Niti Aayog Presentation

1. How to make every rupee go further Bjorn Lomborg

2. Why prioritise?

3. • No matter how much resources • We can’t do it all • Need priorities • Prioritization happens • Even if not acknowledged We can’t do everything

4. India’s total public consumption 0 2,00,000 4,00,000 6,00,000 8,00,000 10,00,000 12,00,000 14,00,000 16,00,000 18,00,000 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Publicconsumption,₹crore }₹4 lakh crore Worldbank 2018

5. • Next year India will likely have an extra ₹4 lakh crore to spend • Where do you spend it? • All sectors want it • Everyone has • A compelling story • Highlighted in newspapers • With campaigners pushing for more funding As public spending increases

6. • Clearly politics crucial in deciding spending • But I want to show you an alternative way • Evidence-based spending • Using cost-benefit analysis • Stepping back, we all agree that we want to • Help and do as much good as possible for every rupee An alternative way to help prioritise

7. How to prioritize?

8. • How do we prioritise in our private lives? • Use a menu • With prices and sizes How to prioritise?

9. Menu with prices and sizes

10. • Copenhagen Consensus • We’ve been making menus for 14 years • “Where will the next rupee do most good?” • Work with 300+ of the world’s top economists • Including 7 Nobel Laureates • Applied the methodology many places Finding the best policies for a state

11. • Using Rajasthan as an example Finding the best policies for a state

12. • A partnership with Tata Trusts and the Copenhagen Consensus Finding the best policies for a state

13. • First, we need to find the best new policies • Where extra money could be spent Finding the best policies for a state

14. Finding the best policies for a state • That means talking to 800+ stakeholders across Rajasthan to find the smartest policies

15. • Second, we ask top economists from India and abroad to analyse the costs and benefits for each of the best policies • We also ask stakeholders and experts to review and comment the papers Finding the best policies for a state

16. Finding the best policies for a state • This gives you 1,000+ pages of peer-reviewed research

17. • Third, if nobody hears about the analyses, they will have no effect Finding the best policies for a state

18. Finding the best policies for a state • Research profiled all across India

19. • Fourth, prioritizing all the research • By top, Indian economists Finding the best policies for a state

20. Finding the best policies for a state • Four Eminent Economists scrutinize all analyses to find best policies

21. • Get the information to the public • Get the information to the civil servants • Get the information to the politicians Getting the research to be useful

22. Getting the research to be useful

27. • Peer reviewed papers • Summaries • Newspaper articles • One-page overview What is the output?

28. • Politics crucial • But we all want to find the optimal policy to help do most good • Evidence-based cost-benefit analysis can help • Show where we can do the most good • Overall • Or within Education, Water, Health and any other number of areas • Help guide politicians to top policies • Help guide civil servants to top policies • Help guide the public to top policies • Through pervasive information campaigns • Help bridge the gap between political and economic optimality Optimality in a political setting

29. • The numbers are for Rajasthan • All numbers standardized across all areas • GDP growth, wages, value of life • Value of future vs present • You will hear short presentations from the authors Let’s do a prioritization!

30. Education Rajesh Chakrabarti, Kushal Sagar Prakash, Mansi Arora Sunay Policy Advisory Rajasthan Priorities, Niti Aayog, June 14

31. Introduction Enrolment & retention rates in India Quality of education in India Learning outcomes continue to remain low and even decline over years in Rajasthan  45% of Grade 5 students state could not read a Grade 2 textbook in 2016  % of Grade 5 students able to do division decreased from 46.8 % in 2007 to 37.2% in 2016 Improving learning outcomes with limited budget  Rajasthan’s education budget fell from 19% in 2010 to ~17% in 2016 (RBI, 2016)  Reaping higher benefits from current expenditure is one way to bridge the gap

32. First analyzed intervention Computer assisted learning (CAL) at the Right Level

33. Description of computer assisted learning (CAL) at the right level Application of personalized technology for increased positive effect on learning outcomes Adaptive to children’s level Intuitive & easy to use Complementary to classroom teaching Scalable Least dependent on infrastructure

34. Mindspark is an education software that: Adapts to student’s learning levels and learning pace Analyzes data to identify patterns of student errors Targets content to alleviate conceptual ‘bottlenecks’ Helps educators plan lessons and discover new teaching methods, and in-sync with the school curriculum Used by 400,000 students, has a database of over 45,000 test questions, and administers over a million questions every day The model of Mindspark is analyzed for benefit-cost ratio The study uses evidence from an evaluation of Mindspark done in Delhi in 2017

35. Costs involved in implementing CAL at the right level Cost components Costs for scaling are estimated from Muralidharan et al (2017) Cost per student for 5 month scaled intervention is Rs.1333 Infrastructure Hardware Staffing Pro-rated cost for software development Cost for Pilot (or <50 schools): Rs.1000 per student per month Cost for >50 schools Rs.267 per student per month Costs for >1000 schools Rs.130 per student per month

36. Benefits from CAL at right level Benefits are gains in lifetime earnings from improved learning outcomes Benefit is Rs.98,825 for every individual Net Present value (NPV) of lifetime benefits is calculated Improved learning outcomes from CAL at RL Improved test results Wage returns from improved test results Aslam et al. (2011)Muralidharan et al. (2017) 5.08% (Impact on wage/yr)

37. Benefits from CAL at right level 0 5000 10000 15000 20000 25000 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 Gaininannualincome Working age of an individual Benefit to an individual over lifetime

38. Total costs, total benefits and cost-benefit ratio Discount rate 3% 5% 8% Benefit (1000 INR) 177.2 98.8 46.3 Cost (1000 INR) 1.3 1.3 1.3 BCR 133 74 35

39. Second analyzed intervention Doubling teacher-pupil ratio

40. Description of doubling teacher pupil ratio Reduction of pupil teacher ratio (PTR) further by 50% RTE stipulates PTRs for primary (30) and upper primary levels (35) Rajasthan is well within the target Review of literature suggests that further reductions may yield greater effects on learning outcomes (Muralidharan and Sundararaman 2013, Giridar and Karopady, 2005) Case of AP  even with PTR within RTE figures, further 50% reduction of PTR improved performance substantially Based on the idea that smaller class size leads to improved learning

41. Costs involved in doubling teacher pupil ratio Cost components Annual cost of intervention per student: Rs.17,368 Salary of additional teachers Identifying and recruiting extra teachers Training extra teachers Not considered Hence conservative estimates of costs  Optimistic BCR Annual wage of trained teacher in Rajasthan: Rs.3,30,000

42. Benefits from doubling teacher pupil ratio Benefits are gains in lifetime earnings of students from improved learning outcomes Benefit is Rs.85,944 for every individual Net Present value (NPV) of lifetime benefits is calculated Improved learning outcomes from incentive Improved test results Wage returns from improved test results Muralidharan and Sundaramana, 2013 Aslam et al. (2011) 4.5% (Impact on wage)

43. Benefits reaped with age 0 5000 10000 15000 20000 25000 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 Gaininannualincome Working age of an individual Benefit to an individual

44. Total costs, total benefits and cost-benefit ratio Discount rate 3% 5% 8% Benefit (1000 INR) 164.7 85.9 36.6 Cost (1000 INR) 17.4 17.4 17.4 BCR 9 5 2

45. 4 minutes for Q&A

46. Conditional Cash Transfer for ANC Visits Abusaleh Shariff, US India Policy Institute, Washington DC and Amit Sharma, People Research on India’s Consumer Economy & The World Bank, New Delhi Rajasthan Priorities conference, Jaipur June 8-10

47. Percentage pregnant women making at least 4 ANC visits 39% 51% 93% RAJASTHAN INDIA KERALA (IDEAL)

48. Why Financial Incentives • Motivate women to make ANC visits • Cover their travel costs, food expenditure during the travel etc • Compensate the wages lost due to the visits

49. The solution • Provision of Rs 2000 for accessing 4 ANC visits during pregnancy • Financial incentive will boost uptake of 4 ANC services from 39 percent to 61 percent of women during pregnancy (assumption)

50. Costs • Estimated cost of incentives – about Rs. 186 Crore • Estimated private cost (travel etc) – about Rs. 55 Crore • Total estimated cost of intervention per annum – Rs. 241 Crore

51. Benefits • Reduction in neonatal mortality of 8 per 1000 live births (assumption) • This leads to saving 2,764 infant lives per year and averting 13,558 YLDs • Total estimated benefits of intervention per annum – Rs. 2,097 Crore

52. Total costs, total benefits and cost-benefit ratio Discount rate 3% 5% 8% Benefits (INR Crore) 2,855 2,097 1,556 Cost (INR Crore) 241 241 241 BCR 12 9 7

54. A Benefit-Cost Analysis of Screening and Treatment for Cardiovascular Disease Shreelata Rao Seshadri, Vijayalakshmi Hebbare © 2017 Copenhagen Consensus Center (This work has been produced as a part of the Rajasthan Priorities project under the larger, India Consensus project. This project is undertaken in partnership with Tata Trusts.)

55. Burden of NCD : Rajasthan

56. Economic Impact Loss of Productivity 2005-2015 237 billion $ 1.5% of GDP

57. Estimation of Costs & Benefits - CVD

58. CVD: Secondary Prevention with Multidrug Polypill • Target: To screen 70% of all persons aged 30- 69 for CVD • Objective: To identify those who are at high risk of CVD or with existing CVD • Intervention: To treat identified persons with a multidrug polypill, achieving 60% adherence to treatment • Outcome: Averting about 20% of CVD mortality

59. Cost Estimates • Cost estimates based on secondary data sources generated in similar contexts, extrapolated to 2018-2030 • The total costs include private costs of seeking out-patient care, treatment costs and opportunity costs of lost wages • The aggregated costs were then applied to the total target population and then discounted at 3%, 5% and 8%

60. Benefits • Benefits were estimated based on the number of deaths averted by the polypill intervention • Total deaths due to CVD for the specified target population were estimated from the Global Burden of Disease 2017 • Proportion of deaths possible to be averted were estimated based on the available evidence in the literature

61. Intervention Costs Coverage % Adherence to (30-69 yrs M/F) Female Polypill Male Female 70 7 60 4201.7 4105.7 (30-69 yrs M/F) Metoformin treatment Screening % Male % Male Female 50 8.1 65 2197.03 2101.03 Hypertension prevalence (%) Unit costs (Rs.) 12.4 Male Intervention 2 - Diabetes Diabetes prevalence % Female 4.7 Intervention 1 - CVD Unit costs (Rs.)

62. Total costs, total benefits and cost-benefit ratio Intervention - CVD Discount rate 3% 5% 8% Benefit (Crs) 158,718 111,886 70,759 Cost (Crs) 5,508 4,826 4,020 BCR 28.8 23.2 17.6

64. Investments in tuberculosis control in Rajasthan Nimalan Arinaminpathy, D.Phil Department of Infectious Disease Epidemiology, Imperial College London Rajasthan Priorities conference, Jaipur June 8-11

65. Background: TB in India Killed 4,35,000 in 2016

66. Background: major challenges • Private healthcare sector dominates TB control in India • Vast, fragmented disorganized • Substandard TB care: •Missed opportunities for diagnosis •Treatment: lack of adherence support leads to inferior outcomes • Multi-drug-resistant (MDR) TB: ~4% of burden, but 40% of budget

67. Background: ways forward • Ambitious, far-reaching vision for TB control • Need to see that “services are established as per Standards for TB Care in India to privately- managed patients…Regulatory tools, however, are limited, and partnership is the preferred way to move forward.” • “Active case finding in vulnerable groups is a focus over the next 5 years” with priority groups including slums What is the potential benefit- cost of these interventions at scale, in Rajasthan?

68. Background: transmission dynamics • Infectious diseases: indirect effects can be as important as direct effects Start of symptoms Spontaneous cure or death Detection and cure

69. Background: transmission dynamics • Infectious diseases: indirect effects can be as important as direct effects • Mathematical modelling is a helpful tool for capturing these overall health gains Detection and cure

70. The model framework

71. Private sector engagement

72. Private sector engagement: activities • Public Private Support Agency (PPSA): recent, successful pilots for engaging the private sector in Mumbai, Patna and elsewhere in India • Sensitise and engage with private providers, offering: •Subsidies for high-quality diagnostic tests •Free TB treatment for all those treated in the private sector •Adherence support to patients with linkage to a call centre •Provider support for notifying TB • Aim: not to ‘displace’ the private sector, but offer high-quality diagnosis and treatment wherever patients seek care • Assume an intervention that reaches 75% of private providers, and successfully engages with 2/3 of them

73. Impact on the epidemic

74. Incremental costs

75. Overall benefits and costs Interventions Benefit (INR crores) Cost (INR crores) BCR Quality of Evidence Private sector TB engagement 54541 304 179.4 Medium Intervention 2 81959 699.22 117.2 Limited Programmatic + patient costs (including patient time and spending) Notes: All figures assume a 5% discount rate

77. E-markets Nilanjan Banik, (www.nilanjanbanik.in) Professor, Bennett University NITI AAYOG, Delhi, 14 June, 2018

78. This is why my topic is important • Large Dependence on Agricultural Sector •58% of Indian earns their livelihood from the agriculture sector •Average land-holding size is 1.15 hectare. •India has around 260 million people living in poverty and 80% of them live in countryside. • Agriculture and the Weather God •Less than 35% of this land comes under irrigation. •In India, 85% of the farmers are small and marginal farmers. •The median annual wage for a farmer in India is around $290, which is barely two months’ minimum wage in Mumbai. • Interventions that would help •Introduction of E-Mandis

79. E Market • Important from the perspective of doubling farm income. • Regulated market have problems associated with lower market size, lack of price discovery because of buyers cartelization, and lack of information related to product standards. • E-market ensure single unified license, mechanism for online market, better infrastructure for grade realization. • Initially, 21 wholesale markets across eight states were connected. These states and corresponding markets which initially participated through e-NAM are Telangana (5), Uttar Pradesh (5), Gujarat (3), Haryana (2), Himachal Pradesh (2), Jharkhand (2), Madhya Pradesh (1), and Rajasthan (1).

80. Evidence • After introduction of online trading modal prices in e-mandis in Karnataka witnessed much higher increase than the increase in wholesale prices of the same commodity. The increase in real terms varies from 1 percent to 43 percent. (NITI Aayog, 2017). • In Karnataka, between 2007 and 2015,there was a 128% increase in average price in e-markets compared to 88% increase in average price in non-e-markets (Reddy, 2016). • Coffee traded through electronic tendering fetches a 4% higher price over the price determined through physical auction in Karnataka (Banker and Mitra, 2007).

81. E-Market in Rajasthan • Rajasthan joined the e-Nam initiative in 2017. • Presently, 25 markets have e-market facilities. • Although the benefit is competitive price discovery for the farmers, there are multiple costs involved - costs of creating software and hardware for running e-markets, and training farmers to be computer literate. • Problem with infrastructure related to grading, weighing, and sorting. Problem with dispute settlement mechanism. • Nationally, at present, e-mandi cover only 7% of Indian farmers and 2% of total agriculture produce.

82. Benefit and Cost • To estimate the benefits from expansion of e-markets across the state, we take the estimated price premium from NITI Aayog (2017) of 13%. • For the calculation of benefits beyond 2017 we assume the same effectiveness rate of 13% × 0.5, and expand the amount of produce going through the mandis by the long-term growth rate of agriculture in Rajasthan, 6% p.a. • Data from the Government of India’s E-NAM portal suggest a slow take up of the service in Rajasthan, with only 2.5% of total produce value traded through the e-portal since its inception in April 2016 to Dec 2017. • For this exercise we assume an 20% increase every year from a low base of 2.5%.

83. Cost-Benefit Analysis of E-Market (Figures in INR Crore) Intervention Discount Rate Benefit Cost BCR E-Mandis 3% 11,779 156 75 5% 8,523 131 65 8% 5,374 104 52

85. Land Record Digitization Nirupama Soundararajan and Shagun Khurana Pahle India Foundation, New Delhi 14th June, 2018 - NITI Aayog, New Delhi

86. PRESENT SCENARIO • Obtaining land records highly dependent on human intervention • Manual records subject to manipulation and present opportunities for harassment and rent seeking. • Recording, storage and retrieval of manual records – a major challenge for the state governments.

87. STATUS OF DILRMP IN RAJASTHAN • Last survey operations were undertaken in Rajasthan in the year 1976. • Of total RORs in Rajasthan, computerized copies are available in 97% of the villages. • Of which, in 7.6% villages (3,632 out of 47,918) digital signature of the designated official is available. • Of total RORs in Rajasthan, 89% of the villages do not have it in legally usable form. • 86% of the existing maps are in good condition; of which 15% have been digitised. • Currently, only about 3.3% of the total area of the state has been surveyed using modern techniques under DILRMP.

88. COSTS • High proportion of land- related stalled projects in the state • Risk of expropriation, transfer and convertibility restrictions, opaque and inefficient land markets – disincentive for new business • Land/property-related disputes, which make about 73 per cent of all civil cases in Rajasthan. BENEFITS • Genuine land transactions • Implement rural development programmes. • Land – mainstay for all economic activity, especially manufacturing. • Acquisition of land will become easy; critical to attract and encourage business in the state.

89. METHODOLOGY • Cost of survey per square km – Record Of Discussion - On Re-fixation of Survey/Resurvey, Department of Land Resources. • Cost of digitization per map - average of the costs incurred by six states (Kerala, Haryana, Himachal Pradesh, Sikkim, Madhya Pradesh, Orissa and Bihar) • Operational and maintenance cost = 0.22% of the fixed cost • Knack and Keefer (1995) find that secure property rights lead to economic benefit quantified as 0.024% addition to the growth rate of the economy. Digitization of land records has immense future benefits. The present value of total costs and benefits of the interventions are calculated till 2070.

90. COSTS • Total cost of conducting survey/re-survey operations across rural areas in Rajasthan • Total cost of digitizing the cadastral maps • Operational and maintenance cost accruing on a yearly basis. • Total estimated cost (sum total of all three) = INR 1072.02 crores (PV at 5%)

91. BENEFITS • Economic benefit from secure property rights (SGDP projections from IMF data) • Total estimated benefit = INR 12,598 crores (PV at 5%) 0 500 1000 1500 2000 2500 3000 2017 2021 2025 2029 2033 2037 2041 2045 2049 2053 2057 2061 2065 2069 Benefits(INRcrores) Year Benefits

92. BENEFIT-COST RATIO Discount rate 3% 5% 8% Benefit (INR crores) 22268 12598 6276 Cost (INR crores) 1090 1072 1058 BCR 20 12 6

94. Thank you

Want to download this document?

Want to download this document?

Niti Aayog Presentation

Want to download this document?

Related Books

Free with a 30 day trial from Scribd

Related Audiobooks

Free with a 30 day trial from Scribd