The Hindu | The risk of small States’ heavy reliance on the Union government

The fiscal situation of India’s States has garnered significant attention in recent times. Despite ample data on State finances, most of the analysis is centred around larger States. There needs to be more discussion on the fiscal position of small States (i.e. States with a population of less than 1 crore). Most of these small States have distinctive characteristics that limit revenue mobilisation. Recognising these disabilities, the Constitution has provided mechanisms to address them. But these States continue to rely heavily on the Union government for revenue. This dependence creates vulnerabilities for the States as well as the Union. Read the full article here.

The Wire | Compensation for Accident Victims Isn’t a ‘Favour’ – and the State Must Be More Accountable

The death of our fellow citizens by accident is a matter of routine. Turning the daily newspaper to the city pages inevitably brings news of deaths from accidents of various kinds – a stray bike rider here, a lone bicyclist there, two people sleeping on the pavement, and so on. Every so often, reports of accidents that have a higher count of casualties make it to the front pages, sometimes as the lead story. These describe a bus falling into a gorge or catching fire, a train smashing into another, and on occasion, a boat overturning. Other forms of accidents – bridge or building collapses, stampedes, fires and such – are rarer, but still feature multiple times a year. In India, there is no end to the news of accidental death. Read the full article here.

Mint | Swish expressways must go with public education on using them

On 19 June, Navroze Contractor was riding back home as usual with his motorcycle group on a service road of Hosur Road (National Highway 44). The 80-year old fellow Bangalorean was a highly regarded filmmaker, photographer, music maven and motorcycle enthusiast. A champion of road safety, he was killed when three drunken motorcyclists riding at high speed on the wrong side of the road crashed into him. The staggering irony compounds the tragedy of lives lost as a result of wrongdoings that are, paradoxically, both avoidable and normalized. Erosion of norms is the fastest way to anarchy. Road safety in India will get worse unless they are addressed now. Read the full article here.

Telangana Today | Technology is the new glue

The Indo-US Joint Statement of 22 June 2023 makes it abundantly clear that technology is the new glue that will bind India-US relations for some time to come. It spans five of the six broad themes – defence, clean energy, economy, health, and technology itself. The last theme is a purely geopolitical one ie, strategic convergence. Whether this translates into opportunities for Indian investors and startups will remain a function of the confidence the Indian authorities can generate in the market in both countries. However, this is not the sole responsibility of the authorities – investors and startups too need to take the plunge if they want a share of the pie. Let us look at the opportunities emerging from this Joint Statement. Read the full article here.

Moneycontrol | India mustn’t miss this chance to supercharge its electronic goods industry

India is caught up in a quarrel over tariffs on information and communication technology (ICT) goods. The EU filed a WTO dispute that India has applied tariffs up to 20 percent on certain ICT goods, such as mobile phones and accessories, which is against the Information Technology Agreement-1 (ITA-1), to which India is a signatory. Signatories to ITA-1 are obliged to levy a maximum tariff of zero percent on a set of pre-agreed ICT goods. India claims that the goods on which it levies a tariff are not covered under ITA-1. Besides the EU, Japan and Taiwan also filed similar cases against India. The WTO has ruled against India in all three disputes. Read the full article here.

Times of India | Swades sans sacrifice: How to rethink IIT brain drain puzzle

A new NBER working paper by Prithwiraj Choudhury et. al finds that among the top 1,000 scorers on the IIT-JEE 2010, 36% have migrated abroad. Moreover, of the top 100, as many as 62 have migrated abroad. The better a person’s IIT-JEE rank, the higher the chances they have already bid adieu to India. This paper sparked another conversation on the decades-old problem called ‘brain drain’. So, how do we think about highly skilled emigration from India circa 2023? Read the full article here.

Mint | Our PLI schemes are in need of a coherent trade policy

The recent spat between former Reserve Bank of India governor Raghuram Rajan and electronics and information technology minister Ashwini Vaishnaw over the former’s criticism of the production-linked incentive (PLI) scheme for semiconductors and other manufacturing sectors is part of an ongoing debate on India’s manufacturing policies. Rajan argues that PLI schemes alone do not add value to electronics and semiconductors, even though value addition is a key objective of the ministry’s 2022 vision document. It aims to increase India’s electronics exports to $300 billion by 2025-26 from $25.3 billion in 2022-23, and deepen integration with global value chains (GVCs). Read the full article here.

Mint | Free public transport for women could well transform Karnataka

The Siddaramaiah-Shivakumar government’s move to provide free basic public bus services to women could be a game changer for Karnataka’s development, if it follows up to make the investments necessary to make the policy a success over the medium-term. The economic case for subsidized transport is that it has positive externalities—for growth, environment and social development—that are massive in the Indian context, and thus private players alone will not sufficiently provide. Sure, conditional cash transfers might have been a more efficient way to deliver this subsidy, but a policy that is politically feasible and empirically effective is far better than one that is merely elegant. Read the full article here.

MoneyControl | Government overreach in digital economy could end up with no commensurate benefit and serious distortions

History, it seems, tends to move in full circles. “Be Indian, Buy Indian”, a popular slogan from the bygone era has changed to “Vocal for Local”. Deliberate incursions by the government into the market, especially into the digital economy, are reminiscent of old Nehruvian socialist objectives despite all the blame Nehru gets for India’s economic problems. The government’s intervention into payment via the Unified Payments Interface (or UPI) was justified on the grounds that it is a public good (it isn’t) and that lowering transaction costs can benefit everybody (it can). But the justifications grow thinner when we consider other government run or backed enterprises in the digital economy, such as the Government e-Marketplace (GeM) (facilitate government procurement), mSeva app store (indigenous mobile app store), and the Open Network for Digital Commerce (ONDC) among others. Read the full article here.

Deccan Herald | Free bus travel is not a silver bullet

As temperatures cool down and the monsoon sets in, on the governance front it is raining schemes. The Karnataka government, as part of its five promises programme has announced free bus travel to all women in the state. Expectedly, this announcement has received reactions ranging from criticism that it encourages ‘freebie culture’ to being hailed as ‘revolutionary’. The truth lies somewhere in between. Free bus travel is a welcome step, and will move the needle on women’s mobility. But for this to have a meaningful impact in the long term, the government needs to bring back the focus on economic growth with employment opportunities for women. Read the full article here.

Mint | NCERT’s curriculum for science needs to be ‘rationalized’ again

India, unlike Western and Middle Eastern societies, does not have a doctrinal problem with science. There is no holy book, word of god or scripture whose literality must be defended against new discoveries. I can understand why religious conservatives in the United States challenge modern biology and the evolutionary science it is based on, for it directly contradicts their article of faith. Darwin does not pose such a fundamental threat to religious conservatives of Indic faiths—the story of the origin of the earth and of humans is not a major concern. In fact, there are many different versions of the origin story, none of which are central to the practice of one’s faith, none of which matter to the conduct of daily life, and none of which get in the way of one’s pursuit of knowledge. Read the full article here.

Money Control | Rs 2,000 Note Withdrawal: No demonetisation redux but RBI could have done it better

Like a nightmare resulting from a traumatic experience for a person suffering from PTSD, demonetisation came back to haunt the collective consciousness of this country when the Reserve Bank of India (RBI) decided to recall the 2000 rupee note. Sure, there is an element of exaggeration in the previous statement, but the 2016 demonetisation weighs so heavily on the shared experience of the population that a move by the central bank to recall notes inevitably triggers memories of that episode.

Read more here.

Moneycontrol | The missing piece in the National Logistics Policy is supply chain financing

India’s logistics industry is poised for a brighter future, thanks to the National Logistics Policy launched in September last year. The policy promises to upgrade the physical and digital infrastructure of the logistics sector and improve service efficiency. However, there is a missing piece in the puzzle that could make all the difference for businesses: the financial infrastructure.

Read the full article here.

Deccan Herald | ONDC should exercise its gatekeeping privileges to a minimum

The Open Network for Digital Commerce (ONDC) claims to be an inclusive ecosystem for e-commerce, attempting to break down the moats created by the dominant platforms. However, recent comments by the CEO of the ONDC and the commerce minister's hint at the ONDC playing an assertive gatekeeping role in evaluating the performance of network participants and removing companies that don’t onboard their leading platforms to the network. Such actions would be counterproductive. Transparency and accountability must be built into the structure and operating procedures of the ONDC to ensure that it lives up to its potential of an inclusive networked marketplace.

Read the full article here.

Money Control | Labour Law Reforms: Tamil Nadu reversing flexible work shifts is lost opportunity for business, workers, jobseekers

Undertaking reforms in India is hard. We have often seen this story play out – a desperately required structural reform is introduced, a powerful minority of interest groups vehemently protest the reform, and the government buckles under pressure and rolls back on the reform. This is how the farm laws saga panned out, for instance, and is now repeating with labour law reforms in Tamil Nadu.

Read more here.

What the milk shortage saga tells us about letting government control prices

The milk supply chain has been in trouble in several states over the last few months. Industry leaders expect shortages and price hikes to continue until winter. Besides making your next cup of filter kaapi or chai hard on the pocket, this situation reveals a lot about the consequences of government intervention and price distortions.

E-pharmacy regulation needs nuanced policies

Candlemakers and other people involved in the lighting industry in France petitioned the government to protect them from the unfair competition imposed by the sun, wrote Frederic Bastiat in 1845. Bastiat’s sarcastic observation highlighted the tendency of incumbent businesses to turn to the government for protection from competition.

Fiscal Priorities for Sikkim

In a recent speech, Chief Minister of Sikkim, Prem Singh Tamang (Golay) announced the integration of more developmental projects in the upcoming budget. The successful execution of public projects and the effective implementation of government policies are contingent on the state's healthy fiscal situation. As the Sikkim Government prepares to present the budget, here is a look at the state's financial situation.

Mint | The entry of foreign firms should herald more legal sector reforms

In a surprise move, the Bar Council of India (BCI) has taken a reformatory step towards allowing foreign lawyers and foreign law firms to practise and set up offices in India. This comes after multiple rounds of litigation before various high courts and the Supreme Court of India, where the BCI and several bar associations had opposed the move.

A look at the fiscal health of Goa

Goa Chief Minister has announced that the upcoming  state budget will be "futuristic & realistic" and has hinted at focused attention to specific sectors. The successful implementation of various budgetary proposals depends on the state's fiscal health - the ability of the state to mobilise enough revenues and spend it efficiently. Thus, it is imperative to look at the fiscal performance of Goa. This article attempts to analyse the state's fiscal concerns and seeks to figure out solutions.