Simrit Kaur

Privatization and public enterprise reform: a suggestive action plan

Introducing reforms for the State Owned Enterprises (SOEs) has been an integral part of the reform process initiated in India since 1990s. While reforming, the concerns about ownership, competition and regulation, which have a direct bearing on the issue of the relative performance of publicly owned and privately owned firms have been adequately looked into. This paper focuses on the various modalities of reform options, such as Divestiture (whereby private ownership is inducted in publicly owned enterprises), Greenfield Privatization (whereby private sector is allowed to come and compete in areas hitherto reserved for public sector), and Cold Privatization (that is granting greater autonomy to managers of SOEs by making them sign Memorandum of Understanding) adopted by India to improve the performance of its SOEs. Specifically, the paper gives a comprehensive assessment of the disinvestment policies implemented since 1990. The paper provides a suggestive action plan to spur reforms and improve outcomes and concludes by summarizing the main findings from an overall policy perspective in the context of the Indian SOE reform programme.

Determinants of Food Security in Sub-Saharan Africa, South Asia and Latin America

The paper analyzes various correlates of food security, viz. availability, access, utilization and stability in countries of Sub-Saharan Africa, South Asia and Latin America. Econometric estimates, based on pooled data (1990–2012 for over 40 countries), indicate that while regional variations do exist, nevertheless, broad conclusions can be drawn in terms of determinants of food security. While increases in GDP per capita, as well as its growth; improvement in infrastructure, food production, and access to better drinking water reduce both undernutrition, and the depth of food deficit significantly, food inflation (as also its volatility) has a significant adverse effect on food security. Also, increase in food imports as a percentage of total merchandize exports, in general, has a negative (though non-significant) impact. Given that access to healthy food is a basic human right, steps need to be taken to build resilience of the poor. It is in this context that the paper concludes from a broad policy perspective.

National Rural Employment Guarantee Scheme and Targeted Public Distribution Scheme in Rajasthan and Madhya Pradesh: Complements or Substitutes?

The workfare scheme, the National Rural Employment Guarantee Scheme (NREGS), and the direct food subsidy programme, the Targeted Public Distribution Scheme (TPDS), represent two social safety nets instituted in India as anti-poverty measures. This paper examines whether from the point of view of individual households the two programmes are substitutes or complements, as this will shed light on the appropriateness of the design of the two programmes. Based on primary household data collected for the Indian states of Rajasthan and Madhya Pradesh (MP), we show that, in Rajasthan, a large percentage of households consider TPDS and NREGS programmes to be substitutes for each other, while in MP the households often perceive the two programmes as complements. Thus it appears that the two programmes are better designed in MP since an incentive for participation in one programme has desirable side effects on participation in the other. Correlates of participation in the two states are identified and the paper advances several policy conclusions.

Climate Change, Food Security, and Water Management in South Asia: Implications for Regional Cooperation

Abstract Global warming, climate change and greenhouse gas emissions have been the context of several deliberations since the 1992 Rio Earth Summit. Climate change is a critical issue, especially for the developing economies of South Asia. The region’s geographical dynamics, accompanied by the presence of substantial poverty, undernourished people, and food insecure population, adds to its vulnerability to climate change through a number of ways including their livelihoods, food availability, and affordability. The rivers of the region are the lifelines of the economy providing water to more than half of the world’s population. The increased occurrence of temperature extremes, altered rainfall patterns, rise in frequency of deficit monsoons, and heavy precipitation events observed in the region are the outcomes of climate change. Regretfully, these trends are projected to continue challenging the growth and development in the region, thereby necessitating cooperation among member countries. In this context, an analysis of the food and water security situation is undertaken, along with the expected impacts of climate change on the same. The article concludes by recommending policies that address public investments in agriculture, regional food stocks, and cooperation on water issues.

Combating Food Insecurity: Implications for Policy

Food insecurity is a complex problem that needs to be tackled in a meaningful, coordinated and collaborative manner. Deep reforms attacking the structural weaknesses of the global food systems need to be introduced. This paper analyses the broad economic and regulatory measures that affect food insecurity with specific focus on agricultural productivity, subsidies and safety nets, surge in biofuel demand and variations in foodgrains stocks-to-use ratio. It is important for the world community to understand that many of the shocks and stresses to which the hungry are exposed are caused by their actions and thus the need for them to participate in formulation of agenda to enhance food security. Unfortunately, the developed world and international organizations focus narrowly on production, information and mechanisms to provide food security, rather than on the broader economic and regulatory measures that affect food security, viz. an appropriate biofuel policy and the desirability of maintaining an adequate stock-to-use ratio. It is in this context, that policy recommendations are proposed.

Information, Efficiency, and Sustainability in Indian Agricultural Markets: E-Choupal, ITC's Private Initiative

Spiraling food prices and low productivity in Indian Agriculture has made food security a cause of great concern, more so in rural India (FAO, 2011; ADB, 2011; Kaur 2013; IFAD, 2011). Despite India’s good economic performance, it is home to the largest number of hungry people in the world. In the ranking of the Global Hunger Index (2013), India ranks 63rd out of 88 countries. In Madhya Pradesh alone (a state in India) more people suffer from hunger than in Ethiopia or Sudan. Needless to say, steps need to be taken at war-footing to improve agricultural productivity. With fiscal deficits already high, public investments in agriculture are not expected to pick up. In this context, private initiatives in Indian agriculture that promote productivity and embed sustainability in their business model remain important. The basic objective of the paper is to focus on an illustrative case study of setting up of internet kiosks referred to as ‘e-Choupals’. This case study empirically substantiates what economic literature has always been emphasizing, i.e. information is critical for the efficient functioning of markets (Stigler 1961; Salop and Stiglitz 1977). ‘e-Choupal’ is an innovative market-led ICT project by an Indian private sector company (ITC), which provides access to information primarily to farmers. Since e-Choupals have figured prominently in the context of transformation of agricultural systems in India, we have analyzed it as a case study. Thereafter, based on existing research the paper reviews the impact of this intervention on outcomes such as: the price of soybean received by the farmers; their subsequent plantation decisions as captured by acreage under cultivation; income of farmers; and benefits to ITC. Leveraging the power of Information, Digital Technology and the Internet ‘e-Choupal’ empowers small and marginal farmers with services related to know-how, best practices, timely and relevant weather information, and transparent discovery of prices (Anupindi and Kumar, 2006; Goyal 2010, Kumar, 2004; Meera etal., 2004; Upton, 2003; Yogisha etal, 2008). The paper discusses how the system eliminates most intermediaries and develops a virtual integration of the supply chain, thereby triggering a virtuous cycle of higher productivity, higher incomes, enlarged capacity for farmer risk management, and larger investments to enable higher quality and productivity. We believe that analyzing the role of e-Choupal as an illustrative case study is amenable to extension to other developing countries where agriculture and food security remain a cause of concern.

Privatization and Public Regulation

In many developing and developed countries, privatization through transfer of ownership from public to the private hands is considered as a cure for most of the problems faced by the public sector enterprises (PSEs.) However, policy makers tend to forget that both the systems – private and public – are imperfect. If market failure necessitates the need for government intervention, then failures associated with the government require more market friendly policies. This implies that at any point of time both systems will coexist i.e. privatization will go hand in hand. The present article attempts to discuss the modalities of privatization options and public regulation adopted by India.