A data interactive of the long-pending and ongoing projects of the Indian Railways

This piece originally appeared on Livemint.com

 

A report by the national auditor shows the massive funding challenge the Indian Railways is facing in its expansion plans. As of March 2014, the Indian Railways had spent around Rs.92,000 crore on 479 projects, including some dating back to the 1970s and 80s. But due to shoddy contract and project management, costs have more than doubled, and the Railways needs an additional Rs.183,000 crore just to finish these ongoing projects. Here’s a profile of these projects.

 

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Four charts that explain why 2015 was not a breakout year for Make in India

This piece originally appeared on Livemint.com

 

From pledges to proposals to projects is a long journey. In September 2014, Prime Minister Narendra Modi made the call to manufacturers to ‘Make in India’. While companies are publicly expressing greater belief in this idea of India as a preferred manufacturing location, backing it with investment pledges to the tune of Rs.15 trillion during the Make in India week earlier this month, government data on two measurable actions related to setting up new industrial units shows 2015 was not a breakout year.

OVERALL | According to various metrics proposed or implemented, the numbers in 2015, the first full year of the ‘Make in India’ campaign, dipped marginally or stayed flat over the average of the previous years.

 

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BY INDUSTRY | Ten industries accounted for 65% of the projects implemented. Among these, textiles and food processing registered notable gains, while metallurgical industries and chemicals, other than fetilizers, took a hit.

 

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BY STATE | Ten states accounted for 80% of the projects proposed. Among these, only Chhattisgarh showed a surge in proposals, though not in value terms. On the implementation front, four the 10 states showed a jump, namely Madhya Pradesh, Andhra Pradesh, Karnataka and Rajasthan.

 

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Budget 2016: How much, where and how is the Indian government investing?

This piece originally appeared on Livemint.com

 

Capital expenditure by the government is about the current generation creating assets for future generations: building infrastructure, from schools and hospitals to water canals and bus stations. The higher the capital expenditure, the greater the trickle-down effect on growth in the long run. The problem is Indian governments have very little fiscal room, directing only Rs.1 for every they Rs.4 spend on today’s expenses.

How much is the government investing?

Capital expenditure exceeded 20% of the total in just two of the last nine years. In other words, only one rupee out of every five went towards creating future assets; the other four went towards running expenses like paying salaries. The current National Democratic Alliance (NDA) government projected an expansion back to the 20% mark last year, budgeting about Rs.3.18 trillion. This budget will tell us how it fared in that projection.

 

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Is it investing what it budgeted?

It’s one thing to budget, it’s another to spend as intended. In three of the seven years till 2013-14, the government spent less than budgeted. It spent significantly more than budgeted in two years, which is also when it pierced the 20% mark.

 

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Where is it investing?

The share of transport and communication (which includes roads) has been shrinking. Meanwhile, the share of ‘other social services’—which include housing, labour welfare, employment and rural works—has increased. As has agriculture.

 

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How is it investing?

Increasingly, rather than directly spending, the central government is relying on states and local bodies.

 

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Data for 2013-14 is revised estimate and for 2014-15 is budget estimates.

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Appraisal of Narendra Modi’s performance on three economic pivots

This piece originally appeared on Livemint.com

 

When he came to power, Narendra Modi positioned three things as pivots—and talking points—of his economic stratagem. Appraising them a year on shows Modi’s performance on these three counts is not significantly better than that of the United Progressive Alliance in its last year—on some metrics, it’s worse—and that his promise of a breakout remains, so far, just that: a promise.

1. Reviving investments

Modi wants the wheels of the economy to turn faster. But growth in credit continues to taper, especially to industry, which accounts for 45% of all non-food credit. And in spite of a stronger centre, a greater percentage of projects with an ultimate reporting to the central government and above the size of Rs.150 crore are seeing implementation delays.

 

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2. Make in India

After the lows of mid-2014, the numbers on project proposals, investments and implementation are inching up. But they are still below or around what UPA-II recorded for most of its final year. The number of new companies being set up is also seeing an upward tick, but it’s still business services and not manufacturing—a key pivot of Modi’s revival plan—that is pulling the numbers.

 

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3. Fiscal federalism

Modi says states should have a greater say in shaping their economic choices. The 14th Finance Commission has increased the states’ share in divisible taxes and duties to 42%, from 32%, yielding a Rs.1.86 trillion windfall for states in 2015-16. But the sharing of taxes is one of three ways in which the centre transfers funds to states. The second is grants and loans, which is also increasing. The third is financing various schemes and programmes, where the centre is pulling back to the tune of Rs.1.3 trillion. Thus, the net giveaway to states in 2015-16 is Rs.55,723 crore, an increase of 6.3%.

 

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