Vol. 4 No. 1 (Jan-Feb) (2023): Indian Public Policy Review

This study examines whether Tamil Nadu’s economy will become a US $1 trillion economy by 2030, given its current slow growth regime, inflation, and rupee depreciation. Our analyses indicate that, assuming an inflation rate of 5% and 2% exchange rate depreciation per annum, the Tamil Nadu economy needs to grow at a real growth rate of 13.2% per annum for 8 consecutive years from 2023-24 to 2030-31 to reach the US $1 trillion target. Considering the growth contributions of sub sectors, this study simulates multiple growth strategies to achieve 9% overall growth, which would achieve the target in 2033-34. Further, it examines whether export promotion will help to achieve this target. Finally, it shows that the current level of debt-GSDP ratio is a hindrance to growth. It suggests that ensuring 14% nominal (i.e., 9% real) growth of economy, the state should target for a revenue surplus from 2023-24 onwards, such that it contains its fiscal deficit to only 2% level and obtains a sustainable threshold debt level of about 18% in 2034-35.

This paper examines India’s responses to the Covid-19 pandemic, from the perspective of its federal structures. It first summarizes different institutional components of India’s federal system. Next, it outlines the responses to the pandemic, both over time, and across different levels of government. The main contribution of the paper is a new evaluation of the federal dimensions of India’s governmental responses at different levels. It is argued that, while the national government did well in some respects, and there was considerable coordination across levels of government, there were key failures, both in the manner of the initial abrupt and drastic national lockdown in March 2020, and in the lack of preparation and national response to the deadlier second wave of the pandemic in 2021. By contrast, subnational governments, both state and local, did better than might have been expected, especially in the face of limited resources and information. It is argued that India’s pandemic experience contradicts the “flailing state” idea that was devised to explain the country’s governmental performance in recent decades. The paper also questions the applicability of the concept of “cooperative federalism” to the Indian case. It argues that India’s federal system proved quite resilient, but can be made more effective by strengthening capacity at the local level.

In the context of a perceptible rise in the share of sub-national debt in India’s total public debt, and the predominant role of GST as a revenue source for the state, this study attempts to analyse the sustainability of debt policies adopted by sub-national governments in the context of GST. It looks at the 20 major Indian states, using the fiscal policy response function, two alternative specifications, and panel data methodology to analyse the issue at aggregate and disaggregate levels during GST regime. The results indicate that the debt policy is sustainable at the aggregate level, but only in 9 states at the disaggregate level during the GST regime. However, when GST compensation is excluded from the model, the test results do not indicate that Indian states pursued sustainable debt policies. The observed results are then amplified and corroborated using an indicator-based approach, and it is concluded that the GST remains an undermining factor of debt sustainability. Overall, the study draws attention to the states’ poor revenue performance after GST, and the challenges to the sustainability of their debt position. Policy intervention should be sought to improve the debt situation through an effective GST mechanism in states where the debt is unsustainable.

Schneider and Ingram (1997) have theorised that policy design in U.S. democracy is dependent on the social construction of the target population. The paper tries to analyse how the social construction of the target population happens in India, and how it is different from the Western context. The case study of compensatory discrimination policy in India has been used to demonstrate the factors affecting policy design in India. It demonstrates that as we go into the narrow details of any policy, in a democracy, the space for political entrepreneurship increases, despite all institutional constraints. One of the important factors highlighted is the politics of social construction of knowledge in India. A theorisation of the social construction of the target population might be helpful as an analytical concept in public policy, but it is incomplete without an understanding of the political economy of any given policy in India.

The end of the Cold War that resulted in a unipolar world, threw multi-pronged challenges to the eminent power-USA, and the West. This book provides an enlightening account of how opponents of the West adapted and learned to fight it. Further, it covers what the West needs to do to emerge on top of this highly complex challenge in an ever increasing complex environment.