EPW Readings

1- Accessing Institutional Finance: A Demand Side Story for Rural India

Under the Reserve Bank of India’s “financial inclusion” campaign, the provision of institutional finance has been progressing at differential rates across the country. However, when we pair administrative banking data on availability of bank branches in a state with the All India Debt and Investment Survey (2002-03) capturing both institutional and non-institutional borrowing by households, we find that states with the most access to institutional finance, or supply, are not necessarily the ones with the most demand for finance. Looking at household level data within each state we identify determinants of institutional borrowing, and some of the strongest predictors for accessing institutional finance. A number of empirical regularities emerge in terms of the importance of having assets like land for borrowing, which undermines the basic philosophy of financial inclusion.

2- Crop Insurance in India : Scope for Improvement

The National Agricultural Insurance Scheme is vital for providing insurance cover to farmers, across regions, across seasons and across crops. This paper comprehensively reviews the NAIS and suggests changes to make it more effective. The paper is based on a detailed analysis of exhaustive data for 11 crop seasons, covering the rabi season of 1999-2000 onwards up to the same in 2004-05. Field investigations were also conducted in Haryana, Rajasthan, Andhra Pradesh, Madhya Pradesh and Gujarat to assess the response of farmers, bankers and other stakeholders. The authors also rely on discussions with knowledgeable persons like government functionaries from the department of agriculture, bankers, academicians and farmer representatives in Nagpur, Jaipur and Hyderabad.

3- Case for Caste-based : Quotas in Higher Education

The roots of discrimination in India go so deep that social and economic disparities are deeply intertwined, although in increasingly complex ways. We still need reservations for different groups in higher education, not because they are the perfect instruments to rectify long-standing discrimination, but because they are the most workable method to move in this direction. The nature of Indian society ensures that without such measures, social discrimination and exclusion will only persist and be strengthened.

4- Can We De-Stigmatise Reservations in India?

The “politics of recognition” that Other Backward Classes have set into motion has its own set of terms and dynamics that contrast well with that of the dalits’ political discourse. The politics of obcs have now brought into the public domain issues that are likely to change the very terms of discourse in which the debate on reservations was pursued for the last three decades. The obc discourse on reservations has de-stigmatised policy; obcs have also articulated their demands beyond community concerns by bringing up issues related to regionalism and linguistic assertion. These can influence the very grounds on which public institutions, policy and political processes have, so far, been perceived and pursued in Indian politics.

5- Caste, Politics and Public Good Distribution in India: Evidence from NREGS in Andhra Pradesh

This paper attempts to measure the effect of castereservation policies on the provision of public goods and services in gram panchayats in Andhra Pradesh using data from the National Rural Employment Guarantee Scheme. The investigation finds that the effect of reservation varies tremendously in different social, political, and institutional contexts, shedding light on the conflicting results of similar studies. It provides important lessons for future research and policy about the caste-political conditions in which reservation can produce positive or perverse results.

6- Understanding the Andhra : Crop Holiday Movement
Why would farmers keep their own land fallow as part of a voluntary “crop holiday protest movement” in a part of Andhra Pradesh is a question that has puzzled many. A field visit to the Konaseema region reveals that the dynamics of class contradictions in the area are also responsible for the nature of the movement that goes beyond the issue of remunerative prices.

7- Developmental Crisis and Dialectics of Protest Politics : Presenting the Absent and Absenting the Present

There is not just a crisis of development today, but also a crisis of ideas for emancipatory forms of development. What is needed from progressives is a rigorous theory that must acknowledge what is present (class exploitation, imperialism, national and social oppression, profit-driven ecological destruction, gross commercialisation of all spheres of human life including  culture and social relations) but also what is absent (collective democratic control over our lives, our planet, our bodies, our destiny, our culture). That should be the start of the process of bringing about fundamental changes in the status quo.

8- Building a Creative Freedom : J C Kumarappa and His Economic Philosophy

Joseph Cornelius Kumarappa (1892-1960) was a pioneering economic philosopher and architect of the Gandhian rural economics programme. Largely forgotten today, Kumarappa’s life-work constitutes a large body of writings and a rich record of public service, both of profound significance. A critical intellectual engagement with his life-work can shed new light on some of the most fundamental constituents of the human economic predicament, and also contribute to a more nuanced understanding of one of the most fecund periods in modern Indian history.

9- Diary of a Moneylender

Debates about the role of the moneylender in the rural credit scenario tackle two conflicting images. One sees the moneylender as a resilient entity calling for his future involvement in the process of rural development, and the other sees him as an exploiter to be slowly weeded out. To get a more nuanced account of his role, a diary kept by a moneylender operating in a village in the Anantapur district of Andhra Pradesh is analysed here. Even a cursory reading of this diary gives rich details on the scale and importance of the transactions carried out by the moneylender. Through this diary, formal lending agencies, be they banks or microfinance institutions, which have plans to supplant the moneylender will gain rich insights into the role played by this ubiquitous entity.

10- Critique of the Common Service Centre Scheme

The Common Service Centre scheme aims to establish nearly three lakh rural internet kiosks across India. A recent evaluation study, however, found poor demand among users and delayed roll-out of government-to consumer services, causing losses and attrition among private operators of the scheme. There is space, therefore, for greater engineering of public good outcomes by tying financial incentives to computer education goals.

Ten Issues - 17

1- Why Zappos Offers New Hires $2,000 to Quit : The policy of providing a let-out after one week has gained worldwide attention. Columnist Keith McFarland explains why it makes sense.

2- Who Was Milton Friedman?: Keynesianism was a great reformation of economic thought. It was followed, inevitably, by a counter-reformation. A number of economists played important roles in the great revival of classical economics between 1950 and 2000, but none was as influential as Milton Friedman.

3- End Financial Control of European Governance : In developing countries and now in Europe, government debt allows creditors to exercise undue power over decision making. The Euro crisis is clear evidence that we need to break out of the economic straitjacket imposed by an over-powerful financial sector, says Susan George in an interview with Nick Buxton.

4- Who needs a bank? : Should we make banks better, or just make them redundant? Peer-to-peer currency schemes like bitcoin.org offer the possibility of networked money without banks. Should democrats embrace the possibilities?

5- Free Enterprise Vs. Regulation : Raghuram Rajan had seen the impact of over-regulation in an underachieving economy. Years later, he also saw the perils of under-regulation as championed during the Alan Greenspan era. The Eric J. Gleacher, Professor of Finance at the Booth School of Business discusses the question of achieving the right mix of free enterprise and sensible regulation

6- Too much information : How to cope with data overload

7- Good Ideas and Great Ideas : A worthy idea needs to be nurtured and developed, rethought and reworked, often thrown away and picked back up again. There’s a substantive difference between a passing fancy and groundbreaking concept. It is our approach to ideas that makes that difference.

8- Johann Hari: How to survive the age of distraction - As in the book The Lost Art of Reading – Why Books Matter in a Distracted Time, the critic David Ulin puts it: "Reading is an act of resistance in a landscape of distraction.... It requires us to pace ourselves. It returns us to a reckoning with time. In the midst of a book, we have no choice but to be patient, to take each thing in its moment, to let the narrative prevail. We regain the world by withdrawing from it just a little, by stepping back from the noise."

9- 5 Principles of Creativity : So to compete in today’s marketplace, you have to be able to create. That’s much different than just working faster or harder or longer. The good news is that, while we can’t all be a Picasso or a Mozart, there are some simple principles we can follow that will enhance our ability originate ideas that are truly new and important.

10 - The game theory of discovery and the birth of the free-gap : Too many things to choose from, more every day. No efficient way to alert the world about your service, your music, your book. How about giving it away to help the idea spread?

Ten Issues - 15

1- Why Pandits aren't returning to roots ? : The Pandits, though, will tell you another story: of murders and village loudspeakers issuing threats. Jagmohan is rarely the central figure that Kashmiri Muslim makes him out to be.

2-Will Pakistanis put their national interest first? by Harini Calamur :If there is any country in the world that is a poster child for dictatorship, it is Pakistan. Over the last two and half decades at least, Pakistan seems to have been more stable and more prosperous under its military dictators than its “democratically” elected leaders.

3- Islamic Banking System: Threats and Opportunities --- The Islamic banking system is an important component of Islamic finance. Islamic finance has unique features because its foundation is laid on the principles and rules of Islamic law (sharia), which states that everything is owned by Allah and man has only been permitted to use it.

4- The predicament of the Islamic Republic by Hamid Dabashi. Green Movement's focus on civil rights voids it of the appeal needed to spark an Arab Spring-like revolution. Author is Hagop Kevorkian Professor of Iranian Studies and Comparative Literature at Columbia University.

5- Argentine Free Book Movement woos readers : In Buenos Aires, the 'City of Books', a novel idea sees books left in public places for readers to pick up and enjoy.

6- A Critique of Reporting on the Middle East by Nir Rosen : Too often consumers of mainstream media are victims of a fraud. You think you can trust the articles you read, why wouldn’t you, you think you can sift through the ideological bias and just get the facts.

7- The Insularity of American Literature: Philip Roth Didn't Deserve the Booker International Prize : "There is powerful literature in all big cultures, but you can't get away from the fact that Europe still is the center of the literary world...not the United States," Horace Engdahl, permanent secretary of the Nobel Prize jury, recently said. "The US is too isolated, too insular. They don't translate enough and don't really participate in the big dialogue of literature...That ignorance is restraining."

8- The UID Project and Welfare Schemes : This article documents and then examines the various benefits that, it is claimed, will flow from linking the Unique Identity number with the public distribution system and the National Rural Employment Guarantee Scheme. It filters the unfounded claims, which arise from a poor understanding of how the PDS and NREGS function, from the genuine ones. On the latter, there are several demanding conditions that need to be met in order to reap marginal benefits. A hasty linking of the PDS/NREGA with the UID can be very disruptive. Therefore, other cheaper technological innovations currently in use in some parts of the country to fix existing loopholes in a less disruptive manner are explored.

9- Uttar Pradesh to set up 2000+ mandis : The Mayawati government proposes to reduce the distance that farmers must travel to take their produce to market to an average of seven kms. This should help farming families boost their incomes, writes Devinder Sharma.

10- Revolution U by TINA ROSENBERG : The Serbian capital is home to the Center for Applied NonViolent Action and Strategies, or CANVAS, an organization run by young Serbs who had cut their teeth in the late 1990s student uprising against Slobodan Milosevic. Author throws light on what Egypt learns from the students who overthrew Milosevic.

Thought of the Day : Economist Paul Krugman once remarked: If [George W.] Bush said that the world was flat, the headline on the news analysis would read 'Shape of Earth: Views Differ'. It was a pithy summary of how news organizations are now so obsessed with the idea of "balance" they will give both sides of any argument equal coverage, even if one side is plainly absurd.