Contrary to popular concepts of a predominantly rural India, an increasingly larger percentage of Indian population today lives in the urban areas. India's urban population is now second largest in the world after China, and is higher than the total urban population of all countries put together barring China, USA and Russia. Over the last fifty years, while the country's population has grown by 2.5 times, in the urban areas it has grown by five times.
In 1947, only 60 million people (15 per cent of the total population at that time) lived in urban areas. India’s urban population grew from the 290 million reported in the 2001 Census to an estimated 340 million in 2008 (30 percent of the total population) and it could soar to 590 million plus (40 percent of the population) by 2030. This urban expansion will happen at a speed quite unlike anything India has seen before. The steep growth in number of people living is partly due to the skewed development that has led to proliferation of commercial activities, and greater job opportunities in towns and cities. Facilities like health and education, and infrastructure like roadways, telecommunication, airports, railways and ports are also many times better in urban areas.
In spite of its prominent role in Indian economy, urban India faces serious problems due to population pressure, deterioration in the physical environment and quality of life. According to estimates, nearly one third of the urban India lives below poverty line. About 15 percent of the urbanites do not have access to safe drinking water and about 50 percent are not covered by sanitary facilities.
Traffic congestion has assumed critical dimensions in many metropolitan cities due to massive increase in the number of personal vehicles, inadequate road space and lack of public transport. There is a huge and widening gap between demand and supply of essential services and infrastructure. Urban poor in India are forced to live under unhygienic conditions in slums, lacking in basic amenities. Slums have grown in almost all major cities due to inability of major chunks of population to afford accommodation in planned areas of the cities.
The five fold explosive growth in urban India has resulted in serious infrastructure constraints. Water, transport, housing, electricity, health and sanitation are some of the areas of concern. Infrastructure to meet these requirements calls for huge investments.
The Central Public Health Engineering (CPHEEO) has estimated the requirement of funds for 100 percent coverage of the urban population under safe water supply and sanitation services by the year 2021 at Rs 172,905 crores. Estimates by Rail India Technical and Economic Services (RITES) indicate that the amount required for urban transport infrastructure investment in cities with population 100,000 or more during the next 20 years would be of the order of Rs. 207,000 crore.
The speed of urbanization poses an unprecedented managerial and policy challenge, says the McKinsey Global Institute (MGI) report. Unfortunately, India has not even started to engage in a national discussion on how to effectively handle the seismic shift in the demographic make-up of the country.
Unlike many countries that are grappling with aging population, India has a young and rapidly growing population—a potential demographic dividend. But, India needs thriving cities if that dividend is to pay out. New research by the MGI estimates that cities could generate 70 percent of new jobs created in 2030, produce more than 70 percent of Indian GDP, and drive a near four-fold increase in per capita incomes across the nation.
It is estimated that in terms of both population and GDP many Indian cities will become larger than many countries today. The GDP of Mumbai Metropolitan Region is projected to reach $265 billion by 2030, larger that the GDP of countries like Portugal, Colombia and Malaysia.
Besides, as India’s cities will expand, the economic make-up will also change. In 1995, India’s GDP split almost evenly between its urban and rural economies. In 2008, urban GDP accounted for 58 percent of overall GDP. By 2030, as per the MGI report, urban India will generate nearly 70 percent of country’s GDP.
Cities offer the promise of a higher quality of life for a large number of Indians. They are also vital for funding the development because they generate 80-85 percent of tax revenue. As per the MGI report, cities benefit beyond their own boundaries. Rural populations adjoining urban centres have been found to have an estimated 10 to 20 percent higher monthly incomes than the rural average.
Lack of vision among the political class and administrators is leading the Indian cities towards decay and gridlock. The MGI report believes that the “lack of serious policies to manage urbanization could jeopardize even the GDP growth rate (as projected by economic planners).”
Urban India is today failing many of its citizens. Across all major quality-of-life indicators, cities of India fall much short of delivering even a basic standard of living to the residents. As per the MGI report, if India continues to invest in urban infrastructure at its current rate—very low by international standards—in 20 years’ time the urban infrastructure will fall woefully short of what is necessary to sustain prosperous cities.
Life of the city dweller would become a lot tougher. Water shortage will result in a large section of the population having no access to potable water. More than 70 percent of the sewage will remain untreated, causing serious health problems. Increasing number of private vehicles and shortcomings in the public transportation infrastructure would create urban gridlock—similar to the acute congestion that cripples some Latin American cities.
In per capita terms, India’s annual capital spending on urban infrastructure and services of $17 is only 14 percent of China’s $116 and 4 percent of UK’s $391. The MGI report estimates that India needs to invest $1.2 trillion (Rs 53.1 trillion) just on capital expenditure in its cities over the next 20 years, equivalent to $134 per capita per year. That is almost eight times the current level of spending.
International experience has shown that cities can be turned around in about ten years or even less. UK, China and South Africa have done it. As per the MGI report, the planners have to work on five dimensions for effective result: funding, governance, planning, sectoral policies and shape.
Funding: The MGI report suggests four sources of funding that India should tap into—monetizing land assets, collecting higher property taxes and user charges that reflect costs, debt and public-private partnerships, and formula-based government funding.
Governance: India’s large cities are still governed by bureaucrats who can be transferred out of office at a short notice. This is in sharp contrast to large cities world-wide where the mayors have been empowered with long tenures and clear accountability. According to the MGI report, fully formed metropolitan authorities with clearly defined roles are absolutely essential for the successful management of large cities.
Planning: India’s urban planning is in very poor state. There are urban plans but they are not practical, are rarely followed and are riddled with exemptions. As per the MGI report, central to planning in any city is the optimal allocation of space, especially land use and Floor Area Ratio (FAR) planning. These plans need to be detailed, comprehensive and enforceable, and exemptions should be rare.
Sectoral policies: All good cities have policies in critical areas like job creation, affordable housing for low-income groups, public transportation and climate-change mitigation. As per the MGI report, India has largely failed to embrace the need for dedicated policy attention within cities. In the absence of policy to meet the housing needs of low-income group, Indian cities will continue to be effected by the slum menace.
Shape: India has to aim for a distributed model of urbanization to ensure its federal structure as also to ensure that migration flows are not unbalanced towards a particular city or cities. MGI report concludes that India should build at least 25 new satellite cities near today’s Tier 1 and 2 cities to accommodate populations in each of up to one million people. Such an effort, despite being more expensive than renewing existing cities, will act as a benchmark and a model for well-planned, environmentally sustainable world-class cities, while helping ease of the strains of rapid urbanization.
Integrated townships
Typically, an integrated township has the following key characteristics and elements:
Social infrastructure:
School: A quality school with education up to at least 10thstandard is set up within the township, reducing the travelling time between home and school and in turn providing the children with more time for play and studies.
Medicare: A good healthcare facility with at least 50-plus beds and an emergency care is set up within the township, thereby facilitating residents.
Recreation: Adequate space for basic sports such as football, cricket, tennis and badminton, fitness facilities including a gymnasium and swimming pools are set up within the township to enhance social lifestyle.
Community centre: A spacious, well-decorated community centre with a club house and a function hall is set up within the township.
Infrastructure and services:
Road network: A well-planned road network both within the township and connecting to the nearest highway or main road is built, thereby easing communication.
Water supply and management: A well-planned and sustainable water management system is built within the township, providing round the clock water supply to residents as well as treating the waste water generated within the township and recycling it. This also reduces dependence on municipal water supply.
Electricity supply and management: Although an integrated township depends on a public or private utility supplier for basic power supply, it has adequate, if not abundant, back-up power for both homes and common areas during temporary or scheduled power cuts or disruptions by the utility supplier.
Communication infrastructure: Good quality telecom services are also made available within the township and nearby.
Estate management:
Garbage and waste management: Good garbage collection, aggregation, treatment and disposal system is a must for a healthier and eco-friendly township.
Infrastructure maintenance: Proper and regular maintenance of roads, pathways, parks, electrical and plumbing infrastructure, children play areas and common areas including community centre is essential for a well-developed integrated township.
Security: Superior estate security and safety for all residents is a critical element of an integrated township.
Shopping and entertainment:
Entertainment: Quality cinema or multiplex, popular games and kid entertainment facilities should be established within the township.
Shopping: Well-stocked grocery stores as well as shopping centres including branded garment stores, electronic goods should be established within the township.
Food courts: Good quality and hygienic food courts with ample menu options should be established within the townships to cater to the taste buds of all types of residents.
Proximity to workplace:
While the intent of an integrated township is always to have the workplace and the residential dwelling in close proximity, in the current context of double-income families, it is practically impossible to achieve this objective fully. However, it can establish adequate, well-equipped office space infrastructure and offer lower rentals to attract companies, banks and corporate houses and create ample opportunities for residents. Apart from this, to smoothen communication between the township and the workplace for rest of the residents, the location of the township should be such that it is easily accessible from various parts of the city.
Constitution (Seventy-Fourth Amendment) Act 1992
This is a revolutionary piece of legislation by which Constitution of India was amended to incorporate a separate Chapter on urban local bodies, which seeks to redefine their role, power, function and finances. The salient features of this Act are:
Urban local bodies, to be known as Municipal Corporations, Municipal Councils and Nagar Panchayat depending on the population shall be constituted through universal adult franchise in each notified urban area of the country.
These shall be constituted for a period of five years and if dissolved earlier, an election to reconstitute it shall be completed before the expiration of a period of six months from the date of its dissolution.
Not less than one-third of total number of seats in each urban local body shall be reserved for women.
The Legislature of a State may by law entrust on these bodies such power and authority as may be necessary to enable them to function as institution of local self government, including those listed in the Twelfth Schedule.
The Twelfth Schedule of the Constitution— has listed the following functions of the urban local bodies:
—Urban Planning including town planning.
—Regulation of land-use and construction of buildings.
—Planning for economic and social development.
—Roads and bridges.
—Water supply for domestic, industrial and commercial purposes.
—Public health, sanitation, conservancy and solid waste management.
—Fire services.
—Urban forestry, protection of the environment and promotion of ecological aspects.
—Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded.
—Slum improvement and up-gradation.
—Urban poverty alleviation.
—Provision of Urban amenities and facilities such as parks, gardens, playgrounds.
—Promotion of cultural, educational and aesthetic aspects.
—Burials and burial grounds; cremations, cremation grounds and electric crematoriums.
—Cattle pounds; prevention of cruelty to animals.
—Vital statistics including registration of births and deaths.
—Public amenities including street lighting, parking lots, bus stops and public conveniences.
—Regulation of slaughter houses and tanneries.
In order that the urban local bodies can perform the functions assigned to them, the Legislature of a State shall assign them specific taxes, duties, tolls and levies and authorise them to impose, collect and appropriate the same.
Each State shall also constitute a Finance Commission which shall review the financial position of the urban local bodies and recommend the principles which should govern the devolution of resources, including grant-in-aid from the Consolidated Fund of the State of these bodies.
The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to the urban local bodies shall vest in the State Election Commission.
In each district a District Planning Committee shall be constituted to consolidate the plan prepared by the urban and rural local bodies.
Similarly for each metropolitan area a Metropolitan Planning Committee shall be constituted to prepare a development plan for the metropolitan area a whole.
Constitution (74th Amendment) Act 1992 has made the urban local bodies into vibrant self governing institutions. This has ushered in a new era of urban governance and urban management in India.
Friday, May 20, 2011
Human Development Report 2010
The 2010 HDR Report by United Nations Development Programme (UNDP), titled “The Real Wealth of Nations: Pathways to Human Development” celebrates the contributions of the human development approach, which is as relevant as ever to making sense of our changing world and finding ways to improve people’s well-being. The Report is also about how the human development approach can adjust to meet the challenges of the new millennium.
India is ranked 119 out of 169 countries on the Human Development Index (HDI) of the UNDP’s 2010 Human Development Report. This marks an improvement of just one rank between 2005 and 2010 though the report, a special 20th anniversary edition, places India among top 10 performers globally in terms of HDI measured on income growth. The category is led by China. India comes 10th after Botswana, South Korea, Hong Kong, Malaysia and Mauritius.
China has improved eight notches (from 2005 to 2010) to secure the 89th position. In South Asia, Nepal has gained five places to reach the 138th rank. Maldives has risen four places to 107; Sri Lanka at 91 too has pipped India in the rankings though Pakistan has lost two ranks to fall to 125, while Bangladesh is up one at 129.
Though high on GDP growth, India reports severe inequalities (the report for the first time measures inequalities, gender gaps and multidimensional poverty as markers of human development) while several low-income nations have posted huge profits by investing in education and health. Nepal is the only South Asian country, which despite low income, stands as the third best performer in the top 10 movers the report highlights.
While the Congress-led UPA Government can take heart from the fact that India’s HDI value has increased from 0.320 in 1980 to 0.519 in 2010, higher than South Asia’s average of 0.516, India still lags behind among medium HD nations. South Asia, particularly India, post shocking percentage losses in HDI values if inequalities are counted.
South Asia loses 33 per cent of its HDI value if health, education and income disparities are factored in. This is the second largest loss after sub-Saharan Africa’s. India fares particularly poorly here, losing 30 per cent overall on the inequality-adjusted HDI. This loss includes 31.3 per cent loss on inequality-adjusted life expectancy index; 40.6 per cent loss on education but only 14.6 per cent loss in income-adjusted HDI index.
The best HDI ranker in the world, Norway, loses just 6.6 per cent to inequality while China loses 23 per cent and Bangladesh 29.4 per cent.
On all major markers of human development, India’s neighbours Bangladesh and Pakistan beat it. India’s life expectancy at birth is among the lowest, 64.4 years as against China’s 73.5; Bangladesh’s 66.9, Pakistan’s 67.2 and Nepal’s 67.5. In mean years of schooling too, India lags behind recording 4.4 years while China has 7.5; Pakistan 4.9 and Bangladesh 4.8. On female labour force participation too, Bangladesh with 61 per cent is much ahead of India, which has just 31 per cent.
The 2010 report uses several new methodologies; hence its indicators are not comparable to those in the earlier reports.
Human development is about sustaining positive outcomes steadily over time and combating processes that impoverish people or underpin oppression and structural injustice. Plural principles such as equity, sustainability and respect for human rights are the key.
Human development is also the expansion of people’s freedoms to live long, healthy and creative lives; to advance other goals they have reason to value; and to engage actively in shaping development equitably and sustainably on a shared planet. People are both the beneficiaries and the drivers of human development, as individuals and in groups. This reaffirmation underlines the core of human development—its themes of sustainability, equity and empowerment and its inherent flexibility. Because gains might be fragile and vulnerable to reversal and because future generations must be treated justly, special efforts are needed to ensure that human development endures—that it is sustainable.
A major contribution of 2010 HDR is the systematic assessment of trends in key components of human development over the past 40 years. This retrospective assessment, an important objective for the 20th anniversary, is the most comprehensive analysis of the HDR to date and yields important new insights.
In some basic respects the world is a much better place today than it was in 1990—or in 1970. Over the past 20 years many people around the world have experienced dramatic improvements in key aspects of their lives. Overall, they are healthier, more educated and wealthier and have more power to appoint and hold their leaders accountable than ever before.
The world’s average HDI has increased 18 percent since 1990 (and 41 percent since 1970), reflecting large aggregate improvements in life expectancy, school enrolment, literacy and income. But there has also been considerable variability in experience and much volatility, themes to which we return below.
Almost all countries have benefited from this progress. Of 135 countries in our sample for 1970–2010, with 92 percent of the world’s people, only 3—the Democratic Republic of the Congo, Zambia and Zimbabwe—have a lower HDI today than in 1970.
Overall, poor countries are catching up with rich countries in the HDI. This convergence paints a far more optimistic picture than a perspective limited to trends in income, where divergence has continued. But not all countries have seen rapid progress, and the variations are striking. Those experiencing the slowest progress are countries in Sub-Saharan Africa, struck by the HIV epidemic, and countries in the former Soviet Union, suffering increased adult mortality.
The top HDI movers (countries that have made the greatest progress in improving the HDI) include well known income “growth miracles” such as China, Indonesia and South Korea. But they include others—such as Nepal, Oman and Tunisia—where progress in the non-income dimensions of human development has been equally remarkable. It is striking that the top 10 list contains several countries not typically described as top performers. And Ethiopia comes in 11th, with three other Sub-Saharan African countries (Botswana, Beninand Burkina Faso) in the top 25.
Not all countries have progressed rapidly, and the variation is striking. Over the past 40 years a quarter of developing countries saw their HDI increase less than 20 percent, another quarter, more than 65 percent. These differences partly reflect different starting points—less developed countries have on average faster progress in health and education than more developed ones do. But half the variation in HDI performance is unexplained by initial HDI, and countries with similar starting points experience remarkably different evolutions, suggesting that country factors such as policies, institutions and geography are important.
Health advances have been large but are slowing. The slowdown in aggregate progress is due largely to dramatic reversals in 19 countries. In nine of them—six in Sub-Saharan Africa and three in the former Soviet Union—life expectancy has fallen below 1970 levels. The causes of these declines are the HIV epidemic and increased adult mortality in transition countries.
Progress in education has been substantial and widespread, reflecting not only improvements in the quantity of schooling but also in the equity of access to education for girls and boys. To a large extent this progress reflects greater State involvement, which is often characterized more by getting children into school than by imparting a high-quality education.
Progress in income varies much more. However, despite aggregate progress, there is no convergence in income—in contrast to health and education—because on average rich countries have grown faster than poor ones over the past 40 years. The divide between developed and developing countries persists: a small subset of countries has remained at the top of the world income distribution, and only a handful of countries that started out poor have joined that high-income group.
Understanding the Patterns and Drivers of Human Development
One of the most surprising results of human development research in recent years is the lack of a significant correlation between economic growth and improvements in health and education. Research shows that this relationship is particularly weak at low and medium levels of the HDI. This is traceable to changes in how people become healthier and more educated. The correlation in levels today, which contrasts with the absence of correlation in changes over time, is a snapshot that reflects historical patterns, as countries that became rich were the only ones able to pay for costly advances in health and education. But technological improvements and changes in societal structures allow even poorer countries today to realize significant gains.
The unprecedented flows of ideas across countries in recent times—ranging from health-saving technologies to political ideals and to productive practices—have been transformative. Many innovations have allowed countries to improve health and education at very low cost—which explains why the association between the income and non-income dimensions of human development has weakened over time.
Income and growth remain vital. Income growth can indicate that opportunities for decent work are expanding—though this is not always so—and economic contractions and associated job losses are bad news for people around the world. Income is also the source of the taxes and other revenues that governments need in order to provide services and undertake redistributive programs. Thus, increasing income on a broad basis remains an important policy priority.
One important aspect is how relationships between markets and States are organized. Governments have addressed, in a range of ways, the tension between the need for markets to generate income and dynamism and the need to deal with market failures. Markets may be necessary for sustained economic dynamism, but they do not automatically bring progress in other dimensions of human development. Development that overly favours rapid economic growth is rarely sustainable. In other words, a market economy is necessary, but not enough.
Regulation, however, requires a capable State as well as political commitment, and State capability is often in short supply. Some developing country governments have tried to mimic the actions of a modern developed State without having the resources or the capacity to do so. For example, import substitution regimes in many Latin American countries floundered when countries tried to develop a targeted industrial policy. In contrast, an important lesson of the East Asian successes was that a capable, focused State can help drive development and the growth of markets. What is possible and appropriate is context specific.
Beyond the State, civil society actors have demonstrated the potential to curb the excesses of both the market and the State, though governments seeking to control dissent can restrict civil society activity.
The dynamics can be virtuous when countries transition to both inclusive market institutions and inclusive political institutions. But this is difficult and rare. Oligarchic capitalism tends to spell its own demise, either because it stifles the productive engines of innovation—as in the failed import substitution regimes of Latin America and the Caribbean—or because material progress increases people’s aspirations and challenges the narrow elite’s grip on power, as in Brazil, Indonesia and South Korea since the 1990s.
Human development is not only about health, education and income. Even when countries progress in the HDI, they do not necessarily excel in the broader dimensions. It is possible to have a high HDI and be unsustainable, undemocratic and unequal just as it is possible to have a low HDI and be relatively sustainable, democratic and equal. These patterns pose important challenges for how we think about human development, its measurement and the policies to improve outcomes and processes over time.
Trends conducive to empowerment include the vast increases in literacy and educational attainment in many parts of the world that have strengthened people’s ability to make informed choices and hold governments accountable. The scope for empowerment and its expression have broadened, through both technology and institutions. In particular, the proliferation of mobile telephony and satellite television and increased access to the Internet has vastly increased the availability of information and the ability to voice opinions.
The share of formal democracies has increased from less than a third of countries in 1970 to half in the mid-1990s and to three-fifths in 2008. Many hybrid forms of political organization have emerged. While real change and healthy political functioning have varied, and many formal democracies are flawed and fragile, policy-making is much better informed by the views and concerns of citizens. Local democratic processes are deepening. Political struggles have led to substantial change in many countries, greatly expanding the representation of traditionally marginalized people, including women, the poor, indigenous groups, refugees and sexual minorities.
Recent years have also exposed the fragility of some of the achievement—perhaps best illustrated by the biggest financial crisis in several decades, which caused 34 million people to lose their jobs and 64 million more people to fall below the $1.25 a day income poverty threshold. The risk of a “double-dip” recession remains, and a full recovery could take years.
But perhaps the greatest challenge to maintaining progress in human development comes from the un-sustainability of production and consumption patterns. For human development to become truly sustainable, the close link between economic growth and greenhouse gas emissions needs to be severed. Some developed countries have begun to alleviate the worst effects through recycling and investment in public transport and infrastructure. But most developing countries are hampered by the high costs and low availability of clean energy.
New measures for an evolving reality
Over the years the HDR has introduced new measures to evaluate progress in reducing poverty and empowering women. But lack of reliable data has been a major constraint. This year HDR has introduced three new indices to capture important aspects of the distribution of well-being for inequality, gender equity and poverty. They reflect advances in methods and better data availability.
Adjusting the Human Development Index for inequality. Reflecting inequality in each dimension of the HDI addresses an objective first stated in the 1990 HDR. 2010 report introduces the Inequality-adjusted HDI (IHDI), a measure of the level of human development of people in a society that accounts for inequality. Under perfect equality the HDI and the IHDI are equal. When there is inequality in the distribution of health, education and income, the HDI of an average person in a society is less than the aggregate HDI; the lower the IHDI (and the greater the difference between it and the HDI), the greater the inequality.
A new measure of gender inequality. The disadvantages facing women and girls are a major source of inequality. All too often, women and girls are discriminated against in health, education and the labour market—with negative repercussions for their freedoms. A new measure of these inequalities, built on the same framework as the HDI and the IHDI—to better expose differences in the distribution of achievements between women and men—has been introduced. The Gender Inequality Index shows that gender inequality varies tremendously across countries—the losses in achievement due to gender inequality (not directly comparable to total inequality losses because different variables are used) range from 17 percent to 85 percent. The Netherlands tops the list of the most gender-equal countries, followed by Denmark, Sweden and Switzerland.
Countries with unequal distribution of human development also experience high inequality between women and men, and countries with high gender inequality also experience unequal distribution of human development. Among the countries doing very badly on both fronts are Central African Republic, Haiti and Mozambique.
A multidimensional measure of poverty. Like development, poverty is multidimensional—but this is traditionally ignored by headline figures. 2010 report introduces the Multi-dimensional Poverty Index (MPI), which complements money-based measures by considering multiple deprivations and their overlap. The index identifies deprivations across the same three dimensions as the HDI and shows the number of people who are poor (suffering a given number of deprivations) and the number of deprivations with which poor households typically contend. It can be de-constructed by region, ethnicity and other groupings as well as by dimension, making it an apt tool for policy-makers.
About 1.75 billion people in the 104 countries covered by the MPI—a third of their population—live in multidimensional poverty—that is, with at least 30 percent of the indicators reflecting acute deprivation in health, education and standard of living. This exceeds the estimated 1.44 billion people in those countries who live on $1.25 a day or less (though it is below the share who live on $2 or less). The patterns of deprivation also differ from those of income poverty in important ways: in many countries—including Ethiopia and Guatemala— the number of people who are multi-dimensionally poor is higher. However, in about a fourth of the countries for which both estimates are available—including China, Tanzania and Uzbekistan—rates of income poverty are higher.
Sub-Saharan Africa has the highest incidence of multi-dimensional poverty. The level ranges from a low of 3 percent in South Africa to a massive 93 percent in Niger; the average share of deprivations ranges from about 45 percent (in Gabon, Lesotho and Swaziland) to 69 percent (in Niger). Yet half the world’s multi-dimensionally poor live in South Asia (844 million people), and more than a quarter live in Africa (458 million).
The impacts of the HDR have illustrated that policy thinking can be informed and stimulated by deeper exploration into key dimensions of human development. An important element of this tradition is a rich agenda of research and analysis. This Report suggests ways to move this agenda forward through better data and trend analysis. But much is left to do.
Three priorities are: improving data and analysis to inform debates, providing an alternative to conventional approaches to studying development, and increasing our understanding of inequality, empowerment, vulnerability and sustainability.
The economics of growth and its relationship with development, in particular, require radical rethinking. A vast theoretical and empirical literature almost uniformly equates economic growth with development. Its models typically assume that people care only about consumption; its empirical applications concentrate almost exclusively on the effect of policies and institutions on economic growth.
The central contention of the human development approach, by contrast, is that well-being is about much more than money: it is about the possibilities that people have to fulfil the life plans they have reason to choose and pursue. Thus, our call for a new economics—an economics of human development—in which the objective is to further human well-being and in which growth and other policies are evaluated and pursued vigorously insofar as they advance human development in the short and long term.
Indigenous Peoples and Inequality in Human Development
An estimated 300 million indigenous peoples from more than 5,000 groups live in more than 70 countries. Some two-thirds reside in China.1 Indigenous peoples often face structural disadvantages and have worse human development outcomes in key respects. For example, recent Mexican government analyses show that while extreme multidimensional poverty is 10.5 percent nationally, it exceeds 39 percent among indigenous Mexicans.
When the Human Development Index (HDI) is calculated for aboriginal and non-aboriginal people in Australia, Canada, New Zealand and the United States, there is a consistent gap of 6–18 percent. Indigenous peoples in these countries have lower life expectancy, poorer education outcomes and smaller incomes. In India 92 percent of people of Scheduled Tribes live in rural areas, 47 percent of them in poverty. In Chhattisgarh, with a sizeable share of Scheduled Tribes, the State-wide literacy rate is 64 percent—but that of tribal peoples is only 22 percent.
Some evidence suggests that a schooling gap between indigenous and non-indigenous peoples remains. In China, India and Lao PDR geography, climate and discrimination based on ethnicity make it difficult to deliver basic infrastructure to remote areas, where many indigenous peoples and ethnic minorities live.
Work in Latin America and the Caribbean exploring access to land and this aspect of discrimination shows that a focus on broad-based economic growth can benefit indigenous peoples but is unlikely to be enough to close the gap. More targeted strategies are needed, as proposed by indigenous peoples and as informed by their views and priorities.
Three Success Stories in Advancing the Human Development Index
Some countries have succeeded in achieving high human development following different pathways.
Nepal—major public policy push. That Nepal is one of the fastest movers in the Human Development Index (HDI) since 1970 is perhaps surprising in light of the country’s difficult circumstances and record of conflict. Nepal’s impressive progress in health and education can be traced to major public policy efforts. Free primary education for all children was legislated in 1971 and extended to secondary education in 2007. Gross enrolment rates soared, as did literacy later on. Remarkable reductions in infant mortality reflect more general successes in health following the extension of primary healthcare through community participation, local mobilization of resources and decentralization. The gap between Nepal’s life expectancy and the world average has narrowed by 87 percent over the past 40 years. By contrast, economic growth was modest, and the lack of jobs led many Nepalese to seek opportunities abroad.
Nepal is still a poor country, with enormous scope to improve human development. It ranks 138th of 169 countries in the HDI. Large disparities in school attendance and the quality of education persist, particularly between urban and rural areas and across ethnic groups. Major health challenges remain, related to communicable diseases and malnutrition.
Oman—converting oil to health and education. Oman has had the fastest progress in the HDI. Abundant oil and gas were discovered in the late 1960s, so our data capture the evolution from a very poor to a very rich country, showing a quadrupling of gross enrolment and literacy rates and a 27-year increase in life expectancy.
But even in Oman economic growth is not the whole story. Although first in HDI progress, it ranks 26th in economic growth since 1970, when it had three primary schools and one vocational institute. Its initiatives to convert oil wealth into education included expanding access and adopting policies to match skills to labour market needs. Health services also improved: from 1970 to 2000 government spending on health rose almost six-fold—much faster than GDP.
Tunisia—education a policy focus. Tunisia’s success extends to all three dimensions of the HDI, with education a major policy focus. School enrolment has risen substantially, particularly after the country legislated 10 years of compulsory education in 1991. There has also been some progress in gender equity: about 6 of 10 university students are women. But large inequalities persist, as Tunisia’s modest (56th of 138 countries) ranking on our new Gender Inequality Index demonstrates.
Rapid decline in fertility and high vaccination rates for measles and tuberculosis have yielded successes in health, as has eradication of polio, cholera, diphtheria and malaria. Annual per capita income growth has been around 3 percent over the past 40 years, linked to fiscal and monetary prudence and investment in transport and communication infrastructure.
India’s National Rural Employment Guarantee Act
India’s National Rural Employment Guarantee Act (NREGA) of 2005, the world’s largest public works programme ever, provides basic social security for rural workers: a universal and legally enforceable right to 100 days of employment per rural household on local public works at minimum wage. Labourers who are not given work within 15 days of asking for it are entitled to unemployment benefits.
The act has other noteworthy features:
On average, each participating household worked for 54 days. Disadvantaged groups joined in large numbers; a majority of workers were members of Scheduled Castes or Scheduled Tribes, and more than half were women.
Payments of minimum wages and improved work conditions at NREGA work-sites have created pressure for similar improvements in the private labour market, benefiting all rural workers. Distress migration to urban areas has slowed. And for many rural women programme earnings are an important source of economic independence. As Haski, a tribal woman from Rajasthan, said when asked who decided how programme wages should be spent: “Main ghar ki mukhiya hoon” (I am the head of the household).
Refining the Human Development Index
The Human Development Index (HDI) remains an aggregate measure of progress in three dimensions—health, education and income. But in 2010 report the indicators used to measure progress in education and income have been modified, and the way they are aggregated has been changed.
In the knowledge dimension mean years of schooling replaces literacy, and gross enrolment is recast as expected years of schooling—the years of schooling that a child can expect to receive given current enrolment rates. Mean years of schooling is estimated more frequently for more countries and can discriminate better among countries, while expected years of schooling is consistent with the reframing of this dimension in terms of years. Ideally, measures of the knowledge dimension would go beyond estimating quantity to assessing quality, as several National and Regional Human Development Reports (HDRs) have done.
To measure the standard of living, gross national income (GNI) per capita replaces gross domestic product (GDP) per capita. In a globalized world differences are often large between the income of a country’s residents and its domestic production. Some of the income residents earn is sent abroad, some residents receive international remittances and some countries receive sizeable aid flows. For example, because of large remittances from abroad, GNI in the Philippines greatly exceeds GDP, and because of international aid, Timor-Leste’s GNI is many times domestic output.
A key change was to shift to a geometric mean (which measures the typical value of a set of numbers): thus in 2010 the HDI is the geometric mean of the three dimension indices. Poor performance in any dimension is now directly reflected in the HDI, and there is no longer perfect substitutability across dimensions. This method captures how well rounded a country’s performance is across the three dimensions. As a basis for comparisons of achievement, this method is also more respectful of the intrinsic differences in the dimensions than a simple average is. It recognizes that health, education and income are all important, but also that it is hard to compare these different dimensions of well-being and that we should not let changes in any of them go unnoticed.
Income is instrumental to human development but higher incomes have a declining contribution to human development. And the maximum values in each dimension have been shifted to the observed maximum, rather than a predefined cut-off beyond which achievements are ignored.
India is ranked 119 out of 169 countries on the Human Development Index (HDI) of the UNDP’s 2010 Human Development Report. This marks an improvement of just one rank between 2005 and 2010 though the report, a special 20th anniversary edition, places India among top 10 performers globally in terms of HDI measured on income growth. The category is led by China. India comes 10th after Botswana, South Korea, Hong Kong, Malaysia and Mauritius.
China has improved eight notches (from 2005 to 2010) to secure the 89th position. In South Asia, Nepal has gained five places to reach the 138th rank. Maldives has risen four places to 107; Sri Lanka at 91 too has pipped India in the rankings though Pakistan has lost two ranks to fall to 125, while Bangladesh is up one at 129.
Though high on GDP growth, India reports severe inequalities (the report for the first time measures inequalities, gender gaps and multidimensional poverty as markers of human development) while several low-income nations have posted huge profits by investing in education and health. Nepal is the only South Asian country, which despite low income, stands as the third best performer in the top 10 movers the report highlights.
While the Congress-led UPA Government can take heart from the fact that India’s HDI value has increased from 0.320 in 1980 to 0.519 in 2010, higher than South Asia’s average of 0.516, India still lags behind among medium HD nations. South Asia, particularly India, post shocking percentage losses in HDI values if inequalities are counted.
South Asia loses 33 per cent of its HDI value if health, education and income disparities are factored in. This is the second largest loss after sub-Saharan Africa’s. India fares particularly poorly here, losing 30 per cent overall on the inequality-adjusted HDI. This loss includes 31.3 per cent loss on inequality-adjusted life expectancy index; 40.6 per cent loss on education but only 14.6 per cent loss in income-adjusted HDI index.
The best HDI ranker in the world, Norway, loses just 6.6 per cent to inequality while China loses 23 per cent and Bangladesh 29.4 per cent.
On all major markers of human development, India’s neighbours Bangladesh and Pakistan beat it. India’s life expectancy at birth is among the lowest, 64.4 years as against China’s 73.5; Bangladesh’s 66.9, Pakistan’s 67.2 and Nepal’s 67.5. In mean years of schooling too, India lags behind recording 4.4 years while China has 7.5; Pakistan 4.9 and Bangladesh 4.8. On female labour force participation too, Bangladesh with 61 per cent is much ahead of India, which has just 31 per cent.
The 2010 report uses several new methodologies; hence its indicators are not comparable to those in the earlier reports.
Human development is about sustaining positive outcomes steadily over time and combating processes that impoverish people or underpin oppression and structural injustice. Plural principles such as equity, sustainability and respect for human rights are the key.
Human development is also the expansion of people’s freedoms to live long, healthy and creative lives; to advance other goals they have reason to value; and to engage actively in shaping development equitably and sustainably on a shared planet. People are both the beneficiaries and the drivers of human development, as individuals and in groups. This reaffirmation underlines the core of human development—its themes of sustainability, equity and empowerment and its inherent flexibility. Because gains might be fragile and vulnerable to reversal and because future generations must be treated justly, special efforts are needed to ensure that human development endures—that it is sustainable.
A major contribution of 2010 HDR is the systematic assessment of trends in key components of human development over the past 40 years. This retrospective assessment, an important objective for the 20th anniversary, is the most comprehensive analysis of the HDR to date and yields important new insights.
In some basic respects the world is a much better place today than it was in 1990—or in 1970. Over the past 20 years many people around the world have experienced dramatic improvements in key aspects of their lives. Overall, they are healthier, more educated and wealthier and have more power to appoint and hold their leaders accountable than ever before.
The world’s average HDI has increased 18 percent since 1990 (and 41 percent since 1970), reflecting large aggregate improvements in life expectancy, school enrolment, literacy and income. But there has also been considerable variability in experience and much volatility, themes to which we return below.
Almost all countries have benefited from this progress. Of 135 countries in our sample for 1970–2010, with 92 percent of the world’s people, only 3—the Democratic Republic of the Congo, Zambia and Zimbabwe—have a lower HDI today than in 1970.
Overall, poor countries are catching up with rich countries in the HDI. This convergence paints a far more optimistic picture than a perspective limited to trends in income, where divergence has continued. But not all countries have seen rapid progress, and the variations are striking. Those experiencing the slowest progress are countries in Sub-Saharan Africa, struck by the HIV epidemic, and countries in the former Soviet Union, suffering increased adult mortality.
The top HDI movers (countries that have made the greatest progress in improving the HDI) include well known income “growth miracles” such as China, Indonesia and South Korea. But they include others—such as Nepal, Oman and Tunisia—where progress in the non-income dimensions of human development has been equally remarkable. It is striking that the top 10 list contains several countries not typically described as top performers. And Ethiopia comes in 11th, with three other Sub-Saharan African countries (Botswana, Beninand Burkina Faso) in the top 25.
Not all countries have progressed rapidly, and the variation is striking. Over the past 40 years a quarter of developing countries saw their HDI increase less than 20 percent, another quarter, more than 65 percent. These differences partly reflect different starting points—less developed countries have on average faster progress in health and education than more developed ones do. But half the variation in HDI performance is unexplained by initial HDI, and countries with similar starting points experience remarkably different evolutions, suggesting that country factors such as policies, institutions and geography are important.
Health advances have been large but are slowing. The slowdown in aggregate progress is due largely to dramatic reversals in 19 countries. In nine of them—six in Sub-Saharan Africa and three in the former Soviet Union—life expectancy has fallen below 1970 levels. The causes of these declines are the HIV epidemic and increased adult mortality in transition countries.
Progress in education has been substantial and widespread, reflecting not only improvements in the quantity of schooling but also in the equity of access to education for girls and boys. To a large extent this progress reflects greater State involvement, which is often characterized more by getting children into school than by imparting a high-quality education.
Progress in income varies much more. However, despite aggregate progress, there is no convergence in income—in contrast to health and education—because on average rich countries have grown faster than poor ones over the past 40 years. The divide between developed and developing countries persists: a small subset of countries has remained at the top of the world income distribution, and only a handful of countries that started out poor have joined that high-income group.
Understanding the Patterns and Drivers of Human Development
One of the most surprising results of human development research in recent years is the lack of a significant correlation between economic growth and improvements in health and education. Research shows that this relationship is particularly weak at low and medium levels of the HDI. This is traceable to changes in how people become healthier and more educated. The correlation in levels today, which contrasts with the absence of correlation in changes over time, is a snapshot that reflects historical patterns, as countries that became rich were the only ones able to pay for costly advances in health and education. But technological improvements and changes in societal structures allow even poorer countries today to realize significant gains.
The unprecedented flows of ideas across countries in recent times—ranging from health-saving technologies to political ideals and to productive practices—have been transformative. Many innovations have allowed countries to improve health and education at very low cost—which explains why the association between the income and non-income dimensions of human development has weakened over time.
Income and growth remain vital. Income growth can indicate that opportunities for decent work are expanding—though this is not always so—and economic contractions and associated job losses are bad news for people around the world. Income is also the source of the taxes and other revenues that governments need in order to provide services and undertake redistributive programs. Thus, increasing income on a broad basis remains an important policy priority.
One important aspect is how relationships between markets and States are organized. Governments have addressed, in a range of ways, the tension between the need for markets to generate income and dynamism and the need to deal with market failures. Markets may be necessary for sustained economic dynamism, but they do not automatically bring progress in other dimensions of human development. Development that overly favours rapid economic growth is rarely sustainable. In other words, a market economy is necessary, but not enough.
Regulation, however, requires a capable State as well as political commitment, and State capability is often in short supply. Some developing country governments have tried to mimic the actions of a modern developed State without having the resources or the capacity to do so. For example, import substitution regimes in many Latin American countries floundered when countries tried to develop a targeted industrial policy. In contrast, an important lesson of the East Asian successes was that a capable, focused State can help drive development and the growth of markets. What is possible and appropriate is context specific.
Beyond the State, civil society actors have demonstrated the potential to curb the excesses of both the market and the State, though governments seeking to control dissent can restrict civil society activity.
The dynamics can be virtuous when countries transition to both inclusive market institutions and inclusive political institutions. But this is difficult and rare. Oligarchic capitalism tends to spell its own demise, either because it stifles the productive engines of innovation—as in the failed import substitution regimes of Latin America and the Caribbean—or because material progress increases people’s aspirations and challenges the narrow elite’s grip on power, as in Brazil, Indonesia and South Korea since the 1990s.
Human development is not only about health, education and income. Even when countries progress in the HDI, they do not necessarily excel in the broader dimensions. It is possible to have a high HDI and be unsustainable, undemocratic and unequal just as it is possible to have a low HDI and be relatively sustainable, democratic and equal. These patterns pose important challenges for how we think about human development, its measurement and the policies to improve outcomes and processes over time.
Trends conducive to empowerment include the vast increases in literacy and educational attainment in many parts of the world that have strengthened people’s ability to make informed choices and hold governments accountable. The scope for empowerment and its expression have broadened, through both technology and institutions. In particular, the proliferation of mobile telephony and satellite television and increased access to the Internet has vastly increased the availability of information and the ability to voice opinions.
The share of formal democracies has increased from less than a third of countries in 1970 to half in the mid-1990s and to three-fifths in 2008. Many hybrid forms of political organization have emerged. While real change and healthy political functioning have varied, and many formal democracies are flawed and fragile, policy-making is much better informed by the views and concerns of citizens. Local democratic processes are deepening. Political struggles have led to substantial change in many countries, greatly expanding the representation of traditionally marginalized people, including women, the poor, indigenous groups, refugees and sexual minorities.
Recent years have also exposed the fragility of some of the achievement—perhaps best illustrated by the biggest financial crisis in several decades, which caused 34 million people to lose their jobs and 64 million more people to fall below the $1.25 a day income poverty threshold. The risk of a “double-dip” recession remains, and a full recovery could take years.
But perhaps the greatest challenge to maintaining progress in human development comes from the un-sustainability of production and consumption patterns. For human development to become truly sustainable, the close link between economic growth and greenhouse gas emissions needs to be severed. Some developed countries have begun to alleviate the worst effects through recycling and investment in public transport and infrastructure. But most developing countries are hampered by the high costs and low availability of clean energy.
New measures for an evolving reality
Over the years the HDR has introduced new measures to evaluate progress in reducing poverty and empowering women. But lack of reliable data has been a major constraint. This year HDR has introduced three new indices to capture important aspects of the distribution of well-being for inequality, gender equity and poverty. They reflect advances in methods and better data availability.
Adjusting the Human Development Index for inequality. Reflecting inequality in each dimension of the HDI addresses an objective first stated in the 1990 HDR. 2010 report introduces the Inequality-adjusted HDI (IHDI), a measure of the level of human development of people in a society that accounts for inequality. Under perfect equality the HDI and the IHDI are equal. When there is inequality in the distribution of health, education and income, the HDI of an average person in a society is less than the aggregate HDI; the lower the IHDI (and the greater the difference between it and the HDI), the greater the inequality.
A new measure of gender inequality. The disadvantages facing women and girls are a major source of inequality. All too often, women and girls are discriminated against in health, education and the labour market—with negative repercussions for their freedoms. A new measure of these inequalities, built on the same framework as the HDI and the IHDI—to better expose differences in the distribution of achievements between women and men—has been introduced. The Gender Inequality Index shows that gender inequality varies tremendously across countries—the losses in achievement due to gender inequality (not directly comparable to total inequality losses because different variables are used) range from 17 percent to 85 percent. The Netherlands tops the list of the most gender-equal countries, followed by Denmark, Sweden and Switzerland.
Countries with unequal distribution of human development also experience high inequality between women and men, and countries with high gender inequality also experience unequal distribution of human development. Among the countries doing very badly on both fronts are Central African Republic, Haiti and Mozambique.
A multidimensional measure of poverty. Like development, poverty is multidimensional—but this is traditionally ignored by headline figures. 2010 report introduces the Multi-dimensional Poverty Index (MPI), which complements money-based measures by considering multiple deprivations and their overlap. The index identifies deprivations across the same three dimensions as the HDI and shows the number of people who are poor (suffering a given number of deprivations) and the number of deprivations with which poor households typically contend. It can be de-constructed by region, ethnicity and other groupings as well as by dimension, making it an apt tool for policy-makers.
About 1.75 billion people in the 104 countries covered by the MPI—a third of their population—live in multidimensional poverty—that is, with at least 30 percent of the indicators reflecting acute deprivation in health, education and standard of living. This exceeds the estimated 1.44 billion people in those countries who live on $1.25 a day or less (though it is below the share who live on $2 or less). The patterns of deprivation also differ from those of income poverty in important ways: in many countries—including Ethiopia and Guatemala— the number of people who are multi-dimensionally poor is higher. However, in about a fourth of the countries for which both estimates are available—including China, Tanzania and Uzbekistan—rates of income poverty are higher.
Sub-Saharan Africa has the highest incidence of multi-dimensional poverty. The level ranges from a low of 3 percent in South Africa to a massive 93 percent in Niger; the average share of deprivations ranges from about 45 percent (in Gabon, Lesotho and Swaziland) to 69 percent (in Niger). Yet half the world’s multi-dimensionally poor live in South Asia (844 million people), and more than a quarter live in Africa (458 million).
The impacts of the HDR have illustrated that policy thinking can be informed and stimulated by deeper exploration into key dimensions of human development. An important element of this tradition is a rich agenda of research and analysis. This Report suggests ways to move this agenda forward through better data and trend analysis. But much is left to do.
Three priorities are: improving data and analysis to inform debates, providing an alternative to conventional approaches to studying development, and increasing our understanding of inequality, empowerment, vulnerability and sustainability.
The economics of growth and its relationship with development, in particular, require radical rethinking. A vast theoretical and empirical literature almost uniformly equates economic growth with development. Its models typically assume that people care only about consumption; its empirical applications concentrate almost exclusively on the effect of policies and institutions on economic growth.
The central contention of the human development approach, by contrast, is that well-being is about much more than money: it is about the possibilities that people have to fulfil the life plans they have reason to choose and pursue. Thus, our call for a new economics—an economics of human development—in which the objective is to further human well-being and in which growth and other policies are evaluated and pursued vigorously insofar as they advance human development in the short and long term.
Indigenous Peoples and Inequality in Human Development
An estimated 300 million indigenous peoples from more than 5,000 groups live in more than 70 countries. Some two-thirds reside in China.1 Indigenous peoples often face structural disadvantages and have worse human development outcomes in key respects. For example, recent Mexican government analyses show that while extreme multidimensional poverty is 10.5 percent nationally, it exceeds 39 percent among indigenous Mexicans.
When the Human Development Index (HDI) is calculated for aboriginal and non-aboriginal people in Australia, Canada, New Zealand and the United States, there is a consistent gap of 6–18 percent. Indigenous peoples in these countries have lower life expectancy, poorer education outcomes and smaller incomes. In India 92 percent of people of Scheduled Tribes live in rural areas, 47 percent of them in poverty. In Chhattisgarh, with a sizeable share of Scheduled Tribes, the State-wide literacy rate is 64 percent—but that of tribal peoples is only 22 percent.
Some evidence suggests that a schooling gap between indigenous and non-indigenous peoples remains. In China, India and Lao PDR geography, climate and discrimination based on ethnicity make it difficult to deliver basic infrastructure to remote areas, where many indigenous peoples and ethnic minorities live.
Work in Latin America and the Caribbean exploring access to land and this aspect of discrimination shows that a focus on broad-based economic growth can benefit indigenous peoples but is unlikely to be enough to close the gap. More targeted strategies are needed, as proposed by indigenous peoples and as informed by their views and priorities.
Three Success Stories in Advancing the Human Development Index
Some countries have succeeded in achieving high human development following different pathways.
Nepal—major public policy push. That Nepal is one of the fastest movers in the Human Development Index (HDI) since 1970 is perhaps surprising in light of the country’s difficult circumstances and record of conflict. Nepal’s impressive progress in health and education can be traced to major public policy efforts. Free primary education for all children was legislated in 1971 and extended to secondary education in 2007. Gross enrolment rates soared, as did literacy later on. Remarkable reductions in infant mortality reflect more general successes in health following the extension of primary healthcare through community participation, local mobilization of resources and decentralization. The gap between Nepal’s life expectancy and the world average has narrowed by 87 percent over the past 40 years. By contrast, economic growth was modest, and the lack of jobs led many Nepalese to seek opportunities abroad.
Nepal is still a poor country, with enormous scope to improve human development. It ranks 138th of 169 countries in the HDI. Large disparities in school attendance and the quality of education persist, particularly between urban and rural areas and across ethnic groups. Major health challenges remain, related to communicable diseases and malnutrition.
Oman—converting oil to health and education. Oman has had the fastest progress in the HDI. Abundant oil and gas were discovered in the late 1960s, so our data capture the evolution from a very poor to a very rich country, showing a quadrupling of gross enrolment and literacy rates and a 27-year increase in life expectancy.
But even in Oman economic growth is not the whole story. Although first in HDI progress, it ranks 26th in economic growth since 1970, when it had three primary schools and one vocational institute. Its initiatives to convert oil wealth into education included expanding access and adopting policies to match skills to labour market needs. Health services also improved: from 1970 to 2000 government spending on health rose almost six-fold—much faster than GDP.
Tunisia—education a policy focus. Tunisia’s success extends to all three dimensions of the HDI, with education a major policy focus. School enrolment has risen substantially, particularly after the country legislated 10 years of compulsory education in 1991. There has also been some progress in gender equity: about 6 of 10 university students are women. But large inequalities persist, as Tunisia’s modest (56th of 138 countries) ranking on our new Gender Inequality Index demonstrates.
Rapid decline in fertility and high vaccination rates for measles and tuberculosis have yielded successes in health, as has eradication of polio, cholera, diphtheria and malaria. Annual per capita income growth has been around 3 percent over the past 40 years, linked to fiscal and monetary prudence and investment in transport and communication infrastructure.
India’s National Rural Employment Guarantee Act
India’s National Rural Employment Guarantee Act (NREGA) of 2005, the world’s largest public works programme ever, provides basic social security for rural workers: a universal and legally enforceable right to 100 days of employment per rural household on local public works at minimum wage. Labourers who are not given work within 15 days of asking for it are entitled to unemployment benefits.
The act has other noteworthy features:
- Encouraging women’s participation. A third of employment generated is to be set aside for women and provided within 5 kilometres of their village; child care facilities (if required) must be provided at the work-site.
- Decentralizing planning and implementation. At least half of allocated funds are to be spent by elected local councils; village assemblies are to select and prioritize projects.
- Creating rural assets. People are to be employed to create public assets (such as roads and check-dams) as well as assets on private lands (such as land improvement and wells).
- Imposing strict norms for transparency and accountability. All documents are to be publicly available, with proactive disclosure of essential documents (such as attendance records), and periodic audits are to be carried out by village representatives. In fiscal year 2009/2010 India spent almost $10 billion (approximately 1 percent of GDP) on the programme, and 53 million households participated.
On average, each participating household worked for 54 days. Disadvantaged groups joined in large numbers; a majority of workers were members of Scheduled Castes or Scheduled Tribes, and more than half were women.
Payments of minimum wages and improved work conditions at NREGA work-sites have created pressure for similar improvements in the private labour market, benefiting all rural workers. Distress migration to urban areas has slowed. And for many rural women programme earnings are an important source of economic independence. As Haski, a tribal woman from Rajasthan, said when asked who decided how programme wages should be spent: “Main ghar ki mukhiya hoon” (I am the head of the household).
Refining the Human Development Index
The Human Development Index (HDI) remains an aggregate measure of progress in three dimensions—health, education and income. But in 2010 report the indicators used to measure progress in education and income have been modified, and the way they are aggregated has been changed.
In the knowledge dimension mean years of schooling replaces literacy, and gross enrolment is recast as expected years of schooling—the years of schooling that a child can expect to receive given current enrolment rates. Mean years of schooling is estimated more frequently for more countries and can discriminate better among countries, while expected years of schooling is consistent with the reframing of this dimension in terms of years. Ideally, measures of the knowledge dimension would go beyond estimating quantity to assessing quality, as several National and Regional Human Development Reports (HDRs) have done.
To measure the standard of living, gross national income (GNI) per capita replaces gross domestic product (GDP) per capita. In a globalized world differences are often large between the income of a country’s residents and its domestic production. Some of the income residents earn is sent abroad, some residents receive international remittances and some countries receive sizeable aid flows. For example, because of large remittances from abroad, GNI in the Philippines greatly exceeds GDP, and because of international aid, Timor-Leste’s GNI is many times domestic output.
A key change was to shift to a geometric mean (which measures the typical value of a set of numbers): thus in 2010 the HDI is the geometric mean of the three dimension indices. Poor performance in any dimension is now directly reflected in the HDI, and there is no longer perfect substitutability across dimensions. This method captures how well rounded a country’s performance is across the three dimensions. As a basis for comparisons of achievement, this method is also more respectful of the intrinsic differences in the dimensions than a simple average is. It recognizes that health, education and income are all important, but also that it is hard to compare these different dimensions of well-being and that we should not let changes in any of them go unnoticed.
Income is instrumental to human development but higher incomes have a declining contribution to human development. And the maximum values in each dimension have been shifted to the observed maximum, rather than a predefined cut-off beyond which achievements are ignored.
Plans in India: At a Glance
FIRST PLAN 1951-56
The First Plan with a total outlay of Rs.2378 crore was a rather hapzard venture, as the planning commission had no reliable statistics to work upon. Besides, the plan had to be correlated to the prevailing activities of various government departments. The result was a patchwork of isolated projects. All the same, the plan had a national character and was based on a rational hypothesis. it laid emphasis on Agriculture, Irrigation, Power and Transport so as to provide an infrastructure for rapid industrial expansion in future. The plan turned out to be more than a sucess, mainly because it was supported by two good harvests in the last two years.
SECOND PLAN 1956-61
the second plan a big leap forward.it laid special stress on heavy industries.The industrial policy resolution was amended so as to shift the primary responsibility for development on the public sector. Private sector was left to handle consumer industries. But the great quantity of imports that the plan envisaged in both public and private sectors, practically denuded India’s are accumulated sterling balances in two years and compelled the country to seek extensive foreign aid. Agriculture and Small scale industries remained sluggish, without adding any momentum to development.
THIRD PLAN 1961-66
the third plan rode on a wave of high expectations following over all growth of the Indian economy in the first two plan periods. The third plan aimed at establishing a self sustaining economy. Internal resources having been strained to the utmost, the plan had to rely on heavy foreign aid.
Interim Planning
The Third Plan having gone awry, planning itself had become discredited in the eyes of many and demands were made from different quarters to declare a plan holiday. But neither the government nor the planning commission admitted failure. They refused to fail in with the demand for a plan holiday and proceeded to draw up the fourth plan as from 1966-67.
FOURTH PLAN 1969-74
The Fourth Plan officially commenced on April 1, 1969 with the publication of the draft
plan .Growth with stability was the main objective of the plan. Agriculture was expected to lead the growth with a rate of 5 percent per annul. Such a growth in agriculture would setup a chain reaction in the economy. The target for the growth rate of industry was set at about 9 percent per annual. Altogether the national income was expected to increase of 5.5 percent per annul. Allowing for the increase of population at the rate of 3 percent per annum or about 16 percent in the fourth plan period.
FIFTH PLAN 1974-79
The Fifth plan draft as originally drawn up was part of a long term perspective plan covering a period of 10 years from 1974.75 to 1985-86.The perspective plan attempted to co ordinate various sectors of the economy in terms of the new slogan GARIBI HATAO.The long term rate of growth which the economy was expected to achieve on a self sustaining basis was put up at 6.2 percent per annum.
By the time the fifth plan was approved by the National Development Council its promises had become obsolete and the total outlay had to be increased from Rs. 37.463 crore to 39.303 Crore.This belated attempt had an inglorious end in another 6 month.when the janta party came into power. They scrapped it unceremoniously.
SIXTH PLAN 1980-81 & 1984-85
Sixth plan was formulated after taking into account the achievements and shortcomings of the past three decades of planning. For the sixth plan actual expenditure stood at Rs. 10291.7 Crore as against the envisaged total public sector outlay of Rs. 97500 Crore accounting for a 12 percent increase in nominal terms. The average annual growth rate the sixth plan worked out to 5.2 percent, which is equal to the targeted growth for the plan.
SEVENTH PLAN 1985-90
seventh plan which envisaged an aggregate outlay of Rs. 348,148 Crore with a public sector outlay of Rs. 180,000 Crore ended with the average rate of growth of the gross domestic product at 5.3 percent per annum, which was well above the targeted rate of 5 percent.
EIGHTH PLAN 1992-97
the eighth plan recognized the need for a re orientation of planning in keeping with the process of economy. Though tangible change in the ongoing development process can be effected only over a period of time, the review of initial experience enables us to discern the direction of change and emerging criticalities with a view to identifying the measure to be adopted.
The eighth plan emphasis
1.Human development as the main focus of planning
2.a large economic apace for the private sector.
3.physical and social infrastructure development by the public sector
4.a greater role to the market to infuse economic efficiency even in the working of public sector
The plan proposed a growth rate of 5.6% per annum on the average during the plan period. An investment of Rs. 798,000 Crores(45%).adding to this current outlay of Rs. 73,000 Crores. consistent with the resources position, the size of the plans of the states and the union territories was projected at Rs. 1,86,325 Crore and the central plan at Rs.2,47,865 Crore.This outlay was divided between the centre and the states in the ratio 58.5:41.5 .
NINTH PLAN 1997-2002
The objective of the 9th plan evolved from the common minimum programmed of the government and the chiefs minister’s conference on basic minimum services. The suggestions are as a follows:
1.priority to agriculture and rural development with a view to generating productive employment & eradication of poverty
2.Accelerating the growth rate of the economy with stable prices
3.Ensuring food and nutritional security for the vulnerable section of the society
4.Providing the basic minimum services of safe drinking water, primary health care facilities, universal primary education, shelter and connectivity to all in a time bound population
5.containing the growth rate of population
6.Ensuring environmental sustainability of the development process through participation of people.
7. Empowerment of women and socially disadvantaged groups
8.promoting and developing panchayati raj, co-operative etc;
9.Strengthening efforts to build self reliance.
GDP:6.2
Export Growth Rate(% per annum):12
Import Growth Rate(% per annum):11.4
Domestic saving rate(% of GDP at market price):25.2
current Account Deficit(% of GDP at market price):1.7
Investment Rate(%GDP at market price):26.9
ICOR(%):4.34
Gross Investment:Rs.2004 Crore
According to rough calculations, the ninth plan size will be Rs.8,80,00 Crore.
THE OBJECTIVES OF TENTH PLAN 2002-2007
The total size of 10th plan is Rs. 25737.25 Crore at current prices as against the 9th plan approved outlay of Rs. 20075.00 crore. These figures are not comparable as the State of MP was bifurcated on 1st Nov 200.The planning commission indicated that the size of the tenth plan may be 5.5 times that of the budgetary support provided to the annual plan of 2001-2002 in nominal terms. However, the proposed size of the 10th is 7 times that of the approved outlay of the annual plan 2001-2002.
The sectoral outlays for the ninth plan and the tenth plan are presented in the table now.
HIGHLIGHTS OF 10th PLAN :2002-2007
* Annual 8 %GDP growth during 2002-07
* Annual FDI flows of 7.5 billion US dollars
* Divestment target of Rs 78,000 Crore in five years
* 50 million jobs in five years
* Public sector outlay at Rs.15,92,300 Crore
* Central plan outlay at Rs.9,21,291 Crore
* States and outlay at Rs. 6,71,009 Crore
* Central Budgetary support at Rs.7,06,000 Crore
* Incremental capital output ratio at 3.6%
* Reduction in poverty ratio to 21 % from 26 % by 2007
* Literacy rate to increase to 75% by 2007
* IMF to be reduced to 45 in 2007
* Maternal mortality ratio to be halved 2 in 2007
* Increase in forest cover to 25 % in 2007
* Potable drinking water in all villages
* cleaning of major polluted river stretches
* Decadal population growth to reduce from 21.3 % in 1991-2001 to 16.2 % in 2001-2011
* All children in school by 2003 and all children to complete 5 year schooling in 2007
* Investment rate of 28.4 % of GDP
IMPORATANT POINTS
$ The Third Plan was the first plan to target a 5% growth rate was minimum during this plan.
$ The Sixth Plan achieved for first time a growth rate of more than 5%.
$ In the earlier plans, importance was given to development programmers in the agricultural sector.
$ In the later plans, greater emphasis is laid on the industrial and power sectors of the economy.
The First Plan with a total outlay of Rs.2378 crore was a rather hapzard venture, as the planning commission had no reliable statistics to work upon. Besides, the plan had to be correlated to the prevailing activities of various government departments. The result was a patchwork of isolated projects. All the same, the plan had a national character and was based on a rational hypothesis. it laid emphasis on Agriculture, Irrigation, Power and Transport so as to provide an infrastructure for rapid industrial expansion in future. The plan turned out to be more than a sucess, mainly because it was supported by two good harvests in the last two years.
SECOND PLAN 1956-61
the second plan a big leap forward.it laid special stress on heavy industries.The industrial policy resolution was amended so as to shift the primary responsibility for development on the public sector. Private sector was left to handle consumer industries. But the great quantity of imports that the plan envisaged in both public and private sectors, practically denuded India’s are accumulated sterling balances in two years and compelled the country to seek extensive foreign aid. Agriculture and Small scale industries remained sluggish, without adding any momentum to development.
THIRD PLAN 1961-66
the third plan rode on a wave of high expectations following over all growth of the Indian economy in the first two plan periods. The third plan aimed at establishing a self sustaining economy. Internal resources having been strained to the utmost, the plan had to rely on heavy foreign aid.
Interim Planning
The Third Plan having gone awry, planning itself had become discredited in the eyes of many and demands were made from different quarters to declare a plan holiday. But neither the government nor the planning commission admitted failure. They refused to fail in with the demand for a plan holiday and proceeded to draw up the fourth plan as from 1966-67.
FOURTH PLAN 1969-74
The Fourth Plan officially commenced on April 1, 1969 with the publication of the draft
plan .Growth with stability was the main objective of the plan. Agriculture was expected to lead the growth with a rate of 5 percent per annul. Such a growth in agriculture would setup a chain reaction in the economy. The target for the growth rate of industry was set at about 9 percent per annual. Altogether the national income was expected to increase of 5.5 percent per annul. Allowing for the increase of population at the rate of 3 percent per annum or about 16 percent in the fourth plan period.
FIFTH PLAN 1974-79
The Fifth plan draft as originally drawn up was part of a long term perspective plan covering a period of 10 years from 1974.75 to 1985-86.The perspective plan attempted to co ordinate various sectors of the economy in terms of the new slogan GARIBI HATAO.The long term rate of growth which the economy was expected to achieve on a self sustaining basis was put up at 6.2 percent per annum.
By the time the fifth plan was approved by the National Development Council its promises had become obsolete and the total outlay had to be increased from Rs. 37.463 crore to 39.303 Crore.This belated attempt had an inglorious end in another 6 month.when the janta party came into power. They scrapped it unceremoniously.
SIXTH PLAN 1980-81 & 1984-85
Sixth plan was formulated after taking into account the achievements and shortcomings of the past three decades of planning. For the sixth plan actual expenditure stood at Rs. 10291.7 Crore as against the envisaged total public sector outlay of Rs. 97500 Crore accounting for a 12 percent increase in nominal terms. The average annual growth rate the sixth plan worked out to 5.2 percent, which is equal to the targeted growth for the plan.
SEVENTH PLAN 1985-90
seventh plan which envisaged an aggregate outlay of Rs. 348,148 Crore with a public sector outlay of Rs. 180,000 Crore ended with the average rate of growth of the gross domestic product at 5.3 percent per annum, which was well above the targeted rate of 5 percent.
EIGHTH PLAN 1992-97
the eighth plan recognized the need for a re orientation of planning in keeping with the process of economy. Though tangible change in the ongoing development process can be effected only over a period of time, the review of initial experience enables us to discern the direction of change and emerging criticalities with a view to identifying the measure to be adopted.
The eighth plan emphasis
1.Human development as the main focus of planning
2.a large economic apace for the private sector.
3.physical and social infrastructure development by the public sector
4.a greater role to the market to infuse economic efficiency even in the working of public sector
The plan proposed a growth rate of 5.6% per annum on the average during the plan period. An investment of Rs. 798,000 Crores(45%).adding to this current outlay of Rs. 73,000 Crores. consistent with the resources position, the size of the plans of the states and the union territories was projected at Rs. 1,86,325 Crore and the central plan at Rs.2,47,865 Crore.This outlay was divided between the centre and the states in the ratio 58.5:41.5 .
NINTH PLAN 1997-2002
The objective of the 9th plan evolved from the common minimum programmed of the government and the chiefs minister’s conference on basic minimum services. The suggestions are as a follows:
1.priority to agriculture and rural development with a view to generating productive employment & eradication of poverty
2.Accelerating the growth rate of the economy with stable prices
3.Ensuring food and nutritional security for the vulnerable section of the society
4.Providing the basic minimum services of safe drinking water, primary health care facilities, universal primary education, shelter and connectivity to all in a time bound population
5.containing the growth rate of population
6.Ensuring environmental sustainability of the development process through participation of people.
7. Empowerment of women and socially disadvantaged groups
8.promoting and developing panchayati raj, co-operative etc;
9.Strengthening efforts to build self reliance.
GDP:6.2
Export Growth Rate(% per annum):12
Import Growth Rate(% per annum):11.4
Domestic saving rate(% of GDP at market price):25.2
current Account Deficit(% of GDP at market price):1.7
Investment Rate(%GDP at market price):26.9
ICOR(%):4.34
Gross Investment:Rs.2004 Crore
According to rough calculations, the ninth plan size will be Rs.8,80,00 Crore.
THE OBJECTIVES OF TENTH PLAN 2002-2007
The total size of 10th plan is Rs. 25737.25 Crore at current prices as against the 9th plan approved outlay of Rs. 20075.00 crore. These figures are not comparable as the State of MP was bifurcated on 1st Nov 200.The planning commission indicated that the size of the tenth plan may be 5.5 times that of the budgetary support provided to the annual plan of 2001-2002 in nominal terms. However, the proposed size of the 10th is 7 times that of the approved outlay of the annual plan 2001-2002.
The sectoral outlays for the ninth plan and the tenth plan are presented in the table now.
HIGHLIGHTS OF 10th PLAN :2002-2007
* Annual 8 %GDP growth during 2002-07
* Annual FDI flows of 7.5 billion US dollars
* Divestment target of Rs 78,000 Crore in five years
* 50 million jobs in five years
* Public sector outlay at Rs.15,92,300 Crore
* Central plan outlay at Rs.9,21,291 Crore
* States and outlay at Rs. 6,71,009 Crore
* Central Budgetary support at Rs.7,06,000 Crore
* Incremental capital output ratio at 3.6%
* Reduction in poverty ratio to 21 % from 26 % by 2007
* Literacy rate to increase to 75% by 2007
* IMF to be reduced to 45 in 2007
* Maternal mortality ratio to be halved 2 in 2007
* Increase in forest cover to 25 % in 2007
* Potable drinking water in all villages
* cleaning of major polluted river stretches
* Decadal population growth to reduce from 21.3 % in 1991-2001 to 16.2 % in 2001-2011
* All children in school by 2003 and all children to complete 5 year schooling in 2007
* Investment rate of 28.4 % of GDP
IMPORATANT POINTS
$ The Third Plan was the first plan to target a 5% growth rate was minimum during this plan.
$ The Sixth Plan achieved for first time a growth rate of more than 5%.
$ In the earlier plans, importance was given to development programmers in the agricultural sector.
$ In the later plans, greater emphasis is laid on the industrial and power sectors of the economy.
Thursday, May 19, 2011
Asian Development Bank Assisted North Eastern States Roads Investment Programme (NESRIP)
The Cabinet Committee on Economic Affairs today approved the project proposal titled "ADB assisted North Eastern State Roads Investment Programme (NESRIP)", a centrally sponsored scheme of the Ministry of Development of North Eastern Region to construct / upgrade/ improve a total of 433 km long roads in six NE States at an estimated cost of Rs. 1353.83 Crore to be implemented over a period of 5 years i.e. 2011-2016. The State wise road lengths are: Assam 74.70 km, Meghalaya 93.40 km and Sikkim 34.20 km in Tranche-I and Assam 62.90 km, Manipur 93.20 km. Mizoram 55.00 km and Tripura 20.30 km in Tranche-II.
The Ministry of Development of North Eastern Region is the Executing Agency and is responsible for overall coordination with ADB and participating States and monitoring the progress of the project. A Central level steering committee and Internal Project Management Unit (IPMU) within MDONER, and a State level steering committee and Project Implementation Units (PIUs) have been established in each project State. The PIUs in each State will have primary responsibility for day-to-day project implementation and coordination of both the road works programme and Institutional Development and Capacity Building (IDCB) initiatives and will include staff for project management functions in engineering, procurement, contract management, environmental planning and management, social analysis and management, re-settlement planning and implementation, road maintenance, road safety and accounting. They will be assisted in the operation by project management consultants and construction supervision consultants.
An estimated 4.8 million people living adjacent (within 10 km) to the Project Roads will be directly benefitted. Others will benefit from lower transport costs, faster transit time etc.
The Ministry of Development of North Eastern Region is the Executing Agency and is responsible for overall coordination with ADB and participating States and monitoring the progress of the project. A Central level steering committee and Internal Project Management Unit (IPMU) within MDONER, and a State level steering committee and Project Implementation Units (PIUs) have been established in each project State. The PIUs in each State will have primary responsibility for day-to-day project implementation and coordination of both the road works programme and Institutional Development and Capacity Building (IDCB) initiatives and will include staff for project management functions in engineering, procurement, contract management, environmental planning and management, social analysis and management, re-settlement planning and implementation, road maintenance, road safety and accounting. They will be assisted in the operation by project management consultants and construction supervision consultants.
An estimated 4.8 million people living adjacent (within 10 km) to the Project Roads will be directly benefitted. Others will benefit from lower transport costs, faster transit time etc.
Wednesday, May 18, 2011
Rate of Inflation views on India’s Economic growth
Inflation Rate, Rate of Inflation
The inflation rate is the percentage by which prices of goods and services rise beyond their average levels. It is the rate by which the purchasing power of the people in a particular geography has declined in a specified period. The rate of inflation may be calculated weekly, monthly or annually. However, it is always expressed as an annualized figure.
Inflation Rate: Indices
The inflation rate can be calculated for different price indices. For the national inflation rate, the consumer price index (CPI) is considered. This index measures the actual prices of goods and services needed by the common man. The inflation rate can also be measured by the following indices:
Cost-of-living index (COLI):
This is used to adjust income scales so that the real value of earnings remains the same.
Producer price index (earlier Wholesale Price Index): This measures the average change in prices that domestic producers receive for their products. This index measures the growing pressure on producers due to changes in the costs of their raw materials. This pressure might get passed on to consumers, absorbed by profits or offset by a rise in productivity.
Commodity price index:
This measures the prices of a selected group of commodities.
Core price index: This removes the volatile components (primarily food and oil) from broader indices, like the CPI. Short term changes in demand and supply conditions do not significantly affect such indices. Central banks use it to assess the need for adjusting the monetary policy.
Methods of Calculating the Inflation Rate
The two main methods used to calculate the inflation rate are:
Base period: This method is the more common of the two and assigns a relative weight to each element while making calculations.
Chained measurements: In this method, the contents of the ‘commodity bundle’ are adjusted, along with the prices. Besides, individual time periods in which the price levels fluctuate are also taken into account.
Any undesired change in the rate of inflation can affect the economy and national development at large. The appropriate estimation of inflation rates is necessary to get an overview of the national economy.
Inflation Rate: The Formula
The equation to calculate the inflation rate is:
Inflation Rate = (Po- P-1)* 100 / P-1,
where
Po = the present average price
P-1 = the price that existed last year.
The inflation rate is always stated as a percentage. Another way of calculating the inflation rate is to apply the log rule. The inflation rate is important, since it is subtracted from various economic rates in order to eliminate the impact of inflation. The real increase in wages is also counted by taking into account the prevailing inflation rate.
The inflation rate is the percentage by which prices of goods and services rise beyond their average levels. It is the rate by which the purchasing power of the people in a particular geography has declined in a specified period. The rate of inflation may be calculated weekly, monthly or annually. However, it is always expressed as an annualized figure.
Inflation Rate: Indices
The inflation rate can be calculated for different price indices. For the national inflation rate, the consumer price index (CPI) is considered. This index measures the actual prices of goods and services needed by the common man. The inflation rate can also be measured by the following indices:
Cost-of-living index (COLI):
This is used to adjust income scales so that the real value of earnings remains the same.
Producer price index (earlier Wholesale Price Index): This measures the average change in prices that domestic producers receive for their products. This index measures the growing pressure on producers due to changes in the costs of their raw materials. This pressure might get passed on to consumers, absorbed by profits or offset by a rise in productivity.
Commodity price index:
This measures the prices of a selected group of commodities.
Core price index: This removes the volatile components (primarily food and oil) from broader indices, like the CPI. Short term changes in demand and supply conditions do not significantly affect such indices. Central banks use it to assess the need for adjusting the monetary policy.
Methods of Calculating the Inflation Rate
The two main methods used to calculate the inflation rate are:
Base period: This method is the more common of the two and assigns a relative weight to each element while making calculations.
Chained measurements: In this method, the contents of the ‘commodity bundle’ are adjusted, along with the prices. Besides, individual time periods in which the price levels fluctuate are also taken into account.
Any undesired change in the rate of inflation can affect the economy and national development at large. The appropriate estimation of inflation rates is necessary to get an overview of the national economy.
Inflation Rate: The Formula
The equation to calculate the inflation rate is:
Inflation Rate = (Po- P-1)* 100 / P-1,
where
Po = the present average price
P-1 = the price that existed last year.
The inflation rate is always stated as a percentage. Another way of calculating the inflation rate is to apply the log rule. The inflation rate is important, since it is subtracted from various economic rates in order to eliminate the impact of inflation. The real increase in wages is also counted by taking into account the prevailing inflation rate.
Tuesday, May 17, 2011
Indian Economy MCQs
1. The State having the highest literacy rate among woman in India is—
(A) Tamil Nadu
(B) Kerala
(C) West Bengal
(D) Maharashtra
Ans : (B)
2. IRDP was introduced in the year—
(A) 1978-79
(B) 1979-80
(C) 1980-81
(D) 1981-82
Ans : (A)
3. As per 61st Round of NSSO Survey employment growth rate during 1999-2000 to 2004-05 has been estimated to be—
(A) 2•6%
(B) 2•8%
(C) 3•0%
(D) 3•2%
Ans : (A)
4. Oil Refinery at Bhatinda is being established by—
(A) IOC
(B) HPCL
(C) Reliance
(D) BPCL
Ans : (B)
5. The new Share Price Index (in dollar value) of Mumbai Share Market is—
(A) DOLEX
(B) UREX
(C) FOREX
(D) SENSEX
Ans : (A)
6. BCCI is—
(A) An International Terrorist Organisation
(B) An International Industrial Organisation
(C) A Movement for International Peace
(D) An International Banking Organisation
Ans : (D)
7. Index ‘Residex’ is associated with—
(A) Share Prices
(B) Mutual Fund Prices
(C) Price Inflation Index
(D) Land Prices
Ans : (D)
8. The outlines of second five year plan was made by—
(A) B. N. Gadgil
(B) VKRV Rao
(C) P. C. Mahalanobis
(D) C. N. Vakil
Ans : (C)
9. Committee on Economic Affairs of Union Cabinet has decided to raise share capital of NACIL (National Aviation Company of India Ltd.) by—
(A) Rs. 500 crore
(B) Rs. 600 crore
(C) Rs. 700 crore
(D) Rs. 800 crore
Ans : (D)
10. NABARD was established in—
(A) Fourth Plan
(B) Fifth Plan
(C) Sixth Plan
(D) Eighth Plan
Ans : (C)
11. Devaluation means—
(A) To reduce the value of home currency in other currency
(B) To appreciate the value of home currency
(C) To issue new currency in place of old currency
(D) None of these
Ans : (A)
12. During the first quarter period of 2010-11 indirect tax revenue collection showed a growth of……
(A) 25%
(B) 33%
(C) 43%
(D) 48%
Ans : (C)
13. Government has issued an ordinance announcing ULIPs as ‘Insurance Product’. The regulations of ULIPs will now be done by—
(A) SEBI only
(B) IRDA only
(C) Both SEBI and IRDA
(D) Government itself
Ans : (B)
14. In its latest move, CSO has shifted the base year for national income estimates—
(A) From 1990-91 to 1999-2000
(B) From 1993-94 to 2004-2005
(C) From 2000-01 to 2004-05
(D) From 1999-2000 to 2004-05
Ans : (D)
15. The number of approved share markets in India—
(A) 19
(B) 20
(C) 23
(D) 24
Ans : (D)
16. After merger of Air India and Indian Airlines, the new entity is now known as—
(A) India Airlines
(B) Air India
(C) Indian
(D) Indian Airways
Ans : (B)
17. Dalal Street is situated at—
(A) London
(B) Paris
(C) Mumbai
(D) New Delhi
Ans : (C)
18. RBI was nationalised in—
(A) 1959
(B) 1947
(C) 1945
(D) 1949
Ans : (D)
19. Who was the Chairman of the Working Group of Planning Commission which had suggested the shifting of base year of Wholesale Price Index from 1993-94 to 1999-2000 ?
(A) Dr. C. Rangrajan
(B) Prof. Abhijit Sen
(C) Prof. A. R. Khusro
(D) Prof. Janakiraman
Ans : (B)
20. SBI (Subsidiary Banks Laws) Amendment Bill passed by the Parliament allows SBI to reduce its holding in its seven subsidiary banks from—
(A) 100% to 75%
(B) 75% to 50%
(C) 75% or more to 51%
(D) 75% or more to 49%
Ans : (C)
(A) Tamil Nadu
(B) Kerala
(C) West Bengal
(D) Maharashtra
Ans : (B)
2. IRDP was introduced in the year—
(A) 1978-79
(B) 1979-80
(C) 1980-81
(D) 1981-82
Ans : (A)
3. As per 61st Round of NSSO Survey employment growth rate during 1999-2000 to 2004-05 has been estimated to be—
(A) 2•6%
(B) 2•8%
(C) 3•0%
(D) 3•2%
Ans : (A)
4. Oil Refinery at Bhatinda is being established by—
(A) IOC
(B) HPCL
(C) Reliance
(D) BPCL
Ans : (B)
5. The new Share Price Index (in dollar value) of Mumbai Share Market is—
(A) DOLEX
(B) UREX
(C) FOREX
(D) SENSEX
Ans : (A)
6. BCCI is—
(A) An International Terrorist Organisation
(B) An International Industrial Organisation
(C) A Movement for International Peace
(D) An International Banking Organisation
Ans : (D)
7. Index ‘Residex’ is associated with—
(A) Share Prices
(B) Mutual Fund Prices
(C) Price Inflation Index
(D) Land Prices
Ans : (D)
8. The outlines of second five year plan was made by—
(A) B. N. Gadgil
(B) VKRV Rao
(C) P. C. Mahalanobis
(D) C. N. Vakil
Ans : (C)
9. Committee on Economic Affairs of Union Cabinet has decided to raise share capital of NACIL (National Aviation Company of India Ltd.) by—
(A) Rs. 500 crore
(B) Rs. 600 crore
(C) Rs. 700 crore
(D) Rs. 800 crore
Ans : (D)
10. NABARD was established in—
(A) Fourth Plan
(B) Fifth Plan
(C) Sixth Plan
(D) Eighth Plan
Ans : (C)
11. Devaluation means—
(A) To reduce the value of home currency in other currency
(B) To appreciate the value of home currency
(C) To issue new currency in place of old currency
(D) None of these
Ans : (A)
12. During the first quarter period of 2010-11 indirect tax revenue collection showed a growth of……
(A) 25%
(B) 33%
(C) 43%
(D) 48%
Ans : (C)
13. Government has issued an ordinance announcing ULIPs as ‘Insurance Product’. The regulations of ULIPs will now be done by—
(A) SEBI only
(B) IRDA only
(C) Both SEBI and IRDA
(D) Government itself
Ans : (B)
14. In its latest move, CSO has shifted the base year for national income estimates—
(A) From 1990-91 to 1999-2000
(B) From 1993-94 to 2004-2005
(C) From 2000-01 to 2004-05
(D) From 1999-2000 to 2004-05
Ans : (D)
15. The number of approved share markets in India—
(A) 19
(B) 20
(C) 23
(D) 24
Ans : (D)
16. After merger of Air India and Indian Airlines, the new entity is now known as—
(A) India Airlines
(B) Air India
(C) Indian
(D) Indian Airways
Ans : (B)
17. Dalal Street is situated at—
(A) London
(B) Paris
(C) Mumbai
(D) New Delhi
Ans : (C)
18. RBI was nationalised in—
(A) 1959
(B) 1947
(C) 1945
(D) 1949
Ans : (D)
19. Who was the Chairman of the Working Group of Planning Commission which had suggested the shifting of base year of Wholesale Price Index from 1993-94 to 1999-2000 ?
(A) Dr. C. Rangrajan
(B) Prof. Abhijit Sen
(C) Prof. A. R. Khusro
(D) Prof. Janakiraman
Ans : (B)
20. SBI (Subsidiary Banks Laws) Amendment Bill passed by the Parliament allows SBI to reduce its holding in its seven subsidiary banks from—
(A) 100% to 75%
(B) 75% to 50%
(C) 75% or more to 51%
(D) 75% or more to 49%
Ans : (C)
Rural Development
The function of the Rural Development Division is primarily to provide overall policy guidance in formulation of plans and programmes for Rural Development. This is the nodal Division for matters relating to poverty eradication, employment generation in rural areas, development of watershed & degraded land. The following specific activities are undertaken by Division;
- To assist in formulation of rural development programmes to be included in Five Year Plans and Annual Plans and to make periodic assessment of progress achieved.
- To analyse and prepare comments on the EFC Memoranda and Cabinet Notes paper for Group of Ministers pertaining to rural development programmes.
- To maintain liaison with Ministry of Rural Development, National Institute of Rural Development (NIRD) and other allied organisations mainly and participating in the meetings.
- To collect information from various Divisions of the Planning Commission, State Governments and also from the Central Ministries which are implementing various schemes related to rural development.
- To organize Working Group meetings to finalise the Draft Five Year Plan proposals of the State Governments. This involves the preparation of background papers, discussions on inter-se plan priorities, critical examination of plan proposals in relation to plan objectives and approaches, preparation of Working Group Reports giving, inter-alia, outlays and physical targets.
- Finalisation of the Five Year Plan outlays of the Ministry of Rural Development. Finalisation of Annual Plans of the Central Ministry of Rural Development and State Governments. This includes assessment of progress both in physical and financial terms, in relation to the approved targets and outlays, scheme-wise examination of proposals and reviewing targets and finalizing allocation for next Annual Plan.
- To provide comments, materials etc. for Public representations, VIP references, Parliament Questions and Agenda items for the meetings of Consultative Committee/ Standing Committee for the Planning Commission pertaining to rural development sector are also attended to.
The Rural Development Division looks after the following programmes being implemented by the Ministry of Rural Development (MoRD):
National Rural Employment Guarantee Act (NREGA),
The NREG was launched on February 2, 2006 and the first full year of operation was 2006-07 covering 200 districts. The programme was expanded to 330 districts in 2007-08 and covers the whole country from 1.4.08. The primary objective of the scheme is to provide guaranteed work for 100 days for any household wishing to have such employment. Although all households are eligible, the expectation is that only the poorer sections, i.e., landless labour and marginal farmers would actually seek work. The secondary objective is to ensure that employment generated is from works that raise land productivity.
Swarnjayanti Gram Swarozgar Yojana (SGSY)
SGSY is a major on-going scheme for the self-employment of the rural poor. The basic objective of the scheme is to bring the assisted poor families (swarozgaris) above the poverty line by providing them income generating assets through a mix of bank credit and government subsidy. Credit is the critical component of the scheme whereas the subsidy is an enabling element. The scheme involves organisation of the poor into Self Help Groups (SHGs) build their capacities through a process of social mobilization, their training, selection of key activities, planning of activity clusters, creation of infrastructure, provision of technology and marketing support, etc. Under the scheme focus is on the group approach. However, individual Swarozgaris are also assisted. The SGSY is being implemented by the District Rural Development Agencies (DRDAs) with the active involvement of Panchayati Raj Institutions (PRIs), banks, line Departments and the Non-Government Organisations (NGOs).
The credit mobilization under SGSY has been abysmally low. Further, a large number of SHGs are formed but fizzle out midway after availing the revolving fund. To make the scheme more effective it is being re-structured with a sharper focus on poorest of the poor people. A suitable mechanism will be put in place for higher social mobilization, capacity building and institution building among the target population
Indira Awaas Yojana (IAY)
The IAY is being implemented as an independent scheme since 1996. It aims to provide assistance for construction / upgradation of dwelling units to the Below Poverty Line (BPL) rural households, with special emphasis on SCs, STs and freed bonded labor categories. A maximum assistance of Rs 35,000 per unit is provided for construction in plain areas and Rs 38,500 per unit for hilly/difficult areas. Rs 15000 is given for upgradation of a dwelling unit for all areas. The funding of IAY is shared between the Centre and State in the ratio of 75:25. (100% in the case of UTs).
National Social Assistance Programme (NSAP)
The National Social Assistance Programme (NSAP) was launched with the aim to provide social assistance benefit to poor households in the case of old age, death of primary breadwinner and maternity. The programme supplements the efforts of the State Governments with the objective of ensuring minimum national levels of well being and the Central assistance is an addition to the benefit that the States are already providing on Social Protection Schemes. With a view to ensure better linkage with nutrition and national population control programmes, the Maternity Benefit Component of the NSAP was transferred to the Department of Family Welfare, Ministry of Health and Family Welfare with effect from 2001-02. The schemes of NSAP and Annapurna have been transferred to the State Plan with effect from 2002-03 with a view to provide requisite flexibility to the State / UT in the choice and implementation of the schemes.
Integrated Watershed Management Programme (IWMP)
During the Eleventh Plan, the three area development programmes, namely, Integrated Wasteland Development Programme, Drought Prone Area Programme and Desert Development Programme have been integrated and consolidated into a single programme called Integrated Watershed Management Programme (IWMP). This consolidation is for optimum use of resources, sustainable outcomes an integrated planning. The common guidelines for the Watershed Development Programme have been formulated and are effective from 1.4.2008. An amount of Rs.1825 crore has been allocated for IWMP during 2008-09. The ongoing projects sanctioned prior to 1.4.2008 under DADP, DDP, and IWDP would be continued to be implemented as per old guidelines.
The modified IWMP would adopt a three tier apporch in which the upper reaches which are mainly forested and hilly would be treated with the support of Forest Department. For land situated intermediate slopes above the agriculture lands, the IWMP would address all the necessary issues of land treatment by adopting best possible options including cropping pattern, horticulture and agro-forestry etc. In the lower tire, which are plains and mainly agricultural lands, the IWMP would be dovetailed with the employment generating programme such as National Rural Employment Guarantee Scheme (NREGS) an would fill the critical gaps of NREGS and vice versa.
Under the new programme, a cluster approach would be followed with a broader vision of natural hydro-geographical unit of average size of 4,000 to 10,000 ha. comprising of clusters of micro-watershed to be selected as project area. The progrrame would be implemented by dedicated institutional agencies at state and central level. Professional support (in the form of multidisciplinary expert team) would be provided to support these institutions with proper fund allocation. A core GIS facility with spatial and non-spatial data augmented with satellite imagery data would be set up for giving Controlled access/distributon for local project planning.
The project period is proposed in the range of 5 to 7 years in three distinct phases, i.e. Preparatory, Watershed works and Consodilation phase. The consodilation phase will include livelihood activities, marketing, processing and value addition activities.
National Land Records Modernization Programme (NLRMP):
The National Land Records Modernization Programme (NLRMP) has been conceptualized as a major system and reform initiative that is concerned not merely with computerization, updating and maintenance of land records and validation of titles, but also as a programme that will add value and provide a comprehensive database for planning developmental, regulatory and disaster management activities by providing location-specific information, while providing citizen services based on land records data.
Under the NLRMP, the following three layers of data will be integrated on a geographic information system (GIS) platform: Spatial data from satellite imagery/aerial photography, Survey of India and Forest Survey of India maps, and Revenue records: cadastral maps and RoR details. All cadastral maps will be digitized, and data included with plot numbers and unique id for each land parcel. Administrative unit boundaries from village level upwards (including panchayat, block, tehsil, circle, sub-division, district, division, State and national boundaries), forest, water bodies and other physical attributes of land and land use details will be overlaid, and other developmental layers (e.g., watersheds, road networks, etc.) added to the core GIS.
The activities to be supported under the Programme, inter alia, include survey/resurvey using modern technology including aerial photogrammetry, updating of land records including mutation records, completion of computerization of the records of rights (RoRs), computerization of registration, automatic generation of mutation notices, digitization of maps , integration of the entire system digitization of maps and training and capacity building of the concerned officials and functionaries. Connectivity amongst the land records and registration offices and land records management centers at tehsil/taluk/circle/block level would be supported. Access to land records data would be provided to Cooperative and other financial institutions for facilitating credit operations.
A major focus of the Programme will be on citizen services, such as providing records of rights (RoRs) with maps; other land-based certificates such as caste certificates, income certificates (particularly in rural areas), domicile certificates; information for eligibility for development programmes; land passbooks, etc.
In addition, the Programme will be of immense usefulness to the governments - both Central and State Governments - in modernizing and bringing efficiency to the land revenue administration as well as offering a comprehensive tool for planning various land-based developmental, regulatory and disaster management activities needing location-specific information. Even the private sector will be able to benefit from this comprehensive tool for planning business and economic activities.
As indicated above, the NLRMP has been approved by the Cabinet in its meeting held on 21.8.2008. The budget provision for the Scheme during the current year (2008-09) is Rs.473.00 crore. Accordingly, it is proposed to implement the NLRMP across the country and to make it fully operational over the next five to eight year period. The components of the scheme will become integrated with the Revenue Administration of the States/UTs and will continue as such on an ongoing basis.
Special Economic Zones (SEZs)
India was one of the first in Asia to recognise the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia's first EPZ set up in Kandla in 1965. Seven more zones were set up thereafter. However, the zones were not able to emerge as effective instruments for export promotion on account of the multiplicity of controls and clearances, the absence of world-class infrastructure, and an unstable fiscal regime. While correcting the shortcomings of the EPZ model, some new features were incorporated in the Special Economic Zones (SEZs) Policy announced in April 2000. This policy intended to make SEZs an engine for economic growth supported by quality infrastructure complemented by an attractive fiscal package, both at the Centre and the State level, with the minimum possible regulations. The salient features of the SEZ Scheme are:-
All the 8 Export Processing Zones (EPZs) located at Kandla and Surat (Gujarat), Santa Cruz (Maharashtra), Cochin (Kerala), Chennai (Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta (West Bengal) and Noida (U.P.) have been converted into Special Economic Zones. In short span of about three years, SEZs Act and rules were notified in February, 2006. So far formal approvals have been granted for setting up of 576 SEZs out of which 319 have been notified. Out of the total employment provided to 3.87 lakh persons in SEZs as a whole, 2.53 lakh persons is incremental employment generated after February, 2006 when the SEZ Act came into force. This is apart from the million of man-days of employment created by the developer of infrastructure activities. Physical exports from SEZs have increased from Rs.66,638 crore in 2007-08 to Rs.99,689 crore in 2008-09, registering a growth of 50%. There has been overall growth of export of 620% over past five years (2004-09). These figures establish beyond doubt that the response to the SEZ policy of the Central Government has been overwhelming and the scheme has been able to achieve the envisaged objectives. An investment of Rs.1,08,903 crore has been made in SEZs. This includes Foreign Direct Investment of US $ 2.29 billions.
A total of 91 SEZs are making exports. Out of this 43 are IT/ITES, 13 Multi product and 35 other sector specific SEZs. The total number of units in these SEZs is 2263.
- A designated duty free enclave to be treated as foreign territory only for trade operations and duties and tariffs.
- No licence required for import.
- Manufacturing or service activities allowed.
- SEZ units to be positive net foreign exchange earner within three years.
- Domestic sales subject to full customs duty and import policy in force.
- Full freedom for subcontracting.
- No routine examination by customs authorities of export/import cargo.
All the 8 Export Processing Zones (EPZs) located at Kandla and Surat (Gujarat), Santa Cruz (Maharashtra), Cochin (Kerala), Chennai (Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta (West Bengal) and Noida (U.P.) have been converted into Special Economic Zones. In short span of about three years, SEZs Act and rules were notified in February, 2006. So far formal approvals have been granted for setting up of 576 SEZs out of which 319 have been notified. Out of the total employment provided to 3.87 lakh persons in SEZs as a whole, 2.53 lakh persons is incremental employment generated after February, 2006 when the SEZ Act came into force. This is apart from the million of man-days of employment created by the developer of infrastructure activities. Physical exports from SEZs have increased from Rs.66,638 crore in 2007-08 to Rs.99,689 crore in 2008-09, registering a growth of 50%. There has been overall growth of export of 620% over past five years (2004-09). These figures establish beyond doubt that the response to the SEZ policy of the Central Government has been overwhelming and the scheme has been able to achieve the envisaged objectives. An investment of Rs.1,08,903 crore has been made in SEZs. This includes Foreign Direct Investment of US $ 2.29 billions.
| Year | Value (Rs. crore) | Growth Rate (over previous Year) |
|---|---|---|
| 2003-2004 | 13,854 | 39% |
| 2004-2005 | 18,314 | 32% |
| 2005-2006 | 22,840 | 24.7% |
| 2006-2007 | 34,615 | 52% |
| 2007-2008 | 66,638 | 92% |
| 2008-2009 | 99,689 | 50% |
Impact of the Scheme
The overwhelming response to the SEZ scheme is evident from the flow of investment and creation of additional employment in the country. The SEZ scheme has generated tremendous response amongst the investors, both in India and abroad, which is evident from the following details of certain SEZs which have recently come up:- Nokia Special Economic Zone in Tamil Nadu (Telecom equipments SEZ).
- Mahindra City SEZ, Tamil Nadu (Apparels and fashion accessories; IT/hardware; auto ancillary).
- Apache SEZ (Adidas Group) in Andhra Pradesh (Footwear SEZ).
- Mundra Port and Special Economic Zone, Gujarat (Multi product SEZ).
- Moser Baer SEZ, Noida, Uttar Pradesh (SEZ for Non-conventional energy including solar energy equipment).
- Wipro Limited, Andhra Pradesh (IT SEZ).
- Divvy's Laboratories Limited, Andhra Pradesh (Pharma SEZ).
- Flextronics SEZ in Tamil Nadu (Electronic Hardware SEZ).
- ETL Infrastructure IT SEZ, Tamil Nadu (IT SEZ).
- Wipro Limited, Karnataka - 2 SEZs in Sarjapur and Electronic City (IT SEZ).
- Biocon Limited, Karnataka (Biotech SEZ).
- Serum Bio-Pharma Park, Maharashtra (Pharma SEZ).
- Manyata Promoters Private Limited, Karnataka (IT/ITES SEZ).
- Chandigarh Administration, Chandigarh (IT SEZ).
- Hyderabad Gems Limited, Hyderabad (Gems and Jewellery SEZ).
- Maharashtra Airport Development Corporation Limited, Maharashtra (Multi product SEZ).
- Reliance JamnagarInfrastructure Ltd. (Multi Product).
- Suzlon Infrastructure Ltd. (Hi-tech Engineering Products & related services).
Saturday, May 14, 2011
ECONOMIC SNAPSHOT
- Indian economy is estimated to grow at 8.6 percent in 2010-11 as compared to the growth rate of 8.0 percent in 2009-10. The growth rate of 8.6 per cent in GDP during 2010-11 has been due to the robust growth rates of over 8 per cent in the sectors of manufacturing, construction, trade, hotels, transport and communication, financing, insurance, and, real estate and business services.A growth rate of 18.3 percent is estimated for GDP at current prices in the year 2010-11.
- The agriculture, forestry and fishing sector is likely to show a growth of 5.4 per cent in its GDP during 2010-11, as against the previous year's growth rate of 0.4 per cent.The estimate of GDP from agriculture in 2010-11,according to the Department of Agriculture and Cooperation (DAC),production of foodgrains and oilseeds is expected to grow by 6.5 per cent and 11.9 per cent, respectively, as compared to the previous agriculture year. The production of cotton and sugarcane is also expected to rise by 41.2 per cent and 15.2 per cent, respectively, in 2010-11. Among the horticultural crops, production of fruits and vegetables is expected to increase by 4.1 per cent and 3.8 per cent, respectively, during the year 2010-11.
- The growth in GDP for mining and quarrying and manufacturing sectors during 2010-11 is expected to be 6.2 and 8.8 percent respectively over previous year. According to the latest estimates available on the Index of Industrial Production (IIP), the index of mining and manufacturing registered growth rates of 8.0 per cent and 10.0 per cent during April-November, 2010. The estimated growth rate for construction sector is 8.0 percent in 2010-11. The key indicators of construction sector, namely, cement production and steel consumption have registered growth rates of 4.4 per cent and 8.8 per cent, respectively during April- December, 2010.
- The estimated growth in GDP for the trade, hotels, transport and communication sectors during 2010-11 is placed at 11.0 per cent, mainly on account of growth during April- November, 2010-11 of 14.9 per cent in passengers handled in civil aviation,21.3 per cent in air cargo handled and 40.9 per cent in stock of telephone connections. The sales of commercial vehicles witnessed an increase of 34.1 per cent per cent in April-December, 2010. The financing, insurance, real estate and business services sector is expected to show a growth rate of 10.6 per cent during 2010-11, on account of 14.0 per cent growth in aggregate deposits and 22.6 per cent growth in bank credit during April- November 2010 (against the respective growth rates of 18.6 per cent and 10.1 per cent in the corresponding period of previous year). The growth rate of community, social and personal services during 2010-11 is estimated to be 5.7 per cent.
- Per capita Income of Indians is estimated to rise by 17.3 per cent during 2010-11, as per the revised data released by the Government. Per capita income means earnings of each Indian if the national income is evenly divided among the country's population.However, the increase in per capita income is estimated at at 6.7 percent during 2010-11, if it is calculated in real terms i.e on 2004-05 prices.
Table for the annual growth by economic activity in Gross Domestic Product (GDP) for the year 2010-11, released by the Central Statistics office (CSO):
| S.No. | Industry | at Constant (2004-05) Prices | at Current Prices | ||
| (US$ billion) | (%) | (US$ billion) | (%) | ||
| 1 | Agriculture, forestry & fishing | 152.42 | 5.4 | 295.25 | 23.2 |
| 2 | Mining & quarrying | 24.32 | 6.2 | 40.13 | 18.2 |
| 3 | Manufacturing | 170.87 | 8.8 | 228.09 | 14.5 |
| 4 | Electricity, gas & water supply | 20.49 | 5.1 | 22.15 | 8.6 |
| 5 | Construction | 84.57 | 8.0 | 129.21 | 17.0 |
| 6 | Trade, hotels, transport & communication | 291.36 | 11.0 | 379.65 | 16.7 |
| 7 | Financing, insurance, real estate & business services | 187.89 | 10.6 | 285.97 | 26.5 |
| 8 | Community, social & personal services | 141.87 | 5.7 | 216.87 | 11.3 |
Total GDP | 1073.79 | 8.6 | 1597.49 | 18.3 | |
Source: Central Statistics Office (CSO), Ministry of Statistics & Programme Implementation, Government of India
- During 2010-11, on a financial-year basis, Reserve Money (M0) expanded by 8.4 per cent (up to 10 December 2010), compared to an increase of 1.6 per cent during the corresponding period of the preceding year.The net foreign assets (NFA) of the RBI increased by 6.1 per cent during this period, as against an increase of 1.5 per cent during the corresponding period of the previous year. On a year on-year basis,(as on 11 December 2010), the NFA of the RBI marginally increased by 0.6 per cent compared to a 6.8 per cent increase a year earlier.
- During 2010-11, on a financial-year basis, M0 expanded by 8.4 per cent (up to 10 December 2010), compared to an increase of 1.6 per cent during the corresponding period of the preceding year.The net foreign assets (NFA) of the RBI increased by 6.1 per cent during this period, as against an increase of 1.5 per cent during the corresponding period of the previous year. On a year on-year basis,(as on 11 December 2010), the NFA of the RBI marginally increased by 0.6 per cent compared to a 6.8 per cent increase a year earlier.
- Net RBI credit to the Central Government increased by US$ 15.8 billion ( Rs. 70,856 crore) during the financial year so far (up to 10 December 2010). This was mainly on account of increase in repo operations under the Liquidity Adjustment Facility (LAF) and open market purchases of the Bank, partly offset by increase in the cash balances of the Central Government. On a year-on-year basis, increase in the net RBI credit to the Central Government, as on 10 December 2010, was US$ 47.1 billion ( Rs. 2,10,714 crore) as against an increase of US$ 21.9 billion ( Rs. 98,273 crore) a year earlier.
- Narrow money (M1) increased by 18.6 per cent in 2009-10 as compared to an expansion of 9.0 per cent during 2008-09. During 2010-11, M1 growth has generally been higher than in 2009-10. On a financial-year basis, M1 increased by 3.1 per cent during the current year (up to 3 December 2010) compared to increase of 5.1 per cent during the corresponding period of the previous year.
- On a year-on-year basis, as on (3rd December 2010), M1 growth was 16.5 per cent as compared to 18.3 per cent a year earlier. During the current financial year (up to 3 December 2010), currency with the public expanded by 12.9 per cent US$ 22.2 billion ( Rs. 99,324 crore), compared to an increase of 9.8 per cent US$ 14.5 billion ( Rs. 64,962 crore) during the corresponding period of the previous year.
- Broad money (M3) supply increased by 16.8 per cent during 2009-10.On a year-on-year basis also, as on 3 December 2010, the growth in time deposits moderated to 14.9 per cent from 18.7 per cent a year earlier.
- During the current financial year 2010-11 (up to 3 December 2010) the growth in M3 was 8.2 per cent as compared to 9.6 per cent during the corresponding period of the previous year. On a year-on-year basis, M3 grew by 15.3 per cent on 3 December 2010, as against growth of 18.6 per cent on the corresponding date of the previous year. Among the sources of M3, however, bank credit to the commercial sector has been accelerating since November 2009.
- Broad money (M3) (up to February 25, 2011) increased by 13.6 per cent as compared to 13.8 per cent during the corresponding period of the last year. The year-on-year growth, as on February 25, 2011 was 16.5 per cent as compared to 17.0 per cent last year.
Infrastructure
The Index of Six core industries having a combined weight of 26.7 per cent in the Index of Industrial Production (IIP) with base 1993-94 stood at 268.9 (provisional) in February 2011 and registered a growth of 6.8% (provisional) compared to 4.2% registered in February 2010. During April- February 2010-11, s ix core industries registered a growth of 5.7% (provisional) as against 5.4% during the corresponding period of the previous year.
Crude Oil
Crude Oil production (weight of 4.17% in the IIP) registered a growth of 12.2% (provisional) in February 2011 compared to a growth rate of 4.0% in February 2010. The Crude Oil production registered a growth of 11.9% (provisional) during April- February 2010-11 compared to 0.3% during the same period of 2009-10.
Petroleum Refinery Products
Petroleum refinery production (weight of 2.00% in the IIP) registered a growth of 3.2% (provisional) in February 2011 compared to growth of 0.7 % in February 2010. The Petroleum refinery production registered a growth of 2.5% (provisional) during April- February 2010-11 compared to (-) 0.4% during the same period of 2009-10.
Coal
Coal production (weight of 3.2% in the IIP) registered a growth of (-) 5.7% (provisional) in February 2011 compared to growth rate of 6.7% in February 2010. Coal production grew by 0.1 % (provisional) during April- February 2010-11 compared to an increase of 7.9% during the same period of 2009-10.
Electricity
Electricity generation (weight of 10.17% in the IIP) registered a growth of 7.2 % (provisional) in February 2011 compared to growth rate of 6.9% in February 2010. Electricity generation grew by 5.4 % (provisional) during April- February 2010-11 compared to 6.0% during the same period of 2009-10.
Cement
Cement production (weight of 1.99% in the IIP) registered a growth of 6.5% (provisional) in February 2011 compared to 7.9% in February 2010. Cement Production grew by 4.3 % (provisional) during April- February 2010-11 compared to an increase of 10.8% during the same period of 2009-10.
Finished (carbon) steel
Finished (carbon) Steel production (weight of 5.13% in the IIP) registered a growth of 11.5% (provisional) in February 2011 compared to (-) 0.2% (estimated) in February 2010. Finished (carbon) Steel production grew by 8.1% (provisional) during April- February 2010-11 compared to an increase of 5.2% during the same period of 2009-10.
N.B: Data are provisional. Revision has been made based on revised data obtained.
MACRO ECONOMIC INDICATORS
Population | 1.21 billion |
Gross Domestic Product (GDP) during 2010-11 | US$ 1,597.5 billion |
Gross National Income (GNI) during 2010-11 | US$ 1,584.2 billion |
Per Capita Income in 2010-11 | US$ 1,020.3 |
Overall Industrial growth (February 2011) | 3.6 % |
Forex Reserves (April 2011) | US$ 303.5 billion |
| Amount of FDI inflows during 2010-11 (April 2010-February 2011) | US$ 18.3 billion |
Cumulative amount of FDI inflows (August 1991 to February 2011) | US$ 145.2 billion |
Exchange rate INR/1 USD (as on May 06, 2011) | 44.57 |
| Exports March 2011 | US$ 29.1 billion |
| Cumulative Exports April-March 2010-11 | US$ 245.9 billion |
| Imports February 2011 | US$ 34.7 billion |
| Cumulative Imports April-March 2010-11 | US$ 350.7 billion |
Average literacy rate (census 2001) | 64.8% |
Life expectancy for males | 63.9 years |
Life expectancy for women | 66.9 years |
Note: The financial year for India is April 1st-March 31st
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