Changing the Indian Economy

Renewal, Reform and Revival

Rama P. Kanungo, Chris Rowley, Anurag N. Banerjee

• Publisher: Elsevier
• Year: 2018
• ISBN:
  9780081020142
• Topic: Business
• Subtopic: Business General
• Index: Business

Changing the Indian Economy: Renewal, Reform and Revival explores the fact that post-Modi India is witnessing unprecedented socioeconomic change, truly labeled as Modi's Mantra and his attempts to morph the Indian economic landscape. India is using an intelligent economic process for its renewal and growth, however, in a recent study by Nomura, 2016, The Japanese Financial Services firm, it is reported that there is downside risk to India's baseline forecast of 7.8 per cent GDP growth in 2016. Although the report suggests that there was a mid-cycle consolidation in mid-2014, the recovery seems to be losing momentum.

This book offers a novel, but inclusive outlook to the entire post-Modi economic overhaul.

• Offers a comprehensive narrative of the current economic scene in India
• Explores how the measures for reform are intelligent, while also considering their weaknesses
• Shows how India has a strong potential to grow amidst diversity of economic reforms and changing governance
• Includes a compilation of insightful articles on Indian economic reform and future prospects

Chapter 1

Political Economy of Resources and Infrastructure in India

Anurag N. Banerjee^*

Nilanjan Banik^**
* University of Durham, Durham, United Kingdom
^** Bennett University, India

Abstract

This chapter examines the political dimensions of strategic resource challenges in India. Natural resource endowments (i.e. land, oil, gas and minerals) can serve as potent drivers of development. For better or worse energy, transport, mineral and land markets in India are shaped by national interest and do not behave as traditional goods markets, especially because of the lack of well-defined property rights. Therefore while markets are an essential part of any response to tighter resource supplies, governments also play a key role as a preeminent domain in this incomplete market setup. This has led to challenges concerning how local resource users are subject to exclusion and dispossession in the national interest of economic growth. For example, there has been an increase in the number of legal contests regarding land, water and mining rights which has increased inequality and local insecurities. Thus a ‘paradox of plenty’ exists in resource-rich countries such as India, where recent history has demonstrated that extractive endowments can disappoint if they are not well-managed. This chapter discusses the problems related to land acquisition and water resources and the possible solutions.

Keywords

economic development

farmers

government

infrastructure

judgement

land

water

1 Problems with land acquisition

Obtaining land for infrastructure or for the building industry is a real problem and can slow down growth. Table 1.1 shows that India lags behind other South Asian countries (with similar levels of economic development), not only in terms of per capita income but also with respect to other key development indicators such as electricity, water and sanitation. In India, obtaining land for infrastructure and the building industry remains a thorny issue.

Table 1.1

Income and Infrastructural Indicators

Indicator	India	South Asia	Lower Middle Income Countries
GNI per capita, Atlas method (current USD) in 2016	1670	1611	2077.69
Access to electricity (% of population) in 2014	79.16	80.05	79.53
Access to improved water source (% of population) in 2015	94.1	92.37	89.18
Access to improved sanitation facilities (% of population) in 2015	39.6	44.77	52.22
Electricity Power Consumption (kWh per capita) in 2014	805.59	707.55	769.05

Source: World Development Indicators (2017), World Bank.

Analysis by TMP Systems found that out of 73,000 commercial projects across eight different countries, over 93% of projects were inhabited. When analysing 262 land tenure cases in 30 countries, the study found consistent material impacts of unclear land rights obstructing the building of new infrastructures, including dams, roads, ports and electricity supplies.^a Therefore obtaining land with a clear title is an issue.

The story is no different in India. With limited government resources, there is a need for public–private partnerships (PPPs) to develop world-class infrastructure and service sector operations. The provision of hassle-free and cheap land to private companies for developing infrastructure is an essential component for this to happen. Investment risks posed by insecure and unclear land rights are responsible for holding back investment in infrastructure. At the other extreme, farmers and human rights activists complain that they are on the receiving end, with middlemen cornering the bulk of the profit.

2 Impact on industry

A study examining 1660 judgements delivered in the Punjab and Haryana High Court between 2009 and 2011 demonstrated how farmers are deprived (Singh, 2012). The study showed that the average government compensation was approximately one-fourth of the market value of the land. Moreover, most of the land procured for building infrastructure was used for commercial purposes [i.e. real estate and special economic zones (SEZs)]....

Table of contents

• Cover
• Title page
• Table of Contents
• Copyright
• List of Contributors
• Preface
• Chapter 1: Political Economy of Resources and Infrastructure in India
• Chapter 2: India’s Exports Through the Lens of Diversification
• Chapter 3: The Multiplier Effect of Developmental and Non-developmental Expenditure in India
• Chapter 4: Failing to Learn: India’s Schools and Teachers
• Chapter 5: Indian Industry: Performance, Problems and Prospects
• Chapter 6: Civil Society Matters: India in Continuity
• Chapter 7: Socioeconomic Reforms and Responsive Government: An Indian Perspective
• Chapter 8: Sectoral Approaches to Skills for Green Jobs in India
• Chapter 9: India’s New Bilateral Investment Treaty: Expansions, Inclusions and Exclusions
• Index