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1. Building on Digital ID for Inclusive Services: Lessons from India

Author:
Alan Gelb and Anit Mukherjee
Publication Date:
09-2019
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
India has emerged as a leader in building on its biometric digital ID (Aadhaar) to reform service and program delivery. It moved quickly to consolidate the rollout of Aadhaar, and then to embed the unique Aadhaar number into program databases. A range of applications, including digital signature and payments, was then constructed on top of the Aadhaar foundation (the India Stack). Together with partners, the Center for Global Development is analyzing the effects of Aadhaar-based reforms. India offers lessons for many other countries as their focus evolves from rolling out an ID system towards using it to improve the efficiency and inclusivity of service delivery. Some programs using Aadhaar are federally administered but others are implemented at state level. It is already clear that some states and sectors are reforming better than others, generally because of better design of the digital reforms or stronger capacity to implement them. The three programs we discuss below high- light achievements as well as challenges that need to be overcome for greater efficiency and inclusion.
Topic:
Development, Governance, Identities, and Digitalization
Political Geography:
India and Asia

2. Ecological Fiscal Transfers and Subnational Budgets: Did Forest-Based Fiscal Devolution Lead Indian States to Increase Forestry Expenditure?

Author:
Jonah Busch, Avani Kapur, and Anit Mukherjee
Publication Date:
10-2019
Content Type:
Research Paper
Institution:
Center for Global Development
Abstract:
Later this year, India’s 15th Finance Commission will review the formula used by its predecessor to determine how much central tax revenue will be devolved to each state for fiscal years 2020-21 through 2024-25. Currently, 7.5 percent of the fiscal devolution (an estimated $6.9-12 billion per year) is allocated in proportion to their forest area circa 2013. These “ecological fiscal transfers” (EFTs) provide Indian states with the incentive to increase their forestry budgets as an investment in increased future shares of central taxes. In this paper, we look at whether states are yet taking advantage of this opportunity. We find that states increased their forestry budgets by 19 percent in three years after the introduction of EFTs relative to three years prior. However, this increase is considerably less than the 42 percent overall budget increase over the same time period. We surmise that states are not yet certain that EFTs will continue in such a way that increases in forest cover will be rewarded with increases in revenue. We recommend that the 15th Finance Commission resolve this uncertainty for states by (i) keeping forests in the devolution formula, and (ii) updating the reference year (e.g. 2019). By doing so India’s EFTs can fulfill their potential as an innovative mechanism for incentivizing states to protect and restore forests, thereby mitigating climate change.
Topic:
Environment, Governance, Fiscal Policy, Ecology, and Forest
Political Geography:
India and Asia