </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
“The other objective of limiting expenditure” the Supreme
Court added, “is to eliminate, as far as possible, the influence of big money
in electoral process. If there were no limit on expenditure, political parties
would go all out for collecting
contributions and obviously the largest contributions would be from the rich and the affluent who constitute but a
fraction of the electorate….. The small man's chance is the essence of Indian
democracy and that would be stultified if large contributions from rich and
affluent individuals or groups are not divorced from the electoral process.”</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
After outlining these objectives, the Supreme Court argued
that “if a candidate were to be subject to the limitation of the ceiling, but
the political party sponsoring him or his friends and supporters were to be
free to spend as much as they like in connection with his election, the object of imposing the
ceiling would be completely frustrated and the beneficial provision enacted in the
interest of purity and genuineness of the democratic process would be wholly emasculated.”
The thus Supreme Court answered the original question in the affirmative. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
This judgment met with the negative reaction of the
government of the day. The Representation of People Act, 1951 was amended by the
Congress government in 1975 and an infamous “explanation” added to the election
expense provision. The explanation ran thus:</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
“Notwithstanding any judgment, order or decision of any
Court to the
contrary, any expenditure
incurred or authorized in connection with the election of a candidate
by a political party or
by any other
association or body of persons or by any individual
(other than the candidate
or his election
agent) shall not be deemed to be, and shall not ever be
deemed to have been, expenditure
in connection with the election incurred or authorized by the candidate
or by his election agent….”</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Not only the sponsoring political party but also friends,
relatives and supporters of a candidate were freed from any limits on spending
for their candidate. The objectives of the original provisions in law limiting
election expenses of candidates had been completely frustrated!</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Financial transparency of political parties<o:p></o:p></b></div>
<pre style="text-align: center;"><o:p> </o:p></pre>
<div class="MsoNormal">
The Income Tax Act was amended in 1979 requiring political
parties to file income tax returns every year. The tax law allowed a political
party to claim full exemption from income tax for a variety of sources of
income including voluntary contributions received from any person provided the
party maintained books of accounts, recorded details of all voluntary contributions
above Rs 10,000 and got their books audited. However, most parties including
the Congress and the BJP did not comply with the law and file returns. This fact
only came to public notice after a Public Interest Litigation filed by ‘Common
Cause’ came up before the Supreme Court in 1995. The Supreme Court ordered the
Government to investigate and prosecute the erring political parties, but it is
not clear if anything came of this. The Law Commission of <st1:country-region w:st="on">India</st1:country-region> in its
170<sup>th</sup> report, “Reform of the Election Laws”, in 1999, made this
scathing comment on the issue:</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
“While a small income-tax payer who fails to file his return
is prosecuted and penalized, the political parties which are in receipt of huge
funds which they spend on elections and other occasions are not being touched.
The parties too do not appear to have realized that if they themselves do not
follow the law, not only it sets a bad example to others, they will not have
the face to tell others to abide by law.”</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The Commission followed a comprehensive analysis of the
problem of election expenses with the recommendation that political parties
must be required by law to keep accounts, have them audited and publish them
for the general public and strong penalties should follow including
de-recognition of the party by the EC for non compliance. The National
Commission to Review the Working of the Constitution also expressed similar
views in 2002.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The election expense laws were finally amended in 2003, but
not on the lines suggested by the Law Commission. The Election and Other
Related Laws (Amendment) Act, 2003 was passed by the NDA Government with the
support of almost all parties including the Congress. While the infamous 1975
“explanation” to the election expense clause was finally deleted, this change made
no difference any longer. The election laws and rules were amended to allow
political parties to “accept any amount of contribution voluntarily offered to
it by any person or company”. Only contributions to parties over Rs 20,000
(earlier Rs 10,000) were to be recorded and reported. The punishment for not
submitting returns was that income tax exemptions could not be claimed! The
income tax laws were also amended to give 100% tax exemptions to companies and
individuals for contributions to political parties. The NDA government claimed
that these changes would bring about more political accountability. But many questions
remained unanswered. Would companies, for example – solely in business for
profit - contribute a part of their profit to party funds without any
expectation of return favors when/if the party came to power? </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The idea of limiting election expenses had been buried once and
for all by codifying in the Representation of People Act, 1951 the right of
political parties to accept (and consequently spend) any amount. Enacting
strict penalties to ensure transparency and accountability in finances of
political parties had been given the go by, even though it was clear that the
laws would not be respected otherwise.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The Election Commission suggested to the UPA government in
2004 that “political parties must be required to publish their accounts (at
least abridged version) annually for information and scrutiny of the general
public and all concerned, for which purpose the maintenance of such accounts
and their auditing to ensure their accuracy is a pre-requisite” Their plea fell
on the deaf ears. The UPA was as comfortable with the status quo as the NDA.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<b>Who will fund the parties?<o:p></o:p></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The escalating cost of elections puts pressure on parties to
mobilize funds whichever way they can. Most political parties do not collect
money for party activities and elections by building a broad membership and
collecting regular dues. The funds collected using legal channels from
companies and individuals are only a fraction of what they ‘need’, given the
possibilities of unlimited expenditure. During the 2004 elections, for example,
all the political parties put together showed expenditure less than Rs. 230
crores according to figures made public by the EC. Sources of unaccounted
wealth need to be tapped; this is probably what makes parties shy of making
their ‘real’ books open to the public. Seen against this context, the recent action
of the Bahujan Samaj Party (BSP) in <st1:city w:st="on">Delhi</st1:city>
in nominating extremely wealthy businessmen is understandable. The President of
its <st1:city w:st="on">Delhi</st1:city> unit
admits that as the party does not fund its candidate’s election expenses, it expects
them to have deep pockets if they should have a fair chance to win. The BSP
candidates for four of the seven <st1:city w:st="on">Delhi</st1:city>
constituencies have declared assets of 622, 155, 14.5 and 19 crore rupees
respectively!</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
There has been a concerted campaign for some time past –
initiated by certain NGO’s and now enthusiastically adopted by corporate <st1:country-region w:st="on">India</st1:country-region> and the
media - to reform the middle class elector. The hope that is held out is that
if more people vote and exercise their choice with discrimination, things will
improve. The question that begs an answer is who will persuade the political
parties to reform? </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<st1:date day="24" month="4" w:st="on" year="2009">24<sup>th</sup>
April 2009</st1:date></div>
<div class="MsoNormal">
<br /></div>
<a href="https://www.blogger.com/blogger.g?blogID=2739979442130109754"></a>
<br />
<blockquote>
</blockquote>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-31822367904288258942014-04-24T11:44:00.001+05:302014-04-24T11:45:48.426+05:30How India subsidizes cereal exports<div dir="ltr" style="text-align: left;" trbidi="on">
<a href="http://economictimes.indiatimes.com/opinion/comments-analysis/free-market-helps-cereal-exports-but-tax-on-input-intensive-commodities-needed/articleshow/34128931.cms">Interesting article</a> by Ashok Gulati in the Economic Times where he points to the increasing cereal production in the country linked to higher production in states like MP and Chattisgarh, the easing of export curbs,and the increasing exports of cereals (mainly rice, wheat, corn). Gulati maintains that the exports are subsidized by the government as it subsidizes the inputs that are needed for cereal production - water, electricity and fertilizers.<br />
<div>
<br /></div>
<div>
Gulati would have the government target the subsidy while freeing up exports completely. But are cereal exports from India at all in public interest? Are there other ways in which the state can intervene to promote the right balance between cereal production and the production of other crops?</div>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-9123005660490944992014-02-17T18:41:00.000+05:302018-10-18T20:00:55.368+05:30AAP's Case for Lower Electricity Tariffs in Delhi<div dir="ltr" style="text-align: left;" trbidi="on">
<i style="background-color: white; color: #222222; line-height: 18.479999542236328px;"><span style="font-family: "arial" , "helvetica" , sans-serif;">My article with this title appears in the Feb 22, 2014 issue of the Economic & Political Weekly as a commentary. It is reproduced below.</span></i><br />
<div>
<span style="color: #222222; font-family: "arial" , "tahoma" , "helvetica" , "freesans" , sans-serif; font-size: x-small;"><span style="line-height: 18.479999542236328px;"><i><br /></i></span></span>
<br />
<div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The Aam Aadmi Party (AAP) announced a
50% subsidy for electricity consumers using under 400 units a month within a
few days of forming its government in Delhi. While the major political parties
criticized the move, the state governments of Haryana and Maharashtra quickly
followed suit announcing their own subsidies. <span style="font-size: small;"><o:p></o:p></span></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">There is a strong public perception in
Delhi that bills are inflated and that electricity distribution companies (discoms)
have managed this by installing fast running meters and obtaining tariff
increases by dubious means. The stiff resistance of the discoms to providing
information under the RTI Act or to submit to a CAG audit served to strengthen
this perception.The
former Delhi Government also compromised itself in the public eye by
stonewalling a CAG audit. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The AAP’s election promises spoke to
these public concerns and its government has taken steps to fulfil them, including
pushing for a CAG audit.AAP’s
expectation is that the audit results will provide grounds for reducing the tariff.
The subsidy has therefore been announced only for three months and its impact
is less than 1% on the Delhi budget.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">This commentary takes a critical look at
the case made out by AAP for an audit of the discoms and lower tariffs after
providing a brief introduction to the tariff fixing process. For more details on
the subject of tariff determination as well as the disaggregated components of
tariff of Delhi discoms, the reader is referred to Kasturi (2013). <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Electricity distribution in Delhi, with
the exception of the New Delhi Municipal Council area and the cantonment, is
split between the Tata Power Delhi Distribution Ltd. (TPDDL) belonging to the
Tata group, and BSES Rajdhani Power Ltd. (BRPL) and BSES Yamuna Power Ltd.
(BYPL), both belonging to the Reliance ADAG group. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The tariff process requires the discoms
to submit a multi-year plan to the Delhi Electricity Regulatory Commission
(DERC) stating their annual revenue requirement that includes the cost of
power, operation and maintenance expenses, depreciation, and a guaranteed
return on capital employed. After review, the DERC approves the requirement for
each utility and fixes a tariff structure that will enable all the utilities to
meet their revenue requirements.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The actual performance of a discom in
any year may differ from plan because of factors beyond its control. The discom
gets an opportunity through a ‘true up’ petition to the DERC to ask for recognition
of variation in expenditure and revenue from plan. The DERC, after validating
the discom’s claims, issues a ‘true up’ order that spells out the revenue
requirement and the revenue actually realized from sales that year, as
recognized by the commission. A gap between the two provides the case for a
revision of tariff. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">‘True up’s’ happen after considerable
delay. Discoms in Delhi submit their ‘true up’ petitions for any year, only a
year later. The DERC then takes several months to arrive at its order. The last
true up orders for Delhi discoms (as of writing in Feb 2014) were passed by
DERC in July 2013 and square up the accounts of 2011-12.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">For better clarity, the revenue
requirement of the discom may be represented by its average cost per unit of
power provided to the consumer. This cost is composed of the cost of the power
procured, the cost associated with distribution loses (due to theft or technical
loss) and the cost of distribution (including the profits guaranteed to the
discom). The latter two, clubbed together is termed ‘distribution overhead’ in
this commentary. The revenues realized by the discom from electricity sale may be
represented, similarly, by an average billing rate.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Table 1 illustrates the average
operational costs and billing rates for the three Delhi discoms for 2011-12.
The discoms used the gap between average billing rate and operational cost to
press for higher tariffs. We will proceed to examine in detail each component
of cost and the revenue along with AAP’s contentions about them. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Table
1: Average operational costs and billing rates of Delhi discoms for 2011-12<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></b></div>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 4.9pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184; width: 357px;">
<tbody>
<tr style="height: 12.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td nowrap="" style="border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: .5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.0pt; mso-border-right-alt: .5pt; mso-border-style-alt: solid; mso-border-top-alt: 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 131.0pt;" valign="bottom" width="175"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-left: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 41.0pt;" valign="bottom" width="55"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">TPDDL<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-left: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">BRPL<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-left: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; mso-border-top-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">BYPL<o:p></o:p></span></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 1;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 131.0pt;" valign="bottom" width="175"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">Power
purchase cost A<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 41.0pt;" valign="bottom" width="55"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">5.10<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">5.15<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">5.30<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 2;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 131.0pt;" valign="bottom" width="175"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">Distribution
overhead B<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 41.0pt;" valign="bottom" width="55"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.61<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.96<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">2.50<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 3;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 131.0pt;" valign="bottom" width="175"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">Total cost
C = A + B<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 41.0pt;" valign="bottom" width="55"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">6.72<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">7.10<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">7.80<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 4; mso-yfti-lastrow: yes;">
<td style="border-top: none; border: solid windowtext 1.0pt; height: 13.5pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 131.0pt;" valign="bottom" width="175"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">Billing
rate<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 13.5pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 41.0pt;" valign="bottom" width="55"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">5.24<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 13.5pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">5.16<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 13.5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">5.11<o:p></o:p></span></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">All costs and rates are in Rs/unit;
Power purchase cost is based on total number of units available at the discom network
periphery. Other costs and rates are based on total number of units billed to
customers.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Source: Respective 2011-12 ‘true up’
orders<o:p></o:p></span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Energy
purchase and sales<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The bulk of Delhi’s power requirement is
met through long term purchase agreements with generation plants in the central
and state sectors. Discoms enter the short term power market to meet peak loads
and sell surplus power during lean periods. Table 2 shows the power purchase
costs for TPDDL and BRPL.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Table
2: Power purchase cost of TPDDL and BRPL<o:p></o:p></span></span></b><br />
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></b>
<br />
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 4.9pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184; width: 589px;">
<tbody>
<tr style="height: 12.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td nowrap="" style="border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: .5pt; mso-border-color-alt: windowtext; mso-border-left-alt: 1.0pt; mso-border-right-alt: .5pt; mso-border-style-alt: solid; mso-border-top-alt: 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" valign="bottom" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-left: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td colspan="2" nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid black .5pt; mso-border-top-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 75.0pt;" valign="bottom" width="100"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">2008-09<o:p></o:p></span></span></b></div>
</td>
<td colspan="2" nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid black .5pt; mso-border-top-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 75.5pt;" valign="bottom" width="101"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">2009-10<o:p></o:p></span></span></b></div>
</td>
<td colspan="2" nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid black .5pt; mso-border-top-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 78.55pt;" valign="bottom" width="105"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">2010-11<o:p></o:p></span></span></b></div>
</td>
<td colspan="2" nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid black 1.0pt; border-top: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid black 1.0pt; mso-border-top-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 74.4pt;" valign="bottom" width="99"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">2011-12<o:p></o:p></span></span></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 1;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" valign="bottom" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">%age<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Rate<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">%age<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Rate<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">%age<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Rate<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">%age<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Rate<o:p></o:p></span></span></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 2;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">NDPL<o:p></o:p></span></span></b></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Long term
purchase<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">89.7%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">2.59<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">80.2%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">2.81<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">82.4%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">3.20<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">92.7%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">3.88<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Short term
purchase<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">10.3%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">4.35<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">19.8%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">5.25<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">17.6%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">5.56<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">7.3%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">3.93<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 4;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Transmission
costs and losses<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">0.33<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">0.42<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">0.48<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">0.82<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 5;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Surplus
sales<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">11.3%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">5.00<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">9.4%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">4.11<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">12.7%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">2.96<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">18.2%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">2.94<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 6;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Net for
customers<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">88.7%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">2.86<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">90.6%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">3.68<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">87.3%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">4.25<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">81.8%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">5.10<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 25.5pt; mso-yfti-irow: 7;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 25.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 25.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Cost
escalation due to short term trades<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 25.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">-1.8%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 25.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 25.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">14.7%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 25.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 25.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">16.4%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 25.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 25.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">8.4%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 25.5pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 8;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">BRPL<o:p></o:p></span></span></b></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 9;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Long term
purchase<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">91.1%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">2.57<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">81.5%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">2.81<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">80.9%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">3.20<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">87.6%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">4.04<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 10;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Short term
purchase<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">8.9%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">4.54<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">18.5%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">5.36<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">19.1%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">5.12<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">12.4%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">3.69<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 11;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Transmission
costs and losses<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">0.36<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">0.38<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">0.55<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">0.80<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 12;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Surplus
sales<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">9.2%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">5.17<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">13.8%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">3.66<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">18.0%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">3.21<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">18.0%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">3.23<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 13;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Net for
customers<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">90.8%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">2.89<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">86.2%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">3.66<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">82.0%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">4.31<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">82.0%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">5.15<o:p></o:p></span></span></div>
</td>
</tr>
<tr style="height: 26.25pt; mso-yfti-irow: 14; mso-yfti-lastrow: yes;">
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 26.25pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 38.0pt;" valign="bottom" width="51"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 26.25pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 100.05pt;" valign="bottom" width="133"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">Cost
escalation due to short term trades<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 26.25pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 39.3pt;" valign="bottom" width="52"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">-0.8%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 26.25pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.7pt;" valign="bottom" width="48"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 26.25pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.0pt;" valign="bottom" width="53"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">15.6%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 26.25pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 35.5pt;" valign="bottom" width="47"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 26.25pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.0pt;" valign="bottom" width="56"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">15.7%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 26.25pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 36.55pt;" valign="bottom" width="49"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 26.25pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 42.95pt;" valign="bottom" width="57"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , sans-serif;"><span style="font-size: xx-small;">6.2%<o:p></o:p></span></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 26.25pt; padding: 0in 5.4pt 0in 5.4pt; width: 31.45pt;" valign="bottom" width="42"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
</tr>
</tbody></table>
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></b>
</div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Rates are in Rs/unit<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Source: DERC ‘true up’ orders<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Up till 2008-09, surplus power was sold
at high rates and more than made up for the higher cost of short term
purchases. In 2009-10 and 2010-11, this situation was reversed. Discoms bought
larger amounts of short term power at high rates and sold surplus power at
lower rates leading to an overall increase in the cost of power of 15-16%. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Based on the high rates obtained for
surplus power in 2008-09 and projecting a greater surplus for 2010-11, the DERC
in May 2010 was on the point of issuing an order reducing tariffs. The discoms
complained against this to the Delhi Government which promptly stopped the DERC
from making the order. The
High Court, hearing a challenge to this government intervention in the DERC’s
work, ruled a year later directing the government to desist from such interventions
in future and asking the DERC to proceed with a new tariff order. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The DERC, by now under a new chairman, was
presented with the 2009-10 accounts by the discoms which included huge overruns
in power purchase costs. It accepted these cost overruns without questioning
and increased tariffs through its tariff orders of August 2011.The above events
are at the centre of AAP’s assertion that the tariff increases since August
2011 are unjustified. <o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span lang="EN-GB"><span style="font-family: "arial" , "helvetica" , sans-serif;">A year later, in
July 2012, the DERC acknowledged irregularities in power trades of the discoms in
the ‘true up’ orders of 2010-11 accounts, stating that: <o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span lang="EN-GB"> “</span>a competitive
bidding process was not followed and power has been contracted on the basis of
request for offers from traders (through verbal communication). As such, there
were no supporting documents to validate the selection of the contracts against
all the offers that may have been received<span lang="EN-GB">” (BRPL) and<o:p></o:p></span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">“Contracts
for short term power purchase were finalized very early in the year and for
most of them, competitive process was not followed…..it appears that that no
efforts were made to sell through exchange or bilateral sources where better
yields are expected.”(TPDDL)<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">After
making these observations, the commission was content to rest the matter with
the advice to the discoms that “there were scope for better management of the
process of short term power purchase and sale of the surplus power so as to
significantly promote the interests of the consumers.”<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Another year
on, things had still not been set right with power trading as is visible in DERC’s
stricture to BYPL in Aug 2013: <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">“Contracts
for sale of short-term power were finalized early in the year and no
competitive process seems to have been followed. It is noted that substantial
quantum of short-term power was sold through Exchange and UI…..”<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">These
were not the only disquieting practices in power trades. Power purchases and
sales of the discoms were often mediated by power trading companies including
those belonging to the Tata & Reliance ADAG groups and the ultimate seller
/ buyer was not revealed.</span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "arial" , "helvetica" , sans-serif;">Clearly
the discoms at a minimum were not putting in their best efforts to manage power
costs. This would not be surprising, given that the cost of power is a pass
through to the customer. The <span lang="EN-GB">AAP alleges worse - that the discoms
converted what should have been a revenue surplus from sale of surplus power
into losses in their books.</span><span lang="EN-GB"> </span><span lang="EN-GB">Its election
manifesto contains a promise to make the buying and selling of electricity by
the discoms transparent and to take steps to bring them under the RTI Act.</span></span></div>
<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Distribution
overheads and average billing rates<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></b></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Distribution overhead has two components
as explained earlier – the cost associated with distribution losses and the
distribution costs. Table 3 shows the distribution losses and the distribution
overheads over the years for the Delhi discoms and for BEST, a public sector
Mumbai discom. All four are of comparable size having between 1.1 and 1.7 million customers.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Table
3: Distribution losses and distribution overheads of discoms<o:p></o:p></span></span></b></div>
<div class="MsoNormal">
<b><span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></b></div>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 4.9pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184; width: 455px;">
<tbody>
<tr style="height: 12.75pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td nowrap="" style="border-bottom: none; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: none; border-left: none; border-right: solid windowtext 1.0pt; border-top: solid windowtext 1.0pt; height: 12.75pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 53.0pt;" valign="bottom" width="71"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-top: solid windowtext 1.0pt; border: none; height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">2007-08<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-top: solid windowtext 1.0pt; border: none; height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">2008-09<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-top: solid windowtext 1.0pt; border: none; height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">2009-10<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-top: solid windowtext 1.0pt; border: none; height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">2010-11<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-bottom: none; border-left: none; border-right: solid windowtext 1.0pt; border-top: solid windowtext 1.0pt; height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">2011-12<o:p></o:p></span></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 1;">
<td nowrap="" rowspan="2" style="border-bottom: solid black 1.0pt; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: black .5pt; mso-border-left-alt: windowtext 1.0pt; mso-border-right-alt: windowtext .5pt; mso-border-style-alt: solid; mso-border-top-alt: windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">TPDDL<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-bottom: none; border-left: none; border-right: solid windowtext 1.0pt; border-top: solid windowtext 1.0pt; height: 12.75pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 53.0pt;" valign="bottom" width="71"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">Loses<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-top: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">20.72%<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-top: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">19.00%<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-top: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">16.51%<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-top: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">12.39%<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: none; border-left: none; border-right: solid windowtext 1.0pt; border-top: solid windowtext 1.0pt; height: 12.75pt; mso-border-right-alt: solid windowtext 1.0pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">11.63%<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 2;">
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 53.0pt;" valign="bottom" width="71"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">Overheads<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.79<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.61<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.94<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.55<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.61<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 3;">
<td nowrap="" rowspan="2" style="border-bottom: none; border-left: solid windowtext 1.0pt; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">BRPL<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-right: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 53.0pt;" valign="bottom" width="71"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">Losses<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">30.89%<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">21.47%<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">20.08%<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">19.64%<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-right: solid windowtext 1.0pt; border: none; height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">18.94%<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 4;">
<td nowrap="" style="border-right: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 53.0pt;" valign="bottom" width="71"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">Overheads<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.97<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.45<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.95<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.92<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-right: solid windowtext 1.0pt; border: none; height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.96<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 5;">
<td nowrap="" rowspan="2" style="border-bottom: solid black 1.0pt; border: solid windowtext 1.0pt; height: 12.75pt; mso-border-bottom-alt: black .5pt; mso-border-left-alt: windowtext 1.0pt; mso-border-right-alt: windowtext .5pt; mso-border-style-alt: solid; mso-border-top-alt: windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">BYPL<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-bottom: none; border-left: none; border-right: solid windowtext 1.0pt; border-top: solid windowtext 1.0pt; height: 12.75pt; mso-border-right-alt: solid windowtext .5pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 53.0pt;" valign="bottom" width="71"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">Losses<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-top: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">33.42%<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-top: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">24.93%<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-top: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">24.90%<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-top: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">23.40%<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: none; border-left: none; border-right: solid windowtext 1.0pt; border-top: solid windowtext 1.0pt; height: 12.75pt; mso-border-right-alt: solid windowtext 1.0pt; mso-border-top-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">22.71%<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 6;">
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 53.0pt;" valign="bottom" width="71"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">Overheads<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.85<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.51<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">2.29<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">2.35<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">2.50<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 7;">
<td nowrap="" rowspan="2" style="border-bottom: solid black 1.0pt; border-left: solid windowtext 1.0pt; border-right: solid windowtext 1.0pt; border-top: none; height: 12.75pt; mso-border-bottom-alt: solid black 1.0pt; mso-border-left-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">BEST<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-right: solid windowtext 1.0pt; border: none; height: 12.75pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 53.0pt;" valign="bottom" width="71"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">Losses<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"></td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"></td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">9.35%<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">8.01%<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-right: solid windowtext 1.0pt; border: none; height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">7.69%<o:p></o:p></span></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 8; mso-yfti-lastrow: yes;">
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 13.5pt; mso-border-bottom-alt: solid windowtext 1.0pt; mso-border-right-alt: solid windowtext .5pt; padding: 0in 5.4pt 0in 5.4pt; width: 53.0pt;" valign="bottom" width="71"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">Overheads<o:p></o:p></span></b></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<br /></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.75<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.70<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 48.0pt;" valign="bottom" width="64"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "arial" , "helvetica" , sans-serif; font-size: x-small;">1.86<o:p></o:p></span></div>
</td>
</tr>
</tbody></table>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Overheads are in Rs/unit and based on
the total number of billed units<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">Source: DERC true up orders for Delhi
discoms; MERC for BEST<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">While the three Delhi discoms had
comparable overheads in 2007-08 and 2008-09, BYPL started showing much higher
overheads than TDPL from 2009-10 and BRPL the same from 2010-11. These two
companies failed to progressively cut down distribution losses, a major reason
for their high overheads. Their losses were much higher even in comparison to
BEST, a public sector company operating in Mumbai city. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">At the time of the privatization of
electricity distribution in Delhi, the major benefit held out was that distribution
losses would be dramatically cut down. The disincentives for not meeting the
distribution loss targets do not seem to have worked for these two discoms.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">So what is the reason for BRPL and BYPL
failure to cut down their distribution losses? <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The AAP alleges that the Reliance ADAG
group discoms have been manipulating accounts showing lower billing (and revenue
collections) in their books; consequently the calculated distribution losses
turn out higher than what they actually are. A
higher distribution loss pushes up the cost of power available for distribution
to the consumer while lower collection pushes down the average billing rate. A
larger gap between the two (see Table 1) would allow a discom to make a case
for a larger tariff hike.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">In support of its allegations, the AAP
has drawn attention to the sudden increase in distribution losses in a number
of circles of BRPL in 2010-11 reversing the steadily decreasing trend of
several years. It has also pointed to the extremely damaging findings of the DERC during the
validation of the 2010-11 billing of BRPL and BYPL. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The commission found numerous instances
of customers with zero consumption or zero rate billing and many customer
categories with average billing rates lower than the prescribed tariff in a
sampling of the billing database of these two discoms.<u> </u>Summing
up the validation exercise in connection with BRPL the commission noted:<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span lang="EN-GB" style="line-height: 115%;">“</span><span style="line-height: 115%;">The
information provided by the Petitioner during the entire validation session was
inconsistent and changed many times. …. the Petitioner could not provide clarifications
to the satisfaction of the Commission.</span><span lang="EN-GB" style="line-height: 115%;">”<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The findings of the DERC from the
validation exercise relating to the 2010-11 true up throw up the question of
how a regulator should deal with a discom if data presented for a true up
petition is unsupported by evidence or does not stand up to scrutiny. DERC
penalised BRPL by an estimated Rs 52 crores in 2010-11, just over 1% of its
revenue requirement for that year.<u> </u>The
AAP would have the regulator take stringent action, including prosecution for
cheating, in case of serious discrepancies in the accounts presented to the
commission. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">A visit to the DERC website, the
repository of all data relating to tariff fixation, is utterly disappointing.
There are no metrics or time series data available to help the public judge the
performance of discoms. The latest true up petitions of the discoms of 2013
that would contain all the data submitted to the DERC, are not available. The most
recent minutes of the meetings of the ‘State Advisory Committee’, a body
mandated under the Electricity Act to advise the commission on matters
including “protection of consumer interest”, date to Oct 2011.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The discoms have provided enough grounds
through their questionable accounting and power trading practices to justify an
independent audit of their accounts. In Delhi, they are monopoly providers of
an essential public good using infrastructure set up in the course of decades
by the state. Leaving aside legal merits, it is entirely reasonable that they
come under the ambit of CAG audits and the RTI Act.<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">The issue however goes beyond an audit
to uncover wrongdoings of the past. How are consumer’s interests to be
safeguarded in future? If consumer charges are decided on the basis of cost and
a regulated profit, surely there should be transparency into the energy and
financial accounting of the discoms, at least to the extent that these have a
bearing on the tariff. Indeed the Electricity Act provides adequate powers to
the State regulatory commissions to make regulations on the information required
to be disclosed by discoms. It
remains for the government of the day to find ways to persuade the DERC to
bring in this transparency. <o:p></o:p></span></span><br />
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span>
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><i>An earlier article, also published in EPW, on electricity pricing in Delhi is available <a href="http://kkasturi.blogspot.in/2012/12/the-price-of-electricity-in-delhi.html">here</a></i></span></span><br />
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span>
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;">References to this article:</span></span><br />
<span lang="EN-GB" style="line-height: 115%;"><span style="font-family: "arial" , "helvetica" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-family: "arial" , "helvetica" , sans-serif;"><span style="line-height: 115%;"><a href="https://scroll.in/article/853902/why-raising-tariffs-will-not-revive-indias-ailing-power-distribution-firms-and-only-hurt-consumers">An Oct 2017 Scroll.in article</a> </span><span style="line-height: 115%;"> </span></span></div>
<div>
<div id="edn21">
</div>
</div>
</div>
</div>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-62687393187057099662014-02-05T11:32:00.002+05:302014-02-05T11:52:23.701+05:30Notes on the agricultural supply chain<div dir="ltr" style="text-align: left;" trbidi="on">
<div style="text-align: left;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><b>Credit Linkages between commission agents and wholesale traders</b></span><br />
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><br /></span>
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;">Traders at the Azadpur Mandi went on strike after the Delhi Government issued orders that traders at mandis have to collect 6% commission from buyers rather than farmers <a href="http://indianexpress.com/article/cities/delhi/azadpur-mandi-on-strike-govt-steps-in-to-prevent-crisis/">(See this report)</a>. </span><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;">Interestingly, one of the traders at the mandi is quoted in the report as saying:</span><span class="Apple-style-span" style="color: #444444; line-height: 22px;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><br /></span></span></div>
<div>
<br /></div>
“<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif; font-size: x-small;">We deal in huge volumes and often sell the produce to the buyers at a credit. Sometimes they pay us off as late as four months. If we don’t take any commission from the sellers at the time of the sale, we will have no money left. Sometimes, the buyer defaults on the payment. What will happen to our earning in that case?”</span><br />
<div style="text-align: left;">
<span class="Apple-style-span" style="color: #444444; line-height: 22px;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><br /></span></span>
<span class="Apple-style-span" style="color: #444444; line-height: 22px;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;">The credit linkages between commission agents and buyers (wholesale traders, sub wholesalers) is another aspect of the agricultural marketing chain that leads to high markups on vegetable and fruit prices.</span></span><br />
<span class="Apple-style-span" style="color: #444444; line-height: 22px;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><br /></span></span>
<span class="Apple-style-span" style="color: #444444; line-height: 22px;"><span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><br /></span></span></div>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-23392712715705029322014-01-25T11:40:00.002+05:302014-01-25T11:43:46.195+05:30Vegetable prices<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbi5dUcMT2o3_na0SJBXufdwHeaSru9lNYCcLezDt8XqaRFotDrpXhs-b_k7ZXTDLs01ADBkqnVhn74-gQYOtioXx15gJuDTZX_cbMfKpTfbCUXNGExkc1uTq6ZI58BYG7mKkB7rFML-lb/s1600/EPWmasthead.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbi5dUcMT2o3_na0SJBXufdwHeaSru9lNYCcLezDt8XqaRFotDrpXhs-b_k7ZXTDLs01ADBkqnVhn74-gQYOtioXx15gJuDTZX_cbMfKpTfbCUXNGExkc1uTq6ZI58BYG7mKkB7rFML-lb/s1600/EPWmasthead.jpg" height="160" width="400" /></a></div>
<a href="https://www.blogger.com/blogger.g?blogID=2739979442130109754"></a>
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
Another piece on the vegetable price inflation of 2013, this time published in EPW. The complete article can be downloaded from <a href="http://www.epw.in/commentary/have-farmers-benefited-high-vegetable-prices-2013.html">here</a></div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0tag:blogger.com,1999:blog-2739979442130109754.post-33423794008018900282013-12-20T12:14:00.004+05:302013-12-20T12:17:11.512+05:30Onion hoarding and profiteering cycle playing out once more<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="text-align: left;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;">In <a href="http://indiatogether.org/2013/dec/eco-vegprices.htm">a recent article in India Together</a>, I had used an episode from 2010 to illustrate the typical hoarding - profiteering cycle in vegetables like onion, thus:</span></div>
<div class="MsoNormal" style="text-align: left;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;">"A vegetable like onion
that can be stored throws up another aspect of this supply chain. The winter <i>rabi</i> crop harvested in April - May,
accounts for 60% of onion production. Part of the crop must be stored to last
the lean months, typically September to January till <i>kharif </i>harvests arrive. Onion
growers, mostly small farmers do not have the capacity to store; storage
capacity is mostly with the large traders in the supply chain. Traders build up
their stocks from the <i>rabi</i> crop and
then release them at higher prices in the retail market in the lean months when
demand is inelastic because of major festivals and the marriage season. This
appears to be the normal seasonal cycle in the onion market.</span></div>
<div class="MsoNormal" style="text-align: left;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;">What happens when <i>mandi</i> middlemen anticipate a shortfall
in production? The natural response is hoarding and tightening of supplies all
along the chain. The consequent price spike is typically followed by a price
collapse coinciding with the next harvest. By then, the traders have already
made a killing while the farmers stare at ruin.</span></div>
<div class="MsoNormal" style="text-align: left;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: left;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;">An episode from a few
years back illustrates this pattern. Onion prices climbed steeply in the months
of Dec 2010 and Jan 2011 before collapsing as suddenly as seen in the graphic
below. The sharply higher retail margins during the spike point to hoarding at
the terminal markets.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: left;">
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<div class="separator" style="clear: both; text-align: center;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiuhyphenhyphen-x5JvRl11wZJrgYgBtBB8X-XigBDPMj5ewhi7khPRXOI2HcAXiMjWSPLBZHqYaoxzp7FQeInnPw-a0uWFIMBYmcFOzlYTKRFDAsvg15B_3CDQgEFAQ-h0kjVYo9ndYy57TbbvLjPNE/s1600/Onion-price-spike.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="235" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiuhyphenhyphen-x5JvRl11wZJrgYgBtBB8X-XigBDPMj5ewhi7khPRXOI2HcAXiMjWSPLBZHqYaoxzp7FQeInnPw-a0uWFIMBYmcFOzlYTKRFDAsvg15B_3CDQgEFAQ-h0kjVYo9ndYy57TbbvLjPNE/s320/Onion-price-spike.jpg" width="320" /></a></span></div>
<br />
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<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;">The trigger for this
episode was untimely rain which was expected to affect the late <i>kharif</i> crop in Karnataka, Gujarat and
Maharashtra. As it turned out, onion production that year reached 15.1 million
MT, the highest annual crop seen till then! Exports too at 1.3 million MT were
lower that year compared to preceding and subsequent years. It appears that
this is the pattern Sharad Pawar had in mind when he spoke about the current
onion crisis and predicted that price would come back to normal in a few weeks.<o:p></o:p></span></div>
<div style="text-align: left;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><span style="line-height: 115%;"><br /></span></span></div>
<div style="text-align: left;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><span style="line-height: 115%;">During the next year (May-11 to April-12)
average wholesale prices at Lasalgaon, the largest onion procuring <i>mandi</i> in India remained in the range Rs
3.90/kg – Rs 11/kg. There were reports of onion farmers in the Nasik area
attempting suicide as they could not get even Rs 2/kg. This gives a lie to
claims that </span><span style="line-height: 115%;">farmers benefit from price spikes"</span></span></div>
<div style="text-align: left;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><span style="line-height: 115%;"><br /></span></span></div>
<div style="text-align: left;">
<span class="Apple-style-span" style="font-family: Arial, Helvetica, sans-serif;"><span style="line-height: 115%;">The same cycle is being repeated again in 2013. Onion prices have fallen to Rs 7/kg in the wholesale markets in Nasik at a time when farmers are bringing in the new crop. ( They had touched RS 100/kg in retail sales in several cities in October/November). There are <a href="http://ibnlive.in.com/news/nashik-wholesale-onion-price-crashes-to-rs-7-per-kg-farmers-protest/440496-3-237.html">news reports</a> of farmers protesting by blocking the Mumbai Agra National Highway. The government <a href="http://www.thehindu.com/todays-paper/onion-export-price-cut-to-350/article5481111.ece">has cut</a> the minimum export price of onion from $1150/tonne to $350/tonne (~Rs 22/kg). Here we see the hoarding/profiteering cycle repeating again to ruin the farmers.</span></span></div>
<a href="http://www.blogger.com/blogger.g?blogID=2739979442130109754"></a>
<br />
<blockquote>
</blockquote>
</div>
Kannanhttp://www.blogger.com/profile/14199123100552248765noreply@blogger.com0