Randomised controlled trials (RCTs) have become a popular methodological choice for policy analysis in the developing world. This paper describes the various ethical and methodological considerations when choosing to adopt RCTs for policy decisions through a review of literature in multiple disciplines. Unlike previous critical analysis of RCTs, this paper contextualises its critique to India, a country that has been the site of well over a hundred RCTs. Through illustrations of recent Indian policy RCTs on corruption, livelihoods, Public Distribution System, conflict and others, the paper raises concern about violations of ethical requirements like equipoise, informed consent, data harms, human costs to research participants and research staff. The paper discusses methodological limitations of RCTs for Indian policy making including heterogeneity, researcher effects, generalisability, policy-relevant unobserved mechanisms and other socio-political considerations. The paper ends with a description of alternative approaches and a simple checklist for practitioners, specifically policy makers, to assess the feasibility of RCTs for informing decision making in their context.

Issue: Mar-Apr 2021
 After the erstwhile Planning Commission released the poverty estimates for India for the year 2011-12 in July 2013, a debate ensued on whether the impressive poverty reduction was not due to an excessively low poverty line set by the commission. Utilizing unit-level data from NSS consumer expenditure surveys of years 1993-94, 2004-05 and 2011-12, this research presents empirical evidence that puts to rest any doubts that India’s poverty reduction is an artifact of a low poverty line. We show that even when the poverty line is set at expenditure levels higher than the Tendulkar poverty line by 25, 50, 75 and 100 percent, the broad trends in poverty reduction captured by the Tendulkar poverty line continue to be valid. Our estimates also show that the absolute number of individuals lifted out of poverty between 1993-94 and 2011-12 was in fact slightly larger when the poverty line is 25 percent above the Tendulkar line. Even though it is difficult to match this remarkable decline at progressively higher poverty lines, we show that the gains remain large even as we push the poverty line to a level twice the Tendulkar line and is reflective of a very broad-based growth during this period.

Issue: Nov-Dec 2020
 Covid-19 has caught India, like the rest of the world, unawares. Given its geographical area, population and level of development, India has handled the pandemic remarkably well. Nevertheless, the pandemic provides an opportunity to identify measures to improve the state of preparedness for future crises. This paper underlines Constitutional and governance issues to prepare the country for such emergencies in the future. To ensure more accurate data on mortality rates and their attribution to the pandemic, the paper underlines the need to improve the Civil Registration System. Another issue relates to the confusion arising from the faulty detection of cases when Rapid Antigen Tests (RAT) and RT-PCR tests do not provide consistent results. This has required the ICMR to issue a press release to reconfirm in the case of negative reports in symptomatic patients when RAT is used. The paper also emphasises the need to link fiscal transfers under the National Health Mission to performances in terms of specified deliverables by the States. Another issue is the need to amend the Constitution to place ‘Public Health’ in the Concurrent List to enable more significant role for the Union government in fighting pandemics like COVID-19. The paper also argues for the creation of a separate local body list in the Seventh Schedule and ensure legal consistency in the assignment across different levels of government in the country. Given the important role of the Union government, ‘Management of Disasters and Emergencies, natural or manmade’ should be an item included in the Concurrent List of the Seventh Schedule as recommended by the Second Administrative Reforms Commission. This enables congruency and cohesion in dealing with disasters between different levels of government. 

Issue: Nov-Dec 2020
 This article focuses on the different channels through which fiscal dominance of the central bank affects financial stability in India, notably through its effect on bank recapitalization and regulation, default closure norms, monetary policy decisions, bond market regulations, capital flow measures and central bank balance sheet. Fiscal dominance also has other side effects on the economy, such as crowding out of private sector investment, external sector fragility of corporate sector financing, financial fragility of firms reliant on market financing, and finally, poor transmission of monetary policy. The paper ends with recommendations on the steps a central bank can take to limit being fiscally dominated. This requires a firm commitment to long-term financial stability, which must be reflected in the central bank’s objectives. The central bank must have autonomy over regulatory decisions, including for government-owned entities in the banking and financial sector. The central bank should adopt a mostly rules-based policy making approach rather than relying on excessive discretion. Finally, the central bank should be democratically accountable through transparency of actions and intent as well as an acknowledgement of limitations of its policy options.

Issue: Sep-Oct 2020 Transformation of Indian economy to a modern, urban and industrial one at a fast pace requires the creation of a policy environment that would accelerate the growth of medium and large enterprises, especially in labour intensive sectors such as apparel, footwear, furniture and numerous light manufactures. Key policy reforms required for the emergence of these enterprises include opening the economy to foreign trade and investment wider, flexible labour markets, availability of land to businesses at reasonable prices and low rental housing for migrant workers taking up jobs in the enterprises. Considering the complexity of undertaking multiple reforms involving both Centre and States, an option may be to create Autonomous Employment Zones, spread over areas of 500 square kilometres or more with full autonomy to implement their own labour and land laws, as is the case in Shenzhen in China. The zones can also be designed such that imports and exports can move rapidly into and out of it. These zones may help bring many multinationals currently looking for locations other than China. The paper also lists a number of reforms in education, privatization, food procurement and public distribution system, power sector, civil service, tax administration, and fiscal and monetary policies. I discuss these reforms in detail in my recent book, India Unlimited. JEL: F1, F4, J2, R3