Productivity
 
The historical roots of India’s booming service economy
Stephen Broadberry , Bishnupriya Gupta
Posted on: 13 Jan 2017
Tags:   services , UK

India stands out from other emerging economies because its growth has been led by the service sector rather than labour-intensive manufactures. This column summarises recent research showing that India has a long history of strength in services, and its service-led development may play to historical strengths rather than hindering its progress.
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The hidden productivity benefits of energy-saving technology: Evidence from LEDs in Indian factories
Achyuta Adhvaryu , Namrata Kala , Anant Nyshadham
Posted on: 03 Oct 2016

Energy-efficient technologies are an increasingly relevant policy priority, given growing consensus on the need to tackle climate change. This column examines the productivity benefits of adopting one such technology – LED lighting – for manufacturing firms in India. It finds that improved productivity resulting from LED lighting’s lower heat emissions makes adopting such technology far less costly than previous anticipated, particularly for labour-intensive firms in hot climates.
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Analysing worker responses to a contract change
Rajshri Jayaraman , Debraj Ray
Posted on: 08 Aug 2016

Higher-powered incentives are generally believed to increase worker productivity. In the context of an Indian tea plantation, this column examines a contract change wherein baseline wages were increased and incentive piece rates were lowered or kept unchanged. It finds that output increased by 20-80% in the following month but fell to original levels thereafter. Possible explanations for the observed impact are explored.
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Land and financial misallocation in India
Gilles Duranton , Ejaz Ghani , Arti Grover Goswami , William Kerr
Posted on: 20 Jul 2016

Optimising the allocation of factors of production – land, capital and labour - improves productivity. In India, where evidence suggests land is severely misallocated to inefficient manufacturing firms, access to financing is disproportionately tied to access to land. This column examines the link between the misallocation of land and access to capital through financial markets. A very strong positive correlation emerges between the two, consistent with the fact that land and buildings can provide strong collateral support for accessing finance from the credit market.
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Promoting the use of a novel water-saving agricultural technology among Indian farmers
Anil Bhargava , Kajal Gulati , Travis J. Lybbert , Nicholas Magnan , David J. Spielman
Posted on: 28 Apr 2015

The Met Department has forecasted a below-normal monsoon in India this year. This column analyses the demand for a water-saving agricultural technology — laser land levelling — among farmers in Uttar Pradesh. It also discusses how such information can feed into the design of a novel approach to combining public subsidies with private service provision to encourage the technology’s uptake among small-scale, resource-poor farmers.
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How serious are India’s manufacturing skill gaps?
Aashish Mehta
Posted on: 13 Apr 2015

It is widely believed that skill gaps are constraining Indian manufacturing, and closing these gaps has become a national priority. This column argues that the public debate on India’s skill gaps rests on weak conceptual foundations. While some industries do suffer from real skill gaps, others are constrained by commercial difficulties that may be better addressed through policies other than skill development programmes.
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Does affirmative action reduce productivity? The case of Indian Railways
Ashwini Deshpande , Thomas Weisskopf
Posted on: 21 Jan 2015

Critics of job reservations argue that such policies have an adverse effect on work efficiency and productivity. This column analyses the effect of job reservations in the Indian Railways – the world’s largest employer subject to affirmative action. It finds that having a larger proportion of lower-caste employees is not associated with lower productivity; in top-tier jobs, in some cases, it is actually associated with higher productivity.
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Building state capacity for better programme implementation: Lessons from the Andhra Pradesh Smartcard Programme
Karthik Muralidharan , Paul Niehaus , Sandip Sukhtankar
Posted on: 03 Dec 2014

Biometric payment systems are posited to reduce leakages in public welfare programmes but there is limited evidence on their effectiveness. This column presents evidence on the impact of the Andhra Pradesh Smartcard Programme on MNREGS and Social Security Pension beneficiaries, based on a large-scale randomised controlled trial. It finds substantial economic benefits, and concludes that using biometric payment infrastructure to deliver welfare payments can be a game changer for governance in India.
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Reconstructing facts in Bt cotton: Why scepticism fails
Ronald Herring
Posted on: 02 Jun 2014

In disputes around Bt cotton, a “triumph narrative” is alleged to have emerged from researchers - mainly economists - catering to vested interests of the biotech industry, its funding and allied journals promoting biotechnology. This column explains why the ‘conspiracy theory’ fails, and then illustrates why the main claims of the peer-reviewed literature demonstrating agro-economic success of Bt cotton are consistent with the near universal adoption of the technology by farmers in India.
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Reversing premature de-industrialisation in India
Amrit Amirapu , Arvind Subramanian
Posted on: 26 May 2014

In countries across the world, de-industrialisation is taking place earlier in the development process. This column analyses how India fares in this regard. It finds that for most Indian states, the share of manufacturing in GDP peaked in the 90s, at levels far lower than comparable Asian countries, and began declining thereafter. Reversing this process is not going to be easy.
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