Labour Bureau Survey Indicates Upward Trend in Employment Since July 2009 Maintained

On the employment front, the country has been able to withstand the adverse impact of the global crisis and generate employment since July, 2009. The Labour Bureau conducted twelve quarterly quick employment surveys to assess the impact of the economic slowdown on employment in India. These surveys indicate that the upward trend in employment since July 2009 has been maintained. This is stated in Economic Survey 2011-12, presented by the Finance Minister, Sh. Pranab Mukherjee, in the Lok Sabha today. The results for selected sectors i.e. textiles including apparel, leather, metals, automobiles, gems and jewellery, transport information technology (IT)/business process outsourcing (BPO) and handloom/powerloom are as follows:

1. Overall employment in September, 2011 over September, 2010 has increased by 9.11 lakh, with the highest increase recorded in IT/BPO (7.96 lakh) sector followed by 1.07 lakh in Metals, 0.71 lakh in Automobiles, 0.08 lakh in Gems & jewellery and 0.07 lakh in Leather industries during the period.

2. An upward trend in employment has been continuously observed since July 2009. During the quarter July to September 2011, employment has increased in respect of all sectors except Leather and Transport where there was a marginal fall. The overall employment has increased by 3.15 lakh during the quarter. At the sectoral level, the maximum increase of 2.04 lakh in employment during the period September, 2011 over June, 2011 was in IT/BPO sector, followed by increase of 0.42 lakh in Textiles including Apparels, 0.38 lakh in Metals, 0.22 lakh in Automobiles, 0.09 lakh in Handloom/Powerloom, 0.07 lakh in Gems & Jewellery.

3. In the export oriented units, the employment at the overall level has increased by 1.96 lakh whereas in the non-exporting units, it has increased by 1.16 lakh during the period September, 2011 over June, 2011.

4. Overall estimated employment in all selected sectors has experienced a net addition of 23.58 lakh during the period October, 2008 (first survey) to September, 2011 (twelfth survey).

The Economic Survey observes that employment growth in the organized sector, public and private combined, has increased by 1.9 % in 2010, which is lower than the annual growth for the previous year. The annual growth rate for the private sector was much higher than that for the public sector. However, in respect of both sectors, annual increase in employment had slowed down in 2010 vis-à-vis 2009. The share of women in organized-sector employment was 20.4 per cent in 2010 March end and has remained nearly constant in recent years.

Lower Carbon Sustainable Growth to be Central Element of 12th Plan

The Economic Survey 2011-12, presented in Parliament today, suggests to make lower carbon sustainable growth a central element of our Twelfth Five Year Plan commencing in April 2012. The Survey points out that India’s per capita CO2 emissions are much lower (1.52 CO2 tons) than those of the developed countries even if historical emissions are excluded. Nevertheless, India has already taken a number of actions on voluntary basis with own resources in pursuance of a sustainable development strategy. Like adoption of the National Action Plan on Climate Change (NAPCC) in 2008 which has both mitigation and adaptation measures an announcement of a domestic goal of reducing the emission intensity of its GDP by 20-25 per cent of the 2005 level by 2020 is a noteworthy measure.

A Chapter on Sustainable Development and Climate Change has been first time introduced in the annual Economic Survey. This new chapter reflects the growing challenges of sustainable development and climate change. Pressures on land, air, water, forests and loss of plant and animal habitant are growing. The Survey cautions that a warming planet is already causing adverse effects, such as more frequent extreme weather events. It comments that the science and evidence of climate change are compelling. Citing the Durban meeting in December 2011 which has set some directions for appropriate responses to climate change, the Survey hopes that the Earth Summit in Rio in June 2012 will take stock of sustainable development priorities globally. Taking an optimist view, the Survey hopes that the Twelfth Five Year Plan will be setting out India’s priorities for a sustainable and inclusive, lower carbon development path. It says, as a responsible and enlightened member of the international community, India showed flexibility along with other developing countries toward the success of the Durban Conference. Developed countries are expected to reciprocate the flexibility shown by G-77 countries and India at Durban.

Commending further India’s sensitivity to global concerns, the Survey says that India has done well on all such counts of stewardship over the past decades. It has followed a conscious path in response to the key environmental issues. Sustainable development in terms of environmental concerns has been a recurring theme in Indian policy and planning. Economic reforms since 1980s have accelerated growth and incomes. Social well-being has improved broadly, as measured by gains in life-expectancy. India has stepped up protection of its natural environment, such as its forests.

Outlining the challenges ahead, the Survey comments that the 2009 State of the Environment Report by the Ministry of Environment and Forests (MoEF) clubs the issues under five key main challenges faced by India, which are climate change, food security, water security, energy security and managing urbanization. Broad-based economic and social development is ultimately the answer for greater environmental sustainability. Economic pricing of energy and other resources will be a key to switching to more sustainable development path. New technologies will be crucial, mostly in the private sector. But social justice will also require stepped-up public spending on energy access and other elements, the Survey suggests.

Economic Survey Forecasts 2.5 Percent Growth for AGRO Sector

The higher levels of agricultural output and ample food stocks as on date and the levels of reservoir storage this year augur well for bringing down headline inflation in the next fiscal. It has been observed by the Economic Survey 2011-12 presented today by the Union Finance Minister Shri Pranab Mukherjee in the Parliament. However, the Survey expresses concern over the growth rate in agriculture sector which has fallen short of planned target inspite of record food grain production. During the current Five Year Plan it is estimated at 3.28 percent against the target of 4 percent. According to Survey, agriculture and allied sectors are estimated to achieve a growth rate of 2.5 percent during 2011-12. Agriculture including allied activities accounted for 13.9 percent of Gross Domestic Products (GDP) in 2011-12.

The successive high production levels boosted the stock position of foodgrains in the central pool and as on February 1, 2012 it was 55.2 million tonnes comprising 31.8 million tonnes of rice and 23.4 million tonnes of wheat. This is adequate for meeting the requirements under the targeted public distribution system (TPSD) and welfare schemes during the current financial year. The Survey says that as per the Second Advance Estimates, production of foodgrains during 2011-12 has been estimated at 250.42 million tonnes.

Expressing concern over decline in the area under food grains cultivation the Survey calls for speedy improvement in yield through adequate investment in research and development. Pooling of many land holdings may yield better results for which land laws for leasing with sufficient safeguards in place should be considered. Addressing infrastructure requirements in the agriculture sector, especially storage, communication, roads and market should be priority.

According to the Survey, the outlook for the next fiscal remains bright but given the rapidly rising levels of demand for food there is a need to consider some policy options to ensure brighter medium term outlook. These options could, inter alia, be regular imports of agricultural commodities in relatively smaller quantities with an upper ceiling on quantity should to be decided annually, relatively well in advance, after assessing the likely domestic situation in terms of production and consumption requirements. According to Survey, “improving mandi governance, promoting inter-state trade by eliminating multiple levies, taking perishables out of the ambit of the APMC Act, developing a ‘farm-to-fork’ retail supply system, and addressing the investment gaps related to post harvest infrastructure for agricultural produce including through FDI in multi-brand retail” may help in improving agriculture commodities management in the country.

Education: Reform Process Continues in 2011-12

In the primary education sector, the reforms initiated in 2010-11, continued during the year 2011-12. This is stated in Economic Survey 2011-12, presented by the Finance Minister, Sh. Pranab Mukherjee, in the Lok Sabha today. The expenditure on education as a proportion of GDP by General government has increased from 2.72 per cent in 2006-07 to 3.11 per cent in 2011-12 (BE).

As per the Survey, the Sarva Shiksha Abhiyan (SSA) norms have been revised to correspond with the provisions of the RTE Act including norms for sanctioning additional teacher posts, classrooms, teaching-learning equipment to enable states to move to an eight-year elementary education cycle, enhancement of academic support for better school supervision, and expansion of Kasturba Gandhi Balika Vidhyalaya (KGBVs). The National Council for Teacher Education (NCTE) has been notified as the academic authority for teacher qualifications. Also, a country wide campaign has been launched for raising public awareness about Right to Education (RTE) and to ensure all schools become RTE compliant. The number of out-of-school children has come down from 134.6 lakh in 2005 to 81.5 lakh in 2009 as per an independent study conducted by the SRI-IMRB.

The Survey states that as part of the National Mission in Education through ICT, content generation and connectivity along with provision for access devices for institutions and learners are the major components of the Mission. A major development during the year has been the launch of Aakash, the low cost access-cum-computing device that was launched on 5 October, 2011. Besides so far nearly 400 universities have been provided 1 Gbps connectivity or have been configured under the scheme and more than 14,000 colleges have also been provided VPN connectivity. Creation of e-content for 996 courses in Phase II in engineering, sciences, technology, humanities, and management has been undertaken by IIT Madras. The Consortium for Educational Communication (CEC) has been tasked with creation of e-content for 87 undergraduate subjects. More than 2000 e-journals and 55,000e-books from 297 publishers have been made available online under this programme.

The Survey points out some institutions like the IITs have, in order to promote innovation, created technology business incubation facilities in their campuses. These are providing to be focal points amongst students and faculty for working towards taking some of their applied research to the market through the creation of business models for the same. These efforts need to be expanded greatly (a) by scaling up the previously successful centres of such innovations, and (b) by creating many such centres across the higher technical institutions in the country.

Summary of Economic Survey

Indian economy is estimated to grow by 6.9% in 2011-12 mainly due to weakening industrial growth. This indicates a slowdown compared not just to the previous two years, when the economy grew by 8.4%, but also from 2003 to 2011, except 2008-9 economic downturn, when the growth rate was 6.7 percent. The Economic Survey 2011-12, presented by the Finance Minister, Sh Pranab Mukherjee in the Lok Sabha, however predicts 7.6% GDP growth in 2012-13 and 8.6% in 2013-14. With agriculture and services continuing to perform well, the slowdown can be attributed almost entirely to weakening industrial growth. The services sector continues to be a star performer as its share in GDP has climbed from 58% in 2010-11 to 59% in 2011-12 with a growth rate of 9.4%. Similarly, agriculture and allied sectors are estimated to achieve a growth rate of 2.5% in 2011-12 with foodgrains production likely to cross 250.42 million tonnes owing to increase in the production of rice in some States. The industrial sector has performed poorly, retreating to a 27% share of the GDP. Overall growth during April-December 2011 reached 3.6% compared to 8.3% in the corresponding period of the previous year.

The Survey points out that inflation as measured by the wholesale price index (WPI) was high during most of the current fiscal year, though by year end there has been a clear slowdown in price rise. Food inflation, in particular, has come down significantly, with most of the remaining WPI inflation being driven by non-food manufacturing products. Monetary policy was tightened by the Reserve Bank of India (RBI) to control inflation and curb inflationary expectations. The growth rate of investment in the economy is estimated to have registered a significant decline during the current year. The year witnessed a sharp increase in interest rates that resulted in higher costs of borrowings; and other rising costs affecting profitability and, thereby, internal accruals that could be used to finance investment.

But despite the low growth figure of 6.9%, India remains one of the fastest growing economies of the world as all major countries including the fast growing emerging economies are seeing a significant slowdown. The global economic environment which was tenuous at best throughout the year, turned sharply adverse in September, 2011, owing to the turmoil in the euro-zone countries and questions about others, reflected in sharp ratings downgrades of sovereign debt in most major advanced countries. While a large part of the reason for the slowing of the Indian economy can be attributed to global factors, domestic factors also played role. Among these are the tightening of monetary policy owing to high and persistent headline inflation and slowing investment and industrial activity. However, for the Indian economy, the outlook for growth and price stability at this juncture looks more promising. There are signs from some high frequency indicators that the weakness in economic activity has bottomed out and a gradual upswing is imminent. The Economic Survey expects the growth rate of real GDP to pick up to 7.6% in 2012-13 and faster beyond that. The main reason for a gradual recovery is the decline in overall investment rate. Gross capital formation during the third quarter of 2011-12 as a ratio of GDP was at 30%, down from 32% one year ago. As fiscal consolidation gets back to track, savings and capital formation should begin to rise; moreover, with the easing of inflationary pressures in the months to come, there could be a reduction in policy rates by RBI, which should encourage investment activity and have a positive impact on growth. Preliminary calculations suggest that the growth rate of GDP in 2013-14 will be 8.6%. These projections are based on assumptions regarding factors like normal monsoons, reasonably stable international prices, particularly oil prices, and global growth somewhere between where it now stands and 0.5% higher .The Global economy remains quite fragile and concerted efforts will be needed through G-20 and other forums to restore stability and renewed growth, including addressing the sovereign debt crisis, financial regulation, growth and job creation efforts and energy security.

The Economic Survey suggests that the progressive deregulation of interest rates on savings accounts will help raise financial savings and improve transmission of monetary policy. Other key areas include the deepening of domestic financial markets, especially corporate bond market and attracting longer-term inflows from abroad. Efforts at attracting dedicated infrastructure funds have begun. India’s foreign trade performance will remain a key driver of growth. During the first half of 2011-12, India’s export growth was a high 40.5%, but has been decelerating since. Imports have growth rapidly, by 30.4% during 2011-12 (April-December). Similarly, country’s Balance of Payments has widened to $ 32.8 billion in the first half of 2011-12, compared to $29.6 billion during the corresponding period of 2010-11. The foreign exchange reserves increased from US $ 279 billion at end March 2010 to US $ 305 billion at end March 2011. Reserves varied from an all-time peak of US$ 322.2 billion at end August, 2011 and a low of US $ 292.8 billion at end-January, 2012.

The Survey recognizes that sustainable development and climate change are becoming central areas of global concern and India too is equally concerned and engaged constructively in global negotiations. Climate change challenges ahead are large and India is doing more than its fair share in reducing its energy-intensity of growth. India is now much more closely integrated with the world economy as its share of trade to GDP of goods and services has tripled between 1990-2010. At the same time, the extent of financial integration, measured by flows of capital as a share of GDP, has also increased dramatically and the role of India in the world economy has commensurately expanded, along with the other major members of emerging markets.

Following are the highlights of Economic Survey 2011-12 :

• Rate of growth estimated to be 6.9%.  Outlook for growth and stability is promising with real GDP growth expected to pick up to 7.6% in 2012-13 and 8.6% in 2013-14.
• Agriculture and Services sectors continue to perform well. 2.5 % growth in Agro sector forecast. Services sector grows by 9.4 %, its share in GDP goes up to 59%.
• Industrial growth pegged at 4-5 percent, expected to improve as economic recovery resumes.
• Inflation on WPI was high but showed clear slow down by the year-end; this is likely to spur investment activities leading to positive impact on growth.  
• WPI food inflation dropped from 20.2% in February 2010 to 1.6% in January 2012; calibrated steps initiated to rein-in inflation on top priority.
• India remains among the fastest growing economies of the world. Country’s sovereign credit rating rose by a substantial 2.98 percent in 2007-12.
• Fiscal consolidation on track - savings & capital formation expected to rise.
• Exports grew @ 40.5% in the first half of this fiscal and imports grew by 30.4%. Foreign trade performance to remain a key driver of growth. Forex reserves enhanced - covering nearly the entire external debt stock.
• Central spending on social services goes up to 18.5% this fiscal from 13.4% in 2006-07.
• MNREGA coverage increases to 5.49 crore households in 2010-11.
• Sustainable development and climate change concerns on high priority.

 Public Health Investment Increases Substantially:

 There has been an increase in public health investment in the country. The combined revenue and capital expenditure of the Centre and states on medical and public health, water supply and sanitation and family welfare has increased from Rs.53,057.80 crore in 2006-07 to Rs. 96,672.79 crore in 2010-11 (BE). In addition to increasing resource allocation for the Health Sector the Government is also playing a critical role in facilitating access to health care delivery channels, public and private through subsidized health, insurance schemes like the RSBY for providing basic health care to poor and marginal workers. The Rasthriya Swasthaya Bima Yojana (RSBY) is being extended to cover MGNREGA beneficiaries and beedi workers. This has been stated in Economic Survey 2011-12, presented by the Finance Minister, Sh. Pranab Mukherjee in the Lok Sabha today.

The Survey highlights that the Janani Shishu Suraksha Karyakram (JSSK) was launched on 1st June, 2011 to give free entitlements to pregnant women and sick newborns for cashless delivery, C-Section, drugs and consumables, diagnostics, diet during stay in the health institutions, provision of blood, exemption from user charges, transport from home to health institutions, transport between facilities in case of referral, and drop back from Institutions to home. A sum of Rs. 1437 crore has been allocated to the states during 2011-12 under the JSSK. In order to reach out to difficult, inaccessible, backward and under-served areas with poor health indicators, 264 high focus districts in 21 states have been identified based on concentration of SC/ST population and presence of left wing extremism for focused attention. A Mother and Child Tracking system has been introduced, which provides complete data of the mothers with their addresses, telephone numbers, etc. for effective monitoring of ante-natal and post-natal check-up of mothers and immunization services.

The Survey also points out that the Janani Suraksha Yojana (JSY), which targets lowering of Maternal Mortality Ratio by ensuring that deliveries are conducted by skilled birth attendants, has shown rapid growth in last three years, with number of beneficiaries rising to 106.96 lakh in 2010-11 from 90.37 lakh in 2008-09. The issue of governance, transparency, and grievance redressal mechanisms are now the thrust areas for the JSY. 

Highlights of Railway Budget 2012-13

Union Railway Minister Dinesh Trivedi presented the Railway Budget in Parliament on 14 March, 2012.

The highlights of Railway Budget 2012

- Passenger fares increased marginally. The increase will be by 2 paise per km for suburban and ordinary second class; 3 paise per km for mail/express second class; 5 paise per km for sleeper class; 10 paise per km for AC Chair Car, AC 3 tier and First Class; 15 paise per km for AC 2 tier and 30 paise per km for AC I.

- Minimum fare and platform tickets to cost Rs 5.

- 50 per cent concession in fare in AC-2, AC-3, Chair Car & Sleeper classes to patients suffering from 'Aplastic Anaemia' and 'Sickle Cell Anaemia'.

- Extending the facility of travel by Rajdhani and Shatabdi trains to Arjuna Awardees.

- Travel distance under 'Izzat Scheme' to increase from 100 kms to 150 kms.

- SMS on passenger mobile phone in case of e-ticket to be accepted as proof of valid reservation.

- Introduction of satellite based real time train information system (SIMRAN) to provide train running information to passengers through SMS, internet, etc.

- On board passenger displays indicating next halt station and expected arrival time to be introduced.

- Installation of 321 escalators at important stations of which 50 will be commissioned in 2012-13.

- Introduction of regional cuisine at affordable rates; launching of Book-a-meal scheme to provide multiple choice of meals through SMS or email.

- Introduction of coin/currency operated ticket vending machines.

- Upgradation of 929 stations as Adarsh Stations including 84 stations proposed in 2012-13; 490 stations have been completed so far.

- Specially designed coaches for differently-abled persons to be provided in each Mail/Express trains.

- Introduction of Rail Bandhu on-board magazines on Rajdhanis, Shatabdis and Duronto trains.

- Setting up of AC Executive lounges at important stations

- 75 new Express trains to be introduced.

- 21 new passenger services, 9 DEMU services and 8 MEMU services to be introduced.

- Run of 39 trains to be extended.

- Frequency of 23 trains to be increased.

- 75 additional services to run in Mumbai suburban; 44 new suburban services to be introduced in Kolkata area, 50 new services to be introduced in Kolkata Metro; 18 additional services in Chennai area.

- 725 km new lines, 700 km doubling, 800 km gauge conversion and 1,100 km electrification targeted in 2012-13.

- Rs 6,872 cr provided for new lines, Rs 3,393 cr for doubling, Rs 1,950 cr for gauge conversation, Rs 828 cr for electrification

- Highest ever plan outlay of Rs 60,100 cr

- Rae Bareli coach factory manufactured 10 coaches in 2011-12; phase-II of the factory would be commissioned in 2012-13.

- A wagon factory to be set up at Sitapali (Ganjam District of Odisha)

- A rail coach factory with the support of Government of Kerala to be set up at Palakkad; two additional new manufacturing units for coaches to be established in the Kutch area in Gujarat and at Kolar in Karnataka with active participation of the State Governments.

- Setting up of a factory at Shyamnagar in West Bengal to manufacture next generation technology propulsion system for use in high power electric locomotives.

- Creating Missions as recommended by Pitroda Committee to implement the modernization programme.

- Setting up of Railway Tariff Regulatory Authority to be considered.

- New Board Members for Safety/Research and PPP/Marketing to be inducted.

- Rail-Road Grade Separation Corporation to be set up to eliminate level crossings.

- Indian Railway Station Development Corporation to be set up to redevelop stations through PPP mode.

- Logistics Corporation to be set up for development & management of existing railway goods sheds and multi-modal logistics parks.

- National High Speed Rail Authority to be set-up.

- Pre-feasibility studies on six high speed corridors already completed; study on Delhi-Jaipur-Ajmer-Jodhpur to be taken up in 2012-13.

- Introduction of a ‘Green Train’ to run through the pristine forests of North Bengal.

- Setting up of 200 remote railway stations as ‘green energy stations’ powered entirely by solar energy.

- Providing solar lighting system at 1,000 manned level crossing gates.

- 2,500 coaches to be equipped with bio toilets.

- Setting up of 72 MW capacity windmill plants in Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and West Bengal.

- Installation of Integrated Security System at all 202 identified stations to be completed in 2012-13.

- Escorting of trains by RPF/GRP extended to 3,500 trains.

- Integration of RPF helpline with the All India Passenger Helpline.

- Setting up of a Railway Safety Authority as a statutory regulatory body as recommended by Kakodkar Committee

- Three 'Safety Villages' to be set up at Bengaluru, Kharagpur and Lucknow for skill development for disaster management.

- Over one lakh persons to be recruited in 2012-13 – backlog of SC/ST/OBC and other categories to be wiped off.

- Introduction of a wellness programme for railway staff at their work places.

- Ensuring proper rest for skilled and technical staff including the running crew.

- Institution of 'Rail Khel Ratna' Award for 10 rail sports-persons every year.

- New coaching terminal at Naihati, the birth place of Rishi Bankim Chandra Chattopadhyay commemorating him on 175th Birth Anniversary.

- Project to connect Agartala with Akhaura in Bangladesh to be taken up in 2012-13.

- Freight loading of 1,025 MT targeted; 55 MT more than 2011-12

- Passenger growth targeted at 5.4 per cent.

List of New Trains Introduced in Rail Budget 2012-13

As part of the Rail Budget 2012-13, Union Railway Minister Dinesh Trivedi announced 75 new express trains, 21 new Passenger Services, 9 DEMU and 8 MEMU services.

Moreover run of 39 trains will be extended, besides an increase in frequency of 23 trains.

List of New Express Trains
1. Kamakhya-Lokmanya Tilak (T) AC Express (Weekly) via Katihar, Mughalsarai, Itarsi
2. Secunderabad-Shalimar AC Express (Weekly) via Vijayawada
3. Bandra (T)-Bhuj AC Express (Tri-Weekly)
4. Delhi Sarai Rohilla-Udhampur AC Express (Tri-Weekly) via Ambala, Jalandhar
5. Coimbatore-Bikaner AC Express (Weekly) via,Roha,Vasai Road,Ahmedabad,Jodhpur
6. Kakinada-Secunderabad AC Express (Tri-weekly)
7. Yesvantpur-Kochuveli AC Express ( Weekly)
8. Chennai-Bangalore AC Double-decker Express (Daily)
9. Habibganj-Indore AC Double-decker Express (Daily)
10. Howrah-New Jalpaiguri Shatabdi Express (6 days a week) via Malda Town
11. Kamakhya-Tezpur Intercity Express (Daily)
12. Tiruchchirappalli-Tirunelveli Intercity Express (Daily) via Madurai,Virudunagar
13. Jabalpur-Singrauli Intercity Express (Daily) via New Katni Jn.
14. Bidar-Secunderabad Intercity Express (6 days a week)
15. Kanpur-Allahabad Intercity Express (Daily)
16. Chhapra-Manduadih Intercity Express (Daily) via Phephna, Rasra, Mau, Aunrihar
17. Ranchi-Dumka Intercity Express (Daily) via Deoghar
18. Barbil-Chakradharpur Intercity Express (Daily) via Dongoaposi, Jhinkpani
19. Secunderabad-Belampalli Intercity Express(Daily) via Kazipet
20. New Jalpaiguri – New Cooch Behar Intercity Express (5 days a week)
21. Ahmedabad-Ajmer Intercity Express (Daily)
22. Dadar (T)- Tirunelveli Express (Weekly) via Roha, Coimbatore,Erode
23. Visakhapatnam-Chennai Express (Weekly)
24. Visakhapatnam-Sai Nagar Shirdi Express (Weekly) via Vijayawada,Manmad
25. Indore-Yesvantpur Express (Weekly) via Itarsi,Narkher,Amravati,Akola,Kacheguda
26. Ajmer-Haridwar Express (Tri-weekly) via Delhi
27. Amravati-Pune Express (Bi-weekly) via Akola, Purna and Latur
28. Kacheguda-Madurai Express (Weekly) via Dharmavaram,Pakala,Jolarpettai
29. Bikaner-Puri Express (Weekly) via Jaipur,Kota,Katni Murwara, Jharsuguda, Sambalpur
30. Secunderabad-Darbhanga Express (Bi-weekly) via Ballarshah, Jharsuguda, Rourkela, Ranchi, Jhajha
31. Bilaspur-Patna Express (Weekly) via Asansol, Jhajha
32. Howrah-Raxual Express (Bi-weekly) via Asansol, Jhajha, Barauni
33. Bhubaneswar-Bhawanipatna Link Express (Daily) via Vizianagaram
34. Puri-Yesvantpur Garib Rath Express (Weekly) via Visakhapatnam, Guntur
35. Sai Nagar Shirdi-Pandharpur Express (Tri-weekly) via Kurduwadi
36. Bhubaneswar-Tirupati Express (Weekly) via Visakhapatnam,Gudur
37. Visakhapatnam-Lokmanya Tilak(T) Express (Weekly) via Titlagarh,Raipur
38. Howrah-Lalkuan Express (Weekly) via Mughalsarai,Varanasi,Lucknow
39. Kolkata-Jaynagar Express (Weekly) via Asansol,Jhajha,Barauni
40. Dibrugarh-Kolkata Express (Weekly)
41. Firozpur-Sriganganagar Express (Daily) via Fazilka,Abohar
42. Jaipur-Secunderabad Express (Weekly) via Nagda, Bhopal, Narkher, Amravati, Akola
43. Okha-Jaipur Express (Weekly) via Palanpur,Ajmer
44. Adilabad-Hazur Sahib Nanded Express (Daily) via Mudkhed
45. Shalimar-Chennai Express (Weekly)
46. Mysore-Sai Nagar Shirdi Express (Weekly) via Bangalore,Dharmavaram,Bellary
47. Valsad-Jodhpur Express (Weekly) via Palanpur,Marwar
48. Porbander-Secunderabad Express (Weekly) via Viramgam,Vasai Road
49. Bandra (T)-Delhi Sarai Rohilla Express (Weekly) via Palanpur, Phulera
50. Hapa-Madgaon Express (Weekly) via Vasai Road,Roha
51. Bikaner-Bandra (T) Express (Weekly) via Jodhpur,Marwar,Ahmedabad
52. Ahmedabad-Gorakhpur Express (Weekly) via Palanpur,Jaipur,Mathura,Farrukhabad, Kanpur
53. Durg-Jagdalpur Express (Tri-Weekly) via Titlagarh
54. Mannargudi – Tirupati Express (Tri-Weekly) viaThiruvarur,Villupuram,Katpadi
55. Gandhidham-Bandra (T) Express (Weekly) via Morbi
56. Kota-Hanumangarh Express (Daily) via Jaipur,Degana,Bikaner
57. Jhansi-Mumbai Express (Weekly) via Gwalior, Maksi, Nagda
58. Secunderabad-Nagpur Express (Triweekly) via Kazipet
59. Kanpur-Amritsar Express (Weekly) via Farrukhabad, Bareilly
60. Chappra-Lucknow Express (Tri-Weekly) via Masrakh,Thawe,Padrauna
61. Karimnagar-Tirupati Express (Weekly) via Pedapalli
62. Anandvihar-Haldia Express(Weekly) via Mughalsarai, Gomoh, Purulia
63. Barrackpore-Azamgarh Express (Weekly) via Jhajha, Ballia, Mau
64. Indore-Rewa Express ( Tri-weekly) via Bina
65. Running of independent train between Jabalpur-Hazrat Nizamuddin by delinking from 12405/12406 Bhusawal- Hazrat Nizamuddin and 12409/12410 Raigarh-Nizamuddin Gondwana Express
66. Darbhanga-Ajmer Express (Weekly) via Raxaul, Sitapur, Bareilly, Kasganj, Mathura
67. Solapur-Yesvantpur Express (Tri-weekly) via Gulbarga
68. Chennai-Puri Express (Weekly)
69. Hyderabad-Ajmer Express (Weekly)via Manmad, Itarsi, Ratlam
70. Asansol-Chennai Express (Weekly) via Purulia, Sambalpur,Vizianagaram
71. Shalimar-Bhuj Express (Weekly) via Bilaspur, Katni, Bhopal
72. Amritsar- Hazur Sahib Nanded Express (Weekly)
73. Santragachi-Ajmer Express (Weekly) via Kharagpur, Chandil, Barkakana, Katni, Kota
74. Malda Town-Surat Express ( Weekly) via Rampur Hat, Asansol, Nagpur
75. Dwarka-Somnath Express (Daily)

Passenger Trains
1. Koderma-Nawadih Passenger (6 Days)
2. Sriganganagar-Suratgarh Passenger (Daily)
3. Yerraguntla-Nosam/Nanganapalli Passenger (Daily)
4. Villupuram-Katpadi Passenger (Daily)
5. Gunupur-Palasa (Via Parlakhemundi) Passenger (Daily)
6. Ajmer-Pushkar Passenger (5 Days)
7. Kota-Jhalawar City Passenger (Daily)
8. Bareilly-Kasganj Passenger (Daily)
9. Anandnagar-Barahani Passenger (Daily)
10. Rangiya-Tezpur Passenger (Daily)
11. Mysore-Shravan Belgola (Daily)
12. Jodhpur-Bilara Passenger (Daily)
13. Villupuram-Mayiladuthurai Passenger (Daily)
14. Rohtak-Panipat Passenger (Daily)
15. Miraj-Kurudwadi Passenger (Daily)
16. Phulera-Rewari Passenger (Daily)
17. Mysore-Chamarajanagar Passenger (Daily)
18. Gorakhpur-Siwan Passenger (Daily) via Kaptanganj,Thawe
19. Running of independent Passenger trains between Rewa-Bilaspur & Rewa-Chirmiri by delinking from 51751/51752 Rewa-Bilaspur Passenger &51753/51754 Rewa-Chirmiri Passenger
20. Mysore-Birur Passenger via Arsikere (Daily)
21. Jhansi-Tikamgarh Passenger via Lalitpur

MEMU
1. Dahod-Anand
2. Anand-Gandhinagar
3. Bina-Bhopal MEMU service in lieu of conventional services.
4. Palakkad -Coimbatore-Erode
5. Ernakulam – Thrissur
6. Adra-Asansol
7. Adra-Bishnupur via Bankura
8. Sealdah-Lalgola

DEMU
1. Baripada-Bangriposi (Daily)
2. Masagram-Matnashibpur (Daily)
3. Mannargudi-Trichy-Manamadurai (Daily)
4. Hoshiarpur-Firozpur (Daily)
5. Siliguri-Changrabandha (Daily)
6. Pratapnagar- Chota Udepur (Daily)
7. New Jalpaiguri–Bamanhat DEMU service in lieu of conventional services.
8. Delhi Sarai Rohilla – Farukhnagar (6 days a week)
9. Katwa – Azimganj (Daily)

Extension of Trains
1. 12037/12038 New Delhi-Ludhiana Shatabdi Express on 2 days to Moga
2. 12537/12538 Manduadih-Bapudham Motihari Express to Muzaffarpur
3. 19051/19052 Valsad-Sonpur Express to Muzaffarpur
4. 18417/18418 Bhubaneswar-Jharsuguda Rajya Rani Express to Rourkela
5. 12945/12946 Surat-Varanasi Express to Chhapra
6. 13237/13238/13239/13240 Patna-Mathura Express to Kota
7. 15013/15014 Kathgodam-Delhi Sarai Rohilla Express to Jodhpur
8. 12991/12992 Udaipur-Ajmer Express to Jaipur
9. 16779/16780 Madurai-Tirupati Express to Rameswaram
10. 22609/22610 Palakkad-Mangalore Express to Coimbatore
11. 16227/16228 Bangalore-Shimoga Express to Talguppa
12. 19781/19782/19771/19772 Jaipur-Amritsar Express to Ajmer
13. 18005/18006 Howrah-Koraput Express to Jagdalpur
14. 18207/18208 Durg-Jaipur Express to Ajmer
15. 13155/13156 Kolkata-Darbhanga Express to Sitamarhi
16. 19605/19606 Kolkata-Ajmer Express to Ahmedabad (via Abu Road)
17. 12687/12688 Dehradun-Chennai Express to Madurai (via Erode)
18. 11017/11018 Dadar-Yesvantpur Express to Puducherry (3 days) via Jolarpettai-Katpadi-Villupuram & to Tirunelveli (3 days) via Dharmapuri-Erode
19. 14553/14554 Delhi-Una Himachal Express to Amb Andaura
20. 12941/12942 Ahmedabad - Asansol Express to Bhavnagar
21. 16649/16650 Mangalore-Thiruvananthapuram Express to Nagercoil
22. 53139/53140 Kolkata-Chittaranjan Passenger to Deoghar
23. 58207/58208 Raipur-Kesinga Passenger to Bhawanipatna
24. 54033/54032 Delhi-Jind Passenger to Narwana
25. 51973/51974 Mathura-Bandikui Passenger to Jaipur
26. 55713/55714 New Jalpaiguri-Bongaigaon Passenger to Tezpur
27. 54043/54044 Jind-Sirsa Passenger to Hisar
28. 54809/54810 Rewari-Degana Passenger to Jodhpur
29. 57502/57503 Bodhan-Nizamabad Passenger to Kamareddi
30. 56011/56012 Arakkonam-Nandalur Passenger to Cuddapah
31. 59117/59122 Pratapnagar-Bodeli Passenger to Chota Udepur
32. 56714/56711 Tiruchchirapalli-Nagore Passenger to Karaikal
33. 54581/54582 Nangal Dam-Una Himachal Passenger to Amb Andaura
34. 66532 Bangalore – Bangarapet Passenger to Marikuppam
35. 66533 Bangarpet –Krishnarajapuram Passenger to Marikuppam.
36. 66602/66603 Coimbatore-Erode MEMU to Salem
37. 78816/78815 Dallirajhara-Durg DEMU to Raipur
38. 74001/74002 Delhi-Muzaffarnagar DEMU to Saharanpur
39. 76818/76813 Velankanni-Nagore DEMU to Karaikal
40. 13243/13244 Patna-Dehri On Son Express to Bhabua Road

Increase in Frequency
1. 15903/15904 Dibrugarh-Chandigarh Express 1 to 2 days
2. 12731/12732 Secunderabad-Tirupati Express 2 to 4 days
3. 12069/12070 Raigarh-Gondia Janshatabdi Express 4 to 6 days
4. 17003/17004 Hyderabad-Kolhapur Express 2 to 7 days
5. 22451/22452 Chandigarh-Bandra(T) Express 1 to 2 days
6. 16779/16780 Madurai-Tirupati Express 2 to 3 days
7. 12685/12686 Chennai-Mangalore Express 6 to 7 days
8. 16535/16536 Yesvantpur-Solapur Express 3 to 7 days
9. 12187/12188 Jabalpur-Mumbai (CST) Express 2 to 3 days
10. 14009/14010/14019/14020 Chhindwara-Delhi Sarai Rohilla Express 4 to 7 days
11. 16315/16316 Bangalore-Kochuveli Express 3 days to daily
12. 12641/12642 Nizamuddin Kanniyakumari Express 1 to 2 days
13. 22603/22604 Kharagpur-Villupuram Express from 1 to 2 days
14. 12453/12454 New Delhi-Ranchi Rajdhani Express from 1 to 2 days.
15. 12457/12458 Delhi Sarai Rohilla-Bikaner Superfast Express from 3 to 7 days.
16. 56231/56232 Mysore-Bangalore Passenger 6 to 7 days
17. 56237/56238 Mysore-Bangalore Passenger 6 to 7 days
18. 56223/56224 Bangalore-Arsikere Passenger 6 to 7 days
19. 56523/56524 Bangalore-Hindupur Passenger 6 to 7 days
20. 75705/75706 New Jalpaiguri-Aluabari-Siliguri DEMU from 6 to 7 days.
21. 75707/75708 Radhikapur-New Jalpaiguri DEMU from 6 to 7 days.
22. 75709/75710 Balurghat-New Jalpaiguri DEMU from 6 to 7 days.
23. 12485/12486 Shri Ganganagar-Hazur Sahib Nanded Express from 1 to 3 days.

CURRENT ECONOMY MCQs

1.    Cabinet Committee for Economic Affairs approved the National Dairy Development Board’s ambitious National Dairy Plan for the 12th Five-Year Plan to be initiated in 2012. Which of the following facts with regard to the statement is not true?
2.    The project is aimed at boosting milk production using scientific breeding and feeding programmes covering about 2.7 million milch animals in 40000 villages
3.    According to  the National Dairy Development Board, the demand for milk is likely to be about 150 million tonne by 2016-17 and 200-210 million tonne by 2021-22. India was the third largest milk producing nation in 2010-11 with a production of 100.2 million tonne.
4.    Cooperatives currently procure about 16% of the national marketable milk surplus covering around 21% of the country’s villages and 18% of rural milk producing households
5.    The cooperative sector is needed to achieve a procurement share of at least 20% of the marketable milk surplus by 2016-17 so as to retain an overall 50% share of the marketable surplus handled by the organised sector
a.    1 & 3
b.    Only 3
c.    Only 2
d.    3 & 4
Answer: (c)

2. Reserve Bank of India (RBI) on13 February 2012 changed the bank rate, a medium-term signal rate after nine years with the objective to realign it with the marginal standing facility (MSF) rate as a one-time technical adjustment to link it with the main policy repo rate. What does the changed bank rate stand stand at?
a.    9.5%
b.    8.3%
c.    10.1%
d.    8%
Answer: (a)
3. As per the first nationwide retail inflation data released by the Centre of Statistical Office on 21 February 2012, inflation based on the all India Consumer Price Index stood at what per cent in January 2012?
a.    6.6%
b.    7.65
c.    8.32%
d.    5.50%
Answer: (b)
4. The Prime Minister's Economic Advisory Panel (PMEAC) on 22 February 2012 projected 7.5 - 8 per cent growth rate for the fiscal 2012-13. Which of the following facts are true with respect to the above statement?
1.    The economy recorded a growth rate of 8.4 per cent in 2010-11, which according to the CSO estimates is expected to moderate to 6.7 per cent in the current fiscal 2011-12
2.    Inflation was projected to moderate to 6.5% by March 2012 and 5-6 per cent in 2012-13.
3.    The manufacturing sector was projected to grow by 4.8 percent while construction segment is expected to expand by 5.3 percent.
4.    Projected Gross Domestic Product (GDP) growth for 2012 is substantially down from the budgetary target of around nine percent, and 8.4 percent expansion registered in 201
a.    Only 4
b.    Only 1
c.    Only 2
d.    1, 2 & 4
Answer: (d)

5.    Reserve Bank of India (RBI) panel on priority sector lending on 21 February 2012 proposed increment in the target (priority sector) for foreign banks to what per cent of net bank credit from the current level of 32 per cent with sub-targets of 15 per cent for exports and 15 per cent for the MSE sector?
a.    53%
b.    40%
c.    46%
d.    39%
Answer: (b)

 6. Consider the following statements and using the code given below identify the personality with whom these statements are associated
1.    He was the founder of Max Telecom
2.    He is the founder and Chairman of Max India
3.    He has been appointed the Non-Executive Chairman of Vodafone India
4.    He is a veteran of Telecom Industry
(a).    Deepak Parekh
(b).    Sunil Bharati Mittal
(c).    KP Singh
(d).    Analjeet Singh
Answer: (d)
 
7. Which of the following Indian Telecom company on 16 February 2012     got the RBI nod for FCCB redemption?
(a).    Reliance Telecom
(b).    Uninor
(c).    Airtel
(d).    Vodafone
Answer: (a) 
8. Cognizant which on 13 February 2012 inked a 5-year deal with Future Group is a
(a).    Logistic Company
(b).    Aviation Company
(c).    Online Retail Company
(d).    Technology Solution Company
Answer: (d)
 
9. Kintetsu World Express of Japan and Gati on 13 February 2012 entered into a Joint Venture  of which of the following sector?
(a).    Electronic Equipments
(b).    Supply Chain
(c).    Single Brand Retail
(d).    Technology Solution
Answer: (b)

10. Legrand, the French electronic and digital equipments company on 9 February 2012 acquired the UPS business of which of the following Indian brand?
(a).    Luminous
(b).    Onida
(c).    Numeric Power
(d).    Invertabular
Answer: (c)

India home to 4 p.c. of world’s billionaires: Forbes

India is home to over four per cent of the world’s billionaires, including the likes of Ambani brothers, Azim Premji and N R Narayan Murthy alongside Warren Buffet and Bill Gates in Forbes magazine’s annual list of the world’s richest people.

Forbes’s list of 1,226 billionaires is topped by Mexico’s 72-year-old telecom czar Carlos Slim, boasting of a networth of $ 69 billion.

Mr. Slim retained his title as the world’s richest man for the third year in a row. In the second spot is Microsoft founder Gates with a $ 61 billion networth followed by American investment giant and philanthropist Buffet whose networth is $ 44 billion.

Forbes said this year’s 1,226 billionaires are a record high, up one per cent from last year’s total. The numbers are up significantly from the 140 billionaires who had made the cut when the list was first released 25 years ago.

Between them, this year’s billionaires are worth a record $ 4.6 trillion and have an average net worth of $ 3.7 billion.

The list has 48 billionaires from India as well as nine of Indian-origin living in countries like Indonesia, Ireland, Thailand, UK and the US, taking the total number of billionaires hailing from India to 57. India’s 48 billionaires have a total networth of $ 194.6 billion.

Among India’s billionaires, the richest is Reliance Industries Chairman Mukesh Ambani with a networth of $ 22.3 billion. The 54-year-old is ranked 19 in the global rich list.

“Mr. Mukesh Ambani is the world’s richest Indian, despite losing $ 4.7 billion in the past year,” Forbes said.

The publication added that a spat between Ambani’s oil and gas conglomerate Reliance and India’s Oil Ministry over declining output at KG-D6, India’s largest offshore gas field, has dragged down the market cap of the country’s most valuable company.

ArcelorMittal Chairman Lakshmi Mittal comes second with a $ 20.7 billion networth. Forbes said Mr. Mittal lost $ 10.4 billion in the past year, more than anyone else in the world and dropped out of the top 10 rankings for the first time since 2004.

Mr. Mittal had ranked sixth in last year’s list when his networth was $ 31.1 billion. Shares of ArcelorMittal, the world’s largest steelmaker, tanked due to surging costs and tepid demand in Europe, Forbes said.

Wipro boss Azim Premji is the third richest Indian in the list. With a networth of $ 15.9 billion, 66-year-old Mr. Premji is ranked 41 on the Forbes list.

The list has only two women billionaires from India, both matriarchs of big corporate houses. Jindal group’s Savitri Jindal is ranked 80 in the rich list with a networth of $ 10.9 billion. Chair of the media group Bennett Coleman Indu Jain, 75, is ranked 578th in the Forbes list with a networth of $ 2.2 billion.

With an $ 8.1 billion networth, Bharti Entreprises chairman Sunil Mittal is ranked 113. Reliance Anil Dhirubhai Ambani Group chairman Anil Ambani comes in at the 118th position in the list, his networth of $ 7.8 billion, only about a third of that of his wealthier elder brother.

“Despite patch up with brother Mukesh that included a much photographed reunion in their late father’s hometown, Mr. Anil Ambani continues on a losing streak, down one billion dollars in past year and down $ 34.2 billion from his 2008 peak,” Forbes said.

Other billionaires from India include real estate major DLF chief K P Singh ($ 6.4 billion), IT company HCL’s Shiv Nadar ($ five billion), healthcare tycoons Malvinder and Shivinder Singh ($ 3.5 billion), Godrej group chairman Adi Godrej ($ 2.4 billion), Chairman of the Bajaj group conglomerate Rahul Bajaj ($ 1.8 billion) and Infosys co-founder N R Narayan Murthy and his family ($ 1.7 billion).

With a networth of $ 1.4 billion, former Infosys chief executive Nandan Nilekani, pharma tycoons Ajay Piramal and K Anji Reddy and head of the Avantha group Gautum Thapar are tied for the 913rd rank. Investment bigwig Rakesh Jhunjhunwala occupies the 1,075th rank with $ 1.1 billion of networth. Tied for the 1,153th rank is liqour baron Vijay Mallya and Spice group chief Bhupinder Kumar Modi with networth of a billion dollars each.

Also in the list is construction tycoon Pallonji Mistry, an Irish citizen, who with a networth of $ 9.7 billion is ranked 96th. Mistry’s younger son Cyrus has been anointed successor to Tata group Chief Ratan Tata when he retires in December. Incidentally, like last year, Tata is not on the rich list this year.

Among the Indians, who are based outside their native country and have been named in the Forbes list, is venture capitalist Vinod Khosla, whom Forbes calls the “rare Silicon Valley venture capitalist able to generate profits from a clean tech portfolio.”

The IIT and Stanford University alumnus has a networth of $ 1.3 billion and is ranked 960. California-based Kavitark .

“Ram” Shriram, the founding board member of Google and one of the first investors in Google, comes in at rank 804. A trustee at Stanford University, Mr. Shriram’s networth is $ 1.6 billion.

India-born, Indonesian citizen Sri Prakash Lohia and his brother Thai resident Aloke Lohia are ranked 634 and 683 respectively in the list. They are two of three brothers whose fortune spans India, Thailand and Indonesia through the Indorama group of companies involved in textiles, polyester and plastics. Between them, the networth of the two brothers is $ four billion.

Software guru Romesh Wadhwani ranks 634 in the list with a networth of $ two billion. Based in California, the IIT Mumbai alumnus heads Symphony Technology Group which is focused on building software and services companies.

This year there were 128 new additions to the Forbes billionaire list, while 117 dropped off. The US retained its position as the global epicenter of wealth, boasting of being home to 425 billionaires, including Oracle’s Larry Elison who had a networth of $ 36 billion.

Among the American billionaires are New York Mayor Michael Bloomberg ($ 22 billion), Google’s founders Sergey Brin and Larry page ($ 18.7 billion), Facebook founder Mark Zuckerberg ($ 17.5 billion), News Corp chief Rupert Murdoch ($ 8.3 billion) and fashion czar Ralph Lauren ($ 7.5 billion).

DTAAs : to curb black money

Basically DTAAs are those pacts that seek to eliminate double taxation of income or gains arising in one country and paid to residents or companies of another. In other words, the treaty is devised to ensure that the same income is not taxed twice. In a bid to curb the growing menace of black money, the Government of India has written, under revised tax treaties, some countries to freeze the assets of Indians that have not been declared in India and repatriate the money. It is important to note that India has renegotiated Double Taxation Avoidance Agreements (DTAAs) with 29 out of the 79 countries with which it has such agreements, including the US, Mozambique, Tanzania, Ethiopia, Colombia and Norway. Further, India has also involved into the process of revising DTAAs with Switzerland and Mauritius as well.

Depreciation of rupee : Discouraging and unwarranted

Off late there has been a remarkable rise in rupee value against dollar currency. In the month of August, 2011, rupee value against dollar was 44.5-45.0 range but in the month of September, 2011 the rupee value has hovered around the range of 49.0-50.0 range.  It is expected to rise further which would result in weakening the rupee value against the dollar currency. This kind of increase would have the drastic impact on the macro economy of the country like heavy raise in the import cost where countries like India heavily depends on the importing on Oil and other crucial raw materials needs for the industries. Rupee depreciation means that rupee has become less valuable with respect to dollar. If the rupee moves upward from 30 per dollar to 40 per dollar then rupee is said to depreciate. It means that rupee is now cheaper than what it used to be earlier, so if the dollar was Rs 30 and now it reached 40.
'J' curve is used to represents the theory stating that a country's trade deficit will worsen initially after the depreciation of its currency because higher prices on foreign imports will be greater than the reduced volume of imports. The effects of the change in the price of exports compared to imports will eventually induce an expansion of exports and a cut in imports-which, in turn, will improve the balance of payments.

Implications of Rupee Depreciation: The depreciation of a currency has several repercussions, which could have mixed effects on the economy. The popular 'J' curve leads us to believe that although initially the costs of such depreciation may outweigh the benefits, in the long run the country tends to be much better off. Let us consider the sectors of the economy which will be affected by the depreciation of rupee:

• (a) A depreciation of the Indian rupee will give competitive advantage to the Indian export firms, thus boosting Indian exports. The rise in exports will give a boost to the recovery of economic growth.
• (b) A weak domestic currency will make the imports dearer. This will act as a barrier against imports; it will thus improve the trade balance of the country. However, imports of commodities, like oil, whose demand is relatively inelastic, could dilute, fully or partially, the likely improvement in the trade scenario. Although capital imports are needed for economic growth, the need to curb the deficits is more pressing because deficits have an inflationary impact and they can also lead to financial vulnerability. In case there is exchange depreciation, Indian importers would prefer to purchase locally manufactured goods. This would add to the growth in demand for goods and services, thus helping in the economic recovery.
• (c) A weaker domestic currency would help attract more foreign domestic investment. This is so because international companies would find it more attractive to set up units in India to service their foreign units because of the cost advantages, which in the case of a strong currency could be partially or fully wiped out.
• (d) The repayment of foreign debt by the government will be severely affected due to depreciation in the value of the rupee.
• (e) Another drawback of a weak currency is that it might dissuade foreign institutional investment (FII) from investing in India. The prospects of a weaker currency could also lead to a rush for repatriation of funds by FIIs. The FIIs are permitted to transfer money in and out of the country at will and therefore if there were a legitimate fear of a large fall in the value of currency, they may be tempted to repatriate a part of their funds. This could result in a selloff in the capital markets.
• (f) Depreciation of rupee will lead to higher interest rates in the economy, with the help of which the RBI might want to fight off the pressure of depreciation in the value of the domestic currency.

RBI cuts CRR to infuse Rs 48,000cr

The Reserve Bank in a surprise move on  announced 0.75 percentage points cut in its key policy ratio to pump Rs 48,000 crore in the economy, but the move may not lead to immediate reduction in lending rates.

Without waiting for the scheduled policy review due next week, RBI reduced the cash reserve ratio (CRR) — the portion of deposits banks require to keep with the central bank — from 5.5 per cent to 4.75 per cent with effect from tomorrow with a view to ease the liquidity situation.

With this move, the Reserve Bank of India (RBI) would be injecting around Rs 80,000 crore into the economy in less than 40 days. The central bank in January had reduced CRR by 0.5 percentage points, releasing Rs 32,000 crore liquidity.

These measures, according to the central bank, are aimed at addressing “the liquidity deficit (which) is expected to increase significantly during the second week of March on account of to advance tax outflows and the usual front-loading of cash balances by banks with the Reserve Bank.”

The last date for advance tax payment in March 15 and is estimated to drain out Rs 60,000 crore from the system.

Budget

Need for Budget

 It is not as if the Government can tax, borrow and spend money the way it likes. Since there is a limit to the resources, the need for proper budgeting arises to allocate scarce resources to various Governmental activities. Every item of expenditure has to be well thought out and total outlay worked out for a specific period. Prudent spending is essential for the stability of a Government and proper earnings are a pre-requisite to wise spending. Hence, planned expenditure and accurate foresight of earnings are sine-qua-none of sound Governmental finance.

 Demands for Grants

The estimates of expenditure included in the Budget and required to be voted by Lok Sabha are in the form of Demands for Grants. These Demands are arranged Ministry-wise and a separate Demand for each of the major services is presented. Each Demand contains first a statement of the total grant and then a statement of the detailed estimate divided into items.

Railway Budget

The Budget of the Indian Railways  is presented separately to Parliament and dealt with separately, although the receipts and expenditure of the Railways form part of the Consolidated Fund of India and the figures relating to them are included in the 'Annual Financial Statement'.

Budget Presentation

The Budget is presented to Parliament  on such date as is fixed by the President. The Budget speech of the Finance Minister is usually in two parts. Part A deals with general Economic Survey  of the country while Part B relates to taxation proposals. General Budget was earlier being presented at 5 P.M. on the last working day of February, but since 2001 the General Budget is being presented at 11 A.M. on the last working day of February, i.e. about a month before the commencement of the Financial year except in the year when General Elections to Lok Sabha are held.

  Key elements and Budget Documents

Alongwith the 'Annual Financial Statement  Government presents the following documents: an Explanatory Memorandum briefly explaining the nature of receipts and expenditure during the current year and the next year and the reasons for variations in the estimates for the two years, the Books of Demands showing the provisions Ministry-wise and a separate Demand for each Department and service of the Ministry. The Finance Bill which deals with the taxation measures proposed by Government is introduced immediately after the presentation of Budget . It is accompanied by a memorandum explaining the provisions of the Bill and their effect on the finances of the country.

Vote on Account

The discussion on the Budget begins a few days after its presentation. In a democratic set-up, Government is anxious to give Parliament full opportunity to discuss the budgetary provisions and the various proposals for taxation. Since Parliament is not able to vote the entire budget before the commencement of the new financial year, the necessity to keep enough finance at the disposal of Government in order to allow it to run the administration of the country remains. A special provision is, therefore, made for "Vote on Account" by which Government obtains the Vote of Parliament for a sum sufficient to incur expenditure on various items for a part of the year.

Cut Motions

Motions for reduction to various Demands for Grants are made in the form of Cut Motions seeking to reduce the sums sought by Government on grounds of economy or difference- of opinion on matters of policy or just in order to voice a grievance.

Appropriation Bill

After the General Discussion on the Budget proposals and Voting on Demands for Grants have been completed, Government introduces the Appropriation Bill. The Appropriation Bill is intended to give authority to Government to incur expenditure from and out of the Consolidated Fund of India. The procedure for passing this Bill is the same as in the case of other money Bills.

Finance Bill

The Finance Bill  seeking to give effect to the Government's taxation proposals which is introduced in Lok Sabha immediately after the presentation of the General Budget, is taken up for consideration and passing after the Appropriation Bill is passed.

Central Rural Sanitation Programme

The Programme was launched in 1986 with the objectives of improving the quality of life of rural people and providing privacy and dignity to women. The concept of sanitation was expanded in 1993 to include personal hygiene, home sanitation, sage water and disposal of garbage, human excreta and wastewater. The components of the programme included construction of individual sanitary toilets for household below poverty-line (BPL), conversion of dry latrines to water-pour flush toilets, construction of village sanitary complexes for women, setting up of sanitary marts and production centres, intensive campaign for creating awareness and health education, etc.
Keeping in view the experiences of the Central and state governments, NGOs and other implementing agencies and the recommendations of the Second National Seminar on Rural Sanitation, the strategy for the Ninth Five Year Plan was revised and the programme was restructured form 1 April 1999. The restructured programme moves away form the principle of state-wise allocation of funds, primarily based on poverty criteria, to a demand driven approach in a phased manner. Total Sanitation Campaign (TSC) was introduced and the Allocation Based Programme was phased out by 31 March 2002. TSC is community-led and people-centred. There was a shift from a high subsidy to a low subsidy regime. The TSC approach emphasized awareness-building component and meets the demand through alternate delivery mechanism. School Sanitation has been introduced as a major component to encourage wider acceptance of sanitation among rural masses. The States/UTs are required to formulate project proposals under the TSC in order to claim Central government assistance.
Under the TSC, so far 559 projects in 30 States/UTs have been sanctioned with the total project outlay of about Rs.6240.27 crore. The Central, State and Beneficiary/Panchayat contributions are about Rs.3675.38 crore, Rs.1424.09 crore and Rs.1140.80 crore respectively. The components sanctioned in the 559 projects are

1. Construction of 499 lakh individual household latrines
2. 656690 toilets for Schools
3. 36098 Community Sanitary Complexes
4. 199033 toilets for Balwadis/Anganwadis and
5. 4030 Rural Sanitary Marts/Production Centres.

Besides, funds have been earmarked for start-up activities, Information, Education and Communication (IEC) and Administrative charges. The total numbers of household toilets constructed up to 2005-06 are 14,48,1807.
To add vigour to the implementation of TSC Government of India has separately launched an award scheme 'Nirmal Gram Puraskar'(NGP) for fully sanitised and open defecation free Gram Panchayats, block and districts. In the first year of its institution only 40 PRIs were awarded NGP on 24 February 2005. In the second year the number of awarded PRIs/Blocks and organisation have increased to 772. His Excellency, Dr. A.P.J. Abdul Kalam, President of India, distributed the Awards on 23 March 2006.

Monitoring and Evaluation

The Ministry of Rural Development lays great emphasis on monitoring and evaluation of all rural development programmes in general and poverty alleviation and employment generation schemes in particular, being implemented in various States/UTs.It is well recognised that the success of the programmes largely depends on the effective delivery system and efficient implementation at the grass-roots level so that the programme benefits reach the rural poor in full measures. In order to ensure this, the Ministry has evolved a comprehensive multi-level and multi tool system of Monitoring and Evaluation for the implementation of its programmes. The Monitoring mechanism includes, inter-alia, the Performance Review Committee, Review meetings by the Minister of Rural Development and Ministers of State with the Chief Ministers/ Ministers of Rural development and Officers of the States, the Area Officer Scheme, periodic progress reports, audit and utilisation certificates, video conferencing and field visits. The Ministry conducts quick evaluation/concurrent evaluation of all major programmes. Impact assessment studies to asses the overall impact of programmes of village-level is also conducted in selected district. The Vigilance and Monitoring Committees at State and District Levels in all States/UTs monitor the implementation of Programmes and introduce greater transparency in the process. These Committees inter-alia include MPs/ MLAs representatives of Panchayti Raj Institutions and NGOs. The Members of Parliament both Lok Sabha and Rajya Sabha have been assigned a Central role in the reconstituted V&M Committees and they have been nominated Chairman/Co-Chairman of the district level V&M Committees.
The Ministry has also taken initiatives to strengthen the monitoring mechanism and quality of implementation of programmes by introducing District Level Monitoring (DLM) System in 130 district of 27 States through external agencies which include monthly reporting of physical and financial performance, qualitative reporting about policy and implementation environments in the district and physical verification of the assets crated under various programmes of the Ministry. Similarly DLM of Total Sanitation Campaign (TSC) and Swajaldhara is implemented in 398 districts of the country w.e.f. 1 July 2005 This system aims at providing continuous, transparent and accountable monitoring inputs in reporting format with the objectives of reporting of the process and progress of the programmes covering different components of the programmes. It also aims at identification of gaps in the implementation at the village, block, district and state level. The monitoring system also elicits the stakeholders' views; assesses the institutional issues and document case studies and success stories on best practices, innovations and lesson learned.
In order to strengthen the monitoring mechanism, the Ministry has a panel of about 300 National Level Monitors comprising retired servicemen and Retired Civil Servants to monitor and furnish periodic reports to the Ministry on the implementation of programmes in selected districts including verifying facts of the cases and complaints if any, which may be referred to them.
The Union Government in recent years has given emphasis to e-governance in all possible areas. Accordingly, the Ministry of Rural Development has also initiated action with the state Governments and UTs to ensure that information and progress reports completed by Districts Rural Development Agencies (DRDAs) are sent through the electronic medium. About 400 (DRDAs) have started sending their reports through online. Efforts are being made in this direction to obtain online progress reports from all the remaining DRDAs.

Bharat Nirman

Bharat Nirman is a time-bound business plan for action in rural infrastructure. Under Bharat Nirman, action is proposed in the areas of irrigation, rural housing, rural water supply, rural electrification and rural telecommunication connectivity.

Rural Roads

To upgrade rural infrastructure, the Government has formulated a proposal for providing the road connections to more than 38,484 villages above 1000 population and all 20,867 habitations above 500 populations in hilly and tribal areas.
To achieve the targets of Bharat Nirman, 1,46,185 kms. of road length is proposed to be constructed by 2009. This will benefit 66,802 unconnected eligible habitations in the country. To ensure full farm to market connectivity, it is also proposed to upgrade 1,94,132 kms. of the existing Associated Through Routes. A sum of approximately Rs.48,000 crore is proposed to be invested to achieve this.
The main thrust of research and development (R&D) in the roads sector is to build a sustainable road infrastructure comparable to the best roads in the world. The various components of this strategy are improvement in design, modernization of construction techniques, introduction of improved material conforming to latest trends, evolving better and appropriate specifications, encouraging development and use of new technologies etc. The dissemination of these matters is done through the publication of new guidelines, code of practices, instructions/circulars, compilation of state-of-the-art reports and seminars/presentations etc. The research schemes sponsored by the Department are generally 'applied' in nature, which, once completed, would enable them to be adopted by user agencies/departments in their work in the field. The areas covered are roads, road transport, bridges, traffic and transportation techniques etc. The Department takes the help of various research institutions, academic institutions and universities to implement the schemes. An outlay of Rs.600.00 lakhs has been provided for R&D in 2007-08. Some of the ongoing major schemes are as follows:

• Roads:
  • Development of GIS based National Highways information system;
  • Guidelines for soil nailing techniques in highway engineering;
  • Pilot study on effect of overloading on road infrastructure;
  • Investigation on field performance of bituminous mixes with modified binders;
  • R&D Studies on performance evaluation of rigid pavements on high density traffic corridors using instrumentation supported by laboratory tests.
  In addition to the above, the proposal of IIT, Roorkee for establishment of the Ministry's Chair in it in the area of development of Highway System has also been sanctioned.
• Bridges:
  • Creation of complete range of independent testing facility at Central Road Research Institute (CRRI ), New Delhi.

Rural Housing

Housing is one of basic requirements for human survival. For a shelterless person, possession of a house brings about a profound social change in his existence, endowing him with an identity, thus integrating him with his immediate social milieu.
The Ministry of Rural Development is implementing Indira Awaas Yojana (IAY) with a view to providing financial assistance to the rural poor living below poverty line for construction of pucca house. The details of the scheme along with its performance are given below:

Indira Awaas Yojana (IAY)

The Government of India is implementing Indira Awaas Yojana (IAY) since the year 1985-86 to provide financial assistance for construction / upgradation of dwelling units to the below poverty line (BPL) rural households belonging to the scheduled castes, scheduled Tribes and freed bonded labourers categories. From the year 1993-94, the scope of the scheme was extended to cover non-Scheduled Castes and Scheduled Tribes rural BPL poor, subject to the condition that the benefits to non-SC/ST would not be more than 40% of the total IAY allocation. The benefits of the Scheme have also been extended to the families of ex-servicemen of the armed and paramilitary forces killed in action, 3% of the Houses are reserved for the rural Below Poverty Line physically and mentally challenged persons, from 2006-07 onward, funds and physical targets under IAY are also being earmarked for BPL minorities in each state.
Under the scheme, financial resources are shared between the centre and the states on a 75:25 basis. Since, reduction of shelterlessness is the primary objective, 75% weightage is given to housing shortage and 25% to the poverty ratios prescribed by Planning Commission for state level allocation. For district level allocation, 75% weightage is given again to housing shortage and 25% to SC/ST population of the concerned districts.
On the basis of allocations made and targets fixed, district Rural development Agency (DRDAs)/Zilla Parishada (ZPs) decide Panchayat-wise number of houses to be constructed under IAY and intimate the same to the concerned Gram Panchayat. Thereafter, the Gram Sabha selects the beneficiaries, restricting its number to the target allotted, from the list of eligible households from the Permanent IAY Waitlists. No further approval of the higher authority is required.
The ceiling on construction assistance under the IAY has been enhanced w.e.f. 1.4.2008, Rs.25, 000/- to Rs.35,000/- per unit in the plain areas and from Rs.27,500/- to Rs.38,500/- in hilly/difficult areas. For upgradation of kutcha house, the financial assistance has also been enhanced from Rs.12,500/- to Rs.15,000/- per unit. In addition, The Reserve Bank of India has been requested by the Ministry of Finance to include IAY houses under the Differential Rate of Interest (DRI) scheme for lending upto Rs.20,000 per unit at an interest rate of 4%.
Further, the dwelling units should invariably be allotted in the name of a female member of the beneficiary household. Alternatively, it can be allotted in the name of both husband and wife. Only in case there is no eligible female member in the family, the house can be allotted in the name of an eligible male member.
The Sanitary latrine and smokeless chullah and proper drainage are required for each IAY house. Latrine could be constructed separate for the IAY house on the site of beneficiary.
The construction of the houses is the sole responsibility of the beneficiary. Engagement of contractors is strictly prohibited.
No specific type design has been stipulated for an IAY house. Choice of design, technology and materials for construction of an IAY house is the sole discretion of the beneficiaries.
About 181.51 lakh houses have been constructed under IAY since inception of the Scheme with an expenditure of Rs.36900.41 crores (upto 31/5/2008).

Performance during the year 2007-08

During 2007-08, the Central allocation for Rural Houseing was Rs.40,322.70 crore. The target for construction/upgradation of IAY houses was 21.27 lakh. Against this target, 19.88 lakh houses were constructed/upgraded by incurring an amount of Rs.5,458.01 crores (including State share).

Performance during the year 2008-09

The Central allocation for 2008-09 under the IAY is Rs.5,645.77 crore for the target of constructing/upgrading 21.27 lakh IAY houses. Out of this, an amount of Rs.1,694.48 crore has been released as part of first instalment and 85,879 houses have been constructed so far, (upto 31/5/2008).

Irrigation

Under the Irrigation Component of Bharat Nirman, the target of creation of additional irrigation potential of 1 crore hectare in 4 years (2005-06 to 2008-09) is planned to be met largely through expeditious completion of identified ongoing major and medium irrigation projects. Irrigation potential of 42 lakh hectare is planned to be created by expeditiously completing such ongoing major and medium projects.
There is a definite gap between irrigation potential created and the potential utilized. Under Bharat Nirman it is planned to restore and utilize irrigation potential of 10 lakh hectare through implementation of extension, renovation and modernization of schemes alongwith command area development and water management practices.
There are considerable areas in the country with unutilised ground water resources. Irrigation potential of 28 lakh hectare is planned to be created through ground water development.
The remaining target for creation of irrigation potential of 10 lakh hectare is planned to be created by way of minor irrigation schemes using surface flow.
10 lakh hectare of irrigation potential is also planned by way of repair, renovation and restoration of water bodies and extension, renovation and modernization of minor irrigation schemes.

Telephone Connections

Telecom connectivity constitutes an important part of the effort to upgrade the rural infrastructure. Under the Bharat Nirman Programme, it will be ensured that 66,822 revenue villages in the country, which have not yet been provided with a Village Public Telephone (VPT), shall be covered. Out of the above villages, connectivity in 14,183 remote and far flung villages will be provided through digital satellite phone terminals. Assistance for both capital as well as operational expenditure for these VPTs will be met out of the Universal Services Obligation Fund (USOF).

Rural Water Supply

To build rural infrastructure, Bharat Nirman has been launched by the Government of India in 2005 to be implemented in a period of four years from 2005-06 to 2008-09. Rural drinking water is one of the six components of Bharat Nirman. During Bharat Nirman period, 55,067 un-covered and about 3.31 lakh slipped-back habitations are to be covered with provisions of drinking water facilities and 2.17 lakh quality-affected habitations are to be addressed for water quality problem.
While prioritising the addressal of the water quality problem, Arsenic and Fluoride affected habitations have been accorded priority followed by Iron, Salinity, Nitrate and other contaminants. To ensure that habitations once provided with drinking water supply infrastructure do not slip back and face drinking water problem, sustainability of drinking water sources and systems has been accorded high priority. To achieve drinking water security at village/ habitation level, conjunctive use of water i.e. judicious use of rainwater, surface water and ground water is promoted.
To enable the rural community shoulder the responsibility in management, operation and maintenance of water supply systems at village level, decentralized, demand-driven, community-managed approach in the form of Swajaldhara have been adopted. To further strengthen community participation in the drinking water sector for sustainability, National Rural Drinking Water Quality Monitoring & Surveillance programme has been launched in February, 2006 under which 5 persons in each Gram Panchayat are to be trained to carry out regular surveillance of drinking water sources for which 100% financial assistance including water testing kits, are provided.

Rural Electrification

Ministry of Power has introduced the scheme Rajiv Gandhi Grameen Vidhyutikaran Yojana (RGGVY) in April 2005, which aims at providing electricity in all villages and habitations in four years and provides access to electricity to all rural households. This programme has been brought under the ambit of Bharat Nirman.
Under RGGVY, electricity distribution infrastructure is envisaged to establish Rural Electricity Distribution Backbone (REDB) with at least a 33/11KV sub-station, Village Electrification Infrastructure (VEI) with at least a Distribution Transformer in a village or hamlet, and standalone grids with generation where grid supply is not feasible.
This infrastructure would cater to the requirements of agriculture and other activities in rural areas including irrigation pump sets, small and medium industries, khadi and village industries, cold chains, healthcare and education and IT. This would facilitate overall rural development, employment generation and poverty alleviation.
Subsidy towards capital expenditure to the tune of 90% will be provided, through Rural Electrification Corporation Limited (REC), which is a nodal agency for implementation of the scheme. Electrification of un-electrified Below Poverty Line (BPL) households will be financed with 100% capital subsidy @ Rs.1500/- per connection in all rural habitations.
The Management of Rural Distribution is mandated through franchisees. The services of Central Public Sector Undertakings (CPSU) are available to the States for assisting them in the execution of Rural Electrification projects.

Rural Water Supply Programme

Clean drinking water is a basic necessity of life. Supply of clean drinking water in the rural areas has always been one of the highest priorities of the government. A Technology Mission on drinking water named "National Drinking Water Mission" (NDWM) was launched in 1986, which subsequently was rechristened as "Rajiv Gandhi National Drinking Water Mission (RGNDWM) in 1991 with three key objectives:

1. Providing safe drinking water to all villages,
2. Assisting local communities to maintain sources of safe drinking water in good condition, and
3. Giving special attention for water supply to Scheduled Castes and Scheduled Tribes.

To achieve the objectives, Accelerated Rural Water Supply Programme (ARWSP) is being implemented to resolve the drinking water problem in rural habitations. The Central Government supplements the efforts of the states by providing financial and technical support. The Tenth Plan emphasizes participatory approach where PRIs should be the key institutions for convergence of drinking water supply programmes at the ground level. The strategy to achieve the Tenth Plan objectives can be briefly summarised as:

1. Accelerating coverage of the remaining Not Covered and Partially Covered habitations including those slipped back from fully covered to partially and not covered categories, with safe drinking water systems.
2. To tackle problems of water quality in affected habitations and to institutionalize water quality monitoring and surveillance systems.
3. To promote sustainability, both of systems and sources, to ensure continued supply of safe drinking water in covered habitations

Accelerated Rural Water Supply Programme (ARWSP) aims at achieving this objective. Considerable success has been achieved in meeting the drinking water needs of the rural population through the said scheme. There are more than 4 million hand pumps and 2 lakh piped water schemes in the rural areas.
The ARWSP was launched during 1972-73. It is currently being implemented through the Rajiv Gandhi National Drinking Water Mission. The scheme aims at coverage of all rural habitations with population of 100 and above, specially the un-reached ones, ensure sustainability of the systems and sources, tackle the problem of water quality and institutionalise water quality monitoring and surveillance through a Catchment Area Approach.
As on 1 April 2005, 96.13 per cent of rural habitations have been Fully Covered (FC) with drinking water facilities and 3.55 per cent are Partially Covered (PC) and 0.32 per cent is Not Covered (NC) with drinking water facilities. There are slippages of FC into NC or PC due to various factors such as lowering of ground water table, systems outliving their lives, increase in population, etc.
Drinking water supply is one of the six components of Bharat Nirman, which has been envisaged to build strong rural infrastructure in four years (2005-06 to 2008-09). The task ahead is to cover all the remaining uncovered habitations and also to cover the slipped back as well as the water quality affected ones. Action Plans from State/UT Governments for achieving the goals of Bharat Nirman in a time bound manner have been obtained.
For ensuring sustainability of the systems, steps were initiated in 1999 to institutionalise community participation in the implementation of rural drinking water supply schemes by incorporating the following three basic principles:

1. Adoption of a demand-driven responsive and adaptable approach based on empowerment of villagers to ensure their full participation in the project through a decision making role in the choice of scheme design, control of finances and management arrangements.
2. Increasing role of government for empowering user groups/gram panchayats for sustainable management of drinking water assets and integrated water management and conservation.
3. Partial capital cost sharing either in cash or kind or both and 100 per cent responsibility of Operation and Maintenance by end-users.

Sector Reforms Projects, based on the above principles were sanctioned in 67 districts on pilot basis. With the experience gained from these pilot projects, reform process has been scaled up in the entire country through Swajaldhara launched on 25 December 2002. A notable feature of Swajaldhara is involvement of Village Water and Sanitation Committee (VWSC)/Panchayati Raj Institutions (PRIs) in planning, implementation, operation and maintenance. This would in turn ensure sustainability of the system. 10 per cent contribution is made by the community and 90 per cent funds are provided by the Central government. In case of SC and ST habitations, community contribution can be in the form of cash, kind, labour or land or a combination of these.
Rajiv Gandhi National Drinking Water Mission (RGNDWM) adopts an integrated approach so that conservation and augmentation of water sources is interrelated with rural water supply schemes to provide sustainable supply of safe drinking water to the rural population. The Mission seeks to provide supply of 40 liters of safe drinking water in rural areas.
An initiative has been taken by Government of India in February 2006 by launching the National Rural Drinking Water Quality Monitoring and Surveillance Programme which envisages institutionalisation of community participation for monitoring and surveillance of drinking water sources at the grass-root level by Gram Panchayats and Village Water and Sanitation Committees, followed by checking the positively tested samples at the district and State level laboratories.
Another initiative taken by the Government is that from 2006-07 onwards focused funding to tackle drinking water has been started. Up to 20 per cent of ARWSP funds are to be earmarked separately for tackling water quality problems. For 2006-07, 20 per cent of ARWSP funds have been allocated for funding under water quality.

Capital Account Convertibility (CAC)

A currency is said to be convertible when it can be freely exchanged for other currency at market rates. Current account transactions are those dealing with payments relating to foreign trade, travel and other services. Capital account deals with transaction of financial assets. While India has made the Indian rupee fully convertible on current account, it is yet to accept capital account convertibility as a goal.

One reason prompting the policy makers to go slow on capital convertibility is the experience of Mexico. It was one of the largest recipients of foreign private capital ($28 billion in 1993). But with the devaluation of the peso, and the collapse of the exchange rate, much of the capital fled country. This catastrophic collapse was made possible by capital account convertibility, which encouraged even Mexican residents to convert their capital into dollars, precipitating the crisis. Similar situation arose in the late 1997 in South East Asian countries also where their local currencies were hammered by speculators leading to devaluation of Indonesian rupiah by almost 58 per cent in one month.

While India make rupee fully convertible under current account, it was felt that the economy was not yet ready for capital account convertibility. The countries which went in for hasty CAC in the 1980s had to face financial crisis. The thinking was that trade and domestic liberation process should be completed before CAC can be thought of. Many economists feel that CAC will only help the drain of Indian capital, which will get invested abroad. The present policy is to go slow on CAC.

There is a school of thought represented by Prof. James Tobin, which even advocated an international tax on financial transaction to prevent speculative flight on capital. After the 1994 Mexico crisis, the idea of a 'Tobin Tax' received fresh attention.