Indo-Pacific Economic Framework- A surrogate NATO for South and East Asian Countries?

To understand the driver of the Indo-Pacific Economic Framework(IPEF) that has been launched on 24 May by 13 countries of South-East Asia including 4 members of the QUAD group and most of the ASEAN countries, we need to understand the interplay of regional and global aspirations of and challenges faced by these countries. 

The first quarter of the present century has seen a quantum leap in humanity’s progress in science and technology creating the possibility of bringing an end to the childhood of humanity. A possibility but not a certainty. On the contrary, a more than even chance is emerging about a nuclear armageddon bringing an end to human civilization as we know it now. The 9/11 terror attack, the financial crisis of 2007-08, America’s war on terror and its exit from Afghanistan, the disproportionate impact of the COVID-19 pandemic on developed countries and now the Ukraine war -all are pointers to an irreconcilable conflict of interests among nations states of today which can be resolved only in a theater of war and destruction. Globally, there are two conflicting intertwined players- a declining but still globally dominant power, both economically and technologically, and a rising power with the ability to challenge the dominant one on both these fronts.

The genesis of IPEF can be traced back to a 2018 document – declassified in January 2021- on Indo-Pacific Strategic Framework prepared by the United States National Security Council(USNSC). The foremost security challenge faced by the USA, as identified by the USNSS is: “How to maintain US strategic primacy in the Indo-Pacific region and promote a liberal economic order while preventing China from establishing new, illiberal spheres of influence, and cultivating areas of cooperation to promote regional peace and prosperity?”.

The document emphasizes the threat posed by China’s rise as a technology superpower. “China seeks to dominate cutting-edge technologies, including Artificial Intelligence and Bio-genetics, and harness them in the service of authoritarianism. Chinese dominance in these technologies would pose profound challenges to free societies.”

This 2018 strategy document also underpins India’s pivotal role in containing as well as counterbalancing China’s aggressive posture in the Indo-Pacific region. The document is quite candid about USA’s objective in regard to India- 

“Accelerate India’s rise and capacity to serve as a net provider of security and Major Defense Partner; solidify an enduring strategic partnership with India, underpinned by a strong Indian military able to effectively collaborate with the United States”.

The Indo-Pacific Strategy document issued in February 2022 by the US government espouses the same line of thought articulated by the 2018 document. The word “economic” is added to provide a veneer of creating a trading block like it was envisaged in the Trans-Pacific Partnership Agreement(TPP).  TPP did not take off as US Senate failed to ratify it.  Being a trade agreement, ratification by congress was a necessity. By making IPEF a framework document, a kind of declaration of intent, it should be possible to avoid the requirement of any legislative approval by all signatories. The word Economic is also slightly problematic since there are already two agreements for facilitating trade among countries of this region. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement (FTA) among 11 countries including Canada, Chile, Mexico, and Peru. The CPTPP was concluded on 23 January 2018 in Tokyo, Japan, and signed on 8 March 2018 in Santiago, Chile. Regional Comprehensive Economic Partnership Agreement (RCEP) is another free trade agreement between ASEAN countries and Australia, China, Japan, Korea, and New Zealand. India was a member of the drafting committee of RCEP but eventually did not join it because it would put India in a disadvantageous situation vis-à-vis China in a free trade regime. It is interesting to note that 3 ASEAN countries having close relationships with China, namely Cambodia, Laos and Myanmar kept them away from IPEF.

Four areas of cooperation have been identified in the joint statement issued by the 11 signatory countries to IPEF. In each of them, it is difficult to see a convergence of interest of all signatory countries. For example, let us consider the Clean Energy, Decarbonization, and Infrastructure component of IPEF. Although India is a signatory to the Paris agreement that requires all countries to achieve net-zero carbon emission by 2050, the Indian prime minister promised to cut its emissions to net-zero by 2070 only.  China has committed to reaching net-zero status by 2060 while US and EU have committed to reaching the target by 2050.  India’s overriding national interest of poverty eradication by maintaining its growth momentum over a longer time will not allow it to toe its de-carbonization policies to that of developed countries who are already enjoying a lifestyle that has led to a much higher per capita carbon emission than is the case with India.

As regards the Trade component of the framework, the declarative statements are as general as possible. Out of 13 participating countries in the IPEF framework, only USA and India are not part of another regional free trade agreement, Regional Comprehensive Economic Partnership or RCEP. China is a member of the RCEP trade block. India was a member of the RCEP drafting committee since the committee began its work in 2011 and just before the signing date of the agreement, in November 2019, it opted out. As a result, India would be out of two existing trade blocks that cover almost all important counties of the region- RCEP and CPPTP. So it is difficult to envisage what new terms and conditions can IPEF will bring in to assuage India’s concerns.

As regards the Supply Chain component of IPEF, the statement says:” ensure access to key raw and processed materials, semiconductors, critical minerals, and clean energy technology”. Among the manufactured products only “semiconductors” is mentioned. The most important omission is Artificial Intelligence related products which represent the cutting-edge technologies of today.

To conclude, on the high table of the 13 signatory countries of IPEF, the USA is bringing nothing substantial to offer. It is more of a taker than a giver. IPEF may turn out to be more of a hubris of a declining power.

Bear Hug

A daughter is crying on her cell

Oh my dearest mom

Believe me, believe me

The bombs are falling all around.

The mother from Muscovy laughs aloud

Are you awake, my sweetheart

A hallucination, a nightmare no doubt.

My bear is a polar one, eager to hug you all

Proselytization is not Jesus’s call.

My dear child

Nothing to fear

The winner will not take it all.

The daughter cries out

Mom, my dearest mom

I love you

I love you most.

When no more call reaches to you

Believe then, believe then

That your Bear has taken me out.

Ferocity, deception, and sheer arrogance

Will prevail

The winner will take it all.

@apology to Abba for the line “winner takes it all”

Central Bank Digital Currency

I am providing a link below to the latest version of my paper. The Reserve Bank of India has declared that it will start a pilot project on the issuance of CBDC. The former Governor Subbarao has strongly cautioned RBI against any interest payment on account-based CBDC. Please see my detailed discussion on various issues related to this subject.

The key takeaways from my paper:

  1. CBDC should not be a mutated version of Bitcoin type digital coin.
  2. CBDC must possess three properies of paper currency fully and comprehesnively: No third party verification is required to transfer digital currency from a holder to a recipent.
  3. No account balance concept is introduced and therefore no double spending is possible.
  4. A holder is a legal owner unless proved otherwise.
  5. All digital currency are of a certain denomination and every transfer is legitimate as long as wallets are genuine. A proper application of public key cryptography and hash function allows a digital currency to mimic it’s paper based counterpart.
  6. The only difference with paper curreency is that transactions based on digital currency are not competely anonymous. But investigation of audit trail of a particular digital note would be very complex and costly. So it would not be easy.
  7. Double spending is prevented because notes are automatically modified in the wallet of the sender which will not be accepted by another receiver’s wallet. No internet is required for a transaction to take place and notes cannot be sent through internet.
  8. No requirement of a blockchain database.
  9. It is neither an account-based nor a token based payment system.
  10. Notes can travel back to issuer- the central bank- and get destroyed by the central bank.

COVID-19- A cross country analysis


The death toll of COVID-19 has reached 2.9 million by April 2021, a little less than 0.04% of the world population. In Wikipedia’s list of the largest known epidemics and pandemics caused by an infectious disease, COVID19 is ranked 8th in terms of its death tolls1. The deadliest known pandemic in history, the Black Death of 1346-1353 in comparison killed between 70-200 million people. Thus, humanity has been able to contain, if not eradicate, nature’s fury by constant progress in scientific knowledge and technology. And, to paraphrase Shakespeare, “therein lies the rub”2. The incidence of death due to COVID19 has been the largest in the most advanced country of the world- that is the USA.  Till January 2021, the USA accounted for around 20% of total recorded death worldwide due to COVID-19.  The top 5 countries, namely the USA, Brazil, India, Mexico, and UK accounted for a little less than 49% of total deaths. The share of these 5 countries in the world population was around 27% and excluding India the other 4 countries had only 9.5% of the world’s population3.  This huge disparity among various countries in terms of the mortality impact of COVID -19 calls for a cross-country analysis of the same.

The objective of the present paper is to identify the distinctive characteristics of the countries recoding 1st wave of COVID-19 deaths of varying intensities. Since country is our unit of analysis, data on various proximate causes of death of a COVID-19 infected person may not be available at that level. However, available micro-level- studies of patients of a single hospital or a local administrative unit -like a county- can be relied upon to identify the possible factors like the presence of certain specific co-morbidities that could determine the fatality rate of the COVID-19 patients.

The paper is organized into 3 main sections. Section I reviews the literature on the characteristics of COVID-19 patients and its impact on their subsequent survival. The parameters that have been used in creating a scoring system to determine the survival probability of COVID-19 patients are also reviewed. It is an accepted fact that higher mortality is expected for COVID-19 patients with chronic lung diseases like asthma. In this respect, the relevance of the so-called ‘hygiene hypothesis” is briefly discussed.  Section II discusses the data and methodology used. Section III presents the results. A concluding section follows.

The paper can be downloaded from the link below:

Central Bank Digital Currency

In December 16 2019, I wrote this letter to RBI Governor


The Governor

Reserve Bank of India


Sub: Possibility of introducing Central Bank Digital Currency in India- a Technical Blueprint

Respected Sir,

Many countries in the world including China are experimenting to introduce Central Bank Digital Currency (CBDC). I have worked out a blueprint for developing such a CBDC for India. I would like to point out that such a CBDC, although based on the principle of cryptography, is not designed on the Distributed Ledger concept. It also does not require Third Party Verification based Consensus schema that drives current Bitcoin and similar cryptocurrencies. According to me a CBDC must mimic the basic characteristics of paper currency which are anonymity (to a reasonable extent, as any digital asset is finally traceable) of transactors, bearer as legal owner and a legal tender if the both transactors agree on this mode of transaction. Furthermore, at the unit level each CBDC would have distinct denominational identity and cannot be sub-divided.

If this proposal appears to be- prima facie- feasible and fits into the RBI’s overall scheme for currency management, I would be ready to provide the underlying distributed database structure etc.  Finally, I would humbly state that my proposal is only a proposal and needs extensive discussion amongst all stakeholders to make it a proper working solution.  

Best regards

Ashok Kumar Nag

Former Adviser`

Department of Statistics and Information Management

Reserve Bank of India

Now that RBI is preparing to introduce digital currency, I feel that I need to put in public domain the blueprint for a digital currency that I had proposed.

eRupiah: RBI’s Virtual Cash  


No currency has ever been used in the human history which did not have the stamp of an authority. Bitcoin is a medium of payment but it is not money for the same reason. As long as, a citizen of a country cannot pay taxes with Bitcoin, it cannot be called a legal tender. Nonetheless, the technology underlying Bitcoin is a significant one with great potential. A central bank, issuer of paper currency, can use some selected components of Bitcoin technology to replace paper currency with virtual currency, retaining all the important features of paper currency. The most important of them is that a central bank note is a freely negotiable bearer bond and a legal tender in the hand of its holder. It does not require any third party verification. Counterfeiting a central bank note is not impossible but difficult and costly. The central bank neither authenticates any transaction made with that particular note nor does it keep any record of that transaction. The note remains as a liability on the book of the central bank till it comes back to it, either for reissue or its destruction. The physical nature of the note ensures that no double spending is possible with the same note by its current holder. In case of digital cash, the main issue that a central bank has to resolve is the issue of double spending without depending on third party verification of the same. What follows hereunder is an outline of a system that any central bank can implement to issue its own currency retaining most, if not all, of the desired properties of a paper currency.

The main features of a paper currency are:

It is a legal tender; transfer between two transactors can happen only through face-to-face encounter; double spending is not physically possible; no third party verification required; counterfeiting is possible but costly and detected by physical examination; each note has a unique identity; gets destroyed when unusable, liability of a central bank, in general.

I am presenting below a system based on digital currency on a mobile phone. There is no compelling reason to believe that the same system cannot be implemented on a specially designed smart card with embedded chip. The system outlined below is described within the currency management framework of the Reserve bank of India (RBI). With little tweaking the same can be customized by any central bank.

RBI Currency Management Framework:

RBI carries out its currency management function through its 19 Issue Offices located across the country. There is a network of 4281 currency chests and 4044 small coin depots in selected commercial bank branches. These chests store currency notes and rupee coins on behalf of RBI.  The note distribution mechanism is summarized in the following diagram.

For issuance of digital currency, each currency chest would function as a data center for hosting the ledger book of notes issued from it.   Similarly each issue office of RBI would have a copy of the entire ledger book of notes. A folio would be opened in the note ledger book when the first time a specific note is issued.  Each data center will have complete inventory of wallets issued by RBI.  An wallet could be a mobile app downloaded on a person’s mobile phone or it could be  a smart card to be issued by RBI. The details are given below.

Every bank branch would have a digital cash dispenser. Any wallet holder would be able to replenish her wallet with digital currency by pairing it with the dispenser via Bluetooth or NFC communication channel.  Similarly every ATM would have similar facility. At the time of cash dispensation from bank branch or ATM would require Aadhaar based biometric verification of wallet.  For cash transfer between wallets of two individuals this verification is not a necessary requirement.

The protocol for issue of eRupiah

  1. RBI would maintain ledgers of each currency note in a distributed database.
  2. Currently RBI issues notes through its Issue offices. The distributed database will be created according to issue departments of RBI. Each Issue office of RBI will be able to issue new digital currency and destroy old digital currency. Destruction of old digital currency would help RBI to keep the number of entries in the ledger folio of a particular note within a limit. Every Issue offices would maintain record of all notes issued by it as well as copies of corresponding records of 3 neighboring Issue offices.
  3. Each currency chest will have a database of notes received by it from RBI’s Issue department.
  4. Each currency chest will also have replicated database of its three nearest neighbor
  5. The system will issue new digital currency when an account holder wants to withdraw cash from its account with RBI. It would be optional, to start with. An account holder can withdraw cash or digital currency according to her discretion.
  6. The account holder would specify how much of its cash withdrawal would be in digital form. This facility would be provided for an interim period when both forms of currency would be in circulation.
  7. To incentivize issue of digital cash, RBI may reward with a fixed amount that could be related to the cost of producing physical cash.
  8. RBI is banker to the Central and State Governments. It also functions as banker to the banks and thus enables settling of inter-bank obligations. These large account holders of RBI would get digital cash in their Jumbo Wallet which would be a server in the account holder’s custody. It would be like a till holding cash. An authorized person can withdraw e-Rupiah from the till as and when required.
  9. The RBI’s Note ledger would comprise ledger folios of each currency notes issued.
  10. Each record in the Note ledger would comprise the following attributes: (1) a sequential no, (2) unique identity / sr no of a note, (3)  hashed value of the note serial no, (4) identity of the issue department, (5) denomination, , (6) time stamp of transaction, (7) hashed value of identity of paying wallet (first time payer would be RBI), (8) hashed value of identity of receiver wallet, (9) active flag,   (10) hashed value of first 9  attributes , (11) hash value of the first 9 attributes of earlier transaction record of the same note. The identity of a wallet is described below.
  11. RBI will also maintain database of each wallet downloaded from its website.
  12. The wallet database will have a header record with the following attributes (1) IMEI no of each phone, (2) Aadhaar No of the phone owner, (3) timestamp of successful downloading of the wallet, (4) the GPS location of the phone at the time of downloading of the wallet, (5) a unique private key generated for each wallet and (6) the corresponding unique public key generated for each wallet. This data would also be hashed and encrypted with RBI’s private key and will be part of the header record. RBI’s public key would also form a part of the header record. The private and public key of each wallet would be generated by RBI at the runtime. The hashed value of attributes 1 to 6 would be the identity of each wallet.
  13. Each wallet will have its own database of transactions. Each record in the transaction database will represent a note that has been loaded into the wallet. Each record will have the following attributes: (1) unique identity of the note, (2) note denomination, (3) digitally signed (with the private key of the paying wallet) hashed value of the concatenated string of serial no and denomination, (4) digitally signed ( with the private key of the paying wallet) hash value of concatenated string of attributes 1 and 2 of the header record with private key of payer wallet, (7) public key of the paying wallet, (8) timestamp of last transaction( i.e. timestamp of receipt of the note , (9) timestamp of the payment transaction, (10) payment status (paid or unpaid), (10) hashed value of the earlier transaction of the note(attributes 1,2,3,4,5).
  14. A transaction between two wallets would involve “note data” transfer from the paying wallet to receiving wallet. [A separate note is given to explain how such transfer can happen with QR codes}. Every note that gets transferred from the payer’s wallet to the recipient’s wallet would essentially mean transfer of the entire record from the former to the latter. In the process of data transfer two insert / update activities take place in the receiver’s and payer’s wallet respectively. The receiver’s wallet inserts a new note record while the payer’s wallet updates the concerned note’s existing record.
  15. Once the receiving wallet gets a new e_Rupiah note, it checks the authenticity of the note by calculating hash value of the concatenated string of attribute 1 and 2 of step at 13. In the payer’s wallet the status flag would get changed to “paid” while in the receiver’s wallet it would continue to have the status flag as “unpaid”.
  16. Any wallet would have a limit in terms of number of records / notes. When the database has reached its limit then the wallet would have to be uploaded to RBI and a new wallet has to be downloaded.
  17. At any point of time a single wallet would be subject to 2 limits- holding limit of no of transactional records and total value of a single transaction. For a high value transaction two factor authentications would be required. (say above one lac). Both paying wallet as well as receiving wallet has to simultaneously establish connection with RBI and get their credential verified.         
  18. As and when no of records in a wallet’s transactional database reaches its limit, the database has to be downloaded in an ATM or at a bank branch.  The wallet would be purged of the all transaction records with status as “paid”. The wallet holder then can download more E_Rupiah from an ATM or from a bank brunch. RBI will update its ledger book of individual notes thus uploaded from each wallet.
  19. Any fraudulent transactions identified in the process of uploading would get notified and thorough automated forensic audit perpetrator of fraud would get identified.  Downloading of Wallet:
  1. The user sends a sms to a designated no with the Aadhaar no of the sender. Each sms would cost the user 1 INR. RBI would send a link to the phone and clicking on the same the app would be automatically downloaded. To activate the app, the user has to sign-in with his/her Aadhaar no. For additional security one may think of incorporating biometric signature of the wallet holder as another feature of the wallet; every use of the downloaded wallet would require signing in biometrically by the wallet holder.

2. The wallet will have the following features:It will recognize another wallet in its vicinity using NFC technology. Alternatively Bluetooth technology for pairing two cell phones can be also used. Both the wallets would then exchange their digital identity and verify them with public keys of both and RBI’s public key. After two wallets have been paired, the payer’s / payee’s wallets would prompt the respective wallet owners to initiate the intended actions on their part. The payer will have to initiate payment action and would type in amount of money to be paid. The wallet would automatically prompt for denominations – a built in program would provide the best possible composition nearest to the amount indicated by the payer. The payer would have the right to change the composition and the resulting total value.

3. Once the payer approves payment the required data transfer takes place without seeking any third party verification at that time. For a transaction above a certain threshold value, at the discretion of the transactors, the receiver’s wallet may be connected with Aadhaar database and a biometric confirmation of the payer’s bonafide may be authenticated.

4. If any wallet holder commits a fraud by hacking the wallet’s database and changing the header record, it would be considered as an act of counterfeiting of notes. As and when any receiver uploads data to RBI website, the same would get immediately detected when RBI updates its ledger folio of notes involved. The concerned wallet holder would be notified with the fraudulent transactions and details thereof. It would be a matter of time to nab the fraudster. 

5. For merchants, wallets can function like mPOS (mobile point of sales) machine. A merchant’s wallet would authenticate the payer’s wallet and notes therein by directly connecting to RBI’s ledger of notes.

How the system will function:

Alice downloads the mobile app/wallet from RBI website. Alice visits it nearest ATM or bank branch and loads its wallet with required e-Rupiah. On a single day Alice would not be allowed to load her wallet with more than, say, fifty thousand value of e-Rupiah. The cash dispenser, say ATM, would be configured accordingly.

Alice wants to pay, say one thousand rupees, to Bob; the Alice keeps her wallet bearing mobile to Bob’s wallet and taps the application on her mobile. The respective apps recognize each other and Alice keys in the amount to be disbursed to Bob. If Alice has necessary denominations then the application would give nearest amount higher than that amount and which can be transacted. The balance can be paid back by Bob.

Loss of Wallet

In case of loss of a wallet, the holder of the wallet would be required to register the loss with RBI and provide its mobile number and Aadhaar number. RBI would broadcast the IMEI no of the wallet to all mobile service providers, thus blocking any further use of the mobile.  In due course, the stolen wallet can be traced and, in case of theft, required action by law enforcing agencies can be initiated. If a fraudster wants to use a stolen wallet by replacing the original header record, it would need to replace all unpaid notes’ records with values consistent with corresponding values of the new fraudulent header record. This would be very costly and may not be worthwhile. Furthermore, it would not be possible to download any further notes from an ATM or a bank branch.

 Cost of Issuing E-Rupiah

As on end March 2017, around 201 billion pieces of notes including coins (one rupee and above) were in circulation.  In that year, India’s adult population (15 years and above) was estimated to be around 916 million. If all adults hold one wallet each, the estimated size of all header records would be around 320 GB, not a very big number by any yardstick.  The size of transaction database, assuming 1000 transaction for each note during its lifetime, would be around 71 petabyte or .07 Exabyte. Amazon Redshift Spectrum Query service charges $5 per Terabyte of Query. If in the extreme case we assume that all notes are transacted once every day of one year, then the cost would be around 132 million US dollar or 862 crore of Indian rupees.  Taking storage cost, it would be well below the cost of printing notes that RBI incurs today.

Digital Currency and Corruption With digital currency it would be very difficult for anybody to make huge cash transaction for drug trafficking, bribing and other illegal purposes. In the Netflix original TV serial Narcos, the Columbian drug cartels are seen to carry out most of their transactions in cash. So much so, they had to store cash buried in fields.  Central Bank Digital Currency would be the most effective antidote to cash mediated corruption and illegal transactions. 

More on the e-Rupiah process

The following paragraphs describes the process of connecting and validating users in proposed p2p e-cash transfer.

The scenario has two users with devices – device A which will send the money (will be called as consumer hereafter) and device B which is a merchant and will receive the money.

The app will require any user to sign up first using the government issued ID card such as aadhaar card. Once the sign up is done, app will connect to RBI server and download a key pair on the phone.

  1. Merchant will start the app and enter the amount it wants to receive.
  2. Once the amount and details are entered the app will create a barcode of the same. At the same time, app will start a hotspot.
  3. The consumer will start the app and scan the barcode using the send button.
  4. The barcode shall contain basic information such as some validation message, network name (hotspot) and network key.
  5. Using the scanned information, the consumer’s app will connect directly to the hotspot started by merchants app. All the basic network validation will be done internally.
  6. Once the two devices are connected, the main process of validation will start.
  7. Both devices will exchange public key of each other.
  8. Once done, both the devices will exchange basic data in form of encrypted packet. The packet shall contain data such as user info and some other validations related data if and as necessary. The packet will be encrypted with the respective users’ public key. For example, consumer will encrypt packet using merchants’ public key.
  9. The merchant’s device will decrypt package received from consumer’s device using its private key and verify the data.
  10. Once verification is done, the consumer shall send the money requested by merchant and will deduct it from app’s database pending upload to RBI server.
  11. Once the transfer is done successfully, the hotspot will be shut down by app.

InThrall of Market

Quote:  [The 1980s and 1990s saw a wave of liberalization sweep across African agricultural markets as part of broad structural adjustment plans. Inherent in the promise of these reforms was the presumption that a competitive private sector would emerge to take advantage of newly created arbitrage opportunities, with agricultural traders efficiently moving crops from surplus to deficit regions, and from harvest to lean seasons. However, recent empirical estimates suggest that agricultural markets remain poorly integrated, with prices varying widely across regions and seasons.

Estimates reveal that traders act consistently with joint profit maximization and earn median markups of 39 percent. Exogenously induced firm entry has negligible effects on prices, and low take-up of subsidized entry offers implies large fixed costs. We estimate that traders capture 82 percent of total surplus1] Quote ends

The Indian Government has recently enacted 3 bills2, collectively known as Farm Bills 2020, which have been hailed by reputed agricultural economists, commentators and journalists for setting free the Indian farmers from the clutch of local traders, middlemen and politicians who collude to exploit both end of the supply chain – producing farmers and consumers of agricultural items. The noted agricultural economist Ashok Gulati has compared passing of these bills as a “ 1991 moment for agriculture”,   a piece of legislation which is expected to “help build more efficient value chains in agriculture by reducing marketing costs, enabling better price discovery, improving price realisation for farmers and, at the same time, reducing the price paid by consumers” (here  ,here, here)

At the same time, passing of these 3 bills  has been condemned by an influential section of farmers and opposition parties as corporatization of Indian agriculture by making the farmers as “contract producers” without any significant role in the farming decision making process(here, here, here). The main worry of the agitating farmers is that these new bills are precursor to gradual withdrawal of the state from the agricultural sector. It appears, as opposed to “1991 moment”, passing of these legislations could be considered as independent India’s “ Indigo( or Nil bidroha) ” moment.. To recall, in 1859, the peasants of Bengal rose in revolt against Indigo planters who had initially persuaded and subsequently coerced the peasants to plant indigo instead of food crop. These planters provided loans to switch over to indigo, a cash crop with a large export market and in due course made these farmers almost bonded labourers.

It would be ante-diluvium to argue that Indian farmers do not need a free-market for their outputs and inputs. But market, particularly a boundary-less pan India one, is not created by legislation only. Market is a social institution.  The critical role that robust institutions play in fostering economic growth is now well established. According to Douglas North, institutions are “the rules of the game in a society, more formally, are the human devised constraints that shape human interaction”3. The state, community or society at large may define the rules and lay down the constraints but without them institutions exist only as ideas. Market is an economic institution. Even a weekly village hat has a rule – the frequency of its operations, roles, implied or otherwise, assigned to various participants etc. As Acemoglu has written: “ economic institutions are collective choices of the society.  And because of their influence on the distribution of economic gains, not all individuals typically prefer the same set of economic institutions. This leads to conflict of interest among various groups and individuals over the choice of economic institutions and the political power of the different groups will be the deciding factor”.

Free-market, being an economic institution, must also be subjected to rules and regulation. It is undeniable that stock exchanges, commodity and financial future markets are free-markets. Dabba-trading, taking place out the regulatory boundaries is a punishable offense. Brokers are licensed entities. Earlier stock exchanges were a mutual or co-operative association of brokers and through a demutualization process these institutions were converted to a public company.

So, brokers, investors and listed companies have only bounded freedom of choice and not an unfettered one. From this point of view to designate APMC as non-free market betrays lack of understanding of market as an economic institution. When stock exchanges were de-mutualized they were not demolished and new markets were created. Only rules and constraints were restructured.

Restructuring of Indian Agriculture Produce Market: An Ongoing Process

Such restructuring has been an ongoing process in respect of markets created under APMC Acts of various states also.  In 2003, the Ministry of Agriculture, GOI came out with a model act on agricultural marketing. It was expected that individual states would suitably amend the extant APMC act to deregulate agricultural marketing. In 2007 draft Model Rules were issued to all states for them to adopt it with suitable modification. In 2017, another model Act titled “Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017 was issued by Ministry of Agriculture and Farmer Welfare. But none of these amendments proposed by the GOI evoked suck kind of revolt by farmers at large, or remonstrations by many state governments. The key features of these proposed amendments are aimed at creating a more competitive agricultural produce market, but within the broad framework of APMC Act. In corroboration of this claim a comparison is given below.

Establishment of private marketLegal persons, growers and local authorities are permitted to apply for the establishment of new markets for agricultural produce in any area. ((Section-3))Chapter IX with the title: Establishment and Functioning of Private Market/ E-Market, Consumer / Farmers Market and Direct Marketing addedVery broad definition of “trade Area” as “ any area or location, place of production, collection and aggregation “ but it excludesphysical boundaries of principal market yards, sub-market yards and market sub-yards managed and run by the market committees formed under each State APMC Act in force in India
Farmers are free to sale in any marketThere will be no compulsion on the growers to sell their produce through existing markets administered by (APMC)(Section-14)  It is stated in respect of e-market: The membership shall be freely available to all including farmers or their groups/ cooperatives/ companies.Any trader may engage in the inter-State trade or intra-State trade of scheduled farmers’ produce with a farmer or another trader in a trade area. No mention of any registration with the concerned state governments.
Registration instead of licensingLicensing of market functionaries is dispensed with and a time bound procedure for registration is laid down. (Section-44)  No clear rule in this regardThe act allows any person to act as trader subject to the following provision: Provided that no trader, except the farmer producer organisations or agricultural co-operative society, shall trade in any scheduled farmers’ produce unless such a trader has a permanent account number allotted under the Income-tax Act, 1961 or such other document as may be notified by the Central Government
Contract FarmingA new Chapter on ‘Contract Farming’ added to provide for compulsory registration of all contract farming sponsors, recording of contract farming agreements, resolution of disputes, if any, arising out of such agreement, exemption from levy of market fee on produce covered by contract farming agreements and to provide for indemnity to producers’ title/ possession over his land from any claim arising out of the agreement  Chapter VI Contract Farming: It is stated: Contract Farming Producer and the Contract Farming Sponsor shall be at liberty to mutually decide the terms and conditions of the Contract Forming Agreement, which shall not be contrary to the provisions of the Act and the Rules.    Allowed as in previous model acts.

It is also not a fact that state/ region level politicians who control and steer the functioning of state governments have been creating hurdles towards reforming and liberalizing APMC centered agricultural marketing regime. By the end of the FY 2016-17, as many as 21 states have adopted the key liberalizing features of the Model APMC Act (establishment of private market, direct sale to traders, contract farming etc.) that have been cited above.    

So the new THE FARMERS’ PRODUCE TRADE AND COMMERCE (PROMOTION AND FACILITATION) ACT, 2020 makes one radical change to the previous model APMC Acts drafted by the GOI – that is complete emasculation of state governments from the regulation of agricultural produce markets. In fact, the proponents of complete de-regulation of agricultural produce marketing regime always wanted to achieve this.  For example, the competition assessment of Model APMC Act, 2003 commissioned by the Competition Commission of India lamented that “ the Model Act allows interference of state governments in the regulatory mechanism” (italics in original)

Interestingly, the new act has not provided for compulsory registration of traders although it has a kept an enabling clause –“The Central Government may, if it is of the opinion that it is necessary and expedient in the public interest so to do, prescribe a system for electronic registration for a trader, modalities of trade transaction and mode of payment of the scheduled farmers’ produce in a trade area”.

This key feature of by-passing of the state governments stands in stark contrast to all budget speeches by erstwhile finance minister Mr. Arun Jaitly. In the following budget speeches of successive years, he talked about the reform initiative of the Centre in collaboration with the states.

“To accelerate setting up of a National Market, the Central Government will work closely with the State Governments to re-orient their respective APMC Acts., to provide for establishment of private market yards/ private markets. The state governments will also be encouraged to develop Farmers’ Markets in town areas to enable the farmers to sell their produce directly ( budget speech of 2014-15).”

“While the farmer is no longer in the clutches of the local trader, his produce still does not command the best national price. To increase the incomes of farmers, it is imperative that we create a National agricultural market, which will have the incidental benefit of moderating price rises.  I intend this year to work with the States, in NITI, for the creation of a Unified National Agriculture Market” ( speech of 2015-16)

“Access to markets is critical for the income of farmers. The Government is implementing the Unified Agriculture Marketing Scheme which envisages a common e-market platform that will be deployed in selected 585 regulated wholesale markets. Amendments to the APMC Acts of the States are a pre-requisite to join this e-platform. I am happy to inform that 12 States have already amended their APMC Acts and are ready to come on board. More States are expected to join this platform in the coming year. The Unified Agricultural Marketing E Platform will be dedicated to the Nation on the birthday of Dr. Baba Saheb Ambedkar on 14th April this year” (speech of 2016-17)

For the post-harvest phase, we will take steps to enable farmers to get better prices for their produce in the markets.  The coverage of National Agricultural Market (e-NAM) will be expanded from the current 250 markets to 585 APMCs.  Assistance up to a ceiling of Rs.75 lakhs will be provided to every e-NAM market for establishment of cleaning, grading and packaging facilities.  This will lead to value addition of farmers’ produce.

Market reforms will be undertaken and the States would be urged to denotify perishables from APMC.  This will give opportunity to farmers to sell their produce and get better prices. We also propose to integrate farmers who grow fruits and vegetables with agro processing units for better price realisation and reduction of post-harvest losses.  A model law on contract farming would therefore be prepared and circulated among the States for adoption (speech of 2017-18)

It is obvious that there has been a sea change in the thinking of the central government about the roles that various stakeholders will be allowed to play in the agricultural reform path that it wants the country to tread in near future.

It is also apparent that the grand idea of “One Nation-One Market” is a primary driver of these Farm Bills 2020. Keeping aside the concept of “nation” in this hyphenated slogan that motivates millions, we need to debate whether new laws are situated in a robust  understanding of the concept of “market” or not. Buying and selling by itself does not define a market. Furthermore, capitalist path of development is not synonymous with free-market development. (see the Singapore’s story here4).

What is the Optimal Market Design for Indian Agricultural Produce?

All “well-functioning markets depend on detailed rules”.  (Alvin Roth).  According to Roth, for a market to function properly three things must be done correctly:

1. Appropriate level of market “thickness”- i.e. a properly functioning market should bring together “a large enough proportion of potential buyers and sellers to produce satisfactory outcomes for both sides of a transaction.”

2. Right incentive to reveal confidential information or to bring asymmetry of information between buyer and sellers to an acceptable level

3. Transactional time to be as low as possible. It means access to information about quality and volume of supply and demand and processing thereof should not be so much consuming that it would be worthless by the time a transaction can actually be concluded.

Without disputing the relevance and indispensable requirements all the three attributes as above, there is one thing missing in the above list and which is a must in respect of the Agricultural Produce Markets is the needed trust between producers and buyers.  Given the immense variety and quality even of a single commodity like rice, information is highly localized and may not be amenable for standardization by a centralized authority. In fact, the Chinese agricultural information started with dismantling of centralized planning system that the country initially adopted. To enable this local information to be integrated with other markets spanning the entire country is a complex activity and needs resources and government intervention. As Roth has said “Market design turns out to be about details, such as the nature of the transactions in question, the opportunities to conduct transactions outside the market, and the distribution of information”.

These new Bills are eloquent about its objectives which are per se laudable but awfully laconic about these operational details. The protagonists of the new Farm Bills are walking on the same path that policy makers of APMC market design followed- describe the destinations correctly without stating how to reach the destination and mechanism of steering the journey to the destination.

State Intervention In Agriculture: A Universal Phenomenon

Finally, it has to be emphasized that state intervention in agricultural sector is a common phenomenon irrespective of the nature of the state. John W Mellor, a former Director-General of International Food Policy Research Institute has been a champion of the view that agriculture, despite having a small share in total GDP of all developed economies, play a central role in the process of creating sustainable economic development locally and globally. He has identified the following two big ideas based on his long international experience in designing and advising polices for this sector6:

1. The rapid growth of small commercial farmer dominated agriculture accelerates the economic transformation and is essential to the rapid decline in dominantly rural poverty.

2. Government has a prominent role if small commercial farmer dominated agriculture is to grow rapidly.

In fact, income support to producing farmer is a global reality. OECD has estimated producer support estimate (PSE), measured as a percentage of gross farm receipts. The following graph shows that Indian farmers are still having a negative production support and the same is borne out by the terms of trade between farmers and non-farmers.

End Notes:

  1. Bergquist , Lauren Falcao &  Michael Dinerstein  : Competition and Entry in Agricultural Markets: Experimental Evidence from Kenya in   American Economic Review 2020, 110(12): 3705–3747
  2.  The bills are — The Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020 (FPTC); The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 (FAPAFS); and The Essential Commodities (Amendment) Bill, 2020 (ECA)
  3. North, D. C, 1990, Institutions, Institutional Change and Economic Performance, Cambridge University Press.
  4.  Acemoglu, D and J,Robinson  “The Role of Institutions in Growth and Development” in Review of Economics and Institutions; vol.1- No 2, Fall 2010.
  5. Lim, Y.C.Linda Sigapore’s Success : The Myth of the Free Market Economy. Asian Survey Vol 23 No 6. June 1983
  6. Mellor, John Williams: Agricultural Development and Economic Transformation:  Palgrave Studies in Agricultural Economics and Food Policy

A Tribute to Tagore in the Time of COVID-19

In this time of COVID-19 let us recall that poem of Tagore which was a clarion call for fearlessness, adherence to reason, universal humanism and empathy for “Others” who are not us.  

In this tribute to Tagore I have elaborated Tagore’s original lines (in red, italics and underlined) to emphasize that nothing much has changed in the world. George Floyd’ death in USA and Jamlo Makdam’s death in India brings out the bitter truth that Tagore’s lament is still valid.

Let us have a world

Where the mind is without fear and the head is held high;

Where any nation state does not lord over others

Where aggression is not justified by patriotism

Where visas are not used to deny a human being to meet a loved one

                      Where knowledge is free;

Where science is not locked down in private enclosures

Where books are not burned by priests of “Other Gods”

Where beliefs do not banish logics

Where the world has not been broken up into fragments by narrow domestic walls;

Where race, caste, tribes, color, language and gods do not create strangers to us

Where words come out from the depth of truth;

Where truth evolves and not handed down

             Where tireless striving stretches its arms towards perfection;

Where innovation rules, ideas confront ideas, paradigm changes;

Where the clear stream of reason has not lost its way into the dreary desert sand of dead habit;

Where a child is not to afraid call out an Emperor naked

Where the mind is led forward by thee into ever-widening thought and action

Into that heaven of freedom, my Father, let my country awake

Where humans can reach for space and brings and an end to its childhood on Earth


The last line is a tribute to Arthur C Clarke’s Childhood’s End

Cry Jamlo Makdam Cry

In a heartbreaking tragedy, a 12-year-old child labour – Jamlo Makdam died on 20th April after walking for 150 km from her workplace Bhupalpally in Telengana to her native place, Bijapur district in Chattisgarh. She was working in Chilly fields in Kannaiguda village.

see here

I have written a poem in her memory.

Cry not -my beloved country- Cry not

                Save your tears

                for Jamlo, the chilly-picker,

She needs them plenty

to keep her walking.

Only a mile afar

 mother waiting to hug her

quench her thirst -before she moves to a land unknown.

Running away from coronavirus, with week’s hunger in belly,

100 rupees tucked in her skirt, bedecked with chilly flakes,

a mere 150 kilometers to walk,

no marathoners to accompany

she is walking, walking, and walking.

On a lonely road

Sun blistering above

With no helpful winds to blow away the heat

She is walking, walking, and walking.

Thirsty blood, tearless eyes

Saliva-less tongue

Still her dream dies hard

home, sweet home and mother awaiting – her final resting place.

Hunger, her best friend, she is not afraid of,

because she must walk, walk, and walk.

Stars are shining

in their AC cooled rooms,

cutting hubby’s hair short, sweeping floors – a first time in life

singing paeans to Lockdown, Lockdown and Lockdown

A 100K like in Instagram -no wonder.

Leaders are busy in their virtual world

With Mask on

Conferring on matters of life and death

gravitas overflowing

may be talking about Michelangelo

and heart beating about Jamlos at large.

But our Jamlo is not even a footnote.

Which country owned Toba Tek Singh?

Gods only know.

Which state owns Jamlo for her to receive some succor?

The answer is blowing in the wind

To her mother’s arm that is the only place on earth she belongs to.  

Corona Pandemic- One size does not fit all

“Blessed are the Meek, for They Will Inherit the Earth” (Matthew 5:5). 

Corona virus -COVID-19- started its journey in an industrial city of China sometimes in late 2019. Within a short span of 3 to 4 months it has enveloped the entire earth with its foot print, thus qualifying it to be designated as a pandemic attack by a tiny microorganism that can multiply only when it can find a human cell as a host , a springboard for jumping to its next victim. It is said that a virus is agnostic about the socio-economic profiles of its victims; it does not care as to what economic strata as person belongs, to what god a person kneels. At the same time credible evidence is there that age, sex and existing conditions do have a bearing on the survival probability of a corona infected person. For example, a study1 of 6839 corona deaths in New York City shows that 72.3% of them belonged to the age group 65 and above, 75% had underlying conditions like Diabetes, Lung Disease, Cancer, Immunodeficiency, Heart Disease etc. 62% of the victims were males.  In another study of 44,000 cases from China, deaths were at least five times more common among confirmed cases with diabetes, high blood pressure or heart or breathing problems2.

So, there are factors that create an enabling conditions for COVID-19 to thrive and kill its victims. But rate of incidence of corona cases and consequent deaths also varies between countries.  One Indian internal medicine expert has stated why incidence of corona is relatively low in India. He has identified 3 factors for a virus’ spread — the “agent or the virus itself, the host and the environment”.  According to him India’s relatively higher temperature and humidity slows down the march of the virus3.

It has also been reported that a US government study has also confirmed the role of ambient temperature and humidity in killing the virus on surfaces and air4.

Even after controlling all the above noted factors there is cultural a dimension that also determines how the virus would affect a given society. David Kelvin, a Canadian microbiologist has pointed out that the practice of Italians greeting “each other with an embrace and kisses” increases the probability pf passing the virus “on a more dangerous dose of COVID-19.”5

Religious faith also sometimes determines a society’s willingness to accept scientific approach to handling of any epidemic disease. For example, only 72.2% of children aged 19 to 35 months in the United States were fully vaccinated in 20156.

A major global survey published in June 2019, covering 140,000 people aged 15 and older in more than 140 countries found people in higher-income countries were among the least confident in vaccine safety — particularly in North America and Europe. Meanwhile, vaccine trust was highest in countries where preventable diseases still spread, such as Bangladesh and Rwanda.7

The above brief review of various plausible determining factors for country wide variations in incidence of corona virus and subsequent death provides a possible direction to further research that would help countries to identify deficiencies in their health infrastructure and attitudinal bottlenecks of the people at large to contain and minimize the effect of a virus like corona , in current time as well as in future. Pending that it may not be irrelevant to look at available data that provides some clues to the factor that are driving the variations in country wise impact of corona virus. Our aim is to carry out a descriptive statistical analysis without trying to build any model for conducting statistical hypothesis. 

Data and Study Variables: For this article we have used data that are available in public domain and put out by multilateral organizations like World Bank, World Health Organization., Worldometer and Pew Research Centre. Main data on COVID-19 is collected from Worldometer, a reference website.  Pew Research Centre brought out a report in October 2017 analyzing religious change and its impact on societies around the world. Covering 199 countries and territories around the world, the study identified countries which favor a specific religion either as an official government sponsored religion or by according a special status to one specific religion over all other faiths. Income data is taken from World Bank website. Expenditure on health data is taken from WHO website. (the further details are available in a table given at the end).

Intensity of infection of a virus can be estimated by the number of virus afflicted persons with symptoms. But a corona infected person may not show any symptom for several days, extending up to 14 days. These pre-symptomatic cases cannot be detected unless a country either carries out a random tests of enough size or for all citizen or at least of all persons in selected age groups. It is also possible that many persons with COVID-19 symptoms remain un-documented because many covid-19 infected persons with mild symptoms recover without hospitalization.  So, the number of cases reported by a country may also depend on the number of tests carried out by that country. However, we consider the number of reported cases as the primary variable of study. To account for the effect of population size we have taken normalized variables- that is cases/tests/deaths per million of population. 

Regarding health infrastructure we have considered the “government expenditure on health as percentage of government expenditure / GDP” as the discriminating variable across countries. To convert this numerical variable to a categorical variable, we have divided countries into 4 groups based on their percentile ranks; 4 groups based on 25 percentile, Median, 75% and maximum amount. The corresponding groups are named as Lower, Lower Middle, Upper Middle and High spenders.

Regarding “Religious Status” variable, every country is put into one of the three categories- (1) Having official State Religion, (2) Having a preferred religion, (3) No official religion. Countries which have declared atheism as official doctrine, we have designated “Capitalist Communism” as its state religion. China, Vietnam. Incidentally, Russia has a preferred state religion- Christianity.


Country Coverage:  This study is based on 123 countries having a total population of 7.2 billion as on 2019. The latest US Census Bureau estimates world population at 7.58 billion as on June 2019, a coverage of 95% of world population8

Income Group: The total number of cases of these countries was 2,32,37,82 or around 2.3 million. If we had included cases of all countries which have reported COVID-19 cases, this number would have been 2.33 million. So, analysis that follows would be representative of the world scenario.  Top ten countries in terms of number of cases accounted for 1.8 million cases, that is 78.26 percent of total cases covered. The income group wise profile of COVID-19 and its proximate determinants is given in the table below.

Table 1 here:

Table 2 here

The descriptive details of various measures of incidence of COVID-19 across income groups and its covariates given above leads to one conclusion – the richer countries with higher proportion of older people are more likely to fall prey to COVID-19 and once infected most likely to die also. The best possible health infrastructure does not provide any protection against these silent and invisible killer.

A sharper picture emerges if one looks at the top ten countries in terms of incidence of COVID-19. The following table gives the relevant details.

Table 3 here            

One obvious outlier in this group most affected countries is Germany. Despite having a high share of older people and a moderate level of public expenditure on health it could achieve much better performance in containing death rate of affected persons. The fact that Germany conducted tests of relatively larger number of persons may not be a good explanation because Spain and Italy also have tested a similar proportion of its people. S

Health Infrastructure:

The quality of health infrastructure of a country is positively correlated with the government allocation of resources for this purpose. Many physical indicators like number of doctors per million people etc. would depend more on government initiative than on private one. To establish the relationship between quality of health infrastructure and other COVID-19 related measures we have converted two numerical indicators of Government health expenditure into qualitative measures based on their percentile ranks. The resulting 4 quality levels are based on quartiles. These 4 levels in ascending order are Low, Lower Middle, Upper Middle, High. The tables below are expected to provide some clues about the importance this factor in determining the intensity of COVIS-19 in different countries.

Table 4 here


 It is obvious that, the countries in highest income bracket with high rate of government expenditure on health suffered disproportionately more due to COVID-18 pandemic. This group of countries accounting for 10.7 percent of the world population recorded 65.4% of death due to COVID-19.  Both China and India, two countries that account for near about 40% of world population and both spending relatively much less than their peer countries in their respective income groups account for only 4 % of the share of cases and 3 % of total deaths. In China, a plausible reason for this could be that the government at a early stage could segregate the district where the virus first struck.  In India, demographic profile of the population as well as peoples’ inherent immunity due to their constant exposure to highly un-hygienic living conditions could be one factor.  I believe people intuitively understand this- the fact that migrant workers are risking their lives to go out of their metropolitan workplaces to remote villages without any worthwhile medical facilities only corroborates what our data is showing above. It is the rich who should be more scared of COVID-19 than the poor.

Age Structure:

Table 5 here

Table 6 here

Table 7 here

The following chain of hypothesis emerges from the data presented above:

  1. the prosperity results in longer life span of people of high-income countries
  2. better health infrastructure increases survival probabilities of older people with heightened co-morbidities
  3. when a new virus like COVID-19 emerges on the horizon, these are the people who are most likely to succumb to the new killer.
  4. in the low-income countries with rickety health infrastructure expected life span is shorter
  5. high child mortality and un-hygienic environment of living for the poor masses create a built-in capability to survive in a hostile environment.

Blessed are the poor for whom poverty is an enabling condition that better prepares them to face the vagaries of nature; otherwise they would have died young. Cursed are the rich who are shielded by their wealth from various known morbidities but make them ill-prepared to face an unknown one.

Societal Culture 

Wikipedia defines culture as “an umbrella term which encompasses the social behavior and norms found in human societies, as well as the knowledge, beliefs, arts, laws, customs, capabilities, and habits of the individuals in these groups” 9.  As mentioned above forms of greeting a person through hugging vs handshake vs bowing reflects “culture” of a group of persons. Religious beliefs or faiths provide the overarching framework of culture of most of the countries, even in 21st century. Such beliefs do matter in the mundane task combating a pandemic. In many Islamic Societies, women cannot go out without wearing burqa or hijab, a kind of mask.  Wearing mask or covering face with simple clothes has been made mandatory in many countries reeling under COVID-19. So, women are much better protected in a conservative Islamic society. An obvious testable hypothesis would be that women to men infection ratio would be much less in an Islamic country that a non-Islamic one.

Religion could be another major factor in determining the intensity COVID-19 infection in social groups opposed to vaccination. Many low-income or lower-middle income countries have implemented universal immunization policy. But in many developed countries it is legally permitted by parents to deny vaccination to their children invoking religious sanction against vaccination.  For example, in USA, 45 states and Washington D.C. have allowed religious exemptions for people who have religious objections to immunizations. 15 states now allow philosophical exemptions for those who object to immunizations because of personal, moral or other beliefs. The Wellcome Trust survey cited above found that some of the world’s top anti-vaccine countries are in Europe. In France 1 in 3 persons disagreed that vaccine is safe. Till a few years back many Catholics were opposed to vaccination because “genetic source material made to develop most vaccines come from aborted fetuses”.  It may be noted that more than 80% of Italian citizens were Catholics. In Spain around 68% are roman Catholics.

Thus, religion can be considered another factor that may affect the progress of COVID-19 in any country. When a state declares a religion as a state religion or a preferred religion, the world view of that religion would guide, direct and probably compel any citizen to be incompliance with the edicts of that religion. The following table may not confirm or reject, prima facie, the role of religion in creating a relatively smooth passage of the onward march of COVID-19 across the globe, but it should ignite a more structured examination of the issue.  We may point out here that countries which have Christianity as an official religion belong to either High or Upper-Middle Income group. The shares of countries in these two income groups among all countries with Christianity as declared religion are respectively 41.4% and 50.3% respectively. So, there is confounding effect between these two factors, namely income status and religious status. It is neither attempted nor possible to disentangle the impact of these two factors on intensity of COVID-19 spread in different countries10, 11.

Table 8 here

Note: Capitalist Communism is taken as state religion for China and Vietnam as atheism(or rather no organized religion)  is declared as state policy.

The table above clearly points out that high per capita income does not ensure lower risk for a citizen getting infected by COVID-19, even though the country has built the best possible health care infrastructure. One caveat is due here. It has been reported that incidence of COVID-19 among poor African Americans are much higher as compared to US average. More data will be needed to address such intra-country issues like incidence of COVID-19 by race, gender and income group.

Concluding Observations:

Governments across the world have reacted to the COVID-19 pandemic in a way that reminds me of what Bertrand Russel famously said-   “Collective fear stimulates herd instinct, and tends to produce ferocity toward those who are not regarded as members of the herd”12.  Only one solution – that is Lockdown and Social Distancing – has been offered by our medical experts and their political bosses without any effort to calibrate its implementation with due regard to social differentiation in terms of prosperity, access to habitable shelter, presence of co-morbidities.  A government which in normal times cannot organize delivery of adequate nutrition to millions of children is taking upon itself to feed hundreds of thousands of migrant wage laborer because they were not allowed to return to their home villages. The irony of such policies is that while migrants would have financed their own journey if they could proceed to their home before imposition of Lockdown, now they will have to be provided with shelter and food at government’s cost.

This essay has been written to highlight the fact that COVID-19 does not affect all countries and even all social groups within a country equally. Of late, politicians across democracies are taking help of Data Science to understand voter’s behavior   – who is more likely to vote in their favors and who are on fence etc.  The electoral strategy is based on such data analysis. But we are yet to see any country that has used Data Science to calibrate its response to COVID-19. For example, in India there are many large industries which are in a relatively segregated place. Most of its workers are residents in the campus. Irrespective of the goods produced there, it is madness to impose complete Lockdown in such places. Many University campuses are also far away from large habitations. It should be possible to work out modalities of functioning of such campuses with appropriate precautionary measures.  These are only few examples.


  6.   The state of the antivaccine movement in the United States: A focused examination of nonmedical exemptions in states and countries:  by  

Jacqueline K. Olive, Peter J. Hotez, Ashish Damania, Melissa S. Nolan :







For all tables see the file from the Google Drive: follow the link below

Poor as a Commodity

This is a blog that I wrote on 21st April 2010 for my earlier site . I am tempted to reproduce it without any revision today in the wake of Prof. Abhijit Banerjee getting his Nobel for his work on poor of the world. Although his work is extremely valuable and revolutionary from methodological point, I am still skeptical about the obsession of social scientists and politicians with poverty , particularly absolute poverty.

Counting tigers and poor have become a national pastime of India’s leisure class. While the population of tigers we want to protect, we would like to number of poor to decline to zero.  We are failing in both, some would say miserably.

 The practice of counting number of poor in a country goes back to the second half of nineteenth century when Charles Booth carried out a remarkable survey of living conditions in London. Booth wanted to contest the results of an 1885 report that claimed that 25% of Londoners were living in abject poverty.  Booth and his team visited every street of London and estimated that the incidence of poverty at 31% initially and then at 35%.  In the first decade of 21st century and after 62 years of independence we can not claim to be in a better position.

The reason for obsessive preoccupation with a precise headcount of poor on the part politicians and economists is not difficult to understand. The Indian government has a huge budget for a variety of poverty alleviation programs. Every state vies for a share of the cake and it depends on the number of poor. There is a turf war between the Ministry of Rural Development (MORD) and the Planning Commission with regard to this counting tussle. A footnote in the Expert Committee Report of the MORD is quite candid about it. It says-

Which Ministry in GOI has the best control over the district collectors, CEO Zilla Parishads and Panchyats? The obvious answer is the Ministry of Rural Development (MoRD). , because it transfers huge funds to DRDAs and to panchayats, runs NREGA, BRGF and TSC, and ever since their creation panchayats have always regarded MoRD as their mentor.  Hence MoRD is the only Ministry in GOI that can make the field officials and the panchayats take its guidelines seriously. Therefore the task of overseeing preparation of the new BPL lists has been rightly given to the MoRD

Another very interesting thing that this report brings into focus the practice of fixing number of BPL (below poverty line) families to the limit fixed by the planning commission estimated poverty ratio. Thus BPL certificate becomes a badge of honor like a caste certificate. Only difference is that BPL certificate can become a tradable commodity. In fact Mr. P. Sainath, a member of the expert group has put it succinctly

  • In many regions like the KBK, with millions extremely poor, you will find that most of the BPL cards in a village are with the local moneylender. The poor owe him money and he takes their cards as collateral. You can find one man with 400 cards.

He also notes that

Dharavi , the biggest slum in all the world  and with a population of over a million ended up home to just 141 BPL cards. If that’s all the poor there are in that slum, then India is poverty-free.

The expert group estimates the number of poor in India as close to 50% as compared to 28.3%.  With this order of variation coming from two arms of the same government, what sanctity is there in these numbers?

Apart from the exegesis of official experts, we have a whole industry of Poverty Research mostly funded by multilateral agencies and grant giving foundations. The route to stardom is well laid out – from JNU / Delhi school to Cambridge on both side of Atlantics or some other ivy league schools and then to the portal of the World bank / UN organizations. India which is estimated to be home of the largest number of poor in the world has also produced the maximum number of researchers on poverty.

And the debate on what is the best way, statistically speaking, to estimate incidence of poverty some times assumes surrealistic proportion.  One just has to recount how, long back, two highly qualified statisticians and professors engaged themselves in a fierce debate about how to take into account inter-person variation in calories intakes and consequently how to correctly measure the incidence of poverty using a minimum level of calorie intake recommended by nutritionists.

What is the real purpose of the debate? The real motive is political – which set of policy measures is good for poverty reduction. So if your prior belief is that economic reform is bad for the country then get a suitable measure of poverty index to demonstrate that poverty has increased in the post reform period. If one’s prior belief is opposite then get hold of another measure. It is said in statistics that if you beat some data sufficiently you can always reject a null hypothesis.

I can not better the opening sentences of Charles Elliott’ book Patterns of Poverty in the Third World in this regard-

The basic configuration of world poverty is well known. Although the detailed statistics are unreliable, the services of a statistician are not required to establish that the majority of mankind is ill-fed, ill-housed, under-educated, and prey to preventable disease.

Do we really need to count the number of poor so accurately as if it is gravitational constant on which depends the trajectory of a missile?  Poverty is ugly and de-humanizing. It is ugly more in a relative sense than in an absolute sense. A poor is not treated as a full citizen in any country- developed, under-developed, capitalist or socialist. The greatest suffering a poor has when she is made to feel as a lesser human being, a person deserving only piety from others. The tears of universal humiliation are much more real and enduring than the tears of hunger. It does not matter whether she is a singleton or numerous.