Articles by Kunal Sen

India’s business climate has historically been considered poor, resulting in low-rankings in the World Bank’s Doing Business Indicators. The National Democratic Alliance government has attempted to reverse this situation by improving the de jure rules related to the business climate. Whether this approach will improve the ease of doing business in India is analysed by using firm-level data on the number of days it takes to get an operating licence or construction permit. De facto deals between the state and businesses, rather than de jure rules, characterise the state–business relationship in Indian states. States with weaker quality of governance provide higher proportions of good deals in terms of the speed of obtaining licences and permits, and easing the norms of business regulations need not necessarily lead to higher productivity.

Despite the presence of a large number of manufacturing firms in the informal sector in India, we know very little about their characteristics and evolution over time. We present some puzzles about firms in the Indian informal manufacturing sector, using unit-level data from the National Sample Survey Office surveys of unorganised enterprises from 2000-01 to 2010-11. There is clear evidence of a positive relationship between worker wages and firm productivity, indicating the importance of improving firm productivity in the Indian informal sector as a means to improve the living standards of workers. Our analysis also shows that there are social and economic barriers to informal enterprises increasing their productivity, which is a matter of major policy concern. There are also gender-related differences in the productivity of firms. Targeted government programmes are needed to address the issues that socially disadvantaged groups and female entrepreneurs face in the informal manufacturing sector.

India's post-reform growth experience can be separated into three distinct growth episodes. The first growth episode was from 1993 to 2002 and was characterised by a set of predictable informal relationships ("ordered deals") between political and economic elites, which were relatively open as well. The second episode was from 2002 to 2010, and deals in this period became increasingly closed, leading to negative feedback effects along with structural retrogression of the economy. The third episode, beginning in 2011, was one of an incipient growth deceleration, and was characterised by increasingly disordered deals. This paper argues that this deceleration is the outcome of two separate phenomena: (1) increasing political delegitimation of the growth process that was seen as highly predatory and corruption-intensive; and (2) the pushback from accountability institutions in the post-2010 period. For growth to return, more than economic reforms or infrastructure spending, it is necessary for a realignment of the relationships between political and economic elites and between elites and non-elites such that there is a return to "open ordered deals".

This paper analyses the productivity performance of both the organised and unorganised segments of the Indian manufacturing sector using unit level data. Both partial and total factor productivity measures are employed. Our analysis reveals that labour productivity has increased for the organised sector over time, whereas both labour productivity and capital intensity growth have slowed down in the unorganised sector during the period between 2000-01 and 2004-05. The improvement in TFP growth in organised manufacturing in the post-2000 period as compared to the second half of the 1990s across most states in India is heartening as also the fact that output growth was mostly productivity-driven in the post-reform period. However, the declining TFP and the increasing capital intensity of the unorganised sector are causes of worry and raise several important questions.

The greater availability of NSS data sets has prompted a flurry of studies on poverty in India generating much debate. Some of the controversy relates to issues to do with quality of data. This article surveys the debate on poverty and the key issues raised in the debate, discussing the construction of the original poverty lines. The authors present new evidence on the divergence between calorie-based poverty measure and the official poverty line, and explore alternative explanations for this divergence.