Improving farmers' access to agricultural insurance in India

Agriculture is an uncertain business in India, partly due to its high dependence on the weather, leaving 120 million farmer households vulnerable to serious hardship. By providing claim payments to farmers in the event of crop failure, agricultural insurance can directly improve the welfare of risk averse farmers, particularly the 80 percent of ‘small and marginal’ Indian farmer households operating less than two hectares. Perhaps even more importantly, affordable agricultural insurance can in effect act as collateral against loans, increasing the creditworthiness of farmers and allowing them the opportunity to invest in appropriate inputs to increase agricultural productivity (Hazell 1992). By strengthening markets for agricultural credit while providing reliable protection that is attractive to the most risk averse, crop insurance may be a more attractive channel for government support to rural livelihoods and risk mitigation than ex-post disaster transfers, which offer no ex-ante guarantee to farmers and may therefore have limited impact on ex-ante decisions, or loan waiver or input subsidy programs, which may adversely distort behavior.

However, the provision of agricultural insurance is challenging, particularly in developing countries. Multiple Peril Crop Insurance programs, where each policyholder is indemnified against their own crop loss, were fraught with moral hazard, fraud and adverse selection, leading to high costs (Hazell 1992, Skees et al. 1999). By comparison, recent experience with voluntary weather indexed insurance has been somewhat underwhelming, with low voluntary demand (Cole et al. 2009, Binswanger-Mkhize 2011).

The Government of India, having historically focused on crop insurance as a planned mechanism to mitigate the risks of natural perils on farm production, is responsible for the world’s largest crop insurance program with 25 million farmers insured. The National Agriculture Insurance Scheme (NAIS) is the main crop insurance program in the country, and in states and union territories that choose to participate, insurance for food crops, oilseeds and selected commercial crops is compulsory for all farmers that borrow from financial institutions and is voluntary for non-borrowing farmers without loans. The NAIS operates on an area yield indexed basis, whereby claim payments to farmers depend on the average yield of the insured crop measured across the insurance unit, typically an administrative block, in which they live. Area yield indexed crop insurance offers a middle ground between indemnity-based multiple peril crop insurance and weather based index-based weather insurance, with the potential for a greater r silience to moral hazard, fraud and adverse selection than the former and lower basis risk, the risk of a mismatch between incurred losses and indexed claim payments, than the latter (Carter et al. 2007).

However, the NAIS is not without its challenges, most notably the open-ended and highly variable fiscal exposure for state and central government, significant delays in the settlement of the farmers’ claims, and dependence on an inefficient crop yield estimation process. The insurance premium rates paid by the farmers are capped and claims in excess of the capped premium volume are borne equally by the state and the central governments after harvest; for every 1 rupee of farmer premium paid between 2000 and 2008 the total claim payment to farmers was 3.5 rupees. The ex-post funding arrangement leads to an open ended fiscal exposure for governments and volatile annual contributions that are difficult to predict in advance of harvest. Indemnity payments tend to get extremely delayed (up to 9-12 months) in part because of administrative and budgetary processes for post-disaster funding of the excess losses. Finally, the crop yield estimation process conducted by the states, used for insurance claims, is subject to reporting delays, inconsistency and moral hazard. In addition, the current NAIS suffers from poor risk classification, which has led to a somewhat arbitrary allocation of government subsidies, and poor marketing.

It was in this context that the Government of India formed a joint task-force with the Ministries of Agriculture and Finance and the public insurance company, the Agricultural Insurance Company of India (AICI) to enhance the crop insurance program and improve insurance coverage. The repor (Joint Group 2004) suggested action on the following items: review current underwriting methodology; develop an actuarially sound design and pricing methodology based on international best practice to act as the foundation for a move to an ex-ante funded, market-based crop insurance program; develop product design and pricing methodology for new weather index insurance products; and suggest cost-effective catastrophe risk financing solutions for the public crop insurance company.

This joint work eventually led to the design and implementation of a modified NAIS (mNAIS), with planned pilot period lasting for three seasons starting winter 2010-11 (Table 1). This is potentially a major initiative given the significant scale of NAIS. If well implemented, an improved program would result in increased benefits for millions of current farmer clients and lead to greater coverage of the insurance program. However, significant challenges remain

World Bank. Author:Mahul, Olivier;Verma, Niraj;Clarke, Daniel J.Document Date: 2012/03/01. Document Type: Policy Research Working Paper. Report Number: WPS5987

Improving farmers' access to agricultural insurance in India  

Soil endowments, production technologies and missing women in India

The deficit of women relative to men in some societies has emerged as the most extreme indicator of gender-based discrimination (Sen 1990). Studies concerned with the demographic gender imbalance have provided evidence on significant effects of economic factors (Rosenzweig and Schultz 1982, Rao 1993, Larsen et al. 1998, Rose 1999, Qian 2008) and of cultural disparities in the perception of women’s worth (Das Gupta et al. 2003). However, great geographical differences in population sex ratios remain and are more difficult to explain (Basu 1982, Das Gupta et al. 2003).

This study examines the remarkable geographical heterogeneity in infant sex ratios in India. In India, a country characterized by a severe female population deficit, sex ratios are not male-biased everywhere. They differ substantially across districts, even within the same state and cultural region (Dyson and Moore 1983, Agnihotri 1996). Average district sex ratios for the 0-to-6 year old population are more biased in the North than in the South, and range from a minimum of 766 to a maximum of 1035 females per 1000 males.

I show that in India, where 72 percent of the population is rural, there is a significant and important association between the geographical variation in exogenous soil texture and rural infant sex ratios. I argue that the association can be explained by differences in the economic contributions of women relative to men in agricultural production. In agriculture, the depth of land and seedbed preparation are exogenously determined by the soil texture. Deep tillage of land reduces the need for transplanting, fertilizing and weeding operations, which are typically performed by women (Basant 1987). In areas where deep tillage is required, the lower demand for female relative to male labor is expected to have a negative impact on the perceived relative value of girls to a household (Boserup 1970, Bardhan 1974 1988, Miller 1982, Rosenzweig and Schultz 1982, Bossen 1989, Qian 2008, Alesina, Giuliano and Nunn 2010).

Soil texture is a physical property of the soil that is exogenously defined by geological and meteorological factors and that is not easily modified by land management practices. The soil texture is not a chemical or biological attribute and, by itself, does not determine the quality of soil or the type of crop that can be grown. Instead, the soil texture determines the workability and tillage requirements of the soil. Deep tillage can only be done in light soils of loamy texture but not in heavy soils of clayey texture (Muller and Schindler 1999).

I built on the exogenous variation in soil texture to explain the variation in rural infant sex ratios in India. The identification assumption is that, conditional on weather, soil chemical and biological characteristics and state fixed effects, the relationship between soil texture and rural 0-to-6 year old sex ratios across districts can only be explained by the impact of deep tillage of land on the relative demand for female labor. Because smaller relative female labor contributions in loamy areas make girls relatively more costly, the ratio of girls to boys will be negatively related to the difference between the fractions of loamy and clayey soils.

Identification is obtained from the variation in soil distribution across districts within a same state. The district is the unit of analysis where the impact of deep tillage of land can be isolated from other channels. In India, labor markets are geographically small and migration is limited and occurs mostly within district boundaries. Other geographical differences in income, agricultural yield or cropping patterns, as well as in culture, policy, social and economic variables, are not driven by soil texture and are insignificant across districts within a same state. Therefore, differences in the relative female labor force participation and the infant ratio of girls to boys across districts within a same state could not be explained by those alternative mechanisms.

Consistently, I find that the districts with larger fractions of loamy relative to clayey soils exhibit a lower ratio of female to male children. I also find significantly lower female participation in agriculture and higher stocks of deep plows and draft animals per hectare of land in loamier districts. In contrast, I find no evidence of differences by soil texture in crop yields, crop mix or income once other determinants are properly identified.

World Bank.Author: Carranza, Eliana;Document Date: 2012/02/01. Document Type: Policy Research Working Paper.Report Number: WPS5974

Soil endowments, production technologies and missing women in India c

Services reform and manufacturing performance: evidence from India

The growth of India's manufacturing sector since 1991 has been attributed mostly to trade liberalization and more permissive industrial licensing. This paper demonstrates the significant impact of a neglected factor: India's policy reforms in services. The authors examine the link between those reforms and the productivity of manufacturing firms using panel data for about 4,000 Indian firms from1993 to 2005. They find that banking, telecommunications, insurance and transport reforms all had significant, positive effects on the productivity of manufacturing firms. Services reforms benefited both foreign and locally-owned manufacturing firms, but the effects on foreign firms tended to be stronger. A one-standard-deviation increase in the aggregate index of services liberalization resulted in a productivity increase of 11.7 percent for domestic firms and 13.2 percent for foreign enterprises.

A vital element of India‟s rapid economic growth since the early 1990s has been the improved performance of its manufacturing sector. Output in manufacturing grew by 5.7 percent per year in the period 1993-2005 (Reserve Bank of India, 2008). Previous explanations for the revival of manufacturing emphasize trade liberalization, more permissive industrial licensing policies, and the limited labor market reforms undertaken since 1991 (see review below). In focusing primarily on proximate policies, however, previous analyses have ignored what we demonstrate is a critical factor, policy reforms in services sectors.

The neglect of services is surprising, first of all, because service inputs, notably finance, transport and telecommunications, are an important component of inputs to manufacturing, so the potential for downstream effects is large.1 Moreover, reforms in the 1990s, allowing greater foreign and domestic competition with greatly improved regulation, have visibly transformed these services sectors.2 Indian firms are no longer at the mercy of inefficient public monopolies, but can now source from a wide range of domestic and foreign private sector providers operating in an increasingly competitive environment. Available evidence suggests that firms today have access to better, newer and more diverse business services.

In this paper, we address three questions: Has services reform led to an increase in manufacturing productivity? Have reforms in some services had a bigger impact than in others? Have some manufacturers (e.g. foreign firms based in India) benefitted more than others? These questions matter profoundly for policy; not only is services reform in India incomplete, but across the world some of themost intransigent policy restrictions today are in services.3 Convincing evidence that these restrictions penalize the politically cherished manufacturing sector could provide an impetus to reform.

Exploring whether there is a systematic link between liberalization in services sectors and the performance of firms in downstream manufacturing industries requires three types of information: a measure of policy reform in services, a performance measure for manufacturing firms and information on the linkages between different sectors of the economy.

WB.Author:Arnold, Jens Matthias ; Javorcik, Beata; Lipscomb, Molly; Mattoo,Aaditya.Document Date: 2012/01/01. Document Type: Policy Research Working Paper.Report Number: WPS5948. Services reform and manufacturing performance : evidence from India

Services reform and manufacturing performance : evidence from India x

The remittance market in India:opportunities,challenges,and policy options

Millions of migrants worldwide send billions of dollars in remittances each year to their families or communities of origin. In many developing countries, remittances are an important source of family and national income and also are the largest source of external financing. Remittances are better targeted at the needs of the poor than foreign aid or foreign direct investment (FDI), as recipients often depend on remittances to cover daily living expenses, to provide a cushion against emergencies, or to make small investments in business or education. Therefore, remittance services should be safe, efficient, and reliable. This can be achieved by increasing competition, enhancing access to payment system infrastructure, improving transparency, and ensuring a sound and predictable legal and regulatory framework.

With an estimated US$49 billion in remittance inflows in 2009, India is the world’s foremost remittance destination. The size and potential impact of these inflows is large. Despite substantial progress over the past 15 years, the provision of accessible, efficient, safe, and cost-effective remittance services in India could be improved. This report undertakes a broad, detailed diagnostic of the Indian remittance market and analyze its characteristics based on the General Principles for International Remittance Services (GPs). It identifies some of the key actions and public policy

measures (especially in the areas of consumer protection, transparency, retail payments, competition, and risk management) for the improvement and future development of this market that would make it more contestable, transparent, accessible, and sound. Migration from India Understanding migration patterns and characteristics of migrants is crucial for identifying important remittance channels and designing policy interventions to enhance the remittance market. According to the Ministry of Overseas Indian Affairs (MOIA), India has the second largest Diaspora in the world, with around 25 million people living in

some 110 countries. Overseas Indians are divided into Nonresident Indians (NRIs) and People of Indian Origin (PIOs). Migration from India has had three distinct phases: (a) early migration of unskilled labor to work on mines and plantations in British colonies, (b) the late- 20th-century migration of unskilled and semiskilled workers to Gulf countries, and (c) the recent migration of high-skilled professional workers to industrial countries.

In chapter one, this report maps the patterns and characteristics of migration flows from India; in chapter two, it provides a detailed discussion of remittance flows to India in terms of their importance, sources, uses, trends, costs, and links to financial access.

In chapter three, the report describes the remittance market (the players, the regulatory framework, as well as the existing operational schemes), setting the stage for chapter four, which presents a diagnostic of the remittance market based on the General Principles for International Remittance Services (GPs). The diagnostic covers the legal and regulatory framework, payment system infrastructure, market transparency and level of consumer protection, market structure, level of competition among remittance service providers, as well as market governance.

It analyzes the existing situation in India and provides detailed recommendations (including lessons learned from international best practices) that are aimed at increasing competition in the remittance industry, providing broader access to payment system infrastructure, enhancing transparency, and ensuring a sound and predictable legal and regulatory framework. Several of the actions could set a basis for leveraging remittances to achieve other important public policy goals such as broadening financial access, expanding financial inclusion, and both strengthening and deepening the financial sector.

The report was prepared through (a) background research (data research and mining, literature review, collection of relevant material and information, and background research), (b) a field visit in 2009 (a team of experts visited India and conducted interviews and focus groups with all relevant stakeholders and major institutions active in the remittance market), and (c) surveys of both the authorities and the market players.

World Bank .Author: Afram, Gabi G.Document Date: 2012/01/01.Document Type: Publication. Report Number: 66235

The remittance market in India:opportunities,challenges,and policy options

For more information about Projects in  India see Southern Asia Projects

 x

India.Advanced Project Preparedness for Poverty Reduction-Supporting Clean Village Environments

On 31 August 2009, ADB approved the provision of a Technical Assistance Cluster (C-TA) to India for Advanced Project Preparedness for Poverty Reduction to the Government of India. The C-TA is financed on a grant basis through the Department of International Development (DFID), funded by the Government of the United Kingdom, under the DFID and ADB Partnership for India, 2009-2013. The C-TA is implemented until 31 December 2013 in two phases: The first phase (Phase 1), in the amount of $14 million equivalent, covers 17 component TA projects with completion by 31 August 2012. The second phase (Phase 2), approved through a major change in scope and implementation arrangements by the ADB Board on 4 October 2011, entails an increase of $8 million equivalent and the addition of 9 new component TA projects to be completed by 31 December 2013. 

Asian Development Bank.Project Number 43166-26

Advanced Project Preparedness for Poverty Reduction-Supporting Clean Village Environments for MDGs :  India

x

India and Latin America and the Caribbean. Opportunities and challenges in trade and investment relations

ECLAC. Division of International Trade and Integration.LC/L.3426.November 2011 India and Latin America and the Caribbean, together with China, are the world’s new growth poles. Economies in developing Asia, led by China and India, are growing three times as fast as the industrialized countries. Latin America and the Caribbean weathered the international crisis with remarkable  esilience and emerged from it sooner and more robustly than the developed economies. In the coming years, the industrialized economies will continue to face complex challenges, in particular the need to rein in and gradually reduce the fiscal deficit and public debt in a context of slower growth and high unemployment. The rise of the emerging economies reflects not only their growing contribution to the world economy, but also the stronger linkages between emerging and developing economies through increased South-South trade and investment and cooperation. In this context, India continues to deepen its trade and investment relations with the Latin American and Caribbean region in search of a more coordinated, institutionalized approach among countries.

On the back of recent global economic events, India and the countries of Latin America and the Caribbean must rethink strategic alliances both globally and regionally. In this respect, India and Latin America and the Caribbean need to reposition themselves in the world economy and to address the growing relevance of South-South linkages (in areas such as trade, foreign direct investment and finance) by enhancing cooperation in innovation and human capital in order to diversify trade, add greater value and apply new knowledge to exports, thus helping to create more stable conditions for growth.

Latin America’s resilience during the international financial crisis and its recent strong recovery have aroused India’s interest in the region, while countries in the region have shown a renewed enthusiasm for learning about the Indian economy as a future trade and investment partner. Indeed, the region’s trade with India will continue to grow rapidly, though from a small base, while an increasing number of Indian companies have begun to invest and operate in the region.

Despite recent improvements on many fronts, however, both India and the countries of Latin America and the Caribbean face some formidable challenges. They still have some of the highest inequality indices in the world, as well as serious deficiencies in infrastructure, technology, innovation and competitiveness. India and the Latin American and Caribbean region, together with their main partners, could approach these challenges as opportunities to forge new partnerships to promote growth and development through increased trade and investment. India could be an active partner of the region in this endeavour.

Increasing trade between Latin America and the Caribbean and the Asia-Pacific region has been prompted primarily by China, while India still remains an unexploited export market as well as an untapped source of imports for the majority of countries in Latin America and the Caribbean. Furthermore, despite the rising interest in investing in the region shown recently by Indian firms, the region’s share of India’s overseas foreign direct investment (FDI) remains quite small. The region’s trade and investment relations with India are still at an incipient stage, making it necessary to consolidate and strengthen ties, while identifying and taking advantage of complementarities and promoting business alliances with a view to stimulating their internationalization and enhancing competitiveness. Several countries in Latin America and the Caribbean have benefited from growing trade flows with the Asia-Pacific region, including Argentina, Brazil, Chile, Costa Rica, Cuba and Peru. However, this trade is mainly of an interindustry nature, whereby the region exports primary products and natural resource-based manufactures and imports manufactures of different technological intensities, thus limiting the potential for deeper economic relations between the two regions. Trade development therefore needs to be promoted at the intra-industry level with an emphasis on export diversification through business initiatives that draw on the competitive advantage of each region and promote increased investment flows centred on value chains involving both Asian and Latin American firms. Efforts should be made to reduce transaction and transport costs, streamline trade logistics, promote communication with trading partners and enhance the international competitiveness and innovation capabilities of countries in both regions.

For the past five years, the Economic Commission for Latin America and the Caribbean (ECLAC) has closely monitored developments in economic relations between Latin America and the Caribbean and China, Japan and the Republic of Korea. The opportunity now to expand the analysis to include India is a welcome challenge. We hope that this document will serve as an input for deliberations during the seminar “The New India and the New Latin America- Synergies and Complementarities”, to be held in December 2011 in Buenos Aires, and contribute to the region’s goal to further promote trade and investment and enhance economic cooperation with India.

Increasing trade between Latin America and the Caribbean and the Asia-Pacific region has been prompted primarily by China, while India still remains an unexploited export market as well as an untapped source of imports for the majority of countries in Latin America and the Caribbean. Furthermore, despite the rising interest in investing in the region shown recently by Indian firms, the region’s share of India’s overseas foreign direct investment (FDI) remains quite small. The region’s trade and investment relations with India are still at an incipient stage, making it necessary to consolidate and strengthen ties, while identifying and taking advantage of complementarities and promoting business alliances with a view to stimulating their internationalization and enhancing competitiveness. Several countries in Latin America and the Caribbean have benefited from growing trade flows with the Asia-Pacific region, including Argentina, Brazil, Chile, Costa Rica, Cuba and Peru. However, this trade is mainly of an interindustry nature, whereby the region exports primary products and natural resource-based manufactures and imports manufactures of different technological intensities, thus limiting the potential for deeper economic relations between the two regions. Trade development therefore needs to be promoted at the intra-industry level with an emphasis on export diversification through business initiatives that draw on the competitive advantage of each region and promote increased investment flows centred on value chains involving both Asian and Latin American firms. Efforts should be made to reduce transaction and transport costs, streamline trade logistics, promote communication with trading partners and enhance the international competitiveness and innovation capabilities of countries in both regions.

For the past five years, the Economic Commission for Latin America and the Caribbean (ECLAC) has closely monitored developments in economic relations between Latin America and the Caribbean and China, Japan and the Republic of Korea. The opportunity now to expand the analysis to include India is a welcome challenge. We hope that this document will serve as an input for deliberations during the seminar “The New India and the New Latin America- vSynergies and Complementarities”, to be held in December 2011 in Buenos Aires, and contribute to the region’s goal to further promote trade and investment and enhance economic cooperation with India.

India and Latin America and the Caribbean. Opportunities and challenges in trade and investment relations

b

India.Energy intensive sectors of the Indian economy:path to low carbon development

The report is divided into seven chapters. Chapter one discusses India's current carbon footprint, the drivers that will contribute to growth in Green House Gas (GHG) emissions, the objectives of the study, and the scope and methodology of the analytical approach.

Chapter two provides an overview of each of the sectors covered by the study, along with their respective specific challenges and past performance, and the modeling approach adopted in the study.

Chapters three, four, and five provide the specific assumptions and findings of the three scenarios: (1) scenario one, alternatively called five year plans scenario, assumes full implementation of the five year plans and other projections and plans by the government of India; (2) scenario two, alternatively called delayed implementation, more closely follows historical performance in implementation of the five year plans; (3) scenario three, or all-out stretch scenario, adds to scenario one additional steps to increase energy efficiency and low-carbon energy sources Sensitivity analysis is conducted on each scenario.

Chapter six provides a brief comparison of the results of the three scenarios, and chapter seven concludes with a brief description of the challenges of low-carbon development in India

Document Date: 2011/08/01. Document Type: Energy Study Plan.Report Number:54607.Volume No: 1 of 1

World Bank.India - Energy intensive sectors of the Indian economy : path to low carbon developmenta

India.Fourth Power System Development Project:procurement plan

PROCUREMENT PLAN UNDER PSDP-IV LOAN [AS ON 30.09.2011].2500 MW HVDC BIPOLE ALONGWITH BIPOLE CONVERTOR STATIONS AT BALIA & BHIWADI.NORTH-WEST TRANSMISSION CORRIDOR STRENGTHENING SCHEME.WESTERN REGION SYSTEM STRENGTHENING SCHEME-II (SET-B).WESTERN REGION SYSTEM STRENGTHENING SCHEME-II (SET-D).EAST - WEST TRANSMISSION CORRIDOR STRENGTHENING SCHEME.EASTERN REGION STRENGTHENING SCHEME-I.SYSTEM STRENGTHENING - XIII IN SOUTHERN REGION.

Document Date:  2011/09/30.Document Type:  Procurement Plan.Report Number: 65855.Volume No:1 of 1

India.Fourth Power System Development Project:procurement plan

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India.Additional Financing for the Fourth Power System Development Project

PROCUREMENT PLAN FOR WORKS/GOODS UNDER ADDITIONAL FINANICING FOR PSDP-IV LOAN [as on 30.09.2011]

Document Date: 2011/09/30.Document Type:Procurement Plan.Report Number: 65856.Volume No: 1 of 1

India - Additional Financing for the Fourth Power System Development Project : procurement plana

India.Karnataka Community Based Tank Management Project

Procurement Plan for Goods for the period from 01.04.0211 to 31.01.2012 ( Both Ongoing & Additional Financing Project. Procurement of Goods. Country: India 

World Bank.Document Date: 2011/11/16.Document Type: Procurement Plan.Report Number: 65815. Volume No: 1 of 1

India - Karnataka Community Based Tank Management Project : procurement plan

a

India.Uttaranchal Rural Water Supply and Sanitation Project

To improve the effectiveness of rural water supply and sanitation (RWSS) services through decentralization and increased role of Panchayati Raj Institutions and local communities in the state of Uttarakhand. The RWSS SWAP, following uniform policies and institutional arrangements is being successfully implemented across the State. Schemes completed in more than 3000 habitations have firmly grounded the policies and institutional program for decentralizing service delivery responsibilities across all 13 districts.

The Project has already benefited 0.6 million rural people against a target of 1.2 million. The water supply schemes are integrated with catchment area programs, household and village sanitation programs, solid waste managementand health and hygiene awareness promotion programs to maximize water and sanitation health benefits to the communities. Additional 4,96,894 Individual Household Latrines

World Bank. Author:Misra,Smita.Document Date: 2011/11/23.Document Type: Implementation Status and Results Report. Report Number: ISR4636

India - Uttaranchal Rural Water Supply and Sanitation Project : P083187 - Implementation Status Results Report : Sequence 10

India: Uttar Pradesh State Roads Project

The project development objective is to improve the performance of the core road system in Uttar Pradesh. The objective will be achieved by (i) improving the capacity and quality of the core state highway network and major district roads; (ii) enhancing road maintenance planning and execution, and reducing the backlog of deferred periodic maintenance; (iii) reducing accidents; (iv) easing traffic movement at selected inter-state crossings; and (v) strengthening the capacities of the Public Works Department.

 

World Bank. Author:Addo-Ashong,Tawia,Document Date:2011/11/19.Document Type:Implementation Status and Results Report.Report Number:ISR4507

 

India:Uttar Pradesh State Roads Project:P067606-Implementation Status Results Report: Sequence 19

 

 

Low-Income Countries' BRIC Linkage: Are There Growth Spillovers?

Trade and financial ties between low-income countries (LICs) and Brazil, Russia, India, and China (BRICs) have expanded rapidly in recent years. This gives rise to the potential for growth to spill over from the latter to the former.

We employ a global vector autoregression (GVAR) model to investigate the extent of business cycle transmission from BRICs to LICs through both direct (FDI, trade, productivity, exchange rates) and indirect (global commodity prices, demand, and interest rates) channels.

The estimation results show that there are significant direct spillovers while indirect spillovers also matters in many cases. Based on these results, we show that growing LIC-BRIC ties have significantly helped alleviate the adverse impact of the recent global financial crisis on LIC economies.

IMF.Author/Editor:Samaké, Issouf ; Yang, Yongzheng. Authorized for Distribution: November 01, 2011
This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Low-Income Countries' BRIC Linkage: Are There Growth Spillovers?

Microinsurance : a case study of the Indian rainfall index insurance market

Rainfall index insurance provides a payout based on measured local rainfall during key phases of the agricultural season, and in principle can help rural households diversify a key source of idiosyncratic risk.

This paper describes basic features of rainfall insurance contracts offered in India since 2003, and documents stylized facts about market demand and the distribution of payouts. The authors summarize the results of previous research on this market, which provides evidence that price, liquidity constraints, and trust all present significant barriers to increased take-up.

They also discuss potential future prospects for rainfall insurance and other index insurance products.

World Bank.Author: Gine,Xavier;Menand,Lev;Townsend, Robert;Vickery, James.Document Date: 2010/10/01.Document Type: Policy Research Working Paper.Report Number: WPS5459.Volume No:  1 of 1

Microinsurance : a case study of the Indian rainfall index insurance market

India.Andhra Pradesh drought adaptation initiative: lessons from community-based adaptation approaches to strengthen climate resilience

This report presents the impact and lessons learned from the Andhra Pradesh Drought Adaptation Initiative (APDAI). The APDAI was implemented as a package of pilot activities in two dryland districts in Andhra Pradesh (Anantapur and Mahbubnagar) with the aim of developing and testing approaches for natural resource-based economic activities to better respond to current climate variability and long-term consequences of climate change.

The report discusses how innovations are being scaled up through integration into regular government programs for greater outreach.

World Bank.Document Date: 2010/11/01.Document Type: Other Environmental Study.Report Number:64507.Volume No: 1 of 1

India.Andhra Pradesh drought adaptation initiative: lessons from community-based adaptation approaches to strengthen climate resilience

India - Assam Agricultural Competitiveness Project: restructuring

The objective of the Assam Agricultural Competitiveness Project (AACP) for India is to increase the productivity and market access of targeted farmers and community groups.

The extension will enable the Bank to continue working with the project authorities to provide the necessary implementation support as well as it will provide more time to process the additional financing from the Bank, as requested by Dietary Energy Supply (DEA) in September 16, 2011to scale up the impact of this project.

As such, the additional financing will support consolidation of the activities undertaken in AACP, enhance long term sustainability of project measures and impact, and would provide for the Bank with a credible strategy in exiting from this successful operation. This will be the second extension of the project. The first extension was for 21 months and the project was extended from March 31, 2010 to December 31, 2011.

Document Date: 2011/10/21. Document Type: Project Paper. Report Number: 65036.

India - Assam Agricultural Competitiveness Project: restructuring (Vol. 1 of 2) : Main report

India - Assam Agricultural Competitiveness Project : restructuring (Vol. 2 of 2) : Data sheet

World Bank.India,The project Karnataka Watershed Development II is now in the pipeline.

As noted in the India Country Assistance Strategy (CAS) 2009-12, national Gross Domestic Product (GDP) grew at more than 9 percent per annum from 2004-2007. High rates of investment and savings and strong export growth, and rapid growth generated substantial public and private resources for investment and development programs.

From 2008 to 2010, average annual GDP has moderated to approximately 6.5 percent due to the global recession. More than 400 million people still subsist on under USD1.25/day, with the majority living in rural areas and dependent on agriculture or other land-based resources.

Agriculture accounts for around 16 percent of Indian GDP. Approximately 60 percent of India’s population depends on agriculture for primary livelihood, largely from rainfed agriculture.

Out of a net sown area of 141 million hectares in India, approximately 68 percent are under rainfed cultivation, mostly in arid and semi-arid areas. Thirteen states, including agriculture as used in the PAD includes crops, horticulture, livestock and agro-forestry, all components of rural land-use in India.

Document Date:  2011/11/09.Document Type: Project Information Document.Report Number: AB6853.Volume No: 1.Country: India. Doc Name: India-Karnataka Watershed Development II

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Effects of licensing reform on firm innovation : evidence from India

The regulatory environment in a country can affect firm performance. This study investigates the impact of a particular regulation, namely license requirements for certain firm activities, on the innovation performance of Indian firms.

First it presents a model of firm and industry evolution that explains the dynamics of multi-product firms. Then, using a firm level panel data set, it shows that removal of license requirements led to roughly 5 percentage points faster innovation rates where innovation is measured as introduction of new product varieties that had not existed in the market.

The results are robust to inclusion of controls for the other policy reforms that occurred during the period of licensing reform.

World Bank. Author: Seker,Murat;Document Date: 2011/11/01.Document Type:Policy Research Working Paper.Report Number: WPS5876.Volume No: 1 of 1

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Determinants of Development Financing Flows from Brazil, Russia, India, and China to Low-Income Countries

BRICs development financing flows have increased significantly and are expected to become more prominent in the post-crisis era. We investigate the potential implications on the country-allocation of loan commitments and the degree of concessionality using a panel vector autoregression model and single equation dynamic panel estimation.

We find that BRICs lend more to LICs with weaker institutions. Land-locked, resource-scarce LICs receive significantly less financing than other resource-rich LICs.

The degree of concessionality is negatively correlated with the amount of loans and positively correlated with better institutional indicators suggesting that the higher the risks, the higher the required returns that BRICs expect.

Mwase, Nkunde.November 01, 2011. Working Paper No. 11/255
This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Determinants of Development Financing Flows from Brazil, Russia, India, and China to Low-Income Countries