Indian Economy: News and Discussion (Jan 1 2010)

somnath · Post by **somnath** » 06 Mar 2011 19:18

Chanakya-ji,

Using data is a good start...Much better than useless allusions to people's grey cells (which onyl Hercule Poirot could make with some finnesse!)...

anyways..To the theory first..

chaanakya wrote:Poverty estimates indicate 37.5% ( going by Planning Comm data) are poor in India so you can deduce how many are out of the net cast by NREGA.

Now if you provide money (as wage and not dole) without asset creation , how could it be non inflationary that you have failed to explain with all your verbal gymnastics which points to your confusion.

I have tried explainign this (econ 101) quite a few times before, but one more time..

1. You (andd some others here) use govt expenditure, investment and money supply inter-changeably - these are different variables, and while interconnected in some ways, are not the same....NREGA expenditure, like any other expdt of the govt, is financed out of tax revenues....All expdt, whether by govt, individual or corporate, givs rise to "money supply"...the money supply created by any expenditure will be a few times the amount of the expdt itself - how much, is dependent on the "velocity" of money...There will be money supply created by the extra expenditure arising out of income tax breaks as well..Every expense really, I guess you get the drift..Therefore, the govt does not "print" money to spend on anything, whether building a road or paying wages, not anymore in India...

2. there is NO empirical evidence anywhere in the world that says that the poor use money less "productively" than the rich..In fact there are tons of evidence on the contrary...Therefore, there is no reason to believe that somehow wages spent by NREGA workers will be spent in a manner where the velocity of money will be "higher" than the same for middle class folks with tax breaks, causing a bigger difference to inflation...

3. the "inflation" argument for NREGA lies not on the some "creation of no assets for a dole given", but on demand side equations...Of course the media doesnt know better, but what RBI actually says is that the economy is doing well, and various sectors of the society are showing increasing demand for everything, including foodgrains...among them, NREGA has been pointed out as a factor of increasing prosperity of unorganised rural labour, and their in general better wage bargaining power....In absence of adequate measures on supply side bottlenecks, the increase in demand will cause inflation - tautological, IS-LM frameworks...But the media of course took that to say: "NREGA casues inflation"!It is almost as if it is an "inflation problem" if only BPL folks with NREGA wages display higher demand for rice, while higher demand for meat-protein and processed food by the middle class financed by tax exemptions and fuel subsidies is non-inflationary!

4. The argument on the asset creation side is different..It is about the fact that if a large amount of money is being spent, then lets try and see if we can build more durable assets rather than just paying wages..Which is why they are trying to club NREGA with other programmes with a greater "capital" outlay...NREGA, I have said many times, was originally desinged as a quasi unconditional cash tranfer scheme, therefore that was the over-riding objective...

If all of this sounds to you as "verbal gymnastics", I can only ask you to first go through a good economics book to get your basics right!

Now to the data....

chaanakya wrote:You have studiously ignored the actual statistics link posted here containing NREGA data

Not at all..Just that much of the data you posted means nothing to the discussion we are having..

# of works completed by itself means nothing - depends on the type of work! there might be projects running over years...If there are an estimated 5-6 crore people getting jobs in NREGA, 9 lac people not gettign job cards is a fairly small error..TO me, the parameters of the programme would be the amount of manhours of labour created, # of people who got 100 days of work, amount disbursed and % of leakages...

I have posted performance comparisons of NREGA against other legacy programmes earlier -go through them...NREGA is one of the most successful programmes ever on welfare in this country..

Does it mean that there are no leakages? Not in the least - people like Jean Dreze too are constantly loking for them..And a lot is changing - bank accounts, UID...The smarter state govts are doing a lot more...But conceptually, is it a good idea? Most of the data tends to point out towards that...

A small note about the poverty numbers...All poverty estimates, whether Planning Commission, or Arjun Sengupta, or anything else are based on the last NSSO exercise -vintage 2004..Part of the intellectual justification for NREGA came out of that...Now there are issues with NSSO data, but what is not in doubt is the presence of hundreds of millions of people living under 2 dollars/day (and hundreds of millions more that live above, but are only one drought away from poverty)....The fresh round of NSSO surveys currently on will reveal some more about the efficacy of NREGA....But macro-economic estimates of rural demand already show that NREGA is having a salutary impact on the same...Hopefully NSSO will support the same with more data...

chaanakya · Post by **chaanakya** » 06 Mar 2011 20:22

Of course Data is useless and means nothing to the discussion , but you insisted on that. If you were into NREGA you would have properly understood that Govt is constantly reviewing all this and you have been gently reminded by your "R&D". As regards my reading basic economics, keep your advice to yourself.

Be that as it may, your statements are just what it is "statements". You are entitled to your views. I entirely disagree with that.

somnath · Post by **somnath** » 06 Mar 2011 20:46

chaanakya wrote:Of course Data is useless and means nothing to the discussion , but you insisted on that.

Data is most useful, as long as you can read and interpret it! There is a ton of material already posted towards the begining of the discussion - go through them...The NREGA site data is also useful, but not (most of) the stuff that you posted (# of works completed for example means nothing - you cant conclude any "quality" parameter one way or the other)...

About the rest, in case you want to remain "sure" in your views and your knowldge of economics, no problem, be my guest! You can continue basing your views on how money supply and govt expdt are the same

Arjun · Post by **Arjun** » 06 Mar 2011 20:56

Somnath, where are you getting your figure of 140,000 Cr of personal tax exemptions in the budget ? As per this article, the amount is 40K Cr....TN Ninan: Dream Objectives

vina · Post by **vina** » 06 Mar 2011 21:14

somnath wrote:I have tried explainign this (econ 101) quite a few times before, but one more time..

Ah. Always love E-Con 101 !

Therefore, the govt does not "print" money to spend on anything, whether building a road or paying wages, not anymore in India...

Yawn. Whether you print paper wampum or do some electronic transactions that say IOU or write a promissory note /bond/whatever, wampum IS wampum . M3 looks like Wampum, squawks like Wampum, flies like Wampum and well, it is Wampum!

3. the "inflation" argument for NREGA lies not on the some "creation of no assets for a dole given", but on demand side equations...Of course the media doesnt know better, but what RBI actually says is that the economy is doing well, and various sectors of the society are showing increasing demand for everything, including foodgrains...among them

,

Zimble Onree. If they didn't have the cash (transferred to them via NREGA, they dont have purchasing power), so less demand for certain goods and the existing supply would be enough to clear the demand and hence no inflation!. Good na ?

In absence of adequate measures on supply side bottlenecks, the increase in demand will cause inflation - tautological, IS-LM frameworks...

Yes. Yes. The Yell Yum framework would say exactly that and that is what is happening. The "supply side" is always sticky and it is only in the long run, the price signals will get transmitted adequately for the supply to pick up. If you increase Wampum to the level where there is a sudden demand, there is no alternative to suffering inflation in the short run , na ?

NREGA, I have said many times, was originally desinged as a quasi unconditional cash tranfer scheme, therefore that was the over-riding objective...

If wealth transfer was the overriding objective, they should do exactly that. Pay those guys and let them sit at home rather than do any "pretend " work. The only problem is , it becomes more difficult to sell politically to the tax payers, whose taxes are transferred away!

In fact, in most cases, it might be better to pay those guys to sit at home and hire earth moving and mechanical equipment to do stuff like building bunds and digging a well etc. Will get it done cheaper and faster and with better quality!

TO me, the parameters of the programme would be the amount of manhours of labour created, # of people who got 100 days of work, amount disbursed and % of leakages...

Again, lets loop back to the previous point. Your parameters should be wealth transferred and nothing to do with labor hours and what got built, unless you somehow thing that the same methods used in building the pyramids should be what is optimal in 2011 !

..But conceptually, is it a good idea? Most of the data tends to point out towards that...

It is a terrible idea. What they should do is to make those conditional on attending skill development and vocational training programs that will help move those folks off the farms and into factories! The crux of India's problem is landless agricultural labor (who largely happen to be Dalit!). If you emancipate them, you need massive mechanization in agriculture and you liberate them from the oppression and those unequal feudal structures.

The best idea is to do something on the lines of the noon meal scheme. You get food and a wage if you get into classroom to read and write , learn stuff like basic healthcare , sanitation and family planning, start learning some vocational skill and somehow make sure that next season you do not go to the farm to work and come to NREGA in the off peak time (when the farm doesn't need that surge of labor).

somnath · Post by **somnath** » 06 Mar 2011 21:18

Arjun wrote:Somnath, where are you getting your figure of 140,000 Cr of personal tax exemptions in the budget ? As per this article, the amount is 40K Cr....TN Ninan: Dream Objectives

Arjun-ji, I linked up the primary source - the Budget document..For data, always try and get to the primary source..

BTW, 1.4 lac crores is direct tax exemptions, not just personal - revenues foregone on personal tax exemptions is about 45k crores, on non-corporates (basically self employed) is 5.5k, corporates is ~90k...

somnath · Post by **somnath** » 06 Mar 2011 21:39

Vina-ji,

In case you believe that an alternative to NREGA is better use of money, thats fine thats a POV..

But couldnt quite understand what you are alluding to in our "wampunisms"..

1. Increase of money supply is "bad"?
2. Expansion of narrow money (M0) and broad money (M3) are one and same?
3. GOI monetises deficits?
4. Only expdt under NREGA causes increase in money supply (lets leave definitional stuff - M3 or M1 or M0 aside for the time being)
5. Supply side rigidites (say on food) is somehow tougher to address for a quantum of incremental demand generated by 40k of "doles" from NREGA than the same generated by 1.4 lac crore of direct tax exemption (and another 40k crore of oil price subsidy)...

I was completely lost in your wumpumisms - hence couldnt figure out much of what you alluded to!!

BTW, the reason why NREGA was planned as a "manual labour" oriented project was to take care of the targeting issue - manual labour makes the programme self selecting..

Arjun · Post by **Arjun** » 06 Mar 2011 21:40

somnath wrote:
Arjun wrote:Somnath, where are you getting your figure of 140,000 Cr of personal tax exemptions in the budget ? As per this article, the amount is 40K Cr....TN Ninan: Dream Objectives
Arjun-ji, I linked up the primary source - the Budget document..For data, always try and get to the primary source..

BTW, 1.4 lac crores is direct tax exemptions, not just personal - revenues foregone on personal tax exemptions is about 45k crores, on non-corporates (basically self employed) is 5.5k, corporates is ~90k...

Ok. One can argue about whether tax exemption to middle class is more 'productive' or non-inflationary than NREGA - but certainly exemptions to self-employed and corporates are more oriented towards ROI. When comparing apples to apples, I would not include the latter two.

Suraj · Post by **Suraj** » 07 Mar 2011 00:43

somnath: How is NREGA requiring manual labor a good thing ? Theo already described the absurdities that result from NREGA would more accurately be called the national wealth redistribution scheme, without bothering with the figment that it provides gainful employment or lasting skills development. It goes out of its way to prevent people from utilizing productive mechanization.

If this bottom rung population has to get beyond their circumstances they need education, skills and involvement with the larger society. NREGA does not accomplish it: as the 2010 NREGA report you quoted itself indicates - it has not reduced the lowest rung poverty or left wing naxalism. If you throw $30 billion at a problem, someone is going to benefit, but that does not prove that the approach is a viable solution. I don't accept the argument that two important programs cannot be combined or implemented with greater synergy. Sorry, that's just your contention.

I've no particular quibble with NDA projects being renamed - all govts do that. I just emphasized that UPAs Bharat Nirman is just NDAs PMGSY et al by another name, not a UPA creation. I've no issue with you choosing to accept evidence selectively - I'll simply return the favour in kind. I just happen to disagree with you that NREGA has been beneficial. Your own conclusions lead you to believe that it has been implemented well, while mine don't. We'll have to agree to disagree.

somnath · Post by **somnath** » 07 Mar 2011 06:30

Suraj,

A PoV that says NREGA is trash isnt a problem, just so long as non sequitors are used..

1. Spending on NREGA is NOT "printing money".
2. Money supply created on NREGA spends is in no way a substantially different animal from that created through other govt welfare spends like tax breaks...
3. The "inflationary" impact of NREGA is NOT on account of the "money supply" side of the IS-LM equation, but on "aggregate demand" - the policy responses/choices are very different for the two..
4. the issue of NREGA not being run conjointily with Bharat Nirman initially was NOT about UPA/NDA "political credits".

About the rest, its a PoV that everyone is entitled to..

Last couple of cents:

1. The manual labour provision is the only way of efficiently "targeting" the programme..Currently, manual labour makes the programme self selecting...Tomorrow, with UID and more bank acocunts, hopefully the "labour" bit can be excised out...

2. Bharat Nirman is a lot more than the PMSDY - it has six projects packaged into it, including some of the erstwhile "Congress" programmes like the rural housing scheme (in fact most of the programmes are almost as old as independent India!)..Total outlay for Bharat Nirman is about 58k crores, the PMSDY gets about 20k crores - so its a bit more than just a lipstick!

There is no "selective evidence" quoting - only a deep disregard for quoting (the largely uneducated) media.. And would always put emphasis on primary sources of data

Rest is, as I said, PoV!

somnath · Post by **somnath** » 07 Mar 2011 07:18

P Sainath takes the tax exempion logic further - a little bit too much some of which I dont agree with, but makes viable points...

http://www.hindu.com/2011/03/07/stories ... 111200.htm

The most egregious exemptions are on corporate tax.Barring banks, almost no major industry in India pays the full marginal corporate tax rate - its amazing! Successive FMs have been only talking about removing the exemptions..The Vijay Kelkar report (one that laid down the GST principles) spoke of doing it, but corporate lobbying has consistently prevented it from happening..Hopwfully, the new annoucements on DTC in this budget will mean something, but I will believe it when I see it...

Theo_Fidel · Post by **Theo_Fidel** » 07 Mar 2011 07:22

I've been trying not to expand this discussion even further but this is getting absurd.

The problem with the NREGA is that it is a conditional system. There are ~ 450 million destitute poor in the country but the scheme has only covered ~ 44 million. So then the question becomes how did the other 400 million get excluded.

- Anyone not living in an organized settlement within a panchayat is excluded.
- Anyone landless with no ration card is excluded.
- The old, sick or infirm are excluded.

- The handicapped are excluded.

- Those without adult members in the family, Orphans, run away children, etc are excluded.
- Those who live near cities have been deliberately excluded.
- Urban poor.

- All people the village panchayat ostracizes.
- Migrants with no fixed address.

I could go on.

If we had taken that ~ to $40 Billion and simply distributed it to the poor in a food voucher program every person below the poverty line would have received ~ $100 over 5 years or about Rs 800 per year. The NREGA is just maya. Promising what it can never deliver. The truth is we are not a rich country that can afford these kinds of programs. To run it properly we would need to fund it properly. Something in the $150 Billion per annum type number.

The ultimate bottom line is that the absolute number of poor in the country has increased by 40 million persons while this program was running. That itself should tell you all you need to know about its effectiveness.

I'm starting to distrust Somnath's motivation for defending this disaster of a program. The refusal to stray from 'talking points' is very odd. Esp. this weird linking of tax breaks to NREGA spending.

Here are some pictures on the nature of these 'investments'. Note the health and clothes of most of the people shown. Are these the real destitute of India that we all have seen. Not.

No one objects to the existence of a cash transfer program but such a program should also benefit society productively i.e. pay for its keep.

Note the pointless location of this particular excercise.

Note the location of the borrow pits. Dig a hole, let nature fill the hole. Look at the angle of the berm and the poor foundations. Sigh!

This is what we would have our women do. Note the lack of children nearby.

Also note that much of this work is done on private property. So who really benefits?

somnath · Post by **somnath** » 07 Mar 2011 08:10

Theo-ji,

Its better from you now - debating the relative merits on facts (or perceptual facts, or factual perceptions!) is much better than debating the issue on the basis of grossly erroneous theoretical assumptions..

1. The coverage of NREGA is 46 million "households" - that is about 200+ million people benefiting from NREGA..One of the links referenced earlier has the data...And it is expanding as more states start shaping up..

2. Children, handicapped, sick/infirm are not included - that is absolutely right...Each of those categories need a different "treatment"...A supplementary NREGA income in the family helps increase access for education for the kid, healthcare for the sick...As I keep saying, NREGA is not "in lieu" of other programmes targeting specific segments that cannot be covered under NREGA..

3. Urban poor not included..This is perhaps the bigest obvious gap, and people like Jean Dreze have been demanding it...Its a complicated scenario - big cities anyway have lots of jobs going around, the issue is of skills....the smaller cities is a different kettle of fish...But this is an important gap..

4. A lot of the issues around NREGA's coverage are due to execution (I have referenced some studies above)..The execution is in the hands of state govts, and the success of the programme is heavily influenced by how the resp state govt has reacted..For example, WB is a major laggard, while UP seems to have done surprisingly well..But this is true of all centrally sponsored projects...
Which begs the bigger isue around "2nd gen reforms" - it is largely around governance levels in states...

Theo_Fidel wrote:The ultimate bottom line is that the absolute number of poor in the country has increased by 40 million persons while this program was running. That itself should tell you all you need to know about its effectiveness.

According to who? And it has increased between what timeframes? 2004 to 2011? Can you reference the study?

the govt of course has been claiming that NREGA has caused a dent in rural poverty - but then, it is expected to..

But other less "motivated" entities are doing the same..UNDP says the same thing..It makes a special mention of NREGA in its progress report on MDG..
http://content.undp.org/go/cms-service/ ... id=2620072

and all indicators in 2009 showed rural consumption holding up largely in parts due to NREGA...

About the pics you post, in absence of information, how can you conclude one way or the other what those earthworks are for? And thereby conclude that they are "useless digging of holes"? And comments like "this is what we would have our women do" are gratuitous to say the least, I am sorry...What do you think these women do in the absence of NREGA? Sit in a call centre? the "absence of children" you refer to could well be because of the fact that NREGA prvides for creation of childcare facilities near worksites - it has not been implemented 100% everywhere, but in lots of places it has...Most of these women would prefer to do this work and use the ,money to send their children to a school better than the worthless govt school in the village...

Finally,

Esp. this weird linking of tax breaks to NREGA spending.

Well, for those who whine that NREGA "doles" are a waste of money, its a bit hypocritical for them to accept tax credit doles as well, no? Distrotionary exemptions on direct taxes alone - the distortions recognised and articulated many times - account each year for an amount FAR higher than any outlay for NREGA...The hypocrisy is astounding...Thats all there i to the "weirdness"...

chaanakya · Post by **chaanakya** » 07 Mar 2011 08:54

somnath wrote:
Data is most useful, as long as you can read and interpret it! There is a ton of material already posted towards the begining of the discussion - go through them...The NREGA site data is also useful, but not (most of) the stuff that you posted (# of works completed for example means nothing - you cant conclude any "quality" parameter one way or the other)...

NREGA is an attempt to directly address the issues - its a cash tranfer-cum-employment-generating tool..without the inefficiencies/overheads embedded in creating corporate entities..Thankfully, there is now enough data on NREGA for researchers to do both top-down and bottoms-up studies...I am referencing a few:

Top-down theoretical analysis
http://www.ilo.org/public/english/burea ... p17007.pdf
http://www.levyinstitute.org/pubs/UNDP- ... Report.pdf

Bottoms-up empirical analysis
http://www.economistsforfullemployment. ... da_SAM.pdf

There are many more, incl some by Jean Dreze that I will dig out later, but the above give a flavour..

So your tons of Data comprises few pdfs from secondary sources mostly ppt linked here
http://forums.bharat-rakshak.com/viewto ... 9#p1039539
And you are eloquently telling from that basis that we have provided employment to more people then there are in Bangladesh.
When pointed to primary source you say

There is no "selective evidence" quoting - only a deep disregard for quoting (the largely uneducated) media and emphasis on primary sources of data Rest is, as I said, PoV!

That could be because primary data don't support your vaunted conclusions about NREGA.Hence you gave "deep disregard" for them.
But then you advise Arjun

Arjun-ji, I linked up the primary source - the Budget document..For data, always try and get to the primary source..

Of course Media is uneducated and hence your unsolicited advice to all and one to study e-CON-o-Mics which is limited to reading Samuelson.

and you start quoting media and secondary sources ppt which though dated enlighten your mind disregarding your own advice. Could it be that there is some difficulty in interpreting primary numbers and you leave the job to others to do that and take what you "think" is appropriate for your pre-conceived notions and ideas dressed in self serving phrases

like "unconditional cash transfer" and "self selecting" phrases I am sure you would have borrowed from some other "primary sources"

About the "social effects" of NREGA, some stats here..
http://www.levyinstitute.org/pubs/conf_ ... hrotra.pdf

Its a slightly dated document, but still:

1. NREGA is more effective than any other programme tried before...
2. High participation of women
3. Higher participation of SC/STs.

An interesting view on how NREGA can be used for "skills development"..

http://economictimes.indiatimes.com/opi ... ms?curpg=1

]a PPP model where construction companies are invited to take up projects in defined geographic areas, employing NREGA-registered labour for the project under implementation. In fact, the real benefit of this idea underlies in its potential for long-term skill-building, as described below.

The project being implemented under the PPP model must create an on-the-job training module aimed at upgrading the skills of people working at the sites. It could be about 80% hands-on training while 20% could be on concepts, quality and other technical aspects delivered in pedagogy suitable for the target group. A select few who come up to the standards benchmarked by the firm for a particular skilled category could be given certificates for the relevant skill.

When someone points to ground realities you say it is anecdotal
But then you yourself do the same when you think

What Jean Dreze "thinks" is less important - it was only a reference - question is what is the empirical facts on the ground...And by the sheer composition of expenditure, the assets being created cannot be very durable..But thats not the point...the objective of the programme,

of course empirical data turns to empirical facts on the ground yet you avoid Theo's facts or mine as anecdotal Since it does not serve your purpose. Of course you equally trash Dreze when RamaY points out that Dreze does not conclude what you are trying to say ( from secondary sources). But what's your position about anecdotal statements when it might be twisted to suit your conclusion

As Amit's anecdotal instance displayed, infrastructure is struggling to catch up, it will continue to struggle to catch up..

So you approve when you think it is suiting you.

The data that I quoted came directly from the reports (up to date) quoted from NREGA monitoring website.
What conclusions one can draw.
Did you see the shelf of projects. Are they leading to durable asset creation in rural areas? You yourself has agreed that

That is precisely why I dont think asset creation is all that high up in the policy makers' minds...Cash transfer is the prime motivation...

And of course your unsolicited advice to RamaY to go through the material you posted to see how much is spent on wages\

On NREGA, there might be leakages, I am sure there are...But the systemic intervention is much more efficient than in most public welfare projects - go through some of the docs I posted on how much of the outlay has been spent on wages for example..

When you can see for yourself what is the up to date outlay and spending and pending.

From the quotable quotes one can understand that you are tying yourself in knots defending NREGA. There is no need to defend NREGA as it flows from the Act promulgated to ensure Wage employment and livlihood security. If it achieves that that is good enough. All other things are secondary and will leave in knots. Afterall , all Govt Schemes do have implementation issues and leakages and corruption and targeting issues.

The point on inflation should have been well understood by you if you had clear mind. Increase supply money to demand side without leading to impact on supply side ( anyway there would be gaps) would cause inflation.
Since no skill generation /productive utilisation is there , there would be no impact on supply side. Demand goes up too much money chasing same amount of goods or may be a little less as Sharad Powar explained causes inflation.
But then these are the points some would consider relevant.

somnath · Post by **somnath** » 07 Mar 2011 09:58

Chanakya-ji,

1. No source referenced by me is "anecdotal" in nature...there are surveys and studies that are done by professionals...That is not "anecdotal" evidence - that is empirical by all definitions, unlike "I saw something while I drove past", or "in my village this happened"...Those too are useful insights, but not replacements for hard empirical data.Which is why it doesnt matter if it comes form Jean Dreze or anyone else...

2. The presentation referenced for the estimate of # of households is by Prof Mahendra Dev (Chairman of Agri Csts Commission), and he inturn quotes NREGA data - dont see what is "anecdotal" about it...The latest NREGA numbers, found in the website, show an improvement on those numbers...I dont know what you are arguing against...I am a big proponent of using primary data sources - which is what I said in that comment about quoting the media, and you misconstrued...

3. Cant help it if you dont want to educate yourself, but terms like "unconditional cash transfer" are standard parts of the development economics lexicon..And quite relevant to the current debate on NREGA..And Samuelson is a start (basic econ 101) - in case you are interested (didnt seem like you were) - I can reference you other reading material as well..

4. In case you or Theo did a survey, even a limited one, using standard sampling and data collection and interpretation means, yes, that would constitute as empirical evidence...A of now, you are simply narrating personal experience, which is useful, but not in terms of analysing trends..

5. Finally, if you think that NREGA is about "wage employment only", then we are on pretty much the same side of the argument! though I do think that asset creation could/should be an additionality built-in, which is what the govt is trying now...

chaanakya wrote:The point on inflation should have been well understood by you if you had clear mind. Increase supply money to demand side without leading to impact on supply side ( anyway there would be gaps) would cause inflation.
Since no skill generation /productive utilisation is there , there would be no impact on supply side. Demand goes up too much money chasing same amount of goods or may be a little less as Sharad Powar explained causes inflation.

Now there goes again - in the entire paragraph, you have used money supply, govt expenditure, demand/supply of goods/services all interchangeably...When you say "increase in supply money to demand side" - what do you mean? NREGA wages cause an increase in money supply? "More amount of money" chasing the same goods causing inflation? The total "money supply" outstanding in India is 63 lac crores today - so 40k crores of "NREGA money supply" (whatever that means) causes inflation!

Told you before, stick to Samuelon - Sharad Pawar cant be a good economist

somnath · Post by **somnath** » 07 Mar 2011 14:15

A performance eval of NREGA in Tamil Nadu by IIT-M..

http://www.nrega.net/pin/reports-and-re ... hennai.pdf

The key data points to note are on targeting:
1. % of people from the "poor" households
2. % of people from the backward castes, esp SC/ST
3. % of people with minimal asset ownership
4. Efficiency of job card processing
5. Satisfactoin levels of the participants

The negative side of things:
1. Universalisation - its only 100 days a year
2. Quality of the works being done

Another performance eval of NREGA, this time in WB by IIM, Calcutta..

http://www.nrega.net/pin/reports-and-re ... lcutta.pdf

Extremely variable performance across the board..Especially related to generation of "mandays", efficiency of processing job cards and participation of women..Though "increase in income" in the area is still a positive..

somnath · Post by **somnath** » 07 Mar 2011 14:22

A quick insight on the movement in poverty levels in India...Most poverty numbers, as stated before, base themselves on the NSSO 2004 survey..The 2011 survey is currently on..In the meanwhile, the other source of data is the NCAER household income survey...A lot of people have started taking this serioulsy as well...

Its a paid report - but the brief highlights are there in the media..
http://www.livemint.com/2010/08/0116435 ... tnumb.html#

The key point is this - the absolute # of "low income" households in India has come off from 65 million in 2002 to 41 million in 2010...
The way NCAER defines "low income" (40k HH income in 2001 prices), it could be defined as the 1 dollar/day poverty level mark as well, assuming a HH size of 4.
So there is clear evidence of that lots of people are being pulled up from poverty...A lot of it by the general high economic growth, some of it surely because of various welfare schemes - NREGA being one...

chaanakya · Post by **chaanakya** » 07 Mar 2011 19:11

somnath wrote: 5. Finally, if you think that NREGA is about "wage employment only", then we are on pretty much the same side of the argument! though I do think that asset creation could/should be an additionality built-in, which is what the govt is trying now...

Told you before, stick to Samuelon - Sharad Pawar cant be a good economist

Its in the Act itself if you care to read it. and Well then there is no argument. You can happily go back to Samuelson. Wish you luck there.

Theo_Fidel · Post by **Theo_Fidel** » 07 Mar 2011 20:20

WRT to JNNURM it appears the outlay has indeed dropped to Rs8000 crore. The DDM did get it right.

The line item was inflated by rolling some misc. grants into the program. Serves us right for believing/taking at face value the government source. All is maya.

Theo_Fidel · Post by **Theo_Fidel** » 07 Mar 2011 20:51

Somnath,

You are now being facetious.

There is not a single person her arguing against some kind of cash support program, except maybe Arjun. The argument is on the nature of these programs. My criticism of the nature of construction taking place is based on my professional work and project experience. This is pitiful. These pictures are not much different from 2000 BC in terms of engineering and using sound technical principles.

The question is on the nature of the support program. I have argued for paying people to attend schools, training institutes, health courses, etc. This is what a nation needs. Not these pointless holes in the ground. This would involve actual work and planning. Not some disorganized shoveling of earth. Honestly take any private earth mover from India who uses manual labor and ask them what they think and they would laugh. There is no way a private contractor would get paid, even by the government for such an unproductive performance.

As far as your point about households. Total job cards issued are only ~10 Crore of which a large number are inactive for the simple reason that each household has only receive 47 days of work on average. I doubt more that 60 million as an outer number have benefited.

Even if we assume 100 million have benefited what about the remaining 350 million. How were they excluded I wonder. And you should wonder too. Your lack of curiosity about this is puzzling.

As far as the IIT study this chart caught my eye. Note the numbers who call themselves as unemployed. Note where the vast majority of labor is coming from. Agriculture and stay at home mom's.

With respect to your point about SC/ST lets talk about TN which appears to be the only area with some survey followup. TN is about 20% SC & about 5% ST. So 6 million SC's are out of the coverage and the ST's about 1-2 million are not covered at all. How is this possible you ask. Heres one example. The 'Paraiyan' caste in south TN work with dead animals and leather processing. They are a good 5% of the population around here. Very very poor. Due to the nature of their work other communities will not share a job site with them. Ergo no work for them.

Lets do some math. TN's SDP is $70 Billion +/-. Agriculture without allied industries is only about 8%-10%. So about $7 Billion. Agricultural wages are about 1/3 of typical activity so total agricultural wages are about $2.5 Billion. This is about Rs10,000 crore. Only about half the districts have been covered. Most of the agricultural belt along the Kaveri, Noyyal, Western Ghats have not yet been properly covered. So say that the districts covered generate 1/3 of agricultural work. So about Rs 3,500 crore in existing wages. The NREGA spent about Rs 1,500 crore in TN. In effect raising wage income by 50%. Without raising agricultural output by 50% in terms of worker productivity or out put. So we have inflation raging in these rural areas.

The one's getting really screwed are those destitute, handicapped, aged, orphans who don't benefit yet must no cut down their intake so the folks one step above them can eat better. Nice.

And we wonder why our statistics stink and all our poverty alleviation programs over the past 60 years have managed to impoverish even more people. I'll say it again as I have said from the beginning. In 10 years time we will look back and say that all the NREGA did was generate even more poor people whose only skill is hard manual labor. What a waste of our demographic dividend.

SwamyG · Post by **SwamyG** » 07 Mar 2011 23:05

linky

The GDP estimates for 2010-11 therefore are fake.

Suraj · Post by **Suraj** » 07 Mar 2011 23:37

^^^^
Devinder Sharma seems to think agriculture is all that the Indian economy is about, or that foodgrain/cereal output is the entirety of the agricultural/forestry/fisheries line item, which is what grew at 5.4% (link, table 1.1). But it is just Huffington Post, a US political site.

Theo_Fidel · Post by **Theo_Fidel** » 08 Mar 2011 00:49

There is a strong push in certain American quarters to discount Indian growth.

The use of Indian writers is a slick way to achieve this. No racism complaint possible. No doubt there is a 'short' taking place on the market. Undoubtedly the belief is that by doing this they can force open the market for american companies to enter and set the agenda on their terms.

There is nothing wrong in the companies coming in, but it will be on our terms.

Suraj · Post by **Suraj** » 08 Mar 2011 00:56

Pretty transparent too - superficial 'analysis' followed by a sweeping controversial statement - conveniently highlighted by SwamyG. Obviously intended to get SDREs to shiver in their dhotis and respond emotionally, so they can be hit with assorted statements about dalits, caste system, Godhra etc. Better to ignore than give attention. Too bad I already clicked the link once.

SwamyG · Post by **SwamyG** » 08 Mar 2011 01:27

^^^
I hope you were not attaching nefarious intentions to me; and all that you say is about Devider Sharma and HP.

VinodTK · Post by **VinodTK** » 08 Mar 2011 05:12

Forbes: Is India An Economic Superpower In the Making?

devesh · Post by **devesh** » 08 Mar 2011 06:00

SwamyG: that link should go in the psy-ops thead. it's not genuine news.

somnath · Post by **somnath** » 08 Mar 2011 06:07

SwamyG wrote:linky
The GDP estimates for 2010-11 therefore are fake.

The author makes a valid point, ie, that fluctuation in agri production isnt "real growth"..But to extrapolate from there that the entire "GDP growth" is "fake" is preposterous...Agri constitutes only about 15-16% of GDP today, so even a large growth rate there (like 5.4% this year) would have a minor impact on overall growth numbers....

somnath · Post by **somnath** » 08 Mar 2011 06:58

Theo-ji,

1. I have no issues on the principle of trying to combine better asset creation with the primary objective of NREGA (of being a social security net). Which is anyway what is happening...

2.

Theo_Fidel wrote:Even if we assume 100 million have benefited what about the remaining 350 million. How were they excluded I wonder. And you should wonder too. Your lack of curiosity about this is puzzling

the numbers are today only an estimate - Prof Dev estimated it to be 200 million two years back, you estimate it to be 100...It can well be something between the two as well...With increased use of UID and Bank acocunts, we will start getting a better fix on the aggregate numbers...But regardless of the exact number (100 or 200), the fact that it has had more impact than any other welfare programme is undeniable..

As to the "gaps" -a few reasons. One, not every single poor person will "opt" for NREGA...Someone getting a job as an agricultural labour for 150 days in Punjab @ a higher rate (it can go up to as high 300-400 rupees in some stages there) will not opt in for NREGA, even though he is quite close to the BPL mark..Two, the coverage efficiency is hugely dependent on the initiative of the state govt - large states like Bihar, WB and Maharastra are underperforming...Three, there is a general scope for improvement! Four, children and the very old are not going to work!

3.

Theo_Fidel wrote:With respect to your point about SC/ST lets talk about TN which appears to be the only area with some survey followup. TN is about 20% SC & about 5% ST. So 6 million SC's are out of the coverage and the ST's about 1-2 million are not covered at all. How is this possible you ask.

Well, you seem to think that every single SC/ST in TN is below BPL AND devoid of alternative opportunities, and hence need to be covered by NREGA....Looking at the record of job card processing efficiency in TN, it should not be a question of lack of job card issuance...It would be (largely, not wholly) a question of the balance opting out because they have at the margin better opportuniities outside NREGA...

You have a point on how caste dynamics play a role - it is something that will need to be tackled by the civil society, and in fact political mobilisation opportunities aforded by NREGA will be a good channel to work on the same...

4.

Theo_Fidel wrote:As far as the IIT study this chart caught my eye. Note the numbers who call themselves as unemployed. Note where the vast majority of labor is coming from. Agriculture and stay at home mom's

As would be expected

Ina Rural employment scheme, one would expect most beneficiaries from the agri sector, no?

Theo_Fidel wrote:Lets do some math. TN's SDP is $70 Billion +/-. Agriculture without allied industries is only about 8%-10%. So about $7 Billion. Agricultural wages are about 1/3 of typical activity so total agricultural wages are about $2.5 Billion. This is about Rs10,000 crore. Only about half the districts have been covered. Most of the agricultural belt along the Kaveri, Noyyal, Western Ghats have not yet been properly covered. So say that the districts covered generate 1/3 of agricultural work. So about Rs 3,500 crore in existing wages. The NREGA spent about Rs 1,500 crore in TN. In effect raising wage income by 50%. Without raising agricultural output by 50% in terms of worker productivity or out put. So we have inflation raging in these rural areas

The issue of significant wage inflation comes about only in an economy that is near full-employment, so somewhere there..In India, we have a scenario of widespread unemployment, underemployment and disguised employment, especially in the rural areas...Therefore, while NREGA gives unskilled agri labour a bit more wage bargaining power in the labour market, the question of materially significant wage inflation contributing to huge "cost push" inflation is stretched...Importantly, the argument cant cut both ways - you cant say that the coverage of NREGA is "only" 100 million (out of 450 million) AND that it is causing major shortages of agri labour puching up wages significantly to contribute to cost push inflation! Another key point to remember is that NREGA wages are at par, and sometimes below the minimum wages set by the state govt...

The inflationary impact of NREGA is different - I explained it before...Locally, a quick rise in disposable income within the community suddenly generates demand for both "giffen" and "superior" goods, causing "flash", or local inflation...this is not structural inflation, and typically trends itself out over time...

About the future, any one of us can be right - either we can look back at it and say it was a waste of money, or it would have mde a significnat difference...I am ready to place a wager in favour of the programme...

What I DO however believe is NOT for debate is the merit behind tax exemptions (and subsidies) for the rich and middle class while cribbing over welfare payments to the poor...

vina · Post by **vina** » 08 Mar 2011 09:47

The issue of significant wage inflation comes about only in an economy that is near full-employment, so somewhere there..In India, we have a scenario of widespread unemployment, underemployment and disguised employment, especially in the rural areas...

Ah. Fallacy of composition. Elementary my dear Watson. What is true for India a whole is not true for large parts of India separately.

I know from first hand experience that many small/medium sized factories /businesses are seeing shortage of labor and higher wage demands (NREGA sets the floor at Rs 150) and for even remotely half skilled work ( like a mason for instance, you cant get even anyone remotely called that for anything less than Rs 400 per day minimum) sharp wage hikes in places like TN. The owners and proprietors all uniformly "blame" NREGA for the wage hikes and labor scarcity. There are folks in BR itself who posted how they had to scrounge villages within a 100km radius for labor and bus folks in everyday to work.

In a place like TN and many parts of southern Karnataka, NREGA actually will increase the labor costs of many farms and small and medium sized businesses (think Tiruppur, Coimbatore, Sivakasi, Mandya , Ramnagaram etc), where people have ample choices to work or not and under what conditions.

Not that I am complaining about the floor price being in place. It will force industry to increase productivity and in the long run is good.

But what you are talking about wrt NREGA and lack of full employment is in places like eastern UP/Bihar/Bengal/Odisha etc where there is massive surplus labor (usually of the unskilled kind , the skilled ones will be the first to migrate to other places in India and "Gelf"). That is where this kind of program is most relevant. That sort of thing is self evident given that it was designed by The Kangress Prince and folks with a largely N. India (esp UP/Bihar) kind of experience and axe to grind.

The NREGA in other states should be suitably tailored and altered to drive industrialization and shift from farms to factories, rather than the fill a hole kind of programs of UP/Bihar/Bengal/Orissa/ Gangetic belt kind of thing.

somnath · Post by **somnath** » 08 Mar 2011 10:09

vina wrote:Elementary my dear Watson

A quote that never was!

NREGA was meant as an employment programme for the unskilled types with limited demand in the job market...(one of the reasons why the projects under NREGA are kept simple - the technically skilled folks anyway have other opportunities)...

Now depending on the state, NREGA wages are set between 80-110 rupees - depends on the min wage fixing level...that isnt going to materially affect the cost of a mason charging 400 rupees...What it "might" in some places is to force landowners to pay the minimum wage which they were not paying hitherto..which, in turn is actually an example of NREGA objectives being met!

But yes, I agree that in "prosperous" places with low levels of unemployment, the programme needs to be tailored....That is really up to the state govt to decide and implement...

somnath · Post by **somnath** » 08 Mar 2011 10:21

Theo_Fidel wrote:WRT to JNNURM it appears the outlay has indeed dropped to Rs8000 crore. The DDM did get it right.

The line item was inflated by rolling some misc. grants into the program. Serves us right for believing/taking at face value the government source. All is maya.

Source?

AnimeshP · Post by **AnimeshP** » 08 Mar 2011 16:54

vina wrote:
The issue of significant wage inflation comes about only in an economy that is near full-employment, so somewhere there..In India, we have a scenario of widespread unemployment, underemployment and disguised employment, especially in the rural areas...
Ah. Fallacy of composition. Elementary my dear Watson. What is true for India a whole is not true for large parts of India separately.

I know from first hand experience that many small/medium sized factories /businesses are seeing shortage of labor and higher wage demands (NREGA sets the floor at Rs 150) and for even remotely half skilled work ( like a mason for instance, you cant get even anyone remotely called that for anything less than Rs 400 per day minimum) sharp wage hikes in places like TN. The owners and proprietors all uniformly "blame" NREGA for the wage hikes and labor scarcity. There are folks in BR itself who posted how they had to scrounge villages within a 100km radius for labor and bus folks in everyday to work.

In a place like TN and many parts of southern Karnataka, NREGA actually will increase the labor costs of many farms and small and medium sized businesses (think Tiruppur, Coimbatore, Sivakasi, Mandya , Ramnagaram etc), where people have ample choices to work or not and under what conditions.

Not that I am complaining about the floor price being in place. It will force industry to increase productivity and in the long run is good.

But what you are talking about wrt NREGA and lack of full employment is in places like eastern UP/Bihar/Bengal/Odisha etc where there is massive surplus labor (usually of the unskilled kind , the skilled ones will be the first to migrate to other places in India and "Gelf"). That is where this kind of program is most relevant. That sort of thing is self evident given that it was designed by The Kangress Prince and folks with a largely N. India (esp UP/Bihar) kind of experience and axe to grind.

The NREGA in other states should be suitably tailored and altered to drive industrialization and shift from farms to factories, rather than the fill a hole kind of programs of UP/Bihar/Bengal/Orissa/ Gangetic belt kind of thing.

Vina saar .. you make a good point but then sully it with a tirade against UP/Bihar et al.

As far as I know all that you said about NREGA is applicable to these states as well. My father runs a small construction business and he is finding it difficult to get labour because most of the labour is working on fill-a-hole kinda projects. Those who are available ask pretty high rates. All this leads to escalation in price which gets passed on to the end customer. IMHO (not being an economist guru) multiply this story a thousand fold and you will see why this scheme is causing high levels of inflation. Am willing to be corrected by any economics guru here.

somnath · Post by **somnath** » 08 Mar 2011 20:05

AnimeshP-ji, if what you say is true across-the-board, we should not have a poverty problem anymore! There is NO labour available, except at high rates..Ergo, we are close to full employment...In which case, NREGA has achieved its objective!

AnimeshP · Post by **AnimeshP** » 08 Mar 2011 20:50

somnath wrote:AnimeshP-ji, if what you say is true across-the-board, we should not have a poverty problem anymore! There is NO labour available, except at high rates..Ergo, we are close to full employment...In which case, NREGA has achieved its objective!

Somnath ji ... me no economist ... but isn't poverty sort of relative .. I mean if everyone is getting money but the buying power of the money is decreasing (due to inflation which in turn is due to everyone getting money) wouldn't the erstwhile poor still remain poor w.r.t the erstwhile rich ?
Again ... I was talking about effect if NREGA on inflation and not on poverty ...

Prem · Post by **Prem** » 08 Mar 2011 21:30

http://www.menafn.com/qn_news_story_s.a ... 1093374268
http://www.deccanherald.com/content/143 ... h-usd.html

economy expected to reach USD 6 trillion by 2020'
Coimbatore, Mar 6 (PTI)

Former ISRO chairman and Planning Commission member K Kasturirangan today said if India sustains a nine per cent GDP growth then by 2020 its economy is expected to approach USD six trillion.
Kasturirangan said that the size of Indian economy would expand close to USD 1.8 trillion in the next 2-3 years."If the present expectations which are reasonable and realistic, fructify, India is poised to become a world power," he said."If we maintain the present rate of growth of GDP at around nine per cent, by the end of the present decade, 2020, this economy is expected to approach USD six trillion, with per capita GDP crossing USD 4,500 from the present USD 1,500", Kasturirangan said in his Graduation Day address at Kumaraguru College of Technology here."If all goes well," the economy could even grow to 9-10 USD trillion and per capita income could rise to in excess of USD 6,000 by 2025, he said.Talking about India's space programme, Kasturirangan said since its inception, the secret behind its success has been "team work
(in 2022, Ancient India take new Avatar )

Glimpse of Indian economy
http://www.youtube.com/watch?v=6ptL7-bL ... dded#at=12

Theo_Fidel · Post by **Theo_Fidel** » 08 Mar 2011 23:46

somnath wrote:...But regardless of the exact number (100 or 200), the fact that it has had more impact than any other welfare programme is undeniable..

How did you get there after some banal comments.

Really, more than the noon meal scheme. Or caste reservations. Or drink water supply and electrification. Or the PDS. Does not compute.

The caste dynamics coming into play is a direct consequence of of the poor thinking behind the NREGA. Not the other way around. How come caste relatively rarely affects noon meal scheme participation.

As far as who uses the NREGA it was meant for the most vulnerable rural groups. But because of its work and distance from village requirements it is actually the most organized who benefit. The vulnerable remain untouched. This is essentially why our absolute poverty number refuses to decline. Keep in mind the absolute poverty number is Rs 60 per day for each household member. A family of 5 would need Rs 300 per day.

Around here one of the saddest characteristics is the 70+ year olds who are often found on the work sites. What are we trying to do here. Work them to death.

I would much prefer a direct transfer for the aged and infirm rather that subjecting to such brutality producing worthless holes in the ground.

And before you go of on your rants about the rich and middle class think about which class you belong to. The rich and the middle class pay for everything. Including the NREGA. It is their savings and investment that allows India to grow at 9% per annum. It is their entrepreneurship that is slowly dragging us out of poverty. It is attitudes such as yours that condemned us to such poverty. Don't you remember all the foolish 'Garibi Hatao', 'Roti Makan Kapada' slogans of of past years. Where did that get us but more poverty. Despite what you may think their money does not belong to GOI to do with as it pleases. The less GOI confiscates from them the faster we will grow. Every rupee you take from them means we grow slower and end poverty later. The investments of the rich and middle class have dragged more people out of poverty than all the GOI dig holes programs.

People may not remember but the oddest thing is that this particular program has been tried many many times before. Its very popular with the professional poverty wallahs. Mostly by state governments but even the GOI tried it under IG in the 70's. I remember Maharashtra in particular trying quite strenuously to implement such a program in the 80's and earlier. I think it was called the Employment Guarantee Scheme. None of them worked. Once a government program is in place for a certain number of years it springs leaks like you would not believe. The people only got poorer as can be seen in our statistics from the period. Yet we refuse to learn from out history.

Let me point out things we could have done with that $40 Billion. Note that the employment generated pays for itself and is hence permanently sustainable.

- Put a metro system of about 30-40 km in everyone of of our top 40 cities generating employment for 10 million+.
- or Bought 1 million buses for our cities and also generated 10 million+ in employment.
- or Built 20,000 km of 6 lane freeway connecting every small town and village in India and generate Employment for 15 million+.
- or Built 20 Rail freight corridors to connect all the major cities in India.
- or completely overhauled IR with new stations and about 50,000 new coaches with contained discharge toilets. This would allow us to double the number of trains we can run.
- or just about finished the important portions of the river transfer scheme even though I don't support it.

Finally if we had simply put it into a bank and electronically distributed it at Rs 500 per month we could have covered the most vulnerable bottom 100 million for the past 4 years.

And despite what you may think the Agricultural Laborers of TN are not the bottom of the social pyramid and definitely not the most vulnerable.

RamaY · Post by **RamaY** » 08 Mar 2011 23:59

^ Theo garu,

I was asking the same question. With that $40B, GOI can develop the basic infra of at least 1 Lakh villages (Rs 1 crores each - Roads, Primary Health Care, Primary/Secondary Education, Drinking Water, Electricity) and encourage self-employment for at least 1 crore people with Rs, 60000-72,000 each.

The problem with our ideas is that they are measurable and tracable. INC doesnt want to do that. They prefer schemes that one cannot trace the money flow and do a cost/benefit analysis.

Bade · Post by **Bade** » 09 Mar 2011 00:35

- Put a metro system of about 30-40 km in everyone of of our top 40 cities generating employment for 10 million+.
- or Bought 1 million buses for our cities and also generated 10 million+ in employment.
- or Built 20,000 km of 6 lane freeway connecting every small town and village in India and generate Employment for 15 million+.
- or Built 20 Rail freight corridors to connect all the major cities in India.
- or completely overhauled IR with new stations and about 50,000 new coaches with contained discharge toilets. This would allow us to double the number of trains we can run.
- or just about finished the important portions of the river transfer scheme even though I don't support it.

When I get to see all of that I will believe in all this economix trends for 2020/2025, year to year variability and other gibberish. Without all of that Theo has mentioned, which is already long overdue for us as a nation, we will look quite sub-saharan in many ways

even in 2020 !

somnath · Post by **somnath** » 09 Mar 2011 05:57

AnimeshP wrote:Somnath ji ... me no economist ... but isn't poverty sort of relative .. I mean if everyone is getting money but the buying power of the money is decreasing (due to inflation which in turn is due to everyone getting money) wouldn't the erstwhile poor still remain poor w.r.t the erstwhile rich ?
Again ... I was talking about effect if NREGA on inflation and not on poverty ...

I am not an economist either (though my work has got a lot to dow tih both economics and economists!)...

you are right, purchasing power is a determinant as well..Which is why the global poverty benchmark, which used to be 1 dollar/day 7-8 years ago, is now universally accepted to be 2 dollars/day...Most estimates of poverty are based around this benchmark..And the benchmark is set on assumptions of minimum calories (this is a unuquely Indian construct), minium affordibility healthcare, education etc...

About NREGA's impact on inflation, I would just repeat what I said earlier...In case NREGA is causing structural inflation to shoot up on account of either higher wages (cost push) or higher demand (demand pull), - and I dont believe it is, at least there is no data on that yet - it is achieving its objective!