Technology in a socio-political-economic perspective
The Economic and Political Weekly is a leftist magazine. I think it’s Ramachandra Guha who had likened it to The Nation published in the U.S.A. Regardless of the political orientation, its articles have a lot of data and analysis and cover society, politics and the economy.
But then, once in a while, the articles throw up a technology angle which makes up for some pleasant and interesting reading. In this post, I will cover three such articles. I don’t have the inclination and energy to paraphrase the technology references in the articles. So I give direct excerpts. English teachers & books may balk at writing by stringing a series of quotes. But this is a blog and I writing a blog post and not an essay.
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The first article is about cash transfer schemes. It’s titled “Reforming or Replacing the Public Distribution System with Cash Transfers?” Authored by Peter Svedberg, it appeared in the Feb 18, 2012 issue.
The summary states: “The targeted public distribution system, intended to provide subsidised food to poor households, is the largest welfare programme in India, with a budget corresponding to about 1% of the net national product. Several studies have found the system to be inefficient and costly in assisting the poor. This paper analyses the case for, and against, replacing a reformed version of this system with a targeted and differentiated cash transfer scheme. Such a scheme could cover about two-thirds of households, and make far larger transfers to the poorest compared to the actual subsidy embedded in the current system, eliminating the risk of large exclusion errors. Further, the overall budget can be held at the present outlay level. It is argued that most of the objections to such a transfer scheme can be circumvented at the design stage.”
Here are the excerpts: “The largest permanent GOI welfare scheme is the targeted public distribution system (TPDS), which aims at providing subsidised food to mainly poor households.
The estimated 4.6 million tonnes of TPDS grains purchased by poor households - with and without BPL or AAY ration cards - corresponds to 15.5% of the total off take of TPDS grains (29.65 million tonnes). That means for each kg of subidised grains bought by the poor, the off-take from the central pool was 6.4 kg.
That about half the TPDS grains is leaked before reaching consumers reflects inefficiency, corruption and theft on a gigantic scale.
In order to reduce leakages during transportation, computerisation of the TPDS has been introduced on a pilot basis in four states. The new techniques include GPS tracking of vehicles transporting TPDS grains, and deployment of clearly marked trucks to facilitate monitoring of routes and unloading places. To reduce diversion of grains at the retail level, easy-to-forge ration cards made of simple paper (and not always showing a photo of the holder) have increasingly been replaced by digital ration cards that are difficult to manipulate and can be used to document sales electronically.
With a CT scheme and cash channelled electronically to eligible poor households through the Aadhaar unique identification numbers (UIDs) that all Indian citizens will be issued over the next few years, according to plan, most leakages would be reduced.
That the average poor household holding a BPL or AAY ration card purchases less than half the TPDS grains allowed indicates serious dysfunctions in the system. One would expect that few households eligible for a cash transfer would abstain from collecting money. Thus, the underutilisation problem would be resolved.
Two data series reveal how remarkably little present (monthly) household income influences present consumption.
A difficult question remains: what level of authority and who should determine eligibility for CTS. The most reliable solution would be if the central authority responsibile for issuing the biometric identity cards registers the three inclusion criteria. This is obviously already in the plans for the new BPL census. The computerized enumeration for the BPL lists to be produced over the second half of 2011, will be matched to the national population register data and will also be UID compatible.
The Case against CTs: Some objections to CTS are not primarily against money transfers as such, but rather to the introduction of digitised UIDs on the ground that the registration will be misused by authorities and infringe on people’s integrity. However, if almost complete coverage of the UIDs is accomplished in a few years time, the question is why not use the then existing technology for transferring cash to poor households rather than providing subsidised food in a system that has proved extremely costly and inefficient in all its dimensions?
The most frequent argument against a CT scheme was valid till a few years back, but no longer. It was argued that in order to receive a transfer, households need not only a unique digitised identity card, but also a bank or a post office account, which about half the rural population in India lacks, according to the National Bank for Agriculture and Rural Development (NABARD). However, such accounts are no longer necessary for being able to receive cash. With modern technology, money can be transferred through ordinary mobile phones. The most successful and well-known such scheme is the Kenyan M-PESA (mobile money in Swahili), which can be used for a variety of transactions. It was started in 2007 and as of April 2011, had 14 million subscribers (more than half of the adult population). Similar schemes are under implementation in many countries, including India.
An Indian operator, Little World, has recently started a branchless micro-banking system based on biometric identification that can be used for cash disbursals of social security pensions, wages under the Mahatma Gandhi National Rural Employment Guarantee Act (NREGA), housing grants, domestic remittances by migrant labourers and a host of other services. So far the scheme covers only three million households (in 20,000 villages in 18 states), but 25,000 new accounts are opened each day.
It is hard to believe that India with its world-class software industry, will not be able to find the technical solutions required for distributing cash electronically to poor households in a CT scheme. In a few years time, it seems that almost every adult Indian will possess a mobile phone. As of September 2011, the total number of wireless subscribers has reached 874 million, reflecting a 25% increase over one year, according to the Telecom Regulatory Authority of India’s latest Indian Telecom Services Performance Indicators from 9 January 2012. For Indian households not possessing a mobile phone, the incentive to buy one would be strong for those found eligible for a cash transfer.”
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The second article deals with agriculture. It’s titled “Agricultural Policy Strategy, Instruments and Implementation: A Review and the Road Ahead”. Authored by Bhupat M. Desai, Errol D’Souza, John W Mellor, Vijay Paul Sharma, and Prabhakar Tamboli, it appeared in the December 31, 2011 issue.
The summary states: “For 40 years, India’s agricultural growth rate has averaged less than one-third of the government’s modest target of 4%. The sector’s performance has been about the same before and after the economic reforms in the early 1990s. The reforms that brought a dramatic acceleration of growth in urban sectors have essentially had no effect on agriculture. Slow agricultural growth has had ill-effects on food security, food price inflation and poverty reduction because of the inadequate level and composition of public expenditure. Agricultural education, research, extension and a wide range of ancillary public institutions have also suffered. Agricultural growth always demands massive public goods provision and that in turn requires a radical reorientation of central, state and district government activities. This paper advocates a new integrated, technology-led strategy to pull out of, what looks like, a vicious circle that agriculture is now caught in.”
Here are the excerpts: “Policy planners recognised the need for higher agricultural growth, but they placed too much faith in the reforms and not enough emphasis on critical policy changes. More specifically, policy neglected basic institutions such as the Indian Council of Agricultural Research (ICAR), state agricultural universities (SAUS) and departments of agriculture in the central and state governments. It relied on the market to evolve and transfer relevant technologies rather than getting it being done through institutions that governments had arduously built over the earlier decades.
The major consequences for this have been the following.
The concept of growth in agricultural production has not moved from diversifying crop patterns to favouring high-value crops.
Poor planning has affected the evolution as well as transfer of genetically modified Bt cotton technology to rain-fed and irrigated areas.
Institutional components at the agronomic, biological, chemical, mechanical and grass roots levels, which are complementary to the engineering component in watershed development, have been neglected in rain-fed and other areas.
The supply of formal agricultural credit in such areas has preceded technical change instead of accompanying it.
There has been inadequate attention paid to post-harvest and storage technology.
The Rashtriya Krishi Vikas Yojana of the Eleventh Five-Year Plan seems to be like the erstwhile Intensive Agriculture District Programme rather than a plan involving high-yielding varieties (HYVS) to deliver better farm growth.
Role of Agricultural Growth
Conventionally, agriculture is viewed as a source of food and raw material for the economy and its people so that they can overcome poverty. This is unquestionable. But it is a narrow vision because agricultural growth is a means to the larger goals of employment-led growth and poverty reduction. Such a larger vision of agricultural growth serves economic welfare while the economic view serves just welfare. These studies provide an understanding of the dominant role technology-led farm growth has in reducing poverty through its direct impact on real wage rates and indirect impact on increased employment.
The absence of accelerated, technology-led agricultural growth has remained a binding constraint on economic growth and poverty alleviation.
Options for Continuous Technical Change
The three options for continuous technical change in the agricultural sector are it being seed-centred (as in the green revolution); resource-centered (as with new technology for dry/rain-fed farming); or seed/breed-cum-resource-centred (as in an integrated farming system).
The third option is preferable for five reasons
(1) Land productivity growth of field crops, livestock, and horticulture has decelerated in the reforms era.
(2) It has the potential to satisfy agriculture’s inherent complementary nature of farm inputs, resources and institutional components.
(3) When this complementary nature is achieved, technical change is economically efficient, which means the production response is larger than the sum of effects of such input and resource used singly.
(4) Such technical change facilitates land and labour augmentation that is suitable to small-scale agriculture.
(5) Being embodied in innovations related to new biological, chemical, mechanical and natural resources and inputs, besides collective actions, it has better potential for sustainability.
Instrument of Public Expenditure for Agriculture
The rationale for an increase in public expenditure is rooted in the inability of governments in the reforms period to bring about technical changes in agriculture and achieve higher agricultural growth.
The public expenditure for technology-led agricultural growth must accord higher priority to
* Agricultural research, education and extension.
* Irrigation and flood control.
* Soil and water conservation and harvesting on a watershed basis.
* Rural infrastructure such as soil-testing laboratories, roads, electricity, regulated markets, Amul-type cooperatives for perishables, rural financial institutions and employment guarantee schemes that concentrate on building community assets that directly contribute to agricultural growth.
Public expenditure for technology-led agricultural growth is far more desirable as such growth drives down poverty besides encouraging its linkages with non-agricultural growth and hence higher overall growth.
Implementation of Continuous Technical Change
The implementation of technical change in agriculture requires a multi-institutional model of organisation and management. The model of single institution is not enough given the size, diversity and complexity of the agricultural sector.
Concluding observations
The rapid growth of urban-based sectors during the reforms area has failed to accelerate agricultural growth or reduce poverty. This has been mainly because of inadequacies in providing the critical public goods on which farm growth thrives. Overcoming these inadequacies would facilitate achieving huge multiplier effects. For instance, raising farm incomes could mean more demand for services from the employment-intensive, non-tradable, rural non-farm sector. This, together with higher agricultural growth, would improved the rate of poverty line.
Since India’s agriculture is land scarce and labour surplus, its growth requires augmenting land and labour using new technology. Such technology could be seed-centred, resource-centred or seed/bred-cum-resource-centred; the last being an integrated farm system. Agricultural policy in the reforms area has neglected all these options. This study advocates a location-specific new technology based on integrated farming. Such technology will bring down the unit cost in real terms, which will most benefit the poor. This was the case with the green revolution though it was only a seed-centred new technology.”
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The third article is about the health sector. It’s titled “In Pursuit of an Effective UHC - Perspectives Lacking Innovation”. Authored by Padmanabh M Reddy, it appeared in the February 25, 2012 issue.
The summary states: “There are certain bold directions outlined by the High Level Expert Group in its recommendation, which, if acted on, will have a great impact on the health status of the population. The key as always is in implementation, which has not been clearly spelt out.”
Here are the excerpts: “Prime Minister Manmohan Singh declared in his Independence Day address on 15 August 2011 that health would be accorded the highest priority in the Twelfth Five-Year Plan which would become operational in April 2012. In this, there is an expression of intent that the government will increase public spending on health to 2.5% of India’s GDP.
The need for country-specific technology from a viewpoint of cost, quality and efficacy is completely absent in the report. The use of medical technology of the western world at currently applicable costs will make medical care phenomenally expensive. We need to have technology which is relevant and serves the purpose in an objective manner, and costs need to be much lower than in the western world models. High-end gadgets with complicated mechanisms of handling may also not serve the purpose because we do not have the kind of quality power required to drive these sensitive equipment or biomedical engineers who can service them, leave alone professionals like nurses and paramedical staff who will be capable of handling those gadgets. Now, even the western world is looking for technology from the emerging markets that is cost-effective.
The dream of reducing out-of-pocket spending health from around 67% today to around 33% by 2022 is a goal worth striving for. India is one among the developing countries where households spend a disproportionate share of their consumption expenditure on healthcare, with the government’s contribution being minimal.
In the information technology (IT) era, synergies can materialise through tele-medicine, area-specific disease mapping, dissemination of health-related education, and by harnessing the medical database of the population. IT does have a great potential to improve the quality, safety, and efficiency of healthcare delivery.
Low cost technology in medical industry should be encouraged; this will indirectly have an impact on tertiary care costs where technology costs are high.”
Images Courtesy
Image 1 : JPicJones
Image 2 : fotosearch.com
Image 3 : swanksalot (Seth Anderson)