Rashtriya Swasthya Bima Yojana extended to the Domestic Workers

The Union Cabinet approved extension of the Rashtriya Swasthya Bima Yojana (RSBY) to all the registered domestic workers in the country recently. The scheme is expected to cover approximately 47.50 lakh domestic workers in the country.

            The Scheme envisages smart card based cashless health insurance cover up to Rs. 30,000/- in any empanelled hospital anywhere in the country. The funds will be allocated from the National Social Security Fund for Unorganised Workers. The premium will be shared by the Central and State Governments in the ratio of 75:25. In case of States in NE Regional and J&K the ratio is 90:10. The estimated expenditure to be borne by the  Government for the year 2011-12 is Rs. 29.70 crore, for 2012-13 is Rs. 74.25 crore, for 2013-14 is Rs. 148.50 crore and 2014-15 is Rs. 297 crore.

            Domestic work forms one of the largest sectors of female employment in the urban areas. Domestic workers are unorganized and the sector remains unregulated and unprotected by labour laws. These workers come from vulnerable communities and backward areas. Most of these are poor, vulnerable, illiterate, unskilled and do not understand the urban labour market.

            The RSBY provides for smart card based cashless health insurance cover of Rs.30,000/- per annum to BPL workers (a unit of five) in unorganised sector is presently being implemented in 25 States / UTs. The scheme has since been extended to building and other construction workers registered with Welfare Boards constituted under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act 1996, street vendors, beedi workers and such MNREGA workers who have worked for more than 15 days during the preceding year.

Domestic Workers

Domestic work forms one of the largest sectors of female employment in the urban areas. Domestic workers are unorganized and the sector remains unregulated and unprotected by labour laws. This is largely because the domestic workers undertake work in private homes rather than in commercial establishments. They work in appalling conditions, with no coverage under the existing welfare measures and schemes for social security, old age pension, health and maternity protection etc.  Domestic workers lack organizational strength and voice and comprise largely of unskilled women, who enter the labour market without any technical skills.  As per National Sample Survey (NSS) 2004-05, there are about 47.50 lakh domestic workers in the country. About 30 lakh of these workers are urban women, making domestic work as the largest female occupation in urban India.

 Domestic workers come from vulnerable communities and backward areas. Most of these are poor, vulnerable, illiterate, unskilled and do not understand the urban labour market. Domestic work is undervalued and poorly regulated, and many domestic workers remain overworked, underpaid and unprotected. They are maltreated, exploited and suffer violence and even sexually abused.  The main issues that concern domestic work are: lack of decent wages and work conditions, no defined work time, no weekly offs, loneliness, violence, abuse, and sexual harassment at workplace, victimization at the hands of traffickers/ placement agencies, forced migration, lack of welfare measures (such as health insurance, maternity protection, old age security), and lack of skills development resulting in stagnation and no career growth. 

 Looking at the vulnerable nature of the domestic workers, the Ministry of Labour & Employment constituted a Task Force to evolve a policy frame work on Domestic Workers in the context of regulatory mechanism and for providing social security. The Task Force in its Report has, inter-alia, recommended extension of the welfare schemes to the domestic workers including: health and maternity benefits, death and disability benefits, and old age benefits. The Task Force defined the “domestic workers” as follows:

“Domestic Worker” means, a person who is employed for remuneration whether in cash or kind , in any house hold through any agency or directly, either on a temporary basis or permanent, part time or full time to do the household work but does not include - any member of the family of an employer.”

The State Governments would identify domestic workers as those having completed 18 years of age. For the purpose of identification of domestic workers, any two of the following criteria would be treated as evidence of persons working as domestic workers:

·         certificate by registered Resident Welfare Association to the effect that a person is working as a domestic worker in the area;

·         employer certificate

·         certificate from a registered trade union that the concerned person is working as a domestic worker;

·         police verification certificate which certifies that the person is working as a domestic worker.

The Task Force has recommended that the Rashtriya Swasthya Bima Yojana (RSBY), the national health insurance scheme should be the first welfare scheme to be extended to the domestic workers.  RSBY provides for smart card based cashless health insurance cover of Rs. 30000 per annum per family (a unit of five).  The premium is shared between Centre and State Government in the ratio of 75:25 basis.   25 States/Union Territories have started enrollment and issuance of smart cards in 348 districts. Remaining States except Andhra Pradesh are in the process of implementation of the scheme.  More than 2.35 crore smart cards have been issued as on June 30, 2011.  

The Government  has taken a decision to extend the RSBY to domestic workers. It is proposed to cover 10% of the estimated 47.50 lakh domestic workers i.e. 4.75 lakh during the current financial year i.e.  2011-12 and remaining in next three years.   After 2014-15 the recurring expenditure is likely to be around Rs. 297 crores annually, though the exact amount will be determined on the basis of persons identified and registered as domestic workers under the scheme during each preceding year and the actual premium rates. The expenditure will be met from the National Social Security Fund for unorganized sector workers administered by Ministry of Finance.

The International Labour Organization (ILO) also discussed at length during the last International Labour Conference on International Convention for protecting the rights of domestic workers and for providing social security to this extremely vulnerable segment of unorganised workers and adopted a Convention and Recommendation. The Government  of India supported adoption of Convention on Domestic Workers.

RURAL - URBAN POPULATION DISTRIBUTION

Financial Stability Report

The Reserve Bank of India (RBI) released its Financial Stability Report (FSR) recently. The third in a series, the recent FSR follows the tradition of the two preceding reports (March and December 2010) and represents the central bank's “continuing endeavour to communicate its assessment of the incipient risks to financial stability”.

The FSR's approach is holistic and focusses on risks to the system arising out of an interplay of the disparate elements of the financial sector infrastructure — the macroeconomic setting, policies markets and institutions. Like its counterparts in the developed world, the RBI says it relies on the latest techniques of risk assessments involving stress tests and so on.

Though technical in nature, the FSR has plenty of messages even for the common man. An important conclusion is that the Indian financial system remains stable in the face of “some fragilities being observed in the global macro-financial environment”. Major economies around the world are slowing down even as the risks from global imbalances and sovereign debt crises remain. India's growth momentum too has slackened mainly due to the uncertainties in the global environment characterised by high energy and commodity prices. However, despite high inflation and fiscal concerns, India's fundamentals remain strong.

Findings

Two of the most significant findings of the FSR are (a) that the banking sector in India — by far the most dominant portion of the Indian financial sector — continues to be stable and (b) the domestic financial markets have remained stress free recently. However, a few caveats are in order.

Indian firms are relying increasingly on external sources of finance, mostly euro-commercial borrowings. That has resulted in currency mismatches. The well-known problem in the derivatives segment in which uninformed companies, many of them from the SME segment, sold unhedged products (loans in Swiss francs or other currencies with low interest rates but without a forward cover) has had disastrous consequences. The aggressive selling of an essentially speculative product has also cost the banks dear. According to many that development would not have happened if the RBI had been more gradual in relaxing foreign exchange controls. It has been one of the cardinal rules of exchange control that there should be an underlying commercial transaction behind any forward cover. Sans the commercial it becomes pure speculative trading.

Although the above has not been highlighted in the FSR, it does mention the other great risk arising out of an unbridled access to foreign currency borrowings by Indian companies.

Many of them who issued foreign currency convertible bonds (FCCB) may face refunding risks at the time of conversion by March 2013. The conversion price of these FCCBs is said to be substantially higher than the prevailing market price and the differential is unlikely to narrow. The RBI recently announced some concessions and extended the date of conversion, but the basic problems with FCCBs remain. Despite giving a clean chit to the banks — at least for now — the FSR does voice some concerns. Banks have aggressively expanded their credit portfolio to accommodate their borrowers. In the process they have come to rely on high cost funds such as those mobilised through certificates of deposits (CDs). Resource mobilisation on those terms is generally for shorter periods and hence contributes to the risk of asset-liability mismatch.

High cost funds

In effect, banks have relied on the higher cost funds to fuel credit booms. How far such practices impair their balance sheets may not be clear now but one has to look at a related factor as well. Incremental credit has tended to concentrate on a few sectors such as retail lending (including home loans), commercial real estate and infrastructure. Although, on the face of it, banks are not over-exposed to these sectors, the fact remains that lending to some of these sectors has become a fashion even among public sector banks. Commercial real estate has been subjected to higher provisioning by the RBI to prevent “overheating”. Individual home loans are highly sensitive to interest rate movements. There is strong possibility that the level of non-performing assets (NPAs) will increase.

The share of public sector banks (PSBs) in these sectors is high. In one obvious sense that might be understandable: after all they remain the dominant players. Yet retail lending — home loans, personal loans including credit cards — has never been part of the ethos of public sector banking. Part of their new enthusiasm might have been prompted by their desire to match the foreign and the new generation private banks. The crucial question is whether the PSBs are equipped to cope with failures such as in credit cards.

Agriculture in India

Agriculture is the mainstay of the Indian economy. Agriculture sector contributes about 17.8 percent of Gross Domestic Product (GDP of India), while 58.2 percent of the population is dependent on agriculture for their livelihood. The agricultural output, however, depends on monsoon as nearly 60 percent of area sown is dependnet on rainfall. The production of foodgrains during 2008- 09, is estimated at 229.85 million tonnes which is higher than the production of foodgrains during 2007-08 (230.78 million tonnes). The estimated production of rice is 99.37 million tonnes while previous year it was 99.69 million tonnes. The production of wheat during 2008-09 estimated at 77.63 millon tonnes while last year’s production was 78.57 million tonnes. The production of coarse cereals estimated at 38.67 million tonnes is less than the last year’s production of 40.76 million tonnes. Sugarcane production is likely to be 289.23 million tonnes. The production of cotton in 2008-09 is estimated at 23.26 million bales of 170 kg.
HARVESTING SEASON
There are three main crop seasons, namely, kharif, rabi and summer. Major kharif crops are rice, jowar, bajra, maize, cotton, sugarcane, sesame, soyabean and groundnut. Major rabi crops are wheat, jowar, barley, gram, linseed, rapeseed and mustard. Rice, maize and groundnut are grown in summer season also.
LAND UTILISATION
Land utilisation statistics are available for 92.9 per cent of total geographical area of 3,287.3 lakh hectares. According to land use statistics available from states, area under forests had increased from 404.8 lakh hectares in 1950-51 to 695.5 lakh hectares in 2003-04. Net sown area increased from 1,187.5 lakh to 1409.6 lakh hectares during the same period. Broad cropping pattern indicates that though foodgrains have a preponderance in gross cropped area as compared to non-foodgrains, their relative share came down from 76.7 per cent during 1950-51 to 65.6 per cent during 2003-2004.
SEEDS Seeds is a critical and basic input for attaining agricultural production and productivity in different agro-climatic regions. The role of quality seed programme, came into prominence about three decades ago. The country made a small beginning with a few thousand quintals of improved seed in the early 60s. Indian seed programme largely adheres to the limited generation system for seed multiplication. The system recognises three generations, namely, breeder, foundation and certified seeds and provides adequate safeguards for quality assurance in the seed multiplication chain to maintain the purity of variety as it flows from the breeder to the farmers. :
ANIMAL HUSBANDRY Animal husbandary and Dairy development plays a prominent role in the rural economy in supplementing the income of rural  households, particularly, the landless and small and marginal farmers. India is endowed with largest livestock population in the world. It accounts for 57 percent of the world’s buffalo population and 15 percent of the cattle population.
COUNTRY OF LIVESTOCK SECTOR TO THE FOOD BASKETThe contribution of livestock sector to the food basket in the form of milk, eggs and meat has been immense in fulfilling the animal protein requirements of ever growing human population.
MILK PRODUCTION
During past five year plans, several measures have been initiated by the Government to increase the productivity of livestock, which has resulted in significant increase in milk production to the level of 10.48 crore tonnes at the end of 2007-08. India has become the largest producer of milk in the world. The per capita availability of milk is estimated to be 252 gm per day, during 2007-08.
EGG PRODUCTION Poultry development in the country has shown steady progress over the years. Egg production during 2006-07 was 5.1 crore. The estimate of egg production for 2007-08 was 53.5 billion numbers. Currently, India ranks third in egg production in the world.
WOOL PRODUCTION
The wool production in the country during 2006-07 was 4.51 crore kg. The estimate of wool production for 2007 08 was 4.4 crore kgs.
FISHEREIS
India is now the third largest producer of fish and the second largest producer of fresh water fish in the world. Fish production has increased from 41.6 lakh tonnes in 1991-92 to 71.2 lakh tonnes in 2007-08.
FERTILIZER
Fertilizer is a key input for increasing agricultural production. The consumption of chemical fertilizers during 2007-08 is estimated to be 22.570 million tonnes. To cushion the impact of decontrol of phosphatic and potassic fertilizers, a concession of Rs 1,000 per tonne on DAP and MOP and proportionate concession on complexes was provided during 1992-93 under a special scheme of concession on sale of decontrolled phosphatic and potassic fertilizers. The prices of decontrolled fertilizers were still considered high and, therefore, the concession was enhanced in subsequent years.
Food Production Foodgrains (2008-09) Food production - 22.985 crore tonne Wheat – 7.763 crore tonne Rice- 9.937 crore tonne Pulse- 1.5 crore tonne Coarse cereals- 3.867 crore tonne Cash Crops Sugarcane- 28.923 crore tonne Cotton - 232.68 lakh bales.

ECONOMIC ORGANISATIONS

INSURANCE REGULATORY AUTHORITY:
On the recommendations of the Malhotra Committee, Government has set up an interim Insurance Regulatory Authority (IRA), with a view to activate an insurance regulatory apparatus essential for proper monitoring and control of the insurance industry. The IRA is headed by a Chairman who is also Controller of Insurance and Chairman of TBC. The other Members of the IRA, not exceeding seven in number of whom not more than three shall serve full time, shall be nominated by the Central government.

GENERAL INSURANCE CORPORATION OF INDIA:  
The general insurance industry in India was nationalised and a government company known as General Insurance Corporation of India (GIC) was formed by the Central Government in November 1972. With effect from 1 January 1973 the erstwhile 107 Indian and foreign insurers which were operating in the country prior to nationalisation, were grouped into four operating companies, namely, (i) National Insurance Company Limited; (ii) New India Assurance Company Limited; (iii) Oriental Insurance Company Finance Limited; and (iv) United India Insurance Company Limited.

LIFE INSURANCE CORPORATION OF INDIA:
Life Insurance Corporation of India (LIC) was established on 1 September 1956 to spread the message of life insurance in the country and mobilise people’s savings for nation-building activities. The life insurance Corporation of India (LIC) with its central office in Mumbai and 7 zonal offices at Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Kanpur and Bhopal operates through 106 divisional offices including one salary savings scheme Divsion at Mumbai 2,048 branch offices and 323 Satellite offices. As on 31st March 2006, LIC has 10,52,283 agents spread all over the country. For the year ended 31st March 2008, business under group schemes, both new and renewed, was to the tune of Rs.3,06,711.77 crore providing cover to 494.83 lakh lives during the preceding year.

INVESTMENT COMMISSION:

The Finance Minister  has announced in the budget speech 2004-05 for setting up an investment in India attractive for investors. Accordingly, Investment Commission has since been set up in December 2004. The commission will have the authority of government to engage, discuss with and invite domestic and foreign business to invest in India. 

Industrial Development Bank of India (IDBI):

Industrial Development Bank of India (IDBI), established under the Industrial Development Bank of India Act, 1964, is the principal financial institution for providing credit and other facilities for development of industry, coordinating working of institutions engaged in financing, promoting or developing industries and assisting the development of such institutions. IDBI has been providing direct financial assistance to large industrial concerns and also helping small and medium industrial concerns through banks and state-level financial institutions. The IDBI was transformed into IDBI Ltd. On 1 October 2004, a company under the companies Act, 1956 and a schedule Bank (on 11 October 2004) under the RBI Act) 1934.

Industrial Credit and Investment Corporation of India Limited (ICICI):

Industrial Credit and Investment Corporation of India Limited (ICICI) was established in 1955 as public limited company to encourage and assist industrial units in the country. Its objectives, inter alia, include providing assistance in the creation, expansion and modernisation of industrial enterprises, encouraging and promoting participation of private capital both internal and external, in such enterprises, encouraging and promoting industrial development and helping development of capital markets.It provides term loans in Indian and foreign currencies, underwrites issues of shares and debentures, makes direct subscriptions to these issues and guarantees payment of credit made by others.

National Workshop on Social Audit of Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGs)

The Union Ministry of Rural Development is organizing a National workshop on Social Audit of Mahatma Gandhi National Rural Guarantee Scheme (MGNREGs) at Vigyan Bhawan, New Delhi on 19th July 2011. It was earlier scheduled to be held in Pune on 18th July. The day long workshop is aimed at sharing roadmap for implementation of the Audit of rules under MGNREGA by the States and seek clarifications from the Ministry. It will also provide a platform to share best practices and impact studies on the implementation of MGNREGs with the States. Union Minister of Rural Development Shri Jairam Ramesh will preside over the function. Representatives from State Governments and Union Territories have been invited to attend the workshop along with the nodal officer of the departments coordinating the action to be taken for implementing the social audit rules of MGNREGA.

Rural Development Ministry has Under Section 24 (I) of the Mahatma Gandhi NREG Act in consultation with the Comptroller & Auditor General of India, notified in the Gazette on 30th June 2011, the Mahatma Gandhi National Rural Employment Guarantee Audit of Scheme Rules, 2011. Simultaneously, the notification deleting Para 13 (b) of Schedule I to the Act has also been issued on 30th June, 2011.

Laying down the rules for Social Audit of MGNREGA is a major step in making social audit the principal instrument for transparency and accountability in its implementation. It is meant to put in place an independent institutional mechanism to increase the awareness of Mahatma Gandhi NREGA workers about their rights and entitlement under Mahatma Gandhi NREGS. It aims to provide a platform for the rural poor to express their opinion about the implementation of Mahatma Gandhi NREGS and thus, encourage public participation in the implementation of the Mahatma Gandhi NREGS leading to strengthening of the program.

Expanding the National Rural Livelihoods Project (NLRP) under NRLM

The Ministry Of Rural Development would be entering into an agreement with the World Bank for soft loan worth US$1 billion (approximately Rs. 4,600 crores) to implement the  National Rural Livelihoods Project (NRLP) under National Rural Livelihood Mission (NRLM) at Krishi Bhawan on Monday. The distribution of project funds among the states would be based on the relative share of rural BPL population in the total states. The investment in one of the world’s largest poverty reduction initiatives would help in setting up of an institutional platform by mobilizing rural poor, particularly women, into robust grassroots institutions of their own where, with the strength of the group behind them, they will be able to exert voice and accountability over providers of educational, health, nutritional and financial services.

NRLP will assist in professionalization of the overall program management of NRLM  by shifting the focus of expenditure-based allocation, to provide quality technical assistance and results-based financing.  It will also make investments in developing a wider base of implementing partnerships with private sector, civil society, and other development institutions for bringing in new ideas, innovations, services, and delivery mechanisms. NRLP   will invest intensively in support implementation of NRLM in 100 districts and 400 blocks of 12 high poverty states (Bihar, Chhattisgarh, Jharkhand, Gujarat, Maharashtra, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, West Bengal, Karnataka and Tamil Nadu), accounting for 85 percent of the rural poor in the country. The aim is to create best practice sites and to develop them as local immersion locations and generate critical pool of social capital for catalyzing social mobilization of the poor and building quality institutions of the poor. The sequence will include the following:

a)      social inclusion through participatory identification of the poor and universal social mobilization;

b)      building institutional platforms of the poor in the form of SHG federations, producer collectives, etc.;

c)      developing social capital in the form of trained community leaders, community resources persons and para-professionals providing livelihood services to the poor;

d)     micro-planning and investments for livelihoods enhancement; (v) access to credit from formal financial institutions available in desired amounts and convenient repayment terms;

e)      convergence with other entitlements and programs such as MGNREGS, pensions, etc.; and

f)       building sustainable livelihoods options for the poor by developing activity/trade clusters supporting farm and non-farm enterprises focused on productivity improvement and market access.

Government has restructured one of its key rural development programs, the SGSY, through the establishment of the National Rural Livelihoods Mission (NRLM) with a clear objective of rural poverty reduction through creation and strengthening institutional platforms of the rural poor. It is being implemented in 28 states and 7 union territories in India. NRLM is one of the world's largest poverty reduction initiatives aimed at reaching out to 350 million people, almost a quarter of India's population. Based on the past experience in several states, NLRP is expected to have a transformational social impact, supporting India's efforts to achieve the millennium development goals (MDG) on nutrition, gender and poverty.

Banking System of India

Banking System of India

• Bank of Hindustan (1770) was the first bank to be established in India (Alexander and Co.) at Kolkata under European management. Other banks set-up was Bank of Bengal (1806), Bank of Bombay (1840) and the Bank of Madras (1843) - these were called Presidency Banks.
• First bank with limited liability managed by an Indian board was Oudh Commercial Bank, founded in 1881. The first purely Indian bank was the Punjab National Bank (1894).

Reserve Bank of India

• It is the Central Bank of the country.
   
  • It was established on Apr 1, 1935 with a capital of Rs.5 crore. This capital of Rs.5 crore was divided into 5 lakh equity shares of Rs.100 each. In the beginning, the ownership of almost all the share capital was with the non-government share-holders.
  • It was nationalized on Jan 1, 1949 as govt., acquired the private share holdings.
  • Administration: 14 directors in Central Board of Directors besides the Governor, 4 Deputy Governors and one Government official. The Governor is the Chairman of the board and Chief Executive of the Bank.
  • Governors:
  • 1st Governor-Sir Smith (1935-37)
  • 1st Indian Governor : CD Deshmukh (1948-49)

  Reserve Bank of India and its functions
  

  1. Issue of Notes: Regulates issue of bank notes above 1 rupee. It acts as the only source of legal tender money because the one rupee notes issued by Ministry of Finance are also circulated through it.
  The Reserve Bank has adopted the Minimum Reserve System for the note issue. Since 1957, it maintains gold and foreign exchange reserve of Rs.200 crore, of which at least 115 crore should be in gold.
  2. Banker to the Government: Acts as the banker, agent and advisor the Govt., of India. It also manages the public debt for the Government.
  3. Banker's Bank: The Reserve Bank performs the same function for other banks as the other banks ordinarily perform for their customers.
  4. Controller of Credit: The Reserve Bank undertakes the responsibility of controlling credits created by the commercial banks. To achieve this objective, it makes extensive use of quantitative and qualitative techniques to control and regulate the credit effectively in the country.
  5. Custodian of Foreign Reserves: For the purpose of keeping the foreign exchange rates stable, the Reserve Banks buys and sells the foreign currencies and also protects the country's foreign exchange funds.
  6. It formulates and administers the monetary policy.
  7. Acts as the agent of the Government of Indian in respect to India's membership of the IMF and the World Bank.

  • No personal accounts are maintained and operated in RBI.

  Reserve Bank of India Amendment Bill 2005 Approved
  

  The Reserve Bank of India (Amendment) Bill 2005 has been approved. This bill amends the Reserve Bank Act for providing flexibility to the Central Bank in fixing the cash reserve ratio (CRR) and statutory liquidity ratio (SLR). CRR is the cash that banks deposit with RBI and is one of the key instruments used by the Central Bank to inject or suck out liquidity from the market.

  SLR specifies the minimum amount that banks must invest in government securities. This bill is to arm RBI with greater autonomy and authority to deal with subjects (mainly CRR and SLR) under the Act. This bill also allows the Central Bank to regulate derivatives, repo instruments (overnight rates used to regulate liquidity) and securities.

  The amendments also seek to end the ambiguity about the legal validity of derivatives as it was seen to inhibit the growth of the market.

   

Manufacturing Sector in India

Contribution of Manufacturing Sector in India

Though India banks heavily on its services sector for growth, the manufacturing sector too plays a significant role in the Indian economy, contributing nearly 16 per cent to the GDP (in 2006-07).

Encouraged by an increasing presence of multinationals, scaling up of operations by domestic companies and an ever expanding domestic market, the Indian manufacturing sector has been averaging a 9 per cent growth in the last four years (2004-08), with a record 12.3 per cent in 2006-07.

India is fast emerging as a global manufacturing hub. Be it automobiles or computer hardware, consumer durables or engineering products, all are being manufactured by multinationals in India.

Moreover, according to a report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and Yes Bank, India is poised to become the global manufacturing hub for luxury brands over the next five years with manufacturing of luxury items becoming a US$ 500 million industry during this period.

India has all the requisite skills in product, process and capital engineering, thanks to its long manufacturing history and higher education system. India's cheap, skilled manpower is attracting a number of companies, spanning diverse industries, making India a global manufacturing powerhouse.

According to a survey of the manufacturing industry, carried out by FICCI among 25 core sectors, 21 capital goods, 15 intermediate goods, 26 consumers durables, and 13 consumer non-durable sectors, the country's manufacturing sector is expected to grow by 9.5 per cent in 2008-09, up from 8.8 per cent last fiscal.

• LG is looking at making India its global manufacturing hub for its mobile handsets. The company will soon be exporting mobile phones to Europe and the Commonwealth of Independent States (CIS) from India.
• Luxury brands like Louis Vuitton and Frette are looking at India as a manufacturing base for their products.
• Skoda Auto, a part of the international Volkswagen Group based in the Czech Republic, plans to make India its regional manufacturing hub. It will start producing cars in India by 2010 with a manufacturing target of 50,000 units. Besides the domestic market, these will also be exported to neighbouring countries like Nepal, Sri Lanka, Burma and Bangladesh.
• Aircraft manufacturer Airbus is considering India as one of the key centers for design and development of its long haul A 350 plane.
• Cummins is making India its manufacturing hub for newly developed line of generator sets.
• Samsung plans to invest US $ 100 million over a period of four years in its manufacturing plant near Chennai and make it its global hub.
• Ford is making India its manufacturing hub for engine manufacturing.
• Hyundai has made India the manufacturing and export hub for its small Cars. The i10 is being manufactured only in India and exported to the world. India is Hyundai's largest base outside Korea.
• Suzuki too is making India its manufacturing hub for small cars. The A-Star is being manufactured solely in India and exported to Europe.
• Nokia is investing an additional US $ 75 million in its Sriperumbudur plant taking the total investment to US$ 285 million. Nearly 50 per cent of its production at Sriperumbudur is exported to countries across the Middle East and Africa, Asia, Australia and New Zealand.

India Advantage

India's vast domestic market and availability of low-cost workers with advanced technical skills has been instrumental in attracting an ever expanding number of multinationals who are setting up their manufacturing base in the country.

The sheer size of the Indian market has obvious appeal. The rapid growth of the Indian economy is likely to make India the fifth largest consumer market in the world by 2025 from twelfth in 2005, according to a study by McKinsey Global Institute.

Aggregate Indian consumer spending is likewise estimated to more than quadruple to approximately US $ 1.5 trillion by 2025, on the back of a ten-fold increase in middle class population and a three-fold jump in household income.

Along with this, India offers abundant engineering and technical manpower, producing annually about 400,000 graduate engineers.

Moreover, according to a study by ASSOCHAM, India will emerge as the fourth strongest economy among the G-20 countries after China, Russia and South Korea from the global crisis, given its robust forex reserves, high GDP growth rate and various fiscal and monetary measures taken to tackle the downturn.

Petroleum and Natural Gas in India

• First successful oil well was dug in India in 1889 at Digboi, Assam.
• At present a number of regions having oil reserves have been identified and oil is being extracted in these regions.
• For exploration purpose, Oil and Natural Gas Commission (ONGC) was established in 1956 at Dehradun, Uttarakhand.
• The total oil reserves in India have been estimated to be about 13 crore tonnes. Domestic production of oil in India is much less to meet the domestic demand.
India currently produces just over 32 million tonnes of crude oil against its annual demand of 105 million tonnes meeting only 30.5 percent of demand from domestic resources.

Oil Refineries in India

• At present there are 19 refineries operating in the country (17 in Public Sector and 2 in Private Sector). Mangalore Refinery and Petro chemicals Limited (MRPL), which was a joint sector company, became a PSU subsequent on acquisition of its majority shares by ONGC.
• Out of 17 Public Sector Refineries 7 are owned by IOC Ltd., two each by Chennai Petroleum Corporation Ltd. (a subsidiary of IOCL), Hindustan Petroleum Corporation Ltd. and ONGC, one each by BPCL, Kochi Refineries Ltd. (a subsidiary of BPCL), Numaligarh Refinery Ltd. (a subsidiary of BPCL) and Bongaigaon Refineries and Petrochemicals (a subsidiary of IOCL). The private Sector Refineries belong to Reliance Industries Ltd. and Essar Industries.

Marketing and Distribution of Petroleum Products

1. Indian Oil Corporation IOC : Established in 1964 by amalgamating Indian Refineries Ltd. and Indian Oil Company Ltd.
2. Bharat Petroleum Corporation Ltd BPCL : By acquisition of Burmah Shell in 1976.
3. Hindustan Petroleum Corporation Ltd (HPCL): Established in 1974 by acquiring the assets of US Company ESSO Eastern. In 1976, Government acquired Caltex Oil Refining Ltd. and merged it with HPCL.
4. Gas Authority of India Ltd GAIL : Established in 1984, for handling post-exploration activities relating to natural gas. The company was assigned the priority task of setting up the cross country HBJ (Hazira, Bijapur and Jagdishpur) pipeline. Presently GAIL is the largest company in India for marketing of natural gas.

Oil India Ltd

Oil India Limited (OIL), under the administrative set-up of the Ministry of Petroleum and Natural Gas, is a National Oil Company engaged in the exploration, production and transportation of crude oil and natural gas in the country. OIL was incorporated in 1959 as a company with two-third share of Burmah OIL Company and one-third share of Government of India. In 1961, OIL became a joint venture company with equal share of Government of India and Burmah OIL Company. On October 14, 1981, OIL became a Government of India Enterprise, a wholly-owned Public Sector Undertaking.

New Industrial Policy of India

• After independence, the first Industrial Policy was declared on April 6, 1948 by the Union Industry Minister Mr. Shyama Prasad Mukherjee. This policy established a base for Mixed and Controlled Economy in India and clearly divided the industrial sectors in to private and public sectors.
  Later on, 1948 Industrial Policy was replaced by a new Industrial Policy Resolution declared on April 30, 1956 with the basic objective of establishing ‘Socialistic Pattern of Society’ in the country.

• Industrial Policy Resolution of 1956 categorized industries which would be the exclusive responsibility of the state or would progressively come under state control. Earmarking the pre – eminent position of the public sector, it envisaged private sector coexisting with the state and thus attempted to give flexibility to the policy framework.
• Though the Government had declared a number of new industrial policies after 1956, but every new policy accepted the 1956 Industrial Policy Resolution as its base. In June 1991, Narsimha Rao Government took over charge and a wave of reforms and liberalization was observed in the economy. In this new atmosphere of economic reforms, the Government declared broad changes in Industrial Policy on July 24, 1991.
• The Industrial Policy initiatives undertaken by the Government since July 1991 have been designed to build on the past industrial achievements and to accelerate the process of making Indian industry internationally competitive. It recognizes the strength and maturity of the industry and attempts to provide the competitive stimulus for higher growth.
• A significant number of industries had earlier been reserved for public sector. Recently, a decision has been taken to open defence industry sector to private sector with foreign direct investment permissible up to 26 percent.
• Now, the areas reserved for the public sector are Atomic energy, the substances specified in the schedule to the notification of the Government of India in the Department of Atomic Energy dated the 15 March, 1995 and railway transport.

List of Industries Requiring Compulsory Licence :

• With the introduction of New Industrial Policy in 1991, a substantial program of deregulation has been undertaken. Industrial licensing has been abolished for all items except for a short list of five industries related to security, strategic or environmental concerns. These are :

• Distillation and brewing of alcoholic drinks.
• Cigar Cigarettes and other substitutes of prepared tobacco.
• Electronic, Aerospace and all types of defence equipment.
• Industrial Explosive, including match boxes.
• Hazardous chemicals.

Distinction between Cottage, Small and Village Industries

• In a broad sense, cottage, small and village industries are treated similar but they fundamentally differ from each other.
• Cottage industry is run by family members on full or part time basis. It possesses negligible capital investment. There is hand made production and no wage earning person is employed in cottage industry.
• Small industrial units employ wage earning labor and production is done by the use of modern techniques. Capital investment is also there. A few cottage industries which are export – oriented have been included in the category of small sector so that facilities provided to small units may also be given to export – oriented cottage industries.
• The industries established in rural areas having population below 10,000 and having less than 15,000 as fixed capital investment per worker will be termed as village industries. KVIC and state village Industries Board provide economic and technical assistance in establishing and operating these industrial units.

India’s Share in Global Trade Up
India has been able to grab a significant portion of the world trade pie with its booming economy and a billion – plus markets, says a report by the World Trade Organization (WTO).
According to the World Trade Statistics report, India’s share in the global trade, including trade in merchandise and services sector has increased from 1.1 percent in 2004 to 1.5 percent in 2006.

WORLD BANK

The World Bank Group constitutes the following Institutions :

• International Bank for Reconstruction and Development (IBRD)
• International Development Association (IDA)
• International Finance Commission (IFC)
• Multilateral Investment Guarantee Agency (MIGA)
• International Centre for Settlement of Investment Disputes (ICSID)
• The IDA and the IBRD constitute the World Bank. Robert Zoellick is its present head.

1. International Bank for Re – Construction and Development (IBRD)

• IBRD was established in December 1945 with the IMF on the basis of the recommendations of the Bretton Woods Conference. That is why IMF and IBRD are called Bretton Wood Twins. Its head – quarter is at Washington D.C.
• At present, 186 nations are members of the IBRD.
• Objective is of assisting of member nations in the economic re – construction and development of their territories.
• The bank makes its loans on terms that are reasonable but at the same time sufficient to earn a profit in the form of interest and commission fees. The loans are long – term, generally repaid in the currencies loaned over 20 Years, with a five – year grace period.
• May also guarantee loans by private investors.
• The loans may be made to member countries, to their political sub – divisions or to private business enterprises in their territories. If the borrower is not a government guarantee of the member – government concerned is required.

Difference between IBRD and IMF

• The banks lends while funds sells i.e., it makes available the necessary currency of a particular country in case of a shortage.
• The bank assists by advancing long – term credits for development and re – construction, whereas IMF facilitates the balanced growth of international trade by short – term credit.

2. International Development Association (IDA) India

• IDA is an associate institution of IBRD and is known as the Soft Loan Window of World Bank.
• It was established on September 24, 1960.
• It provides loans to its member countries and no interest is charged on these long – term loans (but there is a 0.75 per cent annual service charge on disbursed credits). Most IDA commitments are made to countries with annual per capita incomes less than $785. Credits are extended for terms of 40 Years for least developed countries and 35 Years for other countries.
• As an affiliate of IBRD, its directors, officers and staff are those of the IBRD.

3. International Finance Corporation (IFC)

• Established in 1955, the IFC became a UN specialized agency in 1957.
• It provides loans to private industries of developing nations without any government guarantee and also promotes the additional capital investment in these countries.

International Monetary Fund (IMF)

• Established on December 27, 1945 in Washington D.C. on the recommendations of Bretton Woods Conference. But it started its operations on March 1, 1947.
• At present 185 nations are members of the IMF. Dominique Strauss Kahn is the present MD of IMF.

Objectives of IMF

• To promote international monetary co – operation.
• To ensure balanced international trade.
• To ensure exchange rate stability.
• To eliminate or to minimize exchange restrictions by promoting the system of multilateral payments.
• To grant economic assistance to member countries for eliminating the adverse imbalances in balance of payments.
• Main function is to stabilize exchange.
• Offers facilities to the member nations for the expansion of international trade, the control of international exchange and to avoid competitive exchange depreciation.
• The capital resources of the IMF comprise Special Drawing Rights (SDRs) and currencies that members pay under quotas calculated for them when they join the IMF.
• Every IMF member is required to subscribe to the IMF an amount equal to its quota. The quota of a member is largely determined by its economic conditions relative to other members. An amount, not exceeding 25 per cent of the quota, is to be paid in reserve assets, the balance in member’s own currency.
• The quota determines both the amount of foreign exchange a member may borrow from the Fund and its voting power on IMF policy matters. The members with the largest quotas are USA, Japan and Germany in first, second and third spots. India is placed at the thirteenth spot (1961 per cent share in total quota).
• The IMF makes its resources available to its members to meet their short – term or medium – term payment difficulties, subject to established limits and conditions with respect to the amount of its drawing rights.
• Member – countries are given borrowing or drawing rights with the fund which they can use, together with their own nationally held international reserves, to finance the balance of payments deficits.

Multilateral Economic Relations

Multilateral Economic Relations

Agendas of the multilateral fora, during the period, were generally under the shadow of international financial turmoil, high food prices and volatile energy prices. India continued its active engagement with ASEM (Asia-Europe Meeting), BIMSTEC (Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation), BRIC (Brazil, Russia, India and China-May 2008), G-8-05, G-20, IBSA (India, Brazil and South Africa), IOR-ARC (Indian Ocean Rim Association for Regional Cooperation), ACD (Asia Cooperation Dialogue) etc, where it presented its perspective on financial crisis and other critical issues such as food, security, energy security, climate changes and sustainable development. The first IOR-ARC Film Festival was held in New Delhi in February-March 2008 as part of Indian initiatives announced at the 7^th IORARC Council of Ministers (COM) meeting held in Tehran in March 2007.
Secretary (ER) led the Indian delegation to the preparatory meeting of BRIC Deputy Foreign Ministers meeting in Russia in May 2008.
India hosted the 2^nd BIMSTEC (13/11/2008), and the 3^rd IBSA Summit in New Delhi during the period. Prime Minister Dr. Manmohan Singh led the Indian delegations to the ASEM Summit in Beijing, the G-20 Summit in Washington (15/11/2008) and informal interaction of Heads of State/Govt. of BRIC countries. Conclusion of the negotiations on the agreement on "trade in Goods" under the Comprehensive Economic Cooperation Agreement (CECA) between India and ASEAN was considered yet another milestone in India's "Look East" policy.

Indian Technical and Economic Cooperation (ITEC) Programme & Development Partnership (DP)

The Indian Technical and Economic Cooperation (ITEC) programme is the flagship programme of India's technical and economic cooperation efforts. In keeping with India's growing economic strength and international role, efforts were made to enhance and expand India's technical cooperation and development assistance to partner countries with emphasis on capacity building, transfer of technology and sharing of experiences. This involved 158 developing countries including 139 countries under ITEC in Asia, Africa, Central Asia, East Europe, Latin America and 19 countries under SCAAP (Special Commonwealth African Assistance Programme) in Africa. Around 5000 professionals, in Government and other sectors from 158 developing countries attended more than 200 courses conducted by institutions in India, both Government and in the private sector, under the civilian and defence training programmes. Special courses were organized for Africa, IOR-ARC, CIS, Afghanistan, Lao PDR, Yemen in various fields like management, WTO issues, labour, audit etc. Indian experts were deputed to advise and assist in diverse areas such as information technology, auditing, legal expertise, pharmacology, statistics and demography, public administration, textile and agriculture. Many projects were undertaken during the year in the field of information technology, small and medium enterprises, civil construction and vocational training in different parts of the world. Humanitarian assistance was also extended to countries affected by earthquake, cyclones, floods, etc.

Investment and Technology Promotion (ITP)

Economic Diplomacy continued to occupy an important place in India's foreign policy, acquiring a sharper focus in an increasingly interdependent and interconnected world. The Ministry, through the ITP Division, was actively engaged in the promotion and facilitation of foreign investment and trade. It participated in policy meetings of Foreign Investment Promotion Board and Department of Industrial Policy and Promotion, as well as other policy meetings concerning reforms and liberalization of the economy and simplification of investment procedures. ITP Division supplemented the overall efforts of the Government to boost FDI inflow into India, by reaching out to the investor community and organizing and funding promotional events in partnership with the private sector, apex business chambers and our Missions abroad.
Development aid, including grants and Lines of Credit (LOC), to developing countries in Latin America, Africa and Asia formed an important component of our Economic Diplomacy. While helping Indian companies get project contracts and orders for supply of goods in these developing countries, the LOCs have helped in infrastructure development in these regions thereby creating considerable goodwill for the country. During 2008-09. 17 LOCs worth US$ 744 million to 16 developing countries were approved.
Given the importance of energy security for India's development, a separate Energy Security Division has been established in March 2009 to coordinate with Energy Ministries and Indian Missions abroad. The Division worked closely with the Ministry of Petroleum and Natural Gas in organizing the India-CIS Roundtable on Hydrocarbons in November 2008 and Petrotech 2009, hosted/co-hosted seminars on India's energy options, commissioned studies on energy surplus countries and regions, was actively involved in energy security related seminars/conferences organised by other Ministries and Chamber of Commerce and Industry and extended assistance to Indian companies dealing with overseas energy collaborations and opportunities. It also took the initiative to set up a Working Group on energy with senior representatives of oil infrastructure PSUs.

Policy Planning and Research

The PP&R Division maintained close interaction with institutions and individuals specializing in policy research and analysis and extended financial assistance to various academic institutions/think-tanks located in different parts of the country for holding conferences. seminars, preparation of research papers, exchange of scholars on issues related to India's external relations and security with a view to derive invaluable inputs for the planning, formulation and implementation of our foreign policy.
Policy Planning and Research Division continued issuing Monthly Summary for the Cabinet. The Division also continued to edit and publish the Annual Report of the Ministry. The Report serves as a compendium of India's interaction with the rest of the world in the political, economic, and cultural fields, including the views of the Government on various facets of international relations.

Consular, Passport and Visa Services

During the year 3 new Passport Offices were opened at Amritsar, Dehradun and Coimbatore. All 37 Passport Offices have been computerized and issue machine printed and machine readable passports.
A total of 53.15 lakh passports were issued in 2008-09, an increase of approximately 6.5% % over the corresponding figure in 2007-08. The total revenue generated from all Passport Offices also increased to Rs.606 crore, an increase of approximately 5.5% over 2007-08.
The Ministry has been taking a number of measures to make the processing and issue of passports simpler and quicker for the comfort and convenience of the public. District Passport Cells (DPCs) have been opened at the district level to increase the efficiency of the receiving and verification process. Online submission of passport applications has been introduced in all Passport Offices. Also facilitation Counters and Help Desks have also been set up to assist applicants and also to attend to grievances/complaints expeditiously.
The Passport Seva Project launched by the Government of India is expected to result in the issue of new passports within three days after police verification and of all other passport services in one day. The Pilot Project is expected to begin at Chandigarh and Bengaluru by July-August 2009. It will be implemented fully to cover the entire country in 2010.
The Ministry has successfully implemented the project for centralized printing of Machine Readable Passports (MRPs) at CPV Division, New Delhi in respect of 140 Indian Missions/Posts abroad.
All diplomatic and official passports are now being issued as e-passports as part of the pilot project. Based on the experience gained from the pilot project, it is proposed to start issuance of e-passports in the ordinary, category by end 2009. During 2008, visa-waiver agreements were signed with Egypt, EI Salvador, Honduras, Nicaragua, South Africa and Turkey.
Extradition treaties were signed with Brazil, Australia, Iran and Egypt. The apostille attestation on documents was also started at branch secretariat offices of the Ministry at Chennai, Hyderabad, Kolkata and Guwahati with effect from 15 June 2008. During the year, 1,70,000 personal and educational documents and 1,71,000 commercial documents were attested by the Ministry. In addition to this, 80,000 documents were apostilled for use abroad in the member countries.

Administration

There are currently 171 resident Indian Missions and Posts abroad. During the year, a resident Indian Mission was opened in Iceland, while three new Missions are to be opened in the near future in Niger, Mali, and Guatemala. In order to address the Ministry's acute constraints of personnel in the face of India's growing diplomatic responsibilities, a 10-year plan has been developed to induct 514 additional positions in the Ministry in a phased manner.

Implementation of Official Language Policy and Propagation of Hindi Abroad

World Hindi Day was celebrated on 10 January 2008. Hindi Essay Competition was organized for foreign students studying Hindi at Kendriya Hindi Sansthan, Delhi University and Jawaharlal Nehru University.

External Publicity

The main activities of the Division were focused on dissemination of information on India's relations with its immediate neighbours as also with major countries of the world. The Division launched the first phase of the Media Monitoring Project for all users at Headquarters. This is aimed at streamlining the monitoring of media sources for the Ministry. The Project monitors Print, Web and Internet based media in a systematic manner and provides 5 daily products to users on a real time basis.
The Division used the opportunities provided by visits of the President of Iran, Mr. Ahamadnejad; President of Syria, Dr. Bashar Al-Assad; President of Egypt, Mr. Hosny Mubarak; Prime Minister of Nepal, Mr. Pushpa Karnal Dahal "Prachanda"; Prime Minister of Bhutan, Mr. Lyonchen Jigmi Y. Thinley and the President of the Russian Federation, Mr. Anatoly Medvedev to articulate India's position on important bilateral, regional and international issues. The Division also arranged joint press interaction with the visiting dignitaries during these visits. Special briefings by the official spokesperson and other senior officials of the Ministry were also held regularly on important international issues of concern to India.
Media delegations on President's visit to Brazil, Medico, Chile, Vietnam and Indonesia; Prime Minister's visits to Bhutan, Japan (G-8 summit), Sri Lanka (15^th SAARC summit), USA and France (UNGA and Civil Nuclear Cooperation Agreement), China, Oman and Qatar (bilateral); Vice President's visits to Kazakhstan and Turkmenistan; and the External Affairs, Minister's visits to Saudi Arabia, Pakistan, Russia, Australia, Egypt and USA were facilitated by XP Division.

Public Diplomacy

PD Division, in order to fulfill its mandate of outreach activities inside and outside India, and audio-visual and print publicity to effectively project India's Foreign Policy to the wider public, works in collaboration with researchers, think tanks, civil society, media and industry, within India and abroad.
Last year, the Division organized a number of seminars and conferences to effectively project India's foreign policy, and to support Track Two interaction with other countries. A large number of Indian and foreign academics, researchers, senior officials, representatives of industry and the media were involved in the events organized by the Division. Among the major activities of the Division were conferences on our relations with Nepal. Afghanistan, Kazakhstan, Pakistan and Ethiopia. The Division also organized conferences on varied themes such as the fallout of the cold war, development of North-East, terrorism and climate change. With a view to familiarize policy and opinion makers from other countries with modern India and our concerns and interests, the Division hosted visits of delegations from the UK, Mauritius, South Africa. Tajikistan and Taiwan, as well as a delegation of PIO journalists from 16 countries.
The Division commissioned documentaries projecting our interests as also Indian culture and heritage. Some of the documentaries commissioned by the Division were screened at international festivals and awarded special prizes/special mention. The Division's flagship magazine 'India Perspectives' covering a variety of subjects completed twenty years; an anniversary issue and two Special Issues on Indian Publishing and Indian Cinema were brought out.

Foreign Service Institute

The Government of India established the Foreign Service Institute (FSI) in 1986, primarily to cater to the professional training needs of the Indian Foreign Service of the Ministry of External Affairs. The new building of the Foreign Service Institute was formally inaugurated on 14 November 2007 by Hon'ble Minister of External Affairs, Shri Pranab Mukherjee.
FSI has diversified its activities to include courses of interest to staff and officers at all levels of the Ministry of External Affairs, other Civil Services and Foreign Diplomats and Correspondents. FSI organizes and conducts training programmes for MEA Staff, IFS Probationers, Directors and for Joint Secretaries (since 2009), as well as courses for other Civil Services, Foreign Diplomats and Diplomatic Correspondents, The first Mandatory mid-career training programme for Joint Secretary-level IFS officers of the 1979-80 Batches was organised by FSI from 13 April to 1 May, 2009 in collaboration with the Indian School of Business, Hyderabad.
The Training Programmes for the IFS probationers of 2007 and 2008 batches was conducted by FSI between 22007-2009, which included an attachment with IIM, Bangaluru, district training and other field visits. On successful completion of their Training Programme, the Bimal Sanyal Award Ceremony was organized for the probationers of the 2007 batch. IFS probationers of the 2008 batch completed their Mission Orientation Programme in 2009, with 10 probationers visiting Sri Lanka, led by Dean (FSI), and 10 IFS probationers visiting Bhutan.
The Professional Course for Foreign Diplomats (PCFD), which is FSI's main programme for foreign diplomats, was launched in 1992. Around three PCFDs are conducted every year (duration - 4 - 6 weeks). The 47^th PCFD was held in February-March 2009 and more than 1500 foreign diplomats from over 100 countries have been trained at FSI. An MoU providing institutional framework of cooperation between FSI and its counterpart institute in Ukraine was signed. Delegations from Bangladesh, Romania and China visited FSI. The Second Meeting of Deans of Diplomatic Institutes of IBSA (India-Brazil-South Africa) countries was held at FSI in September, 2008. A Seminar on the subject of "India-Brazil-South Africa Cooperation: Challenges and Opportunities" was also held on this occasion.
In response to specific requests from friendly countries, the FSI has also conducted special courses for diplomats from Afghanistan , Canada, Iraq, Laos, Maldives (a Special Course for Diplomats, from Maldives commenced on 14th July, 2009 and will conclude on 12th August, 2009), Norway, Palestine, Sudan and Vietnam. Training programmes for the ASEAN countries have become an annual feature since 2006. In addition to active contacts with specialized institutions and academic bodies in India, FSI has established institutional linkages with 34 counterpart institutions in other countries. Over the last year FSI organized several special lectures by eminent Indian and foreign experts and dignitaries. The Foreign Defence officers attending the 48th Course at National Defence College visited FSI and a lecture was arranged for them.
The Abid Hussain Committee, composed of distinguished diplomats and chaired by Shri Abid Hussain, finalized a report in 2009 making useful recommendations on the further upgradation of the Foreign Service Institute.
The Foreign Service Institute has career foreign service officers at its core, headed by the Dean, who is of the rank of Secretary in the Ministry of External Affairs. FSI has an extensive guest faculty drawn from specialists in the academic and research community, think tanks, other ministries-departments of the Government of India, the media, public life, industry and trade, and retired civil servants.

Indian Council of Cultural Relations

The primary objective of the Indian Council of Cultural Relations [ICCR] is to establish, revive and strengthen cultural relations and mutual understanding between India and other countries. The Council's flagship project, the Rabindranath Tagore Centre (RTC) was inaugurated on 1 June 2008 by Shri Pranab Mukherjee, former Minister for External Affairs.
The Council organized large-scale cultural events with foreign and Indian troupes, on the sidelines of major Summits, such as the India-Africa Summit, IBSA Summit. Arab League Meeting etc. It also coordinated the South Asia Cultural Festival and held cultural programmes for VVIP visitors. A number of festivals were held, such as Sufi Music Festival in Srinagar, Malhaar Festival and Festival of Indian Classical Dance by foreign artists residing in India. An important highlight of 2008 was the "Year of Russia in India" which included a series of high-profile cultural performances. In addition, 50 cultural troupes from different countries were hosted by the Council, with performances held in Delhi and other cities. The Council also provided financial support to NGOs and cultural institutions to jointly organize cultural activities. The Council hosted 19 eminent visitors from different countries under the Distinguished Visitors Programme.
The twenty-one Indian Cultural Centres abroad continued to vigorously promote India's 'Soft Power'. The expanded Cultural Wing of the Indian Embassy in Beijing became functional in the year and preparations were made to open new Cultural Centres in Bangkok, Kuala Lumpur, Tokyo and Dhaka.
The Council organized a series of cultural festivals abroad in Syria, Egypt, Netherlands, Argentina and Hungary, which included diverse and varied cultural programmes. The 'Year of India in Russia' was inaugurated by President, ICCR on 31 March 2009 in Moscow. The Council sponsored 93 cultural delegations which visited 73 countries and also sponsored a number of outstanding artistes abroad and provided travel grants. The Council continued to manage 21 long-term and 12 short term Chairs in Indian Studies in various foreign Universities.
An important focus area of ICCR has been facilitating admission of foreign students in Indian Universities. In 2008-09, ICCR administered scholarships for approximately, 3200 foreign students under various schemes. This included 1778 new scholarships, including 500 scholarships for Afghan students.
The Council opened two new Regional Offices at Cuttack and Shillong during the year to enhance its reach to North-east and eastern India. The Council also organized major exhibitions showcasing Indian and foreign art and sculpture; disseminated 6 journals in 5 different languages and also assisted various organizations/institutes in organizing 24 International Conferences in India.
President of India presented the Jawaharlal Nehru Award for International Understanding for 1995 to President of the Arab Republic of Egypt, H.E. Mr. Mohamed Hosny Mubarak on 18^th November 2008. The Maulana Abul Kalam Memorial Lecture 2009 was delivered by Mr. Martin Luther King III on the subject "A New Nonviolent Revolution".

Indian Council of World Affairs

Indian Council of World Affairs (ICWA) continued in 2008 to develop as a think-tank and an important platform for discussions of foreign affairs in India ICWA signed 6 MoUs for bilateral cooperation, viz, with Centre for Strategic Studies (CSS) of Ministry of Foreign Affairs of Afghanistan, New Zealand Institute of International Affairs (NIIA) Wellington, Australian Institute of International Affairs (AIIA) Melbourne, The Emirates Centre for Strategic Studies and Research (ECSSR) Abu Dhabi, Asia Centre of Bengaluru & Centre for Research in Rural and Industrial Development (CRRID) Chandigarh. Council sponsored a Joint Study between. India-Central Asia Foundation (ICAF), ICWA and Department of International Relations, Al-Farabi Kazakh National University, Almaty, Kazakhstan on "Contemporary Process of Political Modernizing; Experience of Central Asian States and India". The Council organized 7 lectures, 4 seminars/conferences, 6 bilateral dialogues & 14 background briefings, book release/panel discussions.

Achievements of the Ministry of Overseas Indian Affairs

Overseas Indian Citizenship Scheme

The Government launched Overseas Citizenship of India Scheme (OCI Scheme) w.e.f. Dec. 2, 2005 to facilitate life long visa-free travel to India and certain economic education and cultural benefits to Persons of Indian Origin (PIOs). Around 4.56 lakh OCI documents until 31st July have been issued by the Government.

Overseas Workers Resource Centre (OWRC)

In order to educate the intending emigrants about the risks involved in irregular migration and the precautions to be taken while seeking overseas employment and to provide need based information to overseas emigrants an Overseas Workers Resource centre (OWRC) has been established. The Centre operates a toll free 24x7 helpline for the purpose.

Council for Promotion of Overseas Employment (CPOE)

A council for Promotion of Overseas Employment (CPOE) has been established which will serve as a strategic think-tank to conduct market research, identify employment opportunities in the international labour market, disseminate market information to stakeholders, do skill profiling to identify skill gaps and plan appropriate interventions for addressing such gaps, devise strategies to respond to the market dynamics and enable intending emigrants to reap the demographic dividends of globalisation.

Overseas Indian Facilitation Centre (OIFC)

An Overseas Indian Facilitation Centre - a Not for Profit Trust - serves as a single window to promote overseas Indian Investment in India to provide a variety of business advisory services to overseas Indians and Knowledge Networking.

Establishing a PIO University

With a view to providing benefits to the children of Overseas Indians by offering courses of international standards the Government has decided to establish PIO/NRI University at Bengaluru by the Manipal Academy of Higher Education Trust, Manipal. The University will have 50% seats earmarked for PIOs/NRIs and the remaining 50% for resident Indian students.

Setting Up of Overseas Indian Centres

The Government has approved setting up of three Overseas Indian Centres at Dubai, Kuala-Lumpur and Washington to provide medical, legal and financial counseling to the Overseas India workers. Counsellor (Community Affairs) has already been approved at Abu Dhabi and Washington.

India Development Foundation of Overseas Indians

India Development Foundation of Overseas Indians, is a not-for-profit trust registered to provide a credible window for Overseas Indian Philanthropy in India's Social development. The objective of the foundation is to facilitate philanthropic activities by Overseas Indians, including through innovative projects and instruments such as micro credit for rural entrepreneurs, self-help groups for economic empowerment of women, best practice interventions in primary education and technology interventions in rural delivery.

Global-Indian Network of Knowledge

Global Indian Network of Knowledge (Global INK), an electronic platform will connect people of Indian origin from a variety of disciplines including scientists working abroad, recognized as leaders in their respective fields, not just in their country of residence but globally as well, with knowledge users at the national and sub-national levels in India. The network will serve as a strategic 'virtual think-tank'. The outcome targeted will be the germination of ideas on development, identification of the key elements in addressing the challenges to development and articulating and mapping out solutions through innovation and technological interventions.

INDIA-MALAYSIA FTA EFFECTIVE FROM JULY 1, 2011

The free trade agreement between India and Malaysia will come into force from July 1, 2011, giving Indian professionals like accountants, engineers and doctors access to the key South-East Asian nation. In addition, exports of items of considerable interest to India, like basmati rice, mangoes, eggs, trucks, motorcycles and cotton garments, will attract lower or no duty in Malaysia with the implementation of the Comprehensive Economic Cooperation Agreement (CECA), according to a statement of the Commerce Ministry issued in New Delhi on June 30, 2011. It said sensitive sectors like agriculture, fisheries, textiles, chemicals and automobiles have been given protection from imports without duty or with significant cuts. The CCEA will facilitate temporary movement of business people, including contractual service suppliers and independent professionals in accounting, architecture, engineering services, medical and dental, nursing and pharmacy, computer services and management consulting. The agreement will also help boost cross-border investment between the two countries, which achieved bilateral trade of USD 10 billion in the 2010-11 fiscal. With the help of the opening of trade in goods and services, bilateral trade between India and Malaysia is expected to reach USD 15 billion by 2015, it said. "The CECA creates an attractive operating environment for the business communities of both countries," the statement said.
An agreement for freeing trade in goods has already been implemented with the 10-nation Association of Southeast Asian Nations (ASEAN). The pact with Malaysia will lead to tariff liberalisation beyond the India-ASEAN FTA commitments, which were implemented by both countries on 1st January 2010. India has
also freed trade with South Korea, while a similar agreement with Japan will come into effect from August.
ASEAN Free Trade Area (AFTA) is a trade bloc agreement by the Association of Southeast Asian Nations supporting local manufacturing in all ASEAN countries. The AFTA agreement was signed on 28 January 1992 in Singapore.

When the AFTA agreement was originally signed, ASEAN had six members, namely, Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. Vietnam joined in 1995, Laos and Myanmar in 1997 and
Cambodia in 1999. AFTA now comprises ten countries of ASEAN. All the four latecomers were required to sign the AFTA agreement in order to join ASEAN, but were given longer time frames in which to meet
AFTA's tariff reduction obligations.

The primary goals of AFTA seek to:

 Increase ASEAN's competitive edge as a production base in the world market through the elimination, within ASEAN, of tariffs and non-tariff barriers; and
 Attract more foreign direct investment to ASEAN. The primary mechanism for achieving the goals given
above is the Common Effective Preferential Tariff (CEPT) scheme, which established a schedule for phased initiated in 1992 with the self-described goal to increase the "region's competitive advantage as a
production base geared for the world market".
Countries that agree to eliminate tariffs among themselves:
 Brunei
 Indonesia
 Malaysia
 Philippines
 Singapore
 Thailand
 Myanmar
 Cambodia
 Laos
 Vietnam
Regular Observers
 Papua New Guinea
 Timor-Leste
The most recent ASEANmeeting was observed also by :
 China
 Japan
 South Korea
 India
 Australia
 New Zealand

ASEAN Plus Three
ASEAN Plus Three (APT) is a forum that functions as a coordinator of cooperation between theAssociation of Southeast Asian Nations and the three East Asian nations of China, Japan, and South Korea. The first leaders' meeting was held in 1997 and the group's significance and importance was strengthened by the Asian Financial Crisis. The grouping was institutionalised by 1999.
ASEAN Plus Three, in establishing the Chiang Mai Initiative, has been credited as forming the basis for financial stability in Asia, the lack of such stability being a contributing factor to the Asian Financial Crisis. The
Asian Currency Unit (ACU) is a proposed weighted index of currencies for ASEAN+3.
The ACU was inspired by the now defunct European Currency Unit, replaced by the Euro. The Asian Currency Unit's purpose is to help stabilize the region's financial markets. The ACU
as it is proposed is a currency basket and not a real currency, i.e., a weighted index of East Asian currencies
that will function as a benchmark for regional currency movements. The Asian Development Bank is currently reviewing different options concerning the technical aspects related to the ACU calculation, including the nature of the basket, the choice of fixed weights vs. fixed units, the selection of currencies to be included in the basket, the choice of weights, the criteria for their periodical revision, and other aspects as well. The Asian Development Bank was to announce the details of the ACU in March 2006 or later. However external pressures delayed this announcement although the concept was still being studied in detail. A panel discussion in February 2007 cited technical and political obstacles as having prevented the project from advancing. The unit, limited to ASEAN+3, was said to be still moving forward by mid- July 2007.

India Proposed/Suspended Current Bilateral/ Multilateral FTA's
 SAFTA (Bangladesh, Bhutan, the Maldives, Nepal, Pakistan, Sri Lanka and Afghanistan)
 ASEAN (ASEAN-India Free Trade Area)
 European Union (final stage)
 Sri Lanka
 Singapore
 Thailand (separate from FTA agreement with ASEAN)
 Malaysia (separate from FTA agreement with ASEAN)
 Japan
 European Free Trade Association (EFTA) (negotiation ongoing)
 Canada (negotiation ongoing)
 South Korea (India- Korea CEPA)
 Iran has bilateral agreements with the following countries and blocs:
 Venezuela
 Japan has bilateral agreements with the following countries and blocs:
 ASEAN (signed in Hanoi as of 1 April 2008)
 Chile (signed in 2006)
 Brunei (signed in 2007)
 Indonesia
 Malaysia (Japan- Malaysia Economic Partnership Agreement signed in 2005)
 Mexico (took effect in 2005)
 Philippines (signed in 2006)
 Thailand (Japan- Thailand Economic Partnership Agreement signed in 2007)
 Singapore (signed in 2002)
 Vietnam (signed in 2008)
 Switzerland (signed in 2009)
 Kazakhstan (Entry into force: 11 November 1995)
 Moldova (Entry into force: 21 November 1996)
 Russian Federation (Entry into force: 24 April 1993)
 Ukraine (Entry into force: 19 January 1998)
 Uzbekistan (Entry into force: 20 March 1998)
 Lebanon has bilateral agreements with the following countries and blocs:
 Gulf Cooperation Council (GCC)

Bilateral free trade agreements:
This is list of free trade agreements between two sides, where each side could be a country (or othercustoms territory), a trade bloc or an informal group of countries. Every customs union, trade common market, economic union, customs and monetary union andeconomic and monetary union has also a free trade area.
 ASEAN - Australia - New Zealand Free Trade Area (AANZFTA) is a free trade area between ASEAN and ANZCERTA, in effect as of 1 January 2010
 ASEAN-China Free Trade Area (ACFTA), in effect as of 1 January 2010
 ASEAN-India Free Trade Area (AIFTA), in effect as of 1 January 2010
 ASEAN-Japan Comprehensive Economic Partnership (AJCEP), in effect as of 1 December 2008
 ASEAN-Korea Free Trade Area (AKFTA), in effect as of 1 January 2010