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Working Papers | 2012

Organizational Transformation in India: Developing a Typology

Supriya Sharma

Organizational transformation, which is frequently credited with turning around the fortunes of many organizations, has remained an underrated concept in India. This paper is an attempt to study the transformations that have taken place in organizations operating in India, and thus classify them to develop a broad typology, which is relevant for India. This typology has been developed by first identifying the three key components of any transformation-Object, Magnitude and Speed-and building a conceptual framework to understand each episode of transformation better. Analysis reveals nine types of transformations, which capture different aspects of each of the key components of transformation process.

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Working Papers | 2012

Impact of the Introduction of Call Auction on price discovery: Evidence from the Indian Stock Market Using High-Frequency Data

Sobhesh Kumar Agarwalla, Joshy Jacob, and Ajay Pandey

Call markets are claimed to aggregate information and facilitate price discovery where continuous markets may fail. Its advantage, however, comes at the cost of immediacy. Possibly due to faulty design or due to "thick market externalities", the impact of the introduction of call has not been found uniformly beneficial. This paper examines the recent re-introduction of opening call auction at the National Stock Exchange of India. This was advocated based on the supportive evidence of the positive effect of call auction at the time of high market volatility or information asymmetry. The results suggest that the intraday pattern of volume and volatility in the continuous market remains unchanged even after the introduction of call market. The volatility and volume still takes about 30 minutes to stabilize and the auction attracts very little volume. The negative intraday return correlations suggest excessive price movement at the call auction. However, the synchronicity of price discovery, on the lines of Pagano and Schwartz (2003), indicates some improvement in the market quality. Possibly, the no all-round improvement of price discovery could be attributed to the extremely short duration of the auction. The paper contributes to the understanding of the impact of opening call auction on market quality.

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Working Papers | 2012

Corporate Governance: Confidentiality and Role of Media in Changing Times

Anurag K. Agarwal

There is a certain tension between the primary objective of the media to tell as much as possible to the public and the objective of the companies to retain confidentiality. In this tussle, legal and ethical issues are raised, particularly in the recent times when technology is changing at a rapid pace and also with stakes involved becoming higher and higher. With a written Constitution in India guaranteeing freedom of speech and expression to its citizens, including the media, it is a real test for the judiciary to achieve the right balance. Journalists are often protected by law not to disclose the identity of the confidential source, and this right-reporter's privilege-at times seriously hinders the course of law. The paper examines these issues and discusses a couple of such cases. Further, it studies the role of media in India in the fast changing scenario, particularly in the light of the recent Supreme Court judgement-in Sahara v. SEBI case (September 11, 2012)-mandating self-regulation. The paper concludes that legal tools alone cannot bring the desired change and concerted effort needs to be made by the media, government and businesses for healthy and desirable dissemination of information.

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Working Papers | 2012

An Assessment of Livelihood and Educational Status of Sanitation Workers in Ahmedabad, Gujarat

Navdeep Mathur, Ashish Mishra, and Indraraj Dodiya

This study was conducted in 25 neighborhoods and 5 zones of the Ahmedabad Municipal Corporation (AMC). A total of 50 sanitation workers were interviewed and through them we sought to understand the condition of their families as well. What was immediately notable was that there is a high incidence of death among men due to workplace-related injuries that has led to a rise in the number of widows and therefore a rise in women-headed households.

The research study made use of questionnaires, interviews with key informants and participant observation.

The main objectives of this study were:
• To understand the living conditions of sanitation workers after the Gujarat High Court judgement of 2006.
• To analyse the present livelihood and education status of sanitation workers in Ahmedabad as well as assess their awareness about laws and government schemes that directly pertain to them.

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Working Papers | 2012

Entry of Profit-Motivated Microfinance Institutions and Borrower Welfare

Ratul Lahkar and Viswanath Pingali

In this paper, we model welfare implications of entry of commercial microfinance institutions (MFIs). We initially characterize equilibrium with a sole fund-constrained benevolent credit institution followed by equilibrium with only profit-motivated MFIs. We show that entry of such MFIs can lead to an increase in interest and default and a decline in screening. However, it can still represent a Pareto improvement since: all agents previously denied credit can obtain loans, and existing clients have the option of seeking loans from MFIs. Finally, we model multiple group formation as an equilibrium mechanism, which allows more efficient risk diversification.

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Working Papers | 2012

Education and Employment among Muslims in India:
An Analysis of Patterns and Trends

Rakesh Basant

After the submission of the Sachar Committee Report, several studies have undertaken data-based analysis of the socioeconomic and educational conditions of Muslims in India. Many researchers, policy makers and, in fact, common Muslims believe that education can be the only mechanism to enhance their socioeconomic status and facilitate entry into better paid jobs. At the same time there are concerns about access to educational facilities and possible discrimination in the formal labour market. The paper reviews the available evidence on the patterns of Muslim participation in education and employment. Comparing the estimates derived from the most recent round of the National Sample Survey for the year 2009-2010 with the earlier years (1999-2000 and 2004-05), an effort is made to assess if these patterns have changed in recent years. A preliminary analysis of the correlates of these patterns suggests that these are quite complex and multi-dimensional. Perceptions about discrimination interact with endowments, opportunities, supply side conditions and attitudes to give rise to different patterns of participation in employment and education. A different set of policy actions may be required to ameliorate these conditions.

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Working Papers | 2012

Population Heuristics for the Corridor Allocation Problem

Diptesh Ghosh and Ravi Kothari

The corridor allocation problem is one of assigning a given set of facilities in two rows
along a straight corridor so as to minimize a weighted sum of the distances between every
pair of facilities. This problem has practical applications in arrangements of rooms in oces
and in hospitals. The problem is NP-hard. In this paper, we present two population based
metaheuristic implementations for the problem; a genetic algorithm with local search embedded
in it, and a scatter search algorithm with path relinking. We report the results of our experiments
with these algorithms on benchmark instances with up to 49 facilities.

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Working Papers | 2012

Dismantling Fertilizer Subsidies in India:
Some Issues and Concerns for Farm Sector Growth

Vijay Paul Sharma

While fertilizer subsidy has probably been one of the most hotly debated issues in the country over the past two decades but debate reached a new height following a recommendation by the Prime Ministers Economic Advisory Council (PMEAC) in its latest Economic Outlook 2012/13 that "subsidies are progressively losing their relevance and are becoming unbearable fiscal burden so a beginning can be made in dismantling fertilizer subsidy". In view of this, the present paper analyses the fertilizer subsidy from two different aspects, both important for policy planners in the country. First, who is benefiting from the current system of fertilizer subsidies and secondly what is the impact of recent policy changes on fertilizer consumption and prices and proposed removal of fertilizer subsidies on farm income. Fertilizer subsidies account for a significant share of the total support to agriculture and have increased by about 560 per cent between triennium ending (TE) 2003-04 and TE2010-11 mainly due to steep increase in international prices of fertilizers and feedstocks/raw materials, increased consumption and unchanged farm gate prices. The findings suggest that all farmers benefit from subsidies, however, small and marginal farmers receive about 53 per cent of the subsidy, higher than their share in total cropped area (44.3%). The partial decontrol of fertilizer sector which has led to unprecedented increase in prices of phosphatic (P) and potassic (K) fertilizers (about 160% in DAP and 280% in MOP) and relatively cheaper nitrogenous (N) fertilizers, led to sharp fall in consumption of P and K fertilizers, thereby imbalance in use of N, P and K nutrients. Moreover, dependence on expensive imports has significantly increased during the last 6-7 years. The results show that removal of fertilizer subsidy will make farming unprofitable in many states and therefore removal of fertilizer subsidies will not be in the interest of farming community, particularly, small and marginal farmers and less developed states/regions. The paper argues for containing subsidy but without hurting interest of millions of small and marginal farmers including tenant cultivators. As radical reforms like dismantling of subsidy and deregulation of fertilizer industry in one go are neither economically desirable nor politically feasible, a case can be made for continuation of fertilizer subsidy with better targeting and rationing to achieve socio-economic objectives of national food security, poverty alleviation and farmers' welfare as well as subsidy reduction.

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Working Papers | 2012

Food Subsidy in India: Trends, Causes and Policy Reform Options

Vijay Paul Sharma

India has one of the largest food subsidy programmes in the world that has created a relatively effective social safety net but is also under increasing criticism because of its large contributions to government budget deficits, economic inefficiency and poor targeting. The Food Corporation of India is always under attack from all quarters for perceived operational inefficiencies leading to increase in the food subsidy burden. This paper analyses the trends in volume of food subsidy in the post-reforms period (1991-92 to 2012-13) and then examines various components of food subsidy, which are under the control of FCI and those beyond the control of FCI, and relative contribution of these components to total subsidy during the last decade. Broad policy options for containing food subsidy are also suggested in the paper. The data on food subsidy clearly shows that subsidy has increased significantly in the post-reforms period in general and during last 6-7 years in particular reaching a record level of Rs. 72283 crore in 2011-12. The total cost of food subsidies that amounted to about 2.2 per cent of agricultural GDP during the 1990s increased significantly to about 5 per cent during the last decade. Increase in procurement price was main contributor to increase in economic cost of foodgrains which is responsible for rising food subsidy. Other components, which contributed to food subsidy, included open-ended procurement policy, increase in procurement costs mainly statutory charges by state government on procurement of foodgrains, constant central issue prices and distribution costs. However, most of these variables are decided by the government and are beyond the control of FCI. Despite increase in absolute value of subsidy components that are under the control of FCI, there has been an improvement in the efficiency of Corporation's operations, e.g. share of administrative charges of procurement costs, and storage losses have declined during the last decade. Improvement in operations of FCI, though desirable, may not lead to significant reduction in the subsidy. Therefore, steps need to be taken to reduce other costs through appropriate procurement price policy, public-public participation through involvement of more states in procurement and distribution of various foodgrains including coarse cereals, reduction in statutory and non-statutory charges charged by state governments, encourage private and/or public-private partnership in creating scientific storage facilities to reduce losses, need-based procurement of foodgrains, and periodic and affordable increase in central issue price.

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Working Papers | 2012

Health policy processes in Gujarat: A case study of the policy for Independent Nurse Practitioners in Midwifery

Bharati Sharma and Dileep Mavalankar

Background: The policy processes of the policy on 'Nurse practitioners in midwifery' (NPM) are described. The policy aims to educate and create a new cadre of competent midwives in the government hospitals as an alternate human resource for maternal and newborn care for remote rural facilities.

Methods: Participant observation in every day setting, in depth interviews with actors involved in policy processes and a self administered questionnaire to one batch of 37 NPMs were used. The conceptual framework of policy processes developed by Andrew et al (2011) was used for analysis.

Findings: The NPM policy was delayed because of frequent change of secretaries and commissioners of health who led the policy process but did not share the vision of policy initiators, and there was less push and shared vision unlike the national programmes, being a state driven policy. The nature of the issue influenced the policy process; many were unconvinced about developing an autonomous cadre of midwives who can fill in for doctors. It was seen as competition by obstetricians. The policy processes were closed though many departments within the government and some actors outside the government were involved. There was less space for open dialogue amongst the various actors, all the discussion was through notes on the file. The main actor s to push the policy forward were less powerful within the government machinery.

Overall the NPM course has been successful in developing competence for normal childbirth; some more practice is needed for complications during labour. Since majority of the candidates for the course come from cities, the objective of human resource for remote rural facilities may only be partially fulfilled.

Conclusions: There is a need to develop a protocol for robust policy processes which are unaffected by changes in leadership, where there are opportunities for dialogue, to bring in and examine evidence, to improve policy processes.

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