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Governance, Digital ID, Biometrics, Financial Inclusion, Service Delivery, Subsidy Reform, Health Financing
Anit Mukherjee is a policy fellow at the Center for Global Development where he works on issues of governance, public finance, and service delivery in developing countries. His current research focuses on the impact of biometric ID and digital payment systems to reform public subsidies, improve financial inclusion, and promote gender empowerment. Previously, he coordinated a CGD Working Group on Fiscal Transfers for Health that provided recommendations to improve the effectiveness and coordination of health financing in decentralized countries for better outcomes.
Prior to joining CGD, Mukherjee was an associate professor at the National Institute of Public Finance and Policy in New Delhi from 2005-2013 where he designed and implemented innovative citizen-led public expenditure tracking surveys in education and health. As a policy advisor to the world’s largest biometric ID program, Aadhaar, he was involved in the design of direct benefit transfer of subsidies in India. Previously, Mukherjee has served as MDG financing advisor to the Government of Yemen, worked as a consultant for the World Bank and UNAIDS on financing of HIV/AIDS programs in Asia-Pacific, and designed gender-focused social protection as advisor to the Commonwealth Secretariat. Mukherjee studied economics at Presidency College, Calcutta, and Jawaharlal Nehru University, Delhi, and obtained a PhD in policy and planning sciences from the University of Tsukuba, Japan. He has published extensively in peer-reviewed journals and has been cited in major news outlets including Bloomberg, BBC, Financial Times, and NPR. His latest book, Social Sector in a Decentralized Economy: India in the Era of Globalization, was published by Cambridge University Press in 2016.
This paper covers qualitative case studies from Iran, Nigeria, and India to illustrate a series of lessons for governments implementing subsidy reform policies. From these three country experiences, we find that fostering public support to implement lasting reform may depend on four measures: (1) forming a public engagement plan and a comprehensive reform policy that are then clearly communicated to the public in advance of price increases; (2) phasing in price adjustments over a period of time to ease absorption; (3) providing a targeted compensatory cash transfer to alleviate financial impacts on low- to middle-income households; and (4) capitalizing on favorable global macroeconomic conditions.
How do you give over a billion people a digital ID within five years? How do you improve learning for 200 million children in India and countless millions worldwide within a decade? How do you improve health outcomes for billions of poor people and achieve the goals of Universal Health Coverage within a generation? How do you solve the world’s most pressing challenges, not incrementally, but with the urgency they demand?
Aadhaar has already demonstrated the potential of digital ID to transform systems of governance and increase efficiency of private transactions. By addressing the genuine concerns of individual privacy and data protection, it can lead by example as it has done on the technological side. The right to privacy judgement by India's Supreme Court is an opportunity to make Aadhaar a bigger success than it already is. India can learn from other countries to do just that.
The state of Rajasthan in north India has become the digital frontier, with a program that registers all family members under a single identity document known as the “Bhamashah Card,” but it still has to overcome significant challenges of poverty and inequality. In a state that is similar in size and population to Germany, it is no small achievement to take on the ambitious task of providing each family with a unique ID and deliver it within a short span of three years.
Health is a state rather than national subject in many countries (as we’ve discussed here and here), and in India this tendency has just become more pronounced. Based on the 14th Finance Commission’s recommendations (more here), money coming from the Central government to states will be less tied up and states more free to spend that money in whatever way they want.
India is getting some serious cash from coal. According to official estimates, the government will get nearly $250 billion in revenues over a period of 30 years from the sale of over two hundred coal blocks to private bidders. Given India’s record of corruption and mismanagement of natural resources, it is difficult to be optimistic that it will be able to cash in on this windfall and use it for development. But there are a few silver linings that may prove us (happily) wrong.
India’s tax revenue distribution reform creates the world’s first ecological fiscal transfers (EFTs) for forest cover, and a potential model for other countries. In this paper we discuss the origin of India’s EFTs and their potential effects. In a simple preliminary analysis, we do not yet observe that the EFTs have increased forest cover across states, consistent with our hypothesis that one to two years of operation is too soon for the reform to have had an effect. This means there remains substantial scope for state governments to protect and restore forests as an investment in future state revenues.
In 2015, India's system of fiscal devolution underwent a radical transformation. This paper uses the experience of Brazil, China, and Mexico to draw important lessons on how India can use the opportunity of fiscal devolution to create a better system of health financing through better policy coordination between federal and local governments.