Vol. 4 No. 2 (Mar-Apr) (2023): Indian Public Policy Review

While there is an almost unanimous view on the benefits of trade - fuelling economic growth, supporting a greater number of and better paying jobs, raising living standards, and enhancing the consumer surplus with affordable goods and services - contemporary research has primarily looked at external trade, i.e. trade across national borders. This has led to an under-appreciation of the quantum and the effects of internal trade. This is of particular significance for larger economies such as India. One reason is the relative paucity of data for tracking internal trade. This study proposes to make use of domestic taxation (VAT/GST/Sales Tax) data to get a sense of the volume and directions of internal trade with a special emphasis on India. The study quantifies interstate trade flows in India to amount to about 69% of the GDP when domestic movement of imported goods are included, and about 35% of the GDP when only domestically-produced goods are taken into account. Further, internal trade appears to be growing at more than twice the pace of growth of the GDP. Amongst other reasons, this enhanced economic integration is attributable to the transportation efficiency gains that have accrued after the introduction of the Goods & Services Tax (GST).

In 2019, India banned Electronic Nicotine Delivery Systems (ENDS) – a broad category that includes electronic cigarettes, vaping devices, and Heat Not Burn (HNB) devices – because of concerns about health impacts, youth vulnerability, and their potential to undermine tobacco control efforts. This is a missed public health opportunity to reduce tobacco consumption, if ENDS actually help reduce and wean users off nicotine dependency in less harmful ways. This paper applies a risk analysis framework to examine whether India’s ban on ENDS improves public health outcomes, or whether an alternative approach such as regulation would be more effective. It studies global responses and compares how public health goals are served in the United States of America and the United Kingdom, based on four key parameters of concern – health impacts, normalisation of ENDS usage among non-smokers, appeal among youth, and device safety. This comparison demonstrates that the United Kingdom’s regulation-focused approach delivers superior outcomes across all four parameters. Thus, the evidence-based recommendation for India would be to regulate at least HNB devices under the Cigarettes and Other Tobacco Products Act (as they utilise tobacco), as this can help reduce harm and promote innovation in devices that can wean users off nicotine dependence.

The paper estimates the degree of agglomeration of the Indian organised manufacturing sector and examines its evolution pattern across districts over the period 2000-01 to 2009-10.  The estimation of the degree of industrial agglomeration is based on plant-level data from the Annual Survey of Industries. The paper uses the spatially-weighted Ellison Glaser Index to control for the inter-district spillover effect. The overall degree of agglomeration has been moderate and, over time, it registered a declining trend. While analysing the nature of industrial agglomeration, it has been observed that most of the low-tech and medium-low-tech industries are found to be highly agglomerated. 42% of the highly agglomerated industries are also highly polluting in nature. During the period 2000-01 to 2009-10, the second-tier cities observed a rise in the number of plants belonging to the polluting industries. High-tech industries are found to be concentrated in the already industrialised states. In contrast to this, the medium-high-tech industries have been spreading across districts. The distribution of low-tech industries is found to be even across the districts.

This paper examines SAARC’s performance and failures as a regional cooperation forum, since its establishment with the signing of the SAARC Charter in Dhaka on 8 December 1985. First, it  briefly reviews the recent geopolitical situation in South Asia. Against the backdrop of the evolving geopolitical situation, the paper reviews South Asian integration in a nutshell. It then examines the progress and failures of SAARC as a regional forum in four key areas of regional cooperation and integration: trade,  money and finance, and people-to-people contacts. From the available empirical evidence,  the paper deciphers that regional integration under SAARC has progressed at a far lower momentum than what was expected at the time of its formation. Progress in regional cooperation under SAARC also compares poorly with similar regional forums in both Europe and Southeast Asia. Against this backdrop, this paper synthesizes the existing studies on SAARC, and  comes up with ambitious yet pragmatic policy options for fast-tracking the forum’s economic integration.

A book review of Forks in the Road: My days at RBI and Beyond by C. Rangarajan