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Special guest and aspiring civil servant Bhushan Shah joins me to talk about India’s three-year action agenda and the National Civil Aviation Policy.

Links:

• NITI Aayog released draft of three year action agenda
• India’s three year action agenda
• Change of electricity target to 2018
• Garv dashboard to track electirification
• National Civil Aviation Policy 2016
• RCS-UDAN launched

The NITI Aayog — which replaced the Planning Commission in 2014 — is currently finalizing the three year action agenda, first released on 23 April 2017. The Agenda spans 2017–18 to 2019–20 and includes action items for the states in addition to the Centre.

In addition to the Action Agenda, the NITI Aayog is also preparing a 15-year Vision and 7-year Strategy plans which will cover the period 2017–18 through to 2031–32. This makes the 12th five-year plan (2012–17) the last Five Year Plan.

The 3-year Action Agenda was being prepared based on inputs from Central, State and UT Governments. Additionally, consultations have been held with subject matter experts in education, health, culture, transport as well as scientists, economists, journalists and industry associations.

Some of the key agenda items in the Agenda are:

• Medium-term expenditure framework (MTEF) proposing sector-wise expenditure allocation
• Reduction of fiscal deficits to 3% of GDP by FY2018–19, revenue deficit target of 0.9% of GDP by FY2019–20.
• Reform Agricultural Produce Marketing to meet goal of doubling farmer income by 2022.
• Job creation with focus on high-productivity jobs in Coastal Employment Zones, labour reform and action points for specific sectors such as apparel, electronics, food processing, jewelry, tourism, finance and real estate.
• Address rising share of Non-performing assets (NPAs) in banks through auction of large assets and private asset reconstruction
• Focus on bringing down land prices by increasing supply (better conversion rules, release of land held by sick units etc.), reform of Rent Control Act
• North East, Coastal areas, North Himalayan states and Desert & Drought prone states to receive major focus for development
• Strengthen transport infrastructure, digital infrastructure for e-governance and public-private partnerships
• Measures to meet provision of electricity to all households by 2022, LPG connections, elimination of black carbon by 2022
• Reform coal sector through set up of regulator, commercial mining and improve labour productivity
• Create a database of all government schemes and review them
• Create a National Science, Technology & Innovation Foundation to deliberate national issues, priority interventions in science & technology and prepare implementation framework
• Improve administration of patent regime
• Shrink government role in activities that do not serve a public purpose, expand in areas that do
• Strategic disinvestment of 20 identified CPSEs and closing loss-making PSEs
• Tackle tax evasion, expand tax base and introduce tax reform such as consolidate custom duty rates into a unified rate
• Undertake judicial system reform through use of technology, performance evaluation and reduction in judicial workload
• Police reform measures for the states
• Move towards outcome-based assessment in schools, using technology to align teaching to student’s level
• Tiered regulation of universities and colleges with greater autonomy to top universities
• Increase government expenditure on healthcare
• Reforms in AYUSH, acts governing homeopathy
• Develop a more comprehensive Nutritional Information System at a national level
• Develop a composite gender-based index
• Skill-based education and extra-curricular to be mandatory
• Better regulatory structures for environment resources, including air pollution, tree felling policy and sustainable water utilization

You can read the full draft action agenda here:

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Special guest and aspiring civil servant Bhushan Shah joins me to talk about 30 days of the new Uttar Pradesh Government and a look at the increasing foreign investment being picked up by state governments recently.

Links:

• Power for all in UP by 2018
• Gaon Connection Survey in UP
• Japan sanctions 8600 cr for Mumbai trans-harbour link plan
• India signs 2291 cr loan with ADB for Madhya Pradesh roads
• India signs $100 million agreement with World Bank for Uttarakhand health development

Bhadra Sinha, reporting for Hindustan Times:

For the first time in the Supreme Court’s history, three constitution benches of five judges each will sit during the summer break. These would be in addition to the two regular vacation benches set up every year to hear urgent matters.

Music to my ears.

Firstpost:

The historic Goods and Services Tax (GST) regime today came a step closer to meet its July 1 target of rollout, with the Lok Sabha approving four supplementary legislations.

The Central GST Bill, 2017; The Integrated GST Bill, 2017; The GST (Compensation to States) Bill, 2017; and The Union Territory GST Bill, 2017 were passed after negation of a host of amendments moved by the Opposition parties.

Someday I’ll look back and remember how I watched the live stream of much of the debate and the vote, much like the passing of the 122nd Constitutional Amendment that made GST a reality.

Finance Minster Arun Jaitley’s speech in Lok Sabha addressing various questions raised and before he moved the bills is available here.

Mary Achkhanian, reporting for Gulf News:

Indian passport holders with a valid American visa or a Green Card will now be eligible to obtain a UAE visa on arrival, as per the decree approved by the UAE Cabinet, it was announced on Wednesday.

The visa will be valid for 14 days, with a single extension possible for a fee.

Lovely news that follows the UAE Crown Prince H. H. Sheikh Mohammad Bin Zayed Al Nahyan being chief guest at India’s Republic Day 2017 celebrations.

The time taken for trade mark examination has been reduced to less than one month, down from 13 months. As of February 2017, 28,889 applications are pending for examination, while 7.92 lakh applications are pending at all stages, due to lack of manpower according to the Ministry of Commerce & Industry

Earlier this month, the new Trade Mark Rules 2017 were introduced. Trade mark applications now require 8 forms (down from 74), and a 50% incentive for startups. The entire process can now be completed via e-filing and video conference support is available.

Moushumi Das Gupta and Neelam Pandey, reporting for Hindustan Times:

The 12-digit Aadhaar number has helped states strike off 4.4 lakh “ghost students” from schools across Jharkhand, Manipur and Andhra Pradesh, for whom the government had been earmarking funds under the mid-day meal scheme.

This is no small number. Those raising a large hue and cry over the Government’s decision to introduce Aadhaar verification of students availing the benefit need to understand the numbers, and the leak at stake.

For instance, Andhra Pradesh — which linked all its 29 lakh government school students to Aadhaar — had 2.1 lakh claimants who existed only on paper.

It might look small at 7.2% but remember that’s 2,10,000 fake students. And this is just one state.

In Jharkhand, the names of 2.2 lakh non-existent students have been deleted from school records. So far, 89% of the 48 lakh students enrolled in the state’s government schools have availed of Aadhaar numbers.

4.4 lakh fake students in just 3 states implies a large leak within the mid-day meal scheme, especially since the way the process works is that a state government receives a contribution from the Centre (Northeastern states receive 90% from the Centre, all other states get 40%) against the number of students receiving the subsidy. In 2015–16, 10.3 crore students availed the subsidy. Even at 7%, the number of ghost students could be 72,00,000!

The cost incurred by the Central Government is Rs. 4.13 per child per day for primary and Rs. 6.18 per child per day for upper primary. Even at the Rs. 4.13 cost level, we’re looking at estimated leakages amount to Rs. 1000 crores across the Country, and this does not include spending by the states.

Clearly there is a large leak within the mid-day meal scheme, add to already immense Rs. 49,000 crore estimated to be saved by controlling leakages in LPG subsidy, MNREGA, scholarship and pension schemes.

This doesn’t even begin on the teacher’s problem:

A pilot study conducted by Kerala’s department of general education in 2014, after Aadhaar numbers were integrated with the student database, found its schools to have an excess of 3,892 teachers.

In terms of total numbers:

At present, only 30% of the 11 crore students enrolled in class one to eight at government schools across India possess Aadhaar cards.

Remember that the Government has clarified that it will not deny benefits for lack of Aadhaar, but will continue to encourage larger enrollment to help weed out the problem.

M Kalam, writing for the Tech Observer:

After launch of its India manufacturing operations in October last year, global hardware networking giant Cisco has finally delivered the first made in India router under ‘Make in India’ initiative. As gesture the Cisco handed over the first Made in India Router valued under $1500 to the Union electronics & IT minister Ravi Shankar Prasad.

Good to see B2B businesses, especially one with Cisco’s might, begin manufacturing in India. This will result in a quieter but substantial change for locally manufactured products.

Harish Damodaran, writing for The Indian Express:

When urea is applied to the soil, it is first hydrolysed or broken by water into ammonium ions (NH4+), followed by oxidation to nitrite (NO2-) and, then, nitrate (NO3-) forms. This nitrification process is what makes the nitrogen, which is 46 per cent in urea, available to the crops.

[…]

Neem oil basically acts as a ‘nitrification inhibitor’ when coated on urea. By slowing down urea hydrolysis and nitrification, it allows a more gradual release of nitrogen, which can be used by the plant. “Neem-coating increases nitrogen use efficiency. Also, since the urea action is prolonged, the plants stay greener for a longer time. Farmers apply urea when they notice the leaves turning yellowish. But if the crop here is retaining greenness for an extended period, they would reduce the frequency of application. Instead of three bags for an acre of paddy or wheat, they might be using only two now”, Prasad points out.

Some science behind the ‘magic’ behind neem-coated urea, which might explain the contradiction that although food grain output is rising YoY, fertilizer sales are in fact, down, including that of urea. Good read.

Daniel Twining, writing for Foreign Policy:

Americans suffering a crisis of confidence about the future of their country’s democratic institutions under President Donald Trump could use a dose of Indian-style optimism.

[…]

India’s experience offers a useful antidote to Western pessimism — and a reminder that democracy can offer solutions to the growth and governance dilemmas that afflict the United States and Europe.

Twining takes a view on the ‘feeling’ side of the political debate, crediting Modi with ‘doing something’ with his strong political mandate which, in the context of the thumping victory in Uttar Pradesh, seems to be creating an undercurrent of optimism in India. He highlights FDI reform, overall growth cross 7% per year, the upcoming Goods & Services Tax, bankruptcy bill, demonetisation, Jan-Dhan Accounts and Direct Benefit Transfer, and the Modi Government’s foreign policy.

He also makes an interesting point regarding India’s constant election situation:

At the same time, aspirational Indian voters increasingly manifest a tendency to reward governments that deliver growth and toss out politicians who do not meet performance tests. Strong anti-incumbency instincts keep politicians on their toes.

I think that the cost and constant election cycle are more detrimental than good, but perhaps the corollary to India constantly analysing everything from an election perspective is that politicians also have to be ‘on their toes’.

It’s an interesting take overall, correctly grasping the optimism among Indians since 2014, against the overall pessimism in the US since their last election.

CSIS’ India reform scorecard tracks 30 ‘big reforms’ since 2014

The Center for Strategic & International Studies has a high level scorecard tracking the Modi Government against 30 “big reforms” that would help restructure India’s economy, updated each month. CSIS indicates only 9 have seen no progress so far, with over two years to go in the current term.

For those looking for a simple and clear overview of what can be considered progress, worth a look.

The Central Information Commission (CIC) looks after second appeals and complaints received by the commission with respect to the Right to Information Act, 2005.

According to the RTI Act, 2005, Section 20 (1), a fine of Rs. 250 per day up to a maximum of Rs. 25,000 pay be imposed on an Information Officer for refusing an application, not furnishing a reply within stipulated timeframes, malafidely denies the request or furnishes incorrect information.

During the FY15–16, Rs. 10,52,500 penalty was imposed, as against Rs. 7,39,000 during the previous FY. 19,25,000 was fined during FY13–14.

^1 The Right to Information Act, 2005

Dhananjay Mahapatral, reporting for The Times of India:

…the Supreme Court collegium has finalised the memorandum of procedure (MoP) for appointment of judges to constitutional courts.

Finally.

The appointment of Supreme Court judges was a heavily debated topic under previous Chief Justice T. S. Thakur, starting with the Centre’s suggestion for a National Judicial Appointments Commission (NJAC), which was struck down by the Supreme Court in October 2015.

In December 2015, a Constitutional Bench of the Supreme Court ruled that the Central Government could amend the Memorandum of Procedure for appointment of judges, in consultation with the CJI. The Bench also broadly suggested that amendments towards eligibility of judges, transparency in appointments and establishment of a secretariat to review appointment-related complaints be looked into.

A bone of contention related to the ‘national security’ clause that the Centre insisted on adding to the eligibility of judges for appointment, and the Secretariat. Progress has been swift since Chief Justice J. S. Khehar took over in January, and the new Collegium has now approved both items.

Further:

Finalisation of the MoP, which will be sent to the Centre for approval and adoption this week, raises hopes of speedy filling up of vacancies in HCs, which are operating at below 60% of their sanctioned strength.

Clearance of pending cases is a huge problem in India. Just last week, the Supreme Court also set out timelines for case hearing, ordering lower courts to dispense of cases more than five years’ old by the end of the year.

EVMs have been used in all elections in India since 2000, and began their use in Lok Sabha elections in 2004. Quite naturally, there are a few advantages to the EVMs over the traditional ballot paper usage in India. EVMs are cost-efficient, less prone to booth capture and rigging while also severely reduce polling and counting times. In fact, a Madras High Court judgement from 2005 estimates cost of printing and counting using ballots to be 30–40% of total election expenses.

The machines

An EVM comprises two units — a Ballot Unit and a Control Unit. The program used in EVMs is burnt into a one-time programmable chip so that it cannot be altered with thereafter. The machines are not networked in any way to ensure prevention of external interference. EVMs are powered by a 6V battery, and therefore do not rely on an external power source.

In 2006, newer EVMs were introduced with features such as dynamic coding between Ballot Unit and Control Unit, real-time clock, full display, and data and time stamp of each key press.

The EC has now received approval to introduce an upgrade to the EVM, dubbed the ‘M3’ which will replace all pre-2006 EVMs last used during the 2014 Lok Sabha elections. This would mean that older machines without the date-time stamp and other features introduced in 2006 will no longer be in use. The newer machines also have a digital verification system to oversee the contact between two component units, making it further tamper proof by turning the machine inoperative upon fault or change in components. 5.5 lakh M3 EVMs have already been ordered, costing Rs. 3000 crore.

During the 2017 Assembly elections, as part of a United Nations Development Program initiative, 5 countries were given briefings on the Indian electoral process, including the use of EVMs and Voter Verified Paper Audit Trail (VVPAT).

Manufacture

Two indigenous companies currently build the EVMs: Bharat Electronics Ltd. (BEL), a PSU under Ministry of Defense, and Electronics Corporation of India Ltd. (ECIL), a PSU under the Ministry of Atomic Energy.

The EC has requested approval for a third — Central Electronics Ltd. — to be added to help with production of newer M3 units, this approval is still pending.

The EC notes that various levels of testing is performed at these sites before any machines are put into production, including independent units that perform Quality Assurance of the machines. Further, manufacturers do not have information about candidates several years into the future, or what constituency or the sequence of candidates in the Ballot Unit.

Procedure

Before every election, the EC begins a series of checks¹:

• A first level check (FLC) is done in the presence of political parties’ representatives. Manufacturers certify all components are original within the operational EVMs (malfunctioning EVMs are not used in the election).
• The plastic cabinet of the Control Unit are then sealed, and signed by the parties’ representatives. Access to any internal components does not occur thereafter.
• The parties representatives then randomly select 5% of the EVMs, on which a minimum of 1,000 votes are cast. Results of this ‘mock poll’ and all votes are printed and shared with the representatives, and the poll is videographed.
• EVMs are randomized once for allocation of machines to constituencies, and a second time to the individual polling stations in the presence of candidates or their representatives. Final list of EVM serial numbers allocated to a polling station are provided to the parties or their candidates.
• Candidates and their representatives are allowed to conduct additional mock polls at candidate setting.
• They can also conduct a mock poll before the actual poll on poll day.
• Once the candidate setting is complete, the Ballot Unit of the EVM is also sealed, preventing access to the inside of the Ballot Unit. This is also signed by the candidate/representatives.
• On polling day, a mock poll with a minimum of 50 votes is conducted at each polling station in the presence of representatives.
• An additional thread seal and paper seal are now put on the EVMs to block access to all buttons except those needed for the poll. Candidates/representatives are allowed to sign off on this as well.
• At the end of polling, the presiding officer presses the ‘close’ button on the EVM in the presence of polling agents. No votes can be polled thereafter.
• Now the EVM is sealed entirely, and candidates/representatives are allowed to sign off are they are satisfied.
• Strong rooms where EVMs are sealed between polling and counting. Candidates/representatives are allowed to place their own seals, and have their own watchers. The EC posts its own watchers 24x7.

Historically speaking…

Before and after EVMs were introduced, numerous committees were constituted to review their use. To start of, a technical expert committee was appointed by the GoI in 1990, headed by Prof. S. Sampath, with Prof. P. V. Indiresan, and Dr. C. Rao Kasarbada as members. In November 2010, this Committee was expanded to add two additional experts in Prof. D. K. Sharma and Prof. Rajat Moona (now Director General, C-DAC).

The courts were involved as well. The Madras High Court started by rejecting tampering allegations all the way back in 2001, followed by the Kerala High Court in 2002. In 2004, the Karnataka High Court Judge K S Rai said:

After thorough practical experimentation and research the present version of EVM is designed. This invention is undoubtedly a great achievement in the electronic and computer technology and a national pride.

A Mumbai High Court judgement was also issued in 2005.

In 2010, Hari K. Prasad² along with Alex Halderman and Rop Gonggrijp, published a study wherein they claimed to have proved that Indian EVMs were hackable.

Their paper implies that it is not a ‘hack’ of the original system using a vulnerability in software, they physically replaced one of the components with a look-alike. This look-alike was then remotely instructed to modify votes. Their second option also involved breaking into the machine between polling and counting since there is often a delay between these two events. In either case, some kind of physical access to the device was needed to perform any tampering, meaning their claims were based on procedural issues in delivering and storing EVMs, and physically replacing components. These issues are addressed by the detailed process described above, and further improved by newer digitally-encoded EVMs.

Finally, in 2013, the Supreme Court, on petition by Subramanian Swamy overturning the High Court of Delhi, ruled that the EC needed to add Voter Verifiable Paper Audit Trail (VVPAT) system to EVMs as a requirement for free and fair elections, and to add to voter confidence.

20,000 VVPATs were purchased in 2013, and 33,500 came through in 2016. The assembly elections in Goa had all 40 constituencies with VVPAT.

In the 2014 Lok Sabha elections, VVPAT was available in 8 constituencies. The announcement of the new M3 machines by the EC is congruent with the Supreme Court verdict towards replacing all old EVMs prior to the 2019 Lok Sabha elections.

¹ Based on the process as described by the Election Commission of India.

² Hari Prasad was reportedly arrested sometime in 2010. While there is not much additional information, it is believed the reason for his arrest was not his research findings, but the fact that he had obtained an EVM and refused to reveal his source, as it did not come from the EC.

Updated (9 Apr 2017) to include additional details regarding new M3 EVMs

…and a little bit about Shakti Peeth

Shakti Peeth, or seat of Shakti, comprise a series of holy destinations originated when Goddess Sati’s body disintegrated into pieces and fell all over the subcontinent when Lord Shiv carried her corpse in sorrow on her death. 51 peeths are recognized around India, Sri Lanka, Bangladesh, Nepal, Tibet, Bhutan and Pakistan.

Out of this, 12 are considered main Shakti Peeth Tirth, namely:

• Bhagwati Mahakali Maha Shakti, Ujjan
• Mata Kamakshi at Kanchi Puram
• Bramaramba, Malaygiri
• Kumarika, Kanya Kumari
• Ambaji, Gujarat
• Mahalaxmi, Kohlapur
• Devi Lalita at Prayag
• Vindhyavasini, Vindhya
• Vishalakshi, Varanasi
• Mangalavati, Gaya
• Sundari Bhavani, Bengal
• Guhyakesari, Nepal

Ambājī (અંબાજી, अम्बाजी) is located 185 km from Ahmedabad in Gujarat, and 45 kms from Mount Abu in Rajasthan. It is believed that the Heart of Sati Devi fell here, according to Tantra Chudamani.

Gabbar

The location where Devi Sati’s heart fell is Gabbar parvath. Gabbar also assumes significance in two main time periods in our history — during Ramayan, where Lord Ram and Laxman were told to worship Devi Ambaji at Gabbar, where he was given ‘Ajay’ arrow; and the mundan ceremony of child Lord Krishna in presence of his foster parents Nand and Yashoda.

A small temple has been built on Gabbar for darshan. For those who cannot climb to visit Gabbar parvath, a Cable car service is available with a lovely scenic view of one side of the mountain.

The temple, and the Shakti Yantra

The Shikhar of the temple is 61 ft high, at the top of which is a Dhwaj (holy long flag) and Mataji’s Trishul.

There is no idol or picture in the main temple. A convex-shaped Holy Shakti Vishwa Yantra, inscribed with figures and 51 Bijapatra (letters) and the ‘Shree’ syllable is installed such that it is visible for devotion, and cannot be photographed. Non-priests are no longer allowed in the core area around the Yantra.

The priests decorate the Shakti Yantra such that one can imagine it as an idol of Ma Amba in one of her incarnations, shown on her vahan. Depending on the day of the week, Devi ma is shown to be on a different vahan between a peacock, lion, elephant, etc. I will hopefully post the exact set the next time I’m able to visit.

About two years ago, a ‘museum’ of sorts has been setup in the temple, where the team shares a bit about the history of the temple and its importance. A replica of the yantra is also available, and it is truly amazing how different the yantra actually is, compared to what you experience in the temple itself.

Ambaji temple is one of the only places in the world where I experience true peace of mind. As a family, we do try to visit the temple at least once a year.

Over the last few years, the temple trust has been using gold donations to the template to encash the shrine in gold. Over 30 kg of gold has been donated so far, to help with the project to to cover the Shikhar, of which 41 ft have been completed.

The internals of the shrine have also been gold encased as of my last visit.

You can donate to the temple through SBI (Gujarat > Religious Institute > Shree Arasuri Ambajimata Devasthan Trust) here.

The temple also has a Havan Shala, with one main Havan Kund and 8 smaller Havan Kund.

Festivals

Bhadarva Poonam is one of the most popular festivals for visitors to the temple. An estimated 18 — 20 lakh pedesterian pilgrims visit during the festival. Have witnessed them walking along the path to the temple for days and various pop-up rest stops that serve tea, food and rest to the pilgrims are set up by devotees. The euphoria of devotees is a sight and feeling to behold, as I was fortunate enough to a couple of years ago. Devotees arrive with their dhwaj’s and are allowed to climb to the side of the Shikhar to hoist it.

51 Shaktipeeth replica

Lookalike temples of all 51 Shakti Peeth have been created right by Gabbar hills. The project took 6 years to finish and was opened for visit in 2014, allowing devotees to experience all 51 Shakti Peeths in one place.

Timings

Ambaji temple timings are as follows:

• Morning Aarti: 6–6:30 a.m.
• Darshan: 6:30–10:45 a.m.
• Rajbhog: 12–12:15 p.m.
• Atrakuth Aarti: 12:15–12:30 p.m.
• Afternoon Darshan: 12:30–4:15 p.m.
• Evening Aarti: 6:30–7 p.m.
• Evening Darshan: 7–9 p.m.

Soumya Chatterjee, writing for The News Minute:

Karthik’s website, “Return to India Kit” is a straightforward, no-frills guide, that offers returning Indians advice on everything from how and why to get an Aadhaar card to changing postal addresses from the US to India to settling loose ends with the IRS (the US tax agency) to getting OCI cards for American-born children to finding jobs in India. Along the way, it also has resources on setting up start-ups in India, transferring wealth back to India and so on.

I’ve interacted with Mani a few times on Twitter and once in person during his past Middle-east life. This is a smart, and a lovely initiative. Credible knowledge transfer is something that deserves encouragement.

Anubhuti Vishnoi, reporting for the Economic Times:

The latest avatar of the Electronic Voting Machine is called ‘M3’ and the Election Commission is looking to ramp up its production ahead of the 2019 Lok Sabha polls.

EVMs were first used in 1998 so any improvement is welcome.

On technology improvements in the M3:

The M3 comes with digital verification system coded into each machine which is necessary to establish contact between its two component units. This makes it absolutely tamper proof.

Numerous reports of EVM hacks have surfaced over the years, even leading the Supreme Court to order the Voter Verifier Paper Trail (VVPT) system in 2013.

5.5 lakh new M3 EVMs have been ordered already at a cost of Rs. 3,000 crore, to replace an estimated 9 lakh M1 machines. Approval is awaited on adding a third PSU to ramp up manufacturing:

Central Electronics Ltd in Ghaziabad could soon join Bharat Electronics Ltd (BEL) and Electronics Corporation of India, sources in the EC confirmed.

The Economic Times:

Deputy Chairman of the Supreme Court- appointed SIT on black money, Justice Arijit Pasayat, today said Rs 70,000 crore of black money has been unearthed so far and the sixth report on it will be submitted to the apex court in April.

Rupa Subramanya, writing for ORF Online:

The data for PoS show that December 2016 saw a whopping 84 percent increase in PoS as compared to the trend and January 2017 saw a big 72 percent increase above trend. Again, while it’s true there’s a drop in absolute level, such two data point analysis misses the fact that PoS is still way above the pre-demonetisation trend.

This is part of Rupa’s ongoing research into digitisation of the Indian economy overall, including as an effect of demonetization.

As I have also said before, we are still months away from the ‘final’ picture. The general expectation, and the data seems aligned with this, is the net usage pattern, once the dust well and truly settles will be a larger digitisation of the Indian economy by more than just a few percentage points.

Bank transactions such as NEFT, IMPS are seeing double digit percentage increases, the only question to be raised is how much of this is force, and how much of it preference.

She also raises causes for concern:

…admittedly anecdotal evidence suggests that after an initial adoption of digital payments methods, some smaller merchants and traders are now reverting to cash, since the liquidity crunch has largely eased. By the same token, some consumers are now reverting to cash, which is back in ATMs.

Rupa is right in suggesting that this isn’t about trying to return to a ‘black’ economy per se, but issues like “high frequency of failed transactions, network issues and high transaction costs” are certainly making cash feel more convenient. There will also be a more general pushback out of desire to return to old habits now that the ‘inconvenience’ of being forced to use digital payments is over.

BHIM is making good strides to counter this problem (17 million downloads and transactions volumes going up), but digitisation will be well and truly home once banks decide to make it easier to do so. The latest series of bank transacation charges will only put off consumers.

Until then, cash will always feel and be the ‘cheaper’ option.

Hi all, I wanted to introduce Drishti talk, our podcast covering informative discourse around topics that matter to the Indian electorate.

To this end, I invite you to please follow our publication here with a Medium account or on Twitter if you prefer. Tell us your topics of interest, or topics you have expertise on and would like a platform to share.

We think there are enough political debates — particularly shouting matches — out there, and our focus is on informing the Indian voter by puttings facts and direction in context and trying to understand real outcomes.

The general format will be free-flowing conversation (30–45 minutes long) that is both constructive and positive around the India story and hopefully sensitive topics that are lacking informative discussion.

You can listen to our podcast using:

• Apple Podcasts
• Overcast
• Pocket cast
• Follow our publication or the Drishti talk page
• our RSS feed link on your favourite podcast player

I look forward to your feedback, and thoughts on our podcasts as well as the topics we discuss. Together, we can take many steps forward. It is time.

Suranjana Roy, reporting for LiveMint:

The UIDAI filed a police complaint on 15 February against Axis Bank Ltd, business correspondent Suvidhaa Infoserve and e-sign provider eMudhra, alleging they had attempted unauthorized authentication and impersonation by illegally storing Aadhaar biometrics.

In terms of details:

The breach was noticed after one individual performed 397 biometric transactions between 14 July 2016 and 19 February 2017. Of these, 194 transactions were performed through Axis Bank, 112 through eMudhra and 91 through Suvidhaa Infoserve.

In a statement issued by the UIDAI, they said:

With reference to an incident of misuse of biometrics reported in a newspaper, UIDAI said that it is an isolated case of an employee working with a bank’s Business Correspondent’s company making an attempt to misuse his own biometrics which was detected by UIDAI internal security system and subsequently actions under the Aadhaar Act have been initiated.

It looks like an employee working within the Aadhaar framework played with the data (the UIDAI says it was his own data), and that it was UIDAI that flagged the issue and filed a criminal case against the parties involved. In technical terms, the Aadhaar database was not hacked or breached, but human access of the platform was misused. Moreover, it is the important to note that it is the UIDAI’s own systems that eventually picked up on this misuse.

But it does raise some of the larger points the opponents of Aadhaar keep highlighting — trusting any entity with data, particularly biometric data, is unsafe by definition. There is though, the point wherein a unique identity system in a country like India where benefits, subsidies and other services are rampant and untraceable, having a unique, two-step verifiable method to verify citizens’ access to schemes, and rooting out corruption has already brought about numerous benefits.

I’d love to have a more detailed debate on Aadhaar, one covering the Act, the change in its provisions in March 2016, and the larger point of making where to take Aadhaar in India — including how it is administered/delivered, privacy regulations, and more. Please comment if this is something you’d be interested in doing, and we’ll see how we can give this discussion some shape.

One final tidbit:

There has been no incident of misuse of Aadhaar biometrics leading to identity theft and financial loss during the last five years when more than 400 crore Aadhaar authentication transactions have taken place, according to Unique Identification Authority of India (UIDAI).

Notwithstanding the population of India, that is still a lot of transactions.

Indrani Bagchil, reporting for Times of India:

As a first step, India is working on what is called a “farm-to-port” project, said Amar Sinha, secretary in ministry of external affairs.

This would be something similar to a special economic zone but in the style of a corporatised farm, where crops would be grown keeping a specific UAE market in mind, with dedicated logistics infrastructure all the way to the port.

Interesting. The UAE relies heavily on import to cater to its foodstuff needs, and is also a logistics hub in the region. This would mean a ‘dedicated’ farming grounds for the UAE population — an area they are limited in due to soil conditions.

Additionally:

India and the Gulf nations, Sinha said, are coordinating their websites and databases to protect expat labour, so Indian workers travelling to the GCC countries don’t get duped by exploitative agents or employers, as has been the case in several countries, notably Saudi Arabia.

This would probably go down as a substantive reform for Indian labour in the years to come.

R Jagannathan, writing for Swarajya:

Well, my advice to both sides is chill. There is no need to garland or shoot the CSO. The higher growth number does not necessarily validate DeMo. At best, we can say that DeMo was a minor disruption compared to the bigger disruptions happening around the world. As for detractors, they will get ample opportunities to pin the slowdown blame on DeMo, since 2016–17 has anyway seen a slowdown in growth relative to the year before.

Ah, but we don’t know how to chill these days, do we? Or wait until we have enough quantifiable data to comment on something as large as demonetization, instead basing it on one statistic, either way, without establishing context.

In other words, the deceleration due to DeMo itself may be marginal, but the broader slowdown relative to the last financial year is sharper.

Another case where macro-context is important when judging what economic statistics reveal. Growth was not at the same levels this year compared to last year in any event, and even without demonetization, an expectation of downturn in overall growth was to be expected. The point is, can we attribute the entire 0.4% drop from the previous quarter to demonetization? Jagannathan postulates, and I agree, that’s a no.

The reality is that in a world of multiple disruptions there can be no normal level of growth for anybody.

In Macroeconomics 101, right up in Chapter 1, one of the earliest lessons was that concurrency of two events does not imply causality. Economics is a complex ‘sport’, convoluted enough to stump even seasoned professionals.

The above data averages show that the basic trajectory of India’s growth was probably in the 5–6 per cent range for a very long time, both pre- and post-reform. The UPA period was an aberration, and high growth was driven by extremely favourable global conditions and by harvesting the fruits of reform sown during the Atal Behari Vajpayee period.

This is good analysis, and telling when viewed through a larger spectrum (going back all the way to 1985). Our growth pattern has roughly stayed within the same bounds.

Regardless of whether you measure GDP the old way or the new, we are still to recover fully from the self-inflicted wounds of the UPA era.

Hurts.

The lessons for the Modi government are this:

One, keep plugging away at ease of doing business and reforming economic administration. Don’t obsess about the GDP growth rate, or celebrate some good numbers too soon.

Agree. Think a good GDP outcome highlights the resilience of the Indian economy — against both global headwinds and internal disruptions, including demonetization. There are positive signals, such as higher private consumption growth, or the auto industry — widely believed to be a large struggler post November — reporting higher domestic sales, and know Government collections are expected to go up via collections from both a wider tax base and the final payment of the Income Declaration Scheme 2016 come September 2017. But global conditions, and internal factors such as job slowdowns will need to be navigated.

Two, big bang and incremental growth are not opposites. When the condition is ripe, go for big bang (GST is one example); when they are not, keep pushing small doses of reform where you can.

No comment on the advice here, except that I think the Government has done this one thing absolutely right since coming to power. There is scope for deeper analysis on whether every reform was successful or not, but the fact that incremental and big bang reforms have been pursued hand in hand since May 2014 will be hard to argue against.

Three, get states into the act. The centre cannot be the driving force of the economy. Reforms must touch states, and they hold the key to faster growth.

Again, some positive moves have already happened, along with the change of revenue sharing, where they’re steadily increasing revenue sharing with states. Obviously, just the funds aren’t enough, and State initiatives that extend Central initiatives where concurrent control exists have to be strengthened and audited.

And four, forget about what is our potential rate of growth. We can only discover that by hindsight. In an unstable world, no growth outcome is likely to mirror our expectations. Economic forecasting is no better than astrology. We must negotiate growth in the fog generated by disruptive forces. This is why we got our DeMo forecasts wrong, for global disruptions are DeMo raised to the power of 10.

But if you still want a number, I would say India’s growth average will be in the 6–7 per cent range in the coming decade.

I agree with just about everything in this post, except for the prediction numbers. My range would be 7–8 per cent, starting FY2019–20; we can expect the trend to be clear by the end of FY2018–19.

Arvind Virmani, former CEA (2007–09) writes:

(1) Sales which had happened during April-October but had not been declared, brought on the books.

(2) Artificial Sales receipts created to show accumulated cash as earned income to be able to safely deposit in bank.

Evidence of (2) in entirely anecdotal at this point, so there is little to estimate really what/how much of this contributes to the growth bump. However, whether successful or not in ‘bypassing’ an Income Tax notice, the revenue is on the books and part of the formal economy now.

(3) Temporary shift of consumer demand from unorganized to organized (taxed) sector so as to able to use cheque she or digital payments based on bank saving , as unavailable.

(4) Temporary shift in production from cash strapped unorganized sector to organized/tax paying sector operating on cheque & formal credit

As Virmani himself mentions, both these factors repeating themselves will depend on how much of this shifts back to the ‘unorganized’ sector again as cash returns to the economy. While examples of this is still anecdotal as well, I expect a large number within the unorganized sector will choose to move into the organized framework, so the overall trend line will stay steady.

Additionally, the gains of demonetization starting to prop up growth via expanding the formal accounted economy is starting to show its weight in numbers.