Editorial 1: How data can empower MPs to serve people better
Context:
- India’s parliamentary constituencies (PCs) serve a dual role as geographical and administrative policy units headed by democratically elected Members of Parliament (MPs), who are responsible for fulfilling the needs and aspirations of their constituents through impactful policy.
- For MPs to effectively engage with their constituents, it is imperative to understand and prioritise the issues most impacting their communities. Unfortunately, at present, timely and readily available data on critical issues related to population health and socioeconomic well-being is lacking at the PC level.
The launch of the National Data Sharing and Accessibility Policy (NDAP):
- the Government of India (GOI) launched the National Data Sharing and Accessibility Policy (NDAP) to make a variety of data related to population health and well-being from current GOI schemes more accessible.
- In recent years, district-level data whether from GOI administrative data or independent surveys such as the National Family Health Surveys (NFHS) has emerged as a key input for policy deliberations.
- Increasing the availability of district-level data, or data that allows aggregation at the district level does not help the cause of the PC having the same data.
- This is because the 750-plus district boundaries of India do not correspond or are aligned in a straightforward manner with the 543 PCs of India.
- A district can have parts of or an entirety of multiple PCs intersecting it. Similarly, a PC can have parts of a district or a multiplicity of entire districts intersecting it therefore a single digital platform will provide a better result for analysing the data and better framing, implementation of programme.
Data-based monitoring and governance:
- Data-based monitoring and governance of populations becoming central to identifying priorities.
- it is critical that MPs are empowered with appropriate data that relates to the populations they have been elected to serve and are able to effectively liaise with multiple district administrations in a manner that allows them to function effectively, efficiently, and independently without having to solely rely on the district administration which is not in a position to provide accurate data on the PC.
- Set up of District Coordination and Monitoring Committee (DDMC):
- Recognising this need for better synergy between district administration and elected representatives, the Ministry of Rural Development issued an order in 2016 to all states and Union Territories to constitute a District Coordination and Monitoring Committee (DDMC), chaired by district MPs and charged with making implementation and monitoring of central schemes more efficiency.
Learning and adopting from the international platform:
- A new interactive PC data tracker developed by the Geographic Insights Lab at Harvard University has for the first time provided data on crucial population, health, and well-being estimates for each of the 543 PCs, and including a factsheet for each PC.
- The data underlying the PC dashboard comes from the NFHS-4 (2015-2016) and NFHS-5 (2019-2021). The methodology powering the PC tracker provides a solution to the existing PC data gap.
- Using GPS coordinates, the researchers mapped existing NFHS survey clusters onto PC boundary maps, from which indicator prevalence estimates for each PC were estimated.
- It has enabled a reliable PC-level resource for the current data context, a more durable solution would entail that all datasets be consistently geo-tagged for PC , as a new uniform data standard for all microdata (or data that is disaggregated below district levels such as sub-districts or blocks or villages) reporting in India.
- Such a solution is compatible with the current policy intent to steadily move towards digitisation of all government data through the 2022 Draft National Data Governance Framework Policy, which calls for the creation of standards for metadata and datasets across ministries.
- Although still nascent, the announcement of a National Data Governance Policy during the 2023 budget session is a step in the right direction for good governance.
Conclusion:
- Timely and accessible data at the PC-level can transform the work of MPs by bringing to light the most critical issues and at-risk populations in need of targeted interventions.
- It can also empower MPs to raise policy questions at multiple levels of governments from the floor of Parliament to their frequent interactions with the district administrations.
- Further, it facilitates the MPs to independently initiate and sustain meaningful dialogue with civil society NGOs and other stakeholders to collaboratively address the issues most important to their constituents.
Editorial 2: Factors behind moderating CAD, how it will impact markets
Recent Context:
- Recently, Government of India released the data and its shows that India’s exports and imports declined by 6.59% and 3.63% respectively in January, there are indications that the current account deficit (CAD) difference between exports and imports will moderate despite the global slowdown triggered by the rising inflation and interest rates.
- The moderation in CAD, expected to be aided by the fall in commodity prices, rising workers remittances and services exports, and abatement of selling pressure by foreign investors, is set to boost sentiment on the investment front, as it will also bring the pressure off the currency.
What is the significance of CAD?
- Current account deficit refers the economic situation when the value of the goods and services that a country imports exceeds the value of the products it exports
- CAD and the fiscal deficit together make up the twin deficits the enemies of the stock market and investors.
- If the current account – the country’s trade and transactions with other countries show surplus, that indicates money is flowing into the country, boosting the foreign exchange reserves and the value of rupee against the dollar.
- These are factors that will have ramifications on the economy and the stock markets as well as on returns on investments by people.
- According to the RBI, the CAD, which was at $36.4 billion for the quarter ending September 2022, is expected to moderate in the second half of 2022-23 and remain eminently manageable and within the parameters of viability.
- As per RBI,
- “CAD for the first half of 2022-23 stood at 3.3% of GDP. The situation has shown improvement in Q3:2022-23 as imports moderated in the wake of lower commodity prices, resulting in narrowing of the merchandise trade deficit,”
How did the trade deficit narrow in Jan?
- January trade deficit narrowed to $17.7 billion, led by a sharp fall in imports, while exports fell by a smaller amount.
- “The sharp drop in imports was due to non-oil imports falling, mainly due to a price impact (softening in coal prices from mid-December), likely softening in domestic demand post the festive season (such as lower imports of transport equipment), and seasonal impact of the Chinese New Year holidays
- On the other hand, after the Rs26,000 crore sell-off by foreign portfolio investors in January, FPI outflows have come down to Rs4,400 crore in February so far.
- Workers’ remittances went up to $30 billion in the April-September 2022 period from $25.48 billion in the same period a year ago.
- At the same time, gold imports fell to $20 billion from $23.9 billion a year ago.
Will capital flows improve?
- While there is a perception in the markets that capital flows could come under some pressure with China’s reopening and any deviations in monetary policy expectations
- Inflows are expected to increase to the economy on the whole, as foreign investors are unlikely to keep away from India which is expected to witness one of the highest growth rates among large economies.
- At a time when the economies of many developed markets are expected to take a hit, the RBI has projected the GDP growth for the next fiscal (FY2024) at 6.4% and the Union Budget has indicated a capital expenditure of Rs 10 lakh crore (over $ 120 billion).
How will moderating CAD impact the market?
- While rising CAD raises concerns among investors as it hurts the currency and thereby the inflow of funds into the markets, a notable decline in CAD in January has improved market sentiments. The benchmark Sensex at BSE rose 407 points intraday on Thursday before closing at 61,319 with a gain of 44 points or 0.07%.
Conclusion:
- Reduction in CAD is very important for the currency. The value of an economy hinges a lot on the value of its currency and thereby, it also supports the equity markets by keeping the fund flow intact.
- The reduction in CAD is due to services exports, is a positive sign. However, government need to take other areas of economy to cover further CAD.
- Moreover, with the rise in interest rates in India after the RBI hiked the repo rate by 250 basis points to 6.50%, non-resident Indian deposits, remittances, and FPI investment in debt are expected to rise further.
- NRI deposits had increased by $3.62 billion to $134.49 billion in the April-November period of 2022, according to RBI data.
- Capital flow into India came under pressure in 2022 following the sharp rise in interest rates in the US.
- While FPIs pulled out Rs121,439 crore in 2022, even in the first six weeks of 2023, the FPI flow has been negative and the equity markets have witnessed a net outflow of Rs32,887 crore till February 16.
- While the flow of capital will depend upon the interest rate movements and currency movements vis-a-vis the US dollar, there is optimism among global investors about India.