Rethinking Pollution?

The national capital of India is again in news due to pollution. Walking in the streets of Delhi can be more lethal than smoking 50 cigarettes a day. The major reason told to us for this pollution is the stubble burning by the farmers of Punjab and Haryana. This shows the weakness of India’s domestic laws, where a state government cannot do much about the pollution coming from another state.

However, the issue of stubble burning is not new, this occurs every year. Despite various attempts of governments, such as extreme one to arrest the farmers, there is no escape from the issue. Perhaps, because governments’ all the attempts were loose, keeping in mind that farmers are also helpless. Here both, state and the citizens, are helpless.  Why not to test the third important pillar— markets.

Policy making is more like testing when a policy is being introduced no one could be sure that it will absolutely be beneficial. In the countries like India this is easily seen. The odd-even analogy of Delhi Government, where all the citizens were told to drive the cars with “odd number” on the odd dates, and “even number” on even dates. The rationale behind the odd-even was that it could reduce the pollution in Delhi by 50 percent, although the study by The University of Chicago reveled that it indeed reduced pollution but only by the 15 percent last year.

The irony here is that the major polluters in Delhi are the farmers of nearby states, not the vehicles, but the government cannot do much in resolving this crisis through any legislation or policy. Hence, they are trying to put the entire focus on the pollution generating from vehicles.

Such schemes can be a temporary relief, if we look at the mentioned study, it says that odd-even just reduced very little pollution. The policy framework was bit effective, but that is not the policy what is only required. India need a market oriented approach to solve this issue of pollution, for instance it should make strong legislation which penalize the polluter and give subsidy to the victim. In case of Delhi, the farmers of Punjab and Haryana are the polluters.

How should they penalize? Perhaps not through arresting them! But fining the panchayats (the village governments) for neglecting and letting farmers burn the stubble. The subsidies should also be given to them for purchasing the machinery for cutting the stubble.

It is not only harmful for the residents, but for farmers itself. So here the farmers are also the victims. In India average income of farmers is quite low, where they cannot afford purchasing these heavy machinery for this purpose. The administration must consider an approach of providing the machines on rent. This will help the farmers and will reduce the pollution also. However, it will be difficult. The second option, and the most effective one, if the government purchase the stubble from the farmers.

These stubble can be good for making bags and other things.

The Revolutionary Development Economists

I was sleeping in the evening today, and when I woke up, at 5:45 pm, I saw my mobile phone. There was a news notification where I could only see a picture of Prof. Abhijit Banerjee. I searched for my specs and put them on. The first word came from my mouth were “Oh my God!”.

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From Left: Abhijit Banerjee, Esther Duflo and Michael Kermer,

Being an Indian, I am proud that this year’s nobel laureate is Indian born. More than that, I am jumping because this year’s economics nobel is given for the marvelous work in the Development Economics. I am following both, Banerjee and Duflo, since past two years. First time I was introduced to their work by my friend, who suggested me to read their book “Poor Economics“. Both the economists has done great work surveying in the developing countries. Their major research was focused around the countries of South Asia and sub-saharan Africa.

Banerjee is the second Indian-born economist to win a nobel. The first one was also from the same field of development—Amartya Sen. There are many things which are common in both of them. Most interestingly, they both are Bengali and are alumni from Presidency College, Kolkata. Esther Duflo is a french economist, trained in both Paris School of Economics and MIT. And the third economist, Michael Kremer, is a Harvard Professor.

Every year’s nobel comes with lot of stories. Like last year William Nordhaus and Paul Romer won this for works in environmental policy and macroeconomics, respectively. In 2017, Richard Thaler, popularly known as the father of behavioural economics, won for his marvelous contributions towards the behavioural economics.

Banerjee and Duflo’s book, Poor Economics, starts with ” Every year, 9 million children die before their fifth birthday”. Their book discusses deeply about economics conditions of poor. Their another great essay on “Economic Lives of the Poor” tries to address the problems for the reason of poverty. Their works are famous around the globe. All three economists have spend years studying the cause of poverty and developing scientific methods to understand it. The most interesting part in Kremer’s CV is that he has worked in a Secondary School in Kenya. This truly shows his enthusiasm towards the field of development since he was young.

However, I am not a believer of determining the ability of researchers from nobel. As the Nobel committee has ignored many prominent economists like Jagdish Bhagwati, whose contribution in Trade and Development is significant and realistic. In future we’ll find more economists, obviously, winning this prestigious prize. Prof. Raj Chetty, I was expecting whom to win Nobel this year, also have done great works in development and public economics. His contributions are very significant and can certainly help the policy makers in framing the solutions using his approach of big data specially.

India’s Chinese Dream

The past three decades were blissful for the India’s growth numbers, but not for its developmental needs. Despite of being a democracy with the multi-party system, and free elections, it is far behind the authoritarian styled China. The elections in India are on ‘one person one vote’ basis, whereas in China the President is selected on the basis of internal negotiations in the Communist Party of China.

The hard truth here is that the China reduced the poverty, gained literacy, improved infrastructure and worked amazingly on the other welfare areas. The achievements of China is known by almost everyone in India. The desire to be like China runs deep in the heart of every Indian. However no one realizes the cost every Chinese citizen has paid for this, i.e. their basic fundamental right. The liberty and freedom in China is visible with the recent ongoing conflict in Hong-Kong.

The major reason why Indian’s policy makers get inspiration from China is because of their robust growth of the manufacturing sector. Whereas India has a service-centric growth model where the service sector has relatively low employability then the manufacturing sector. However, labour-centric growth, of China, could reduce the ‘unemployment’, by employing people, but is not stable due to low profitability.

This is a traditional economic model: first an economy is agricultural, and then move towards industrialization. This industrialization leads to the reduction of poverty, after this the service sector develops. In the Indian case industrial sector never received a chance to grow. This is mainly because of the attitudes of Indian leaders, who are just for showing growth numbers! Both at the state and the centre level, Indian leaders have no policy to push the industrial sector towards prosperity.

No doubt, India has a commendable record in reducing poverty, especially since 1991 reforms.  But its inefficiency in securing its workers, ensuring healthcare, and promoting other social security services, which every government must ensure, is disappointing.

These days, Bangladesh’s economy is doing much better than China and India. Although the India and the China are still the ‘emerging giants’, whereas, Bangladesh is still small in front of these two. But the Growth numbers shows that Bangladesh have done very well in comparison to India and China. In per-capita terms also it is ahead of India.

The achievements made by Bangladesh in the current decade are astonishing. As Kaushik Basu writes “Still, in my view, Bangladesh’s economic transformation was driven in large part by social changes, starting with the empowerment of women.” The great work done by its ‘bank of poor’ (Grameen Banks), a microcredit institution, was also a transforming step in empowering the women. Today Bangladesh also has much higher life expectancy than India (see Figure)

Figure Source: World Bank

The entire debate so far tells us that out of these three countries—India, Pakistan and Bangladesh— Bangladesh is doing very well. India has lessons to learn from Bangladesh.