Announcements

Position for researchers In the field of Public Finance and Public Procurement

xKDR Forum is looking for researchers to work on a project with the Chennai Mathematical Institution (CMI), involving studying the impact of public finance management and public procurement issues on the private sector. xKDR Forum is a Mumbai-based inter-disciplinary group of researchers working in the fields of household and firm finance, financial markets, public finance management, public procurement and the land market. In these fields, the organisation engages in academic and policy oriented research, and advocacy.

At present, we are looking for candidates for the profile of Research Associate and Research Lead to participate in an ongoing research program in the field of public finance management and procurement.

Our work in this field includes:

1. How elements of the Indian state purchase drugs, by Harleen Kaur, Ajay Shah, Siddhartha Srivastava.

2. Lessons from the Delhi Metro by Pavithra Manivannan, Business Standard, 28^th July 2021.

3. Litigation in public contracts: some estimates from court data by Devendra Damle, Karan Gulati, Anjali Sharma and Bhargavi Zaveri, The LEAP Blog, 26^th May 2021.

4. How large is the payment delays problem in Indian public procurement? by Pavithra Manivannan and Bhargavi Zaveri, The LEAP Blog, 22^nd March 2021.

5. Monetisation lessons from NHAI by Charmi Mehta and Bhargavi Zaveri, Business Standard, 10^th March 2021.

6. The bottleneck of government contracting, by Ajay Shah, Business Standard, 25^th January 2021.

7. What ails public procurement: an analysis of tender modifications in the pre-award process by Shubho Roy and Anjali Sharma, The LEAP Blog, 26^rd November 2020.

8. The payment woes of the Municipal Corporation of Greater Mumbai by Anjali Sharma and Bhargavi Zaveri, Business standard, 23^rd November 2020.

9. The problems of public procurement and payment delays: A review of the recent literature by Sourish Das and Rabia Khatun, The LEAP Blog, 23^rd November 2020.

10. Does India need a public procurement law? by Shubho Roy and Diya Uday, The LEAP Blog, 19^th August 2020.

As a research associate, you will work on project deliverables under the supervision of a senior researcher. You will be expected to implement defined research tasks, work on written documents, reports and articles and interface with external collaborators and stakeholders. The requirements for the role of a research associate are:

• An academic background in the fields of Data Science, Law, Economics and / or Public Policy.
• Minimum one complete year of work experience, preferably in a research intensive organisation.

As a research lead, you will work on project deliverables along with the research head. You will be expected to jointly develop research outputs, work with research associates as well as with collaborators, engage in discussions with external stakeholders and generate at least one working paper in the field each year. The requirements for the role of a research lead are:

• A strong academic background in the fields of Data Science, Economics and / or Public Policy, with at least two research papers in any of these fields.
• At least three years of work experience, preferably in a research intensive organisation; very high quality spoken and written English. Experience with running surveys is additionally desirable.

For both roles, candidates with fluency in quantitative skills are preferred. Competency in programming language 'R is a bonus. In keeping with the current work environment at the organisation, a working knowledge of the document preparation system 'Latex as well as the operating system 'Linux are added advantages.

You must be comfortable with working in an inter disciplinary research environment consisting of people from varying backgrounds such as economics, law, public policy and data science. You must be curious and passionate about research and willing to work on independent outputs as well as in teams.

The remuneration offered will be commensurate with your skill and experience and will be comparable with what is found in other research institutions. Interested candidates must email their resume to careers@xkdr.org with the subject line: Application for "Research positions, public finance management"

Announcements

Position for researchers in the field of Household Finance

xKDR Forum is a Mumbai-based inter-disciplinary group of researchers working in the fields of household and firm finance, financial markets, public finance management, public procurement and the land market. In these fields, the organisation engages in academic and policy oriented research, and advocacy.

At present, we are looking for candidates for the profile of Research Associate and Research Lead to participate in an ongoing research program in the field of household finance.

Our work in this field includes:

1. But clouds got in my way: Bias and bias correction of VIIRS nighttime lights data in the presence of clouds, by Ayush Patnaik, Ajay Shah, Anshul Tayal, Susan Thomas.

2. Distribution of self-reported health in India: The role of income and geography, by Ila Patnaik, Renuka Sane, Ajay Shah, S. V. Subramaniam.

3. Does the quality of land records affect credit access of households in India?, by Susan Thomas, Diya Uday.

As a research associate, you will work on project deliverables under the supervision of a senior researcher. You will be expected to implement defined research tasks, work on written documents, reports and articles and interface with external collaborators and stakeholders. The requirements for the role of a research associate are:

• An academic background in the fields of Data Science, Economics and/ or Public Policy.
• Minimum one complete year of work experience, preferably in a research intensive organisation.

As a research lead, you will work on project deliverables along with the research head. You will be expected to jointly develop research outputs, work with research associates as well as with collaborators, engage in discussions with external stakeholders and generate at least one working paper in the field each year. The requirements for the role of a research lead are:

• A strong academic background in the fields of Data Science, Economics and / or Public Policy, with at least two research papers in any of these fields.
• At least three years of work experience, preferably in a research intensive organisation.

For both roles, candidates with fluency in quantitative skills are preferred. Competency in programming language 'R is a bonus. In keeping with the current work environment at the organisation, a working knowledge of the document preparation system 'Latex as well as the operating system 'Linux are added advantages.

You must be comfortable with working in an inter disciplinary research environment consisting of people from varying backgrounds such as economics, law, public policy and data science. You must be curious and passionate about research and willing to work on independent outputs as well as in teams.

The remuneration offered will be commensurate with your skill and experience and will be comparable with what is found in other research institutions. Interested candidates must email their resume to careers@xkdr.org with the subject line: Application for "Research Positions, Household finance"

Author: Adam Feibelman

Adam Feibelman is a Professor of Law and Director of the Center on Law and the Economy at Tulane Law School.

On this blog:

• Resolving municipal distress in India, 24 October 2021.
• A Maximalist Approach to Data from the IBC, 16 January 2019.
• A Limiting Principle for the NCLT's New Powers Under the IBC, 1 August 2018.
• Anticipating India’s New Personal Insolvency and Bankruptcy Regime, 11 January 2018.
• Don't rush to ban promoters from the IBC process, 17 November 2017.

Resolving municipal distress in India

by Adam Feibelman and Bhargavi Zaveri-Shah.

In recent years, municipal bodies in India have been increasingly accessing the public debt markets. In the four year period beginning 2017 to August 2021, nine municipal corporations made bond issuances aggregating to Rs. 30 billion. In contrast, in the immediately preceding two decades, ten municipal bodies had issued bonds aggregating to less than half this amount. This is generally a positive development. Tapping financial markets expands the resources available to cities for critical services and development. Like firms that access the public markets, municipal bodies that subject themselves to market discipline are held up to higher standards of transparency and local governance. A key missing element in this story, however, is the lack of clarity about municipal creditors' rights in the event of a default by a borrowing municipal body. In a chapter published in the 2021 annual publication of the Insolvency and Bankruptcy Board of India titled Quinquennial of Insolvency and Bankruptcy Code, 2016, we argue that the time is ripe for policymakers in India to develop a re-organisation framework for financially distressed municipal bodies. We evaluate the potential of a formal bankruptcy regime as the model for such a framework.

The case for a municipal re-organisation framework

We make three arguments. We begin by demonstrating the weak state of municipal finances in India. For example, in the decade beginning 2007-08, municipal revenues stagnated at 1% of the GDP, significantly lower than comparable countries. Municipal bodies (urban local bodies or ULBs) are disproportionately reliant on state governments for grants in aid and loans. They are shown to have consistently under-invested in capital infrastructure. The pandemic has exacerbated the weak state of municipal finances in India. The size of the municipal debt market is, therefore, likely to grow as municipalities seek additional resources.

Second, we argue that the current legal regime in India provides neither opportunities for collective action against municipal debt default nor clarity on the treatment of creditors (bond holders, banks and financial institutions, state lending agencies, employees and vendors) in the event of the borrowing municipal body's insolvency. Very few municipal bonds are guaranteed by the state government. At one end of the spectrum, this creates the possibility of aggressive sale of public assets, owned and operated by the ULB for the benefit of the public, by 'powerful' creditors of the ULB. On the other end of the spectrum, this deprives the system of the benefits of early recognition of financial distress in ULBs. It minimizes the possibility of salvaging a ULB's operations through a mutually negotiated and court-supervised re-organisation exercise. The growing levels of municipal borrowing from the public markets and the impact of the COVID-19 pandemic reinforce these concerns.

Third, the standard re-organisation framework applicable to private borrowers does not apply to ULBs as they provide public goods, and most of their assets are presumably for public use. Several countries have enacted differently designed re-organisation frameworks for resolving distressed municipal bodies. We highlight the key features of one such framework, namely, Chapter 9 of the US Bankruptcy Code. To be sure, Chapter 9 has its critics. However, with more than 100 municipal entities having used Chapter 9 for their resolution, it has proven to be a viable municipal bankruptcy regime. It is a rule-bound process, but one that is flexible enough to be able to address the complex problems of government financial distress, which inevitably combine important commercial concerns with essential necessities of social well being. At the least, it helps frame a number of threshold and critical questions that should be part of any discussion on the reorganization of distressed municipal entities.

Key legal and institutional challenges

We conclude by underscoring some key legal and institutional challenges to the idea of a municipal bankruptcy law in India. First, while bankruptcy and insolvency is in the concurrent list of the Constitution, municipal governance is an intrinsically State subject. A union municipal bankruptcy legislation will raise complex questions of federalism and will require provisions that allow states to retain their autonomy in applying a union legislated bankruptcy law to their ULBs. What might be the institutional tools for preserving such autonomy?

Second, experience from the US suggests a pro-active role for courts in administering a municipal bankruptcy. Any framework in India will need to determine whether the court or administrator heading the process will have the power to supervise the functioning of public services during the ULB's insolvency proceedings. If so, this would be a fundamental departure from the design of the Insolvency and Bankruptcy Code, 2016, which seeks to minimise court intervention in the insolvency proceedings and provides for the appointment of Insolvency Professionals for running the debtor's operations. Similarly, the scope of relief that the process can legitimately provide in a ULB's bankruptcy proceeding will need to be considered. Can a resolution plan for a ULB contemplate an increase in taxes? Can it provide for the sale of the ULB-owned public property? How can it do so without impinging upon decisions that are the prerogative of a city level legislature or the state's power?

Enacting a municipal bankruptcy law will require the resolution of these questions and prolonged negotiations with states much like the enactment of the GST framework. However, this should not deter policymakers from beginning the process. The gains of a clear municipal bankruptcy framework, in the face of the severe impacts of the COVID-19 pandemic and the deteriorating state of India's cities, should provide a motivation for doing so. The fact that municipal bonds are set to become an important asset held by Indian households adds an additional imperative and responsibility to ensure that there is a framework in place for addressing municipal financial distress in India.

Adam Feibelman is a Professor of Law and Director of the Center on Law and the Economy at Tulane Law School. Bhargavi Zaveri-Shah is a doctoral candidate at the National University of Singapore.

But clouds got in my way: Bias and bias correction of nighttime lights data in the presence of clouds

by Ayush Patnaik, Ajay Shah, Anshul Tayal, Susan Thomas.

Night lights is an opportunity to measure prosperity, using an eye in the sky, without requiring institutional capacity in economic measurement on the ground. The first wave of research used the DMSP-OLS dataset, which had annual images from 1992 to 2013. An improvement in this field was the launch of Suomi-NPP in 2012 where the pixels are smaller (0.5km x 0.5km), and the frequency shifted from annual to monthly. A substantial economics literature has found innovative applications of this data. When research projects are set in India, most researchers have relied on the district-level dataset that is generously released by the World Bank.

In a new paper, 

• We suggest there is a downward bias in the radiance, that is associated with the presence of clouds. The magnitudes are economically significant, e.g. -28% in July for Bombay.
  
• We propose a bias correction scheme that partly corrects for this bias.
• We have released the source code which implements our improved methods and conventional methods, so they can be used in data construction by applied economists and for methodological research in remote sensing.
  

The problem of bias

As an example, consider the radiance seen at the satellite from the city of Bombay:

The red line is the aggregate radiance from Bombay. It shows peculiar annual dips. The vertical dashed lines mark July months, where the monsoon is strongest (on average). The lower graph is the number of cloud-free pixel-days that make up this aggregate radiance. There is a pattern: odd dips in radiance that are correlated with low values for the number of cloud-free pixel-days.

Is this just the seasonality of income, which happens to be correlated with the seasonality of cloud cover? 

The graph above juxtaposes the seasonal factors of monthly aggregate income in Bombay (the black line) vs. the seasonal factors of monthly aggregate radiance for Bombay (the red line). There is no seasonal dip of income in July as is the case with nighttime lights.

This is just an example, for the city of Bombay. The paper has large scale evidence about the presence of this problem more generally.

We conjecture that for a pixel, in a month with a low number of cloud-free images, even on those few days, there are light clouds which attenuate the signal, thus inducing a downward bias in the observed radiance.

A partial bias-correction scheme

When a pixel has both bright and cloudy months in the data, we are able to estimate the bias and correct for it.

There are pixels which are cloudy all through the year. Here, the bias is unidentified.

Our bias-correction scheme works cautiously, only modifying the data when there is high confidence that there is bias and we are able to estimate the magnitude of the bias. It reduces the bias but does not eliminate it.

As an example, consider Bombay:

As before, the black line has the seasonal factors of aggregate income in Bombay. The red line has the seasonal factors of conventionally cleaned night lights data. The dashed purple line has seasonal factors for the night lights data released by the World Bank. 

The blue dotted line is the new bias-corrected night lights data. These seasonal factors are closer to the black line and an improvement upon the two conventional datasets.

Once again, Bombay is just an example; the paper has large scale evidence which demonstrates these gains. For the aggregate radiance of India:

Here also, the dotted blue line (the seasonality of the new night lights data) is closer to the black line (the seasonality of aggregate income in India), and fares better than the two conventional datasets (the World Bank's release or conventionally cleaned nighttime radiance).

Reproducible research

We have released the data and R code to reproduce all our calculations for Bombay. And, we have released a Julia package using which the new tools can be used for methodological research and applications. This software consumes a pixel-level NASA/NOAA VIIRS dataset and returns a bias-corrected pixel-level dataset which will readily fit into analyses of the existing NASA/NOAA VIIRS data. This is also the first open source package for conventional cleaning.