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A word to the wise

Raghuram Rajan | Former RBI Governor and Professor of Finance at the University of Chicago

The Times of India

In this piece, Raghuram Rajan discusses some of the arguments former RBI governor Y.V. Reddy makes in his book Indian Fiscal Federalism. Reddy, says Rajan, has two important messages in his book. First, that India has been moving towards “devolving more and more functions towards the state and local government levels”– both Reddy and Rajan believe that “this is a good thing”.

The second message, says Rajan, is “about the terms of reference (TOR) of the still-deliberating 15th Finance Commission”. Reddy believes, according to Rajan, that these terms may reverse the movement towards decentralisation.

Rajan says that as would be expected, Reddy is not always critical. Reddy supports the directive in TOR that to decide tax revenue allocations to states, 2011 census population numbers be used instead of 1971 numbers. But given that this might be construed as a reward for underperforming northern states, Rajan believes that the 15th Finance Commission should listen to Reddy’s advice of adopting a “pragmatic approach” while using the population criterion.

Be soft, smart and quiet

Vikram S. Mehta | Chairman and senior fellow, Brookings India

The Indian Express

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Mehta argues that India should use its soft-power to improve US-Iran ties even though it will have to “risk an embarrassing rebuff”. He says that the US-Iran situation is currently in a “fog of uncertainty” and even a false report, a miscalculation, or simply an accident can push the region into conflict.

Any such event will adversely impact India as it imports 65 per cent of its crude oil from the region, says the author. The oil supply lines will get affected and the oil prices will increase. Also, India would have to evacuate its citizens from the region which can be “a major logistical challenge”.

He says that India is in a strong position to stop this “dangerous drift”. According to him, India possesses a rare combination of “soft”, “smart” and “quiet” power which it can leverage to stave off a crisis.

The Weakest Link
  1. Rajivlochan | Professor, Contemporary History, Panjab University, Chandigarh

The Indian Express

Rajivlochan argues that reservation has failed to achieve its objective of providing “social equality, justice and opportunity”. He says that while reservation was considered a means to ensure equitable access to scarce resources in education and employment, the continued scarcity of these resources has “unintentionally sucked out hope”.

He cites the research of Sukhadeo Thorat, Gopal Guru, and Jean Dreze to suggest that “those who use reservation to enter the portals of higher education and corresponding employment, continue to suffer from low self-esteem, and, problems of asserting themselves in public life”. He also says that reservation has created certain privileged groups which corner all benefits of it.

It’s time to act, not do more research

Philip G. Altbach | Research professor and founding director, Centre for International Higher Education at Boston College, US

Eldho Mathew | Independent higher education researcher based in New Delhi

The Hindu

In this piece, the authors argue that India spends considerable resources in commissioning reports for educational reforms instead of better utilising the same resources in implementing reforms which are obvious. They argue that India needs to increase the money it allocates to higher education.

Another challenge in Indian higher education is not only to ensure that students enroll but to also make sure that they graduate. On top of it, providing access to quality education remains a challenge.

The authors suggest that India should have a “differentiated academic system”, among other things. This means creating different sets of institutions to serve different sets of needs. For instance, some universities can be research intensive while others can focus on quality teaching.

A veneer of liberal education 

Debaditya Bhattacharya | The writer teaches literature at Kazi Nazrul University, West Bengal

The Telegraph

In this piece, the author argues that the draft National Education Policy suggests the same reforms for higher education which previous governments tried to bring in and for which they received considerable criticism.

First, he says, the draft NEP advocates a liberal arts education but for a different set of reasons than expected. The focus here, he says, will be on “courses on statistics, data analysis, or quantitative methods”.

Second, he says that the draft advocates a large-scale merger of universities and colleges across the country. He says that through this suggestion, the draft “assumes an impossible uniformity of local social conditions across institutional contexts, and predicts a doubling of student intake by quartering the number of institutions”.

Third, he says, the draft makes a case for increased public investment in education but India’s present economic reality doesn’t allow that. Thus, the suggested liberal arts departments will have to either rely on fee hikes or further contractualisation of faculty.

Lastly, he says that the government’s plan to scrap the UGC and create a “puppet regulatory authority” in its place has been suggested here as well.

Don’t drown the crisis

Anjana Menon | CEO, Content Pixies

The Economic Times

In view of Prime Minister Narendra Modi’s message for tackling the water crisis, the government must aggressively manage demand and recycle sewage water. A system of incentives and disincentives along with mass citizen participation are key, writes Menon.

More than 80 per cent of water is used for agriculture and as much as 60 per cent of irrigated farmland is fed with ground water. To address this “local governments must offer incentives, such as higher crop prices for farmers choosing crops wisely, and demonstrating water conservation in farming”, says Menon. Charging commercial rates for electricity usage by large farmers is crucial for conservation of water. Bringing water conservation under corporate social responsibility, setting household limits are some of the things needed. Households using more water than their limits must be heavily penalised. Water emergency needs to be addressed or else economic progress will evaporate.

Lower the corporate tax rate

Ajay Shah | Professor, National Institute of Public Finance and Policy

Business Standard

Shah in his column writes that in 2018, India stood at a high rate of tax  –48.3 per cent — much higher than G20 median. The right focus of tax policy in India should be based on three elements — property tax, consumption-based GST and residence based income tax. All other attempts at taxation are bad taxes. If India goes to a 20 per cent corporate tax rate, it will be better than three quarters of emerging markets and more attractive than China. Though in 2015 announcements were made on this, there has been tepid action. This July, this needs to be addressed and though there will be fiscal stress in 2019 and 2020, the gains will kick in with a lag.

A roadmap for 15th Finance Commission

Ashima Goyal | Professor, IGIDR, and Member EAC-PM

The Hindu Business Line

For successive finance commissions, as plan expenditures were prioritised under planning, the original constitutional mandate — to equalise opportunities for every citizen by ensuring uniform public services — got diluted. Past finance commissions have been reluctant in doing anything very different. And the average Indian continued to suffer from poor public services. Today as Centrally Sponsored Schemes (CSS) are being rationalised, the 15th FC has the opportunity to revert to the original, says Goyal. Incentives may be designed for capacity building. Richer states can be given a choice for opting out of CSS, conditional on outcomes being above a threshold. The dismantling of Planning Commission has created resentment among states. “An award in line with broad principles of justice, such as linking incentives to delivering constitutional responsibilities, would generate less resistance,” writes Goyal.

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