GSLV Successfully Launches South Asia Satellite

The South Asian Satellite – Some highlights

• Space diplomacy has touched new heights with Prime Minister Narendra Modi’s unique gift in the sky to South Asian neighbours.

• The gift of a communications satellite for use by neighbours at no cost has perhaps no precedent worldwide.

• The satellite, which weighs over 2 tonnes, has been fabricated in three years at a cost of over Rs. 230 crore.

• Its footprint that extends all over South Asia.

• The South Asia Satellite has 12 Ku band transponders which India's neighbours can utilise to increase communications.

• Each country will get access to at least one transponder through which they could beam their own programming.

• The satellite will facilitate DTH television, VSAT links, tele-education, telemedicine and disaster management support. It will provide critical communication links in times of disasters such as earthquakes, cyclones, floods, and tsunamis.

• Heads of Government from all the seven South Asian nations who are benefiting from the satellite, connected via video conference, in a unique celebration of the successful launch.

GSLV Successfully Launches South Asia Satellite

India's Geosynchronous Satellite Launch Vehicle (GSLV-F09) successfully launched the 2230 kg South |Asia Satellite (GSAT-9) into its planned Geosynchronous Transfer Orbit (GTO) today (May 05, 2017). Today’s launch of GSLV was its eleventh and took place from the Second Launch Pad at the Satish Dhawan Space Centre SHAR (SDSC SHAR), Sriharikota, the spaceport of India. This is the fourth consecutive success achieved by GSLV carrying indigenously developed Cryogenic Upper Stage. In its oval shaped GTO, the South Asia Satellite is now orbiting the Earth with a perigee (nearest point to Earth) of 169 km and an apogee (farthest point to Earth) of 36,105 km with an orbital inclination of 20.65 deg with respect to the equator.

Few seconds before the launch countdown reached zero, the four liquid propellant strap-on motors of GSLV-F09, each carrying 42 tons of liquid propellants, were ignited. At count zero and after confirming the normal performance of all the four strap-on motors, the 139 ton solid propellant first stage core motor was ignited and GSLV lifted off at 16:57 IST. The major phases of the flight occurred as scheduled. About seventeen minutes after lift-off, South Asia Satellite was successfully placed in GTO.

. Soon after separation from GSLV, the two solar arrays of the satellite were automatically deployed in quick succession and the Master Control Facility (MCF) at Hassan in Karnataka assumed control of the satellite.

South Asia Satellite is a communication satellite built by ISRO to provide a variety of communication services over the South Asian region. For this, it is equipped with Ku-band transponders.

Following the successful launch, the Honorable Prime Minister of India, Mr. Narendra Modi addressed along with the South Asian leaders. He congratulated ISRO and remarked that today was a historic day for South Asia and a day without precedence. The Prime Minister recalled that two years ago India made a promise to extend the advanced space technology for the cause of growth and prosperity of the people of South Asia and felt that the successful launch of South Asia Satellite today marks a fulfillment of that.

In the coming days, the satellite orbit will be raised from its present GTO to the final circular Geostationary Orbit (GSO) by firing the satellite's Liquid Apogee Motor (LAM) in stages. The South Asia Satellite will be commissioned into service after the completion of orbit raising operations and the satellite’s positioning in its designated slot in the GSO following in-orbit testing of its payloads. 

Getting Narendra Modi’s generic medicines policy right

Rolling out a half-baked populist agenda is likely to backfire and be detrimental to the public health agenda

In what has come to be recognized as his signature fashion, Prime Minister Narendra Modi recently put forward another disruptive policy prescription—this time in healthcare. Doctors will now be required to prescribe generic formulations of medicines, as opposed to specific brands. This is an initiative that goes beyond attempts by institutions like the Medical Council of India to encourage the prescription of generic names, and instead works towards creating a formal legal framework for such a practice. Broadly, this is expected to bring down drug prices and expand access to affordable health solutions. The push towards generics is lauded by many stakeholders, and rightly so. However, Modi’s policy must move beyond rhetoric—for in a sector such as health, faulty policy design will directly affect the country’s mortality statistics.

As per the latest National Sample Survey Office survey on healthcare, in 2014, medicines emerged as a principal component of total health expenses—72% in rural areas and 68% in urban areas. For a country with one of the highest per capita out-of-pocket expenditures on health, even a modest drop in drug prices will free hundreds of households from the widespread phenomenon of a medical poverty trap.

In addition to the social benefits, the generics-only policy also makes economic sense. It is the government’s responsibility to keep the growth engine running. By promoting generic drug consumption, the government safeguards the health of its generic drug manufacturing industry—one of the largest suppliers of low-cost medicines in the world. With increasing pressure from the “Big Pharma” companies in developed countries, Indian generic manufacturers must now operate under a markedly restrictive intellectual property rights (IPR) regime. The new policy can ensure that—at least in the Indian market—generic manufacturers retain an advantage. Big Pharma’s access to Indian consumers will have to be routed through generic companies using channels such as voluntary licensing. Last year, US-based Gilead, for instance, licensed out its Hepatitis C drug, Sovaldi, to 11 Indian generic companies at a drastically reduced price. A generic-only policy is expected to mainstream such practices. In a global economic environment that is turning increasingly hostile to generic drug production, this is a bold move—indicative of the government’s categorical support for one of its key industries.

Low-cost medicines, apart from their attribute as a commercial commodity, have far-reaching implications on public health and international human rights. India has unambiguously subscribed to the pro-public health argument, and has articulated its position several times at home and in international forums. Public health, however, encompasses quality as much as affordability of pharmaceutical drugs. While Modi’s push for a generics-only policy is a step in the right direction, it is important to assess and ensure that Indian generic companies are competent enough to take on the task before institutionalizing such a policy.

Indian generic manufacturers have come under the spotlight due to the inferior quality of their products. Major export destinations—like the US and the European Union—have raised this issue several times. The US food and drug administration (FDA) issued warning letters to 27 manufacturing plants in India between 2011 and 2016, and banned drug imports from several of them, including some of the biggest names in Indian generics manufacturing. The European Medicines Agency (EMA) and the UK’s Medicines and Health Regulatory Authority (MHRA) have issued similar sanctions. This highlights the fallacy in equating brand names with quality—a common justification by Indian doctors for favouring certain brands over others.

Some may argue that such sanctions are merely a manifestation of the general hostility towards generic drugs. However, the problem of substandard quality is further supported by the findings of India’s own regulatory authority. The March 2017 edition of the Central Drugs Standard Control Organization’s (CDSCO) surveillance report shows that a range of commonly consumed drugs, such as the Cipla-manufactured antibiotic ofloxacin tablets or the Cadila-manufactured Cadilose, fall short of standard quality-control criteria.

There are three fundamental areas of concern. The first relates to the efficacy of Indian-made drugs. Oftentimes, such drugs have been found to contain less than the required amount of active pharmaceutical ingredient (API), rendering them ineffective. The FDA’s inspection of Avandamet tablets, used to treat type 2 diabetes, found that some tablets lack the proper dosage of rosiglitazone, an active ingredient.

Closely linked to the issue of efficacy is the lack of data integrity. The poorly managed documentation practices of Indian generic firms featured as the primary criticism flagged by foreign regulatory authorities. The lack of reliable and complete data on the test results of specific drug batches, along with inconsistencies in the records presented, meant that inspection and verification of drug quality was extremely difficult. In fact, in 2013, Ranbaxy pleaded guilty and paid fines amounting to $500 million for fabricating drug-related data in the US.

The third aspect relates to the hygiene standards of the manufacturing plants. Individuals suffering from illness are especially susceptible to infections, and inspections of generic drug plants 
reveal pest infestations and dilapidated infrastructure. Many a manufacturing unit has become home to stray pigeons and lizards. Gaping holes in building walls and rusted pipes have become sources of infectious parasites, in what ideally should be a sterile environment.

Healthcare should be accessible to all, irrespective of purchasing power. The government’s leadership on this issue is welcome. Rolling out a half-baked populist agenda, however, is likely to backfire. Unlike demonetization, one cannot afford to wait and watch for the full impact of a generics-only policy to unfold. The current government has invested heavily in creating institutions to promote evidence-based policymaking, and it must leverage these in crafting an effective generic medicine policy.

India must oppose surging protectionism

It should aggressively voice its concern about increasing restrictions on the movement of professionals at both bilateral and multilateral forums

India’s second largest information technology company Infosys Ltd has announced that it will hire 10,000 Americans over the next two years. This comes after the US administration’s criticism that Indian technology companies are taking jobs away from Americans. Last month, US President Donald Trump signed an executive order to review the H-1B visa programme. Indian IT companies earn the bulk of their revenue from the US market and are big beneficiaries of the work visa programme. Legislation has also been introduced in the US House of Representatives, aiming to double the minimum salary of H-1B visa holders to $130,000 per annum. According to analyst estimates, this could affect the operating margins of Indian technology companies by up to 300 basis points. One basis point is one-hundredth of a percentage point.

The H-1B work-visa programme has been a fiercely debated issue in the US. Critics argue that the programme has been used by Indian outsourcing companies to bring in cheap labour, which hurts American workers both in terms of employment and income. Supporters, on the other hand, are of the view that the programme attracts required skills and helps US firms remain competitive. For instance, The Economist reported in December that in the US, “vacancies in computing and information technology could easily top a million by 2020”. The bigger question that US policymakers should address is this: will increasing the cost of hiring foreign workers and raising wages make American firms more competitive?

The overhaul of the visa programme is part of a wider protectionist agenda of the Trump administration, which has withdrawn from the Trans-Pacific Partnership and intends to renegotiate existing trade deals.

However, the US is not the only country which is taking protectionist measures. Australia and New Zealand have also made movement of professionals difficult, and the UK has tightened visa norms. The chief economist of the International Monetary Fund, Maurice Obstfeld, has fittingly described the evolving situation in his foreword to the latest “World Economic Outlook”: “Mainly in advanced economies, several factors—lower growth since the 2010-11 recovery from the global financial crisis, even slower growth of median incomes, and structural labour market disruptions—have generated political support for zero-sum policy approaches that could undermine international trading relationships, along with multilateral cooperation more generally.”

India will have to tread carefully, given this situation. Union commerce minister Nirmala Sitharaman recently hinted at counter moves against US companies operating in India. Indian policymakers should avoid taking such measures for multiple reasons. First, Indian IT services companies have themselves to blame in part at least for not realizing in time that the labour-cost arbitrage model has limitations. Second, the US is not the only country which is making movement of professionals difficult.

Third, India needs foreign direct investment (FDI) to fund its growth. The Narendra Modi government has done well to liberalize FDI rules in various sectors, which has resulted in a significant surge in foreign investments. Any retaliatory action against companies from the US—or any other country, for that matter—will affect the confidence of international investors and will bode ill for the economy in the medium-to-long run. FDI not only creates jobs but also has a spillover impact in terms of knowledge transfer, which helps increase productivity in general. A 2015 working paper, Impact Of American Investment In India, published by the Indian Council for Research on International Economic Relations had highlighted how investment from US companies has benefited India in various sectors. India has gained significantly after opening up its economy in 1991 and there is no reason why it should not take the process forward.

Thus, rather than replying in kind, India should aggressively voice its concern against increasing restrictions on the movement of professionals at both bilateral and multilateral forums. Global leaders did well to avoid protectionist policies in the aftermath of the 2008 financial crisis. India should play an active role in reviving a similar global consensus through multilateral forums as rising protectionism will have implications for global trade and growth.

At a broader level, even as some of the advanced economies are facing difficulties and are growing at a slower pace, the basics of economics have not changed. This is the reason why the work of early writers in modern economics remains relevant even today. In his classic work, An Inquiry Into The Nature And Causes Of Wealth Of Nations, the father of modern economics, Adam Smith, noted: “…nations have been taught that their interest consisted in beggaring all their neighbours. Each nation has been made to look with an invidious eye upon the prosperity of all the nations with which it trades, and to consider their gain as its own loss. Commerce, which ought naturally to be, among nations, as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity.”

Wise words given the current situation—and as worth heeding now as they were when he wrote them.

How can India deal with rising protectionism? 

Why governments make poor economic choices

Governments take a populist turn in economic policymaking for different reasons—primarily because they think it is a formula for success in elections

My most recent column interrogated the putative relationship between good economics and good politics, suggesting that we have reason to be sceptical of the oft-repeated claim that there is a causal relationship between the two. Good economics, in short, may or may not be good politics. It falls, therefore, on incumbent politicians to pursue good economic policies, if they choose to, not purely looking at short-term electoral calculus, but taking the long view.

Aye, there’s the rub. Incumbent politicians must be convinced that good economics is, indeed, embedded in an understanding of the state which sees government as the guarantor of the rule of law and property rights, provider of internal and external security, and of a small and well-circumscribed set of public goods and services, or, more broadly, as intervening in sectors characterized by chronic market failure.

Unfortunately, such a view, which one might dub a “classical liberal” or (moderate) libertarian position, is not the norm amongst India’s political class, which still harbours unreconstructed predilections towards statism and government command and control.

It is not hard to understand the genesis of such views. I have had the opportunity to speak at some of the best university campuses in India over the years, and am consistently struck by how fundamentally anti-free market the prevailing intellectual currents run and how strong remains the faith that the government knows best. And these views are prevalent not just in the humanities departments, as you would expect, but even among students of economics and business. And their professors are often worse! There are, in other words, multiple drivers of poor economic policy choices by governments, not merely political expediency.

Governments take a populist turn for different reasons—first and foremost, of course, because they think it is a formula for electoral success. Yet, the success of advocacy for populist policy interventions is not merely a matter of cynical electoral math but reflects also this statist mindset. After all, you have to believe in the primacy of liberty and of free markets, to push for it aggressively when you are in office, unless your back is to the wall and you are doing so out of necessity.

Readers of my work will know that I have dubbed this failure to make an intellectual, principled case for pro-market reforms going back to 1991, the “original sin” of reform in India. The trouble is, if the rationale for good policies is that they are done in a mode of crisis, the resolve to persist with those policies will fail to stick when the crisis has passed.

Please note that I am not here re-litigating the tiresome and already settled debate of whether economic reforms were imposed on India as part of a so-called Washington Consensus. That bogey has been debunked, and it is now, or should be, well understood that there were important indigenous intellectual drivers of reform—the work of economists such as Jagdish Bhagwati notable amongst them. In other words, there was an ideational background to the 1991 reforms, but this does not mean that the politicians who carried them out after the initial crisis receded carried conviction.

The notable exceptions in India were, of course, prime minister P.V. Narasimha Rao, the godfather of Indian economic reforms in the early 1990s, and prime minister Atal Bihari Vajpayee, the father of the far-reaching reforms of the late 1990s—yet these are the exceptions, within their own parties, and more generally.

As I and others have argued in detail elsewhere, the 10 years of Congress-led rule from 2004-14 were marked by a notable lack of conviction in pursuing the second generation of economic reforms, with, instead, a penchant for entitlement-based welfare schemes.

In part, this reflected a smug complacency driven by the high rates of gross domestic product (GDP) growth that India managed to achieve without much reform. Indeed, 2010 saw year-on-year GDP growth touch a magical 10.26%, according to World Bank data—marking India’s very brief entry into the double-digit growth club. If you have already been admitted to the club, after all, there’s very little short-term incentive to pay the entrance fee after the fact.

But this is not the whole story. Again, as I have argued elsewhere, the last Congress-led government evidently lacked intellectual conviction in favour of reforms, making it easy to push these into the future as long as growth was good. And, when growth turned down, it was too late to turn things around before the electoral defeat of 2014.

Former Congress leaders, and writers sympathetic to them, point out, with some justice, that several of the flagship schemes of the current Bharatiya Janata Party-led government are the progeny of schemes going back to the previous government. Perhaps the would-be reformers in that government might now be looking back with regret at missed opportunities, maybe even former prime minister Manmohan Singh.

We are again in a situation with acceptably high but not double-digit growth, and again without a clear sense that the government of the day feels any particular urgency in pursuing potentially unpopular reforms in its remaining time in office. We have seen this movie before. Let us hope for a different ending.

IIT Roorkee scientists create low-cost solar cells using Jamun

IIT Roorkee researchers used naturally occurring pigment found in jamun as an inexpensive photosensitizer for Dye Sensitised Solar Cells or Gratzel cells

Gratzel cells are thin film solar cells composed of a porous layer of titanium dioxide coated photoanode, a layer of dye molecules that absorbs sunlight, an electrolyte for regenerating the dye, and a cathode

Scientists at Indian Institute of Technology (IIT) Roorkee have used the juicy, delectable Indian summer fruit Jamun to create inexpensive and more efficient solar cells.

Researchers used naturally occurring pigment found in jamun as an inexpensive photosensitiser for Dye Sensitised Solar Cells (DSSCs) or Gratzel cells.
Gratzel cells are thin film solar cells composed of a porous layer of titanium dioxide (TiO2) coated photoanode, a layer of dye molecules that absorbs sunlight, an electrolyte for regenerating the dye, and a cathode. These components form a sandwich-like structure with the dye molecule or photosensitizer playing a pivotal role through its ability to absorb visible light.
“The dark colour of jamun and abundance of jamun trees in IIT campus clicked the idea that it might be useful as a dye in the typical Dye Sensitised Solar Cells (DSSC),” lead researcher Soumitra Satapathi, assistant professor at IIT Roorkee in Uttarakhand, told PTI.
Researchers extracted dyes from jamun using ethanol. They also used fresh plums and black currant, along with mixed berry juices which contain pigments that give characteristic colour to jamun. The mixture was then centrifuged and decanted. The extracted coloured pigment called anthocyanin was used as a sensitiser.
“Natural pigments are way economical in comparison to regular Ruthenium-based pigments and scientists are optimising to improve the efficiency,” said Satapathi, who is also a visiting professor at the University of Massachusetts Lowell in the US. “The increasing pressure on fossil fuels and concern of global warming has inspired continuous search for alternate energy,” said Satapathi.
Uncertainty over the pace at which new large dams or nuclear plants can be built means strong reliance on solar power—an area where India has high potential and equally high ambition—to deliver on the country’s pledge to build up a 40% share of non-fossil fuel capacity in the power sector by 2030, researchers said.
“In principle, we have a large social need for renewable energy especially solar energy. For quite sometime, our lab is actively engaged in low cost high efficiency solar cells production,” said Satapathi. The research team, which includes Nipun Sawhney and Anubhav Raghav, is very optimistic that the process can easily be replicated for mass production of solar cells.
The simplicity and cost effectiveness of the overall fabrication process, widespread availability of fruits and juices, and ease of extraction of anthocyanin dyes render them novel and inexpensive candidates for solar cells application, researchers said

 

Is lack of development driving the Kashmir conflict? Among Indian states facing armed militancy, Jammu and Kashmir has the best development indicators

The current crisis in Kashmir is characterized as much by the mass protests of youngsters as it is by the militancy of Pakistan-backed terrorists. The signs of growing discontent were visible in the abysmally low turnout in the recently held Srinagar Lok Sabha bypolls. In a visit to the state last month, Prime Minister Narendra Modi appealed to the Kashmiri youth to choose tourism over terrorism.
Is lack of development the reason for growing discontent in Kashmir?
A look at some of the key development indicators suggests that Jammu and Kashmir fares better than the rest of the country when it comes to most development indicators. In comparison to other insurgency-affected states, Jammu and Kashmir appears to be far more developed.
For instance, on the human development index (HDI)—a summary measure of income, educational attainment, and life expectancy—Jammu and Kashmir fares better than the average Indian state, according to a 2011 ranking of states by HDI, published by the erstwhile Planning Commission.
More recent data from the fourth round of the National Family and Health Survey, which was conducted in 2015-16 (NFHS 2015-16), also shows that Jammu and Kashmir fares better on development indicators when compared with all-India averages, or with insurgency-affected states such as Assam, Nagaland, Manipur and Chhattisgarh.
While the data suggests that there is no simplistic link between disaffection and development, it would be hasty to dismiss the role of socio-economic factors altogether.
Here’s why. According to the 2011 census, the share of 0-14-year-old population was slightly higher in Jammu and Kashmir (34%) than all-India (31%). Today, a part of this cohort would be in high schools and colleges, whose participation in anti-state demonstrations and stone-pelting has been widely recorded. Not only does Jammu and Kashmir have more people than the rest of country in this age-group, its youth population (15-34 years) also has a bigger employment problem. According to the 2011 census, Jammu and Kashmir had a much smaller share of main workers (who are employed for more than six months in a year) in comparison to the rest of India and other conflict-ridden states. This trend is in keeping with Jammu and Kashmir’s low share of main workers in the total population as well.

Click here for enlarge

These numbers show that the lack of quality jobs may be one reason for the frustration of Kashmiri youth.
Yet, a conflict such as that in Kashmir can rarely be pinned down to just one cause. Years of armed conflict and the heavily militarized environment has taken an emotional toll on the state’s population. The 2015 Kashmir Mental Health Survey conducted by the international humanitarian organisation, Doctors Without Borders, found that 45% of adults in the Kashmir valley display major symptoms of mental distress, with about one in five adults, or 19% of the adult population, displaying major symptoms of post-traumatic stress disorder (PTSD). The survey put the prevalence of depression in adults at 41%. In contrast, the National Mental Health Survey of India 2015-16 puts the weighted prevalence of depression at the all-India level in single digits.
The period of this survey broadly coincides with the NFHS survey of 2015-16. So, at a time when Jammu and Kashmir was ahead of India in most developmental indicators, its population was suffering from high levels of mental stress and trauma. Kashmir needs development with a healing touch that creates good jobs and reduces stress levels in the valley

Growth problems for India’s medium-size cities

In countries like the US and China, they are engines of economic progress—but in India, megacities still dominate

Although India has experienced rapid growth over the last two decades, spatial disparities have increased. India’s growth is concentrated in mega cities. This stands in sharp contrast with the spatial development in China and the US, where intermediate cities have become the new drivers of growth and job creation. Why is economic activity concentrated in high-density clusters in India? Have the manufacturing and services sectors shown similar or different patterns of spatial development? Will megacities experience decreasing returns in future? Why are medium-size cities not growing? Do they suffer from poor infrastructure? We examined these questions with the help of enterprise data in 900 districts (Klaus Desmet, Syed Ejaz Ghani,Stephen D. O’Connell and Esteban Rossi-Hansberg, The Spatial Development Of India, policy research working paper series 6060, World Bank).

Spatial transformation

The spatial development of the manufacturing and services sectors behaves very differently. Globally, manufacturing has been dispersing from high-density clusters to less-dense areas, whereas services have been experiencing increasing concentration, except for the densest locations where congestion is the dominating force.

Empirical evidence has shown that “young” industries tend to become spatially more concentrated, whereas “old” industries have a tendency towards greater dispersion. The manufacturing sector is now an old industry. The fourth Industrial Revolution is still evolving, with informational technology making services more tradable and a young industry.
The services sector in India shows some similarities with the services sector in the US, with both exhibiting agglomeration economies. However, there are also some differences. In the US, agglomeration economies in services dominate in medium-density locations. Three of the main high-tech counties in the US are in Santa Clara, California (Silicon Valley); Middlesex, Massachusetts (Route 128); and Durham, North Carolina (Research Triangle). In contrast, in India, agglomeration economies are more dominant in high-density locations, such as Hyderabad and Chennai.
The evidence of agglomeration in the services sector in the US is in cities with densities of employment below 150 employees per sq. km, while in India, agglomeration is found in cities with densities above this threshold. In other words, if the US is used as the efficient benchmark, then 150 employees per sq. km is the ideal density to take advantage of agglomeration economies. In India, these medium-density cities are the worst places.
For Chinese locations with a density above 150 employees per sq. km, service employment growth strongly decreases with size, indicating important congestion costs. China looks more like the US, where congestion costs also dominate for locations above the 150 employees per sq. km threshold. Given that the overall level of local infrastructure is better in China than in India, this finding is consistent with the interpretation of frictions holding back the growth of medium-density cities in India, but not in China.
Identifying the frictions and barriers to growth in medium-density cities in India can be a challenging task. There is evidence to suggest that two policy variables have the potential to account for the relative advantage of high-density clusters—the percentage of the population with post-secondary education and the percentage of households with access to telecommunication services. Controlling for either of these two variables, there is no longer evidence of high-density service clusters growing particularly fast. In other words, if all locations had the same percentage of their population with post-secondary education, or if households’ access to telecommunication services in all locations was the same, then high-density service clusters would lose their attractiveness in India.
If India had the same scale dependence in growth rates as the US, different areas of the country would benefit from growth in the services sector. Growth would be more concentrated in the coastal regions, especially in southern states such as Tamil Nadu and Kerala, as well as in northern states such as West Bengal, Bihar and Uttar Pradesh. Of the well-known IT clusters in India, the medium-density cities such as Ahmedabad and Pune, and especially Bengaluru, would grow much faster in the future, whereas the high-density cities, such as Chennai and Mumbai, will face slower growth.
What should policymakers do?

India’s rapid growth has been accompanied by increasing spatial disparities within India. India’s megacities have continued to grow, fed by a steady stream of migrants from the countryside. The spatial evolution of India has continued to favour districts with high levels of employment density. This is especially the case in services. The evidence in manufacturing is more mixed. In the services sector, agglomeration forces still dominate dispersion forces in high-density areas. In other words, these high-density clusters of economic activity continue to be India’s engines of growth.

This raises a number of important policy questions. Should India focus on the development of infrastructure, and in general facilitate the location of employment, in its large cities in order to exploit the still important agglomeration effects? Or should India develop infrastructure in medium-density locations in order to remove some of the impediments to growth present in these areas?
The future drivers of growth and jobs will be the medium-size cities in India, just like in China and the US. But the medium-density locations currently are the worst places. What is preventing medium-density locations in India from growing and taking full advantage of agglomeration forces? Why is their evolution so different from that in advanced economies? This is a major concern in India’s spatial development.