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Showing posts from January, 2013

Newsletter Article: Issue #18 - Compelling to Save

Author: Parul Agarwal

Saving has lately been recognized as an inevitable instrument of financial inclusion. But this financial behaviour needs to be judicious as undisciplined saving traps people in the vicious circle of poverty that results in accumulated debt. For low-income households, situations have stunning capacity to influence behaviour and decision-making (Mullainathan et.al). Additionally, their inter-temporal choices and consequent poor planning indicate majorly loss averse behaviour i.e. their loss of utility associated with giving up a good is greater than the utility of obtaining it. Perfectly aligning with this conduct, low income people often claim that they are not able to save because of reasons like high expenses and unexpected shocks that their families are vulnerable to.
In this scenario of restrained behaviour and varied preferences, access to a no-frills account hasn’t proved to act as a trigger and because these accounts offer liquidity, they are highly leaky b…

Newsletter Article, Issue #18: Saving against all odds - A Savings Story from the field

Author: Sitaram Mukherjee

This is the inspiring story of an ordinary housewife who rose above her position and succeeded in making her life worthwhile. Hailing from Narpatpur, Varanasi, Gita Devi was just another regular housewife whose job description included looking after her family and doing daily chores. Her family consisted of a husband, a son and a daughter and an aged father-in-law. Belonging to a lower middle class family they were not well off, financially. Her husband was the sole earning member of the family and like every average Indian household, Gita Devi was a homemaker.

Newsletter Article, Issue #18: Know the Organization - Centre for Advanced Financial Research and Learning (CAFRAL)

An interview with  Mrs. Usha Thorat, Director, CAFRAL. In  this  issue, we get to know more about  CAFRAL’s aspirations and future plans in the area of Financial Research. Usha Thorat, former Deputy Governor, Reserve Bank of India, took over  as  Director of the Centre for Advanced Financial Research and Learning (CAFRAL) in January 2011. CAFRAL is promoted by Reserve Bank of India as a centre of excellence for research and learning in the field of banking and finance
1. How would you describe CAFRAL? Where is CAFRAL positioned when you take into account all other organizations that research financial services in India with respect to key objectives, priorities?
a.Key Objectives, Priorities b.Current Projects, Future possibilities
CAFRAL is an institution set up and supported by the Reserve Bank of India to evolve into a global centre for research and learning in banking and finance. Relative to other research institutions, I see CAFRAL as providing a leadership and catalytic role in rese…

Newsletter Article, Issue #18: Avaaj Otalo: Evaluating the effectiveness of a mobile-based extension service

Author: Ishani Desai

It is estimated that more than half of the Indian labor force is engaged in agriculture.  Given this, India’s productivity in agriculture is still quite low.  For example, India is the second largest producer of cotton in the world, after China.  Yet, Indian cottonproductivity ranks 78thin the world, with yields only one-third as large as those in China.Many factors, such as access to credit and insurance may contribute to differences in productivity; but a key possibility is that farmers lack information about ways to increase their productivity.
Agricultural research institutions in India generate a large amountof practical scientific knowledge; however, little of this information actually reaches farmers because of inefficient ornonexistent agricultural extension systems.  The Government of India spent nearly $60 million USD on public agricultural extension programs from 2009 to 2010.  Despite this, a nationally representative survey shows that just 5.7 percent…

Reporting live from Satara – HDI through field glasses

My first blog post from Satara was a basic introduction to our project on long term savingsand the second was about some preliminary resultsfrom our baseline data. This post is not technically about the project but is more about the setting in which we conduct it. Social scientists who are not economists begrudge our perpetual need to over-simplifythings into one number or index: e.g. focusing on the literacy rate while ignoring the quality of education, gender differentials or the content of education. While I wholly support the stance of economists who need to aggregate and streamline facts to make cogent policy recommendations, there is no denying the fact that there is a lot of information that gets excluded in the process. I make no ambitious claims to override existing measures for development, but I do think that there are some informal factors that can help us put our fingers on the contextual pulse of an area… and well, it is more fun than Google-ing.

Here is a thought experi…

What scheme would you like? - Let's ask the poor ..

Yesterday evening I attended a SPARK session (symposium like talks on various topics pertaining to development economics held frequently at IFMR) on the MGNREGA. While the speaker went through the history of the various similar schemes the government had conducted in the past, I began to notice a similar feeling in me. The feeling of skepticism over whether the Government knows what it is doing especially in this case. Many a time, we have seen several Government schemes fail to address what they set out to achieve. No matter how well-intentional the objectives are, there is definitely doubt on whether the right people or the right issues are being targeted ...

Today, I came across this article on the WSJ Blog with respect to India, titled - 'How to Find the Poor' - the idea to allow the poor to choose a scheme that they think would benefit them the most sounds ideal I guess. Lets look at ourselves, the privileged lot if I may say so - How often do you count yourself fortunat…

Hard work isn't enough..

Anyone who has visited the Hyderabad field office will never forget Bala, the office boy. At the age of 22 he already has two young sons and has been working hard to support them and give them a bright future. He’s one of the smartest young people I know and if only he had had the chances I had, I’m sure he would have been my boss today and not the other way around.
His elder son started school last year and Bala’s dream was to put him in Delhi Public School. He firmly believes that giving his child a good education will set him free and give him the opportunities that he could only dream of. This is a very noble thought, unfortunately the annual fees at DPS for Kindergarten is approximately Rs. 40,000, which is 5 times his monthly salary. He settled for a cheaper English-medium school close to the office, which is still much better than any Government school close to where he lives, but also more expense than he can afford.

A Platform for Knowledge - Enabling people to learn ..

I received a rather interesting link/website via my email today. The link read as MR University and all I could think of was, "Ok, this must be another website portal of some university or college". Well, on clicking the link and looking through the contents of the site, I was pleasantly surprised. The site http://www.mruniversity.com/ is an online education portal or platform that allows users or teachers to upload short videos on topics or lessons they wish to impart. First topic that I come across is Development Economics.
The intent of the website is eloquently put out by the two economists, Tyler Cowen and Alex Tabarrok in the intro video. What started as a blog focusing on economics and its various implications in understanding why things are the way they are around us, has now an interesting addition. A video portal titled MRUniversity or Marginal Revolution University that focuses on online education with subjects pertaining to economics. It brought back to my mind,…

Vocationalisation of education in India: Current Scenario, Key Challenges and New directions

“Every handicraft has to be taught not merely mechanically as is done today, but scientifically. This is to say, the child should learn the why and wherefore of every process.” - Gandhi’s Philosophy of Education

The greatest challenge in Indian education system today is to provide skill based education to the youth. This is exacerbated by a mismatch in demand and supply for the skilled workforce. The penetration of vocational education and training remains poor not only in rural areas, but also in urban regions where there is a higher installed capacity to impart the same. This post is an attempt to make the readers understand the need of vocational education in India. Also, this is an attempt to summarise a few recommendations on the same. 
A recent survey (61st round) conducted by the NSSO found that:

1. The percentage of population that completed primary education was 70%, but less than 10% went on to complete a graduation course and above. Almost 97% of individuals in the age bracket…