State of India's Economy

The Indian economy slowed down in 2011-12, compared not just to the previous two years but 2003 to 2011 (except 2008-09). However, India remains among the front-runners.

With agriculture and services continuing to perform well, India’s slowdown can be attributed almost entirely to the weakening industrial growth. The manufacturing sector grew by 2.7 per cent and 0.4 per cent in the second and third quarters of 2011-12, respectively. Inflation as measured by the wholesale price index (WPI), was high during most of the fiscal year, though by the year’s end there was a clear slowdown. Food inflation, in particular, came down to around zero, 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) during the year to control inflation and curb inflationary expectations.

The global economic environment turned sharply adverse in September 2011, owing to the turmoil in the euro-zone and questions about the outlook on the US economy provoked by rating agencies.

The macroeconomic situation in February 2011—at the time of presentation of Economic Survey 2010-11—looked positive, even though there was some concern about industrial slowdown. Economic Survey 2010-11 had anticipated that the Indian economy would register growth of around 9 per cent (+ or - 0.25 per cent) in 2011-12, almost reverting to the pre-crisis levels achieved during the three-year period, from 2005-06 to 2007-08. However, during the course of the year it became increasingly clear that economy would fall short of that growth rate by a significant margin.

At sectoral level, growth is estimated to be 2.5 per cent for 2011-12 for agriculture and allied sectors, a little lower than expected. Growth in the services sector is likely to be 9.4 per cent in 2011-12, as against 9.3 per cent in 2010-11. Thus, it was primarily the dip in growth in industry to 3.9 per cent in 2011-12 that led to the slowdown in real gross domestic product (GDP) growth .

Domestic factors, namely the tightening of monetary policy, in particular raising the repo rate in order to control inflation and anchor inflationary expectations, resulted in some slowing down of investment and growth, particularly in the industrial sector. Since monetary policy operates largely through demand compression in the short run, the expectation is that this policy will in fact bolster long-run growth. The 2008-09 down-turn came to India when the country’s fiscal balances were robust. Hence, there was ample scope for fiscal and monetary stimulus. As in most parts of the world, this second slowdown came so quickly on the heels of the previous one that the latitude in terms of fiscal and monetary policy was much more limited.

The growth rate of investment in the economy registered a significant decline during 2011-12. The year also 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. In 2010-11, the growth in gross capital formation, particularly fixed capital formation, was substantially lower than had been achieved in 2005-06 to 2007-08. The investment rate continued to be lower than the peak level achieved in 2007-08.

Despite difficult conditions in the global economy, exports continued to be robust in 2011-12 and registered a growth rate of 14.3 per cent in real terms over and above 22.7 per cent growth achieved in the previous year (2010-11), as per Advance Estimates. Imports are likely to end the year with a real growth rate of 17.5 per cent.

There was a reduction in investment rates, both in the public and private sectors, particularly the corporate sector, in 2010-11. Reduction in corporate investment could be attributed to global factors, with the global economy exhibiting signs of slowing down in the second half of 2010, as well as to domestic factors, namely increased cost of borrowing following the raising of interest rates in order to control inflation. Fixed investment as a ratio of GDP peaked in 2007-08 and has continued to register a decline since then, falling from 31.6 per cent in 2009-10 to 30.4 per cent in 2010-11.

At 2.8 per cent of GDP, the savings-investment gap during 2010-11 remained at the same level as in 2009-10. This reflected the need to finance the investment requirement from foreign savings (current account deficit). The gap, in excess of 2 per cent of GDP, has been at relatively elevated levels (since 2008-09). The savings-investment gap narrowed both in the public as well as private sectors in 2010-11 vis-à-vis 2009-10. For the public sector, it narrowed from -9.0 per cent of GDP to -7.1 per cent.

The increase in the revenue levels, thanks partly to substantial increase in non-tax revenue receipts in the year 2010-11, and the process of fiscal consolidation were among the factors responsible for narrowing of the public sector’s savings-investment gap.

In the medium to long term, growth of an emerging economy depends, to a large extent, not only on overall level of investment but also on its sectoral composition, reflecting the transformation taking place. However, annual growth rates of investment, both at aggregate and sectoral levels may vary, depending on expectations of profitability, sales, etc.

Historic Background
The rate of growth of Indian economy, between 1950-51 and 1990-91, was 4.1 per cent. In contrast, between 1991-92 and 2011-12 the economy registered a growth of 6.9 per cent. While in the four decades from 1951-52 to 1991-92, the growth rate in terms of GDP at factor cost (at 2004-05 prices) was more than 6 per cent only in 10 years, between 1992-93 and 2011-12 (including the AE for 2011-12) (a time-span covering 20 years, inclusive of both observations) the growth rate has been over 6 per cent in as many as 14 years. The growth rate has accelerated significantly since 2003-04. Between 2003-04 and 2011-12, the economy registered a growth of 8.2 per cent per annum. In fact, during this period, the growth rate has never fallen below 6.7 per cent and has been over 8 per cent in six of these nine years. All the three major sectors of the economy, namely agriculture, industry, and services witnessed higher-than-trend growth rates at 3.9 per cent, 8.0 per cent, and 9.6 per cent, respectively. Clearly the services sector has emerged as the key driver of growth in the Indian economy.

This accelerated growth could partly be attributed to an increase in savings and investment rates, which averaged 33.1 per cent and 34.3 per cent, respectively, during the period between 2003-04 and 2010-11. The average savings and investment rates in the 1990s were 23.0 per cent and 24.3 per cent, respectively. Sustaining and accelerating this growth further could be crucial for attaining higher per capita income and other objectives that aim at enhancing human welfare as reflected by the inclusive development agenda

The contributions of the agriculture and allied sector, industry sector, and services sector also underwent significant changes overtime. The long-term growth rate of the agriculture sector (over the last 60 years) has been 2.7 per cent. It was 2.3 per cent between 1950-51 and 1980-81 and 3.1 per cent during 1980-81 to 2011-12. Growth in the industry sector increased from 5.2 per cent in the earlier period to 6.4 per cent between 1980-81 and 2011-12. Similarly, growth in the services sector was 4.4 per cent and 7.8 per cent, respectively, during these two sub-periods.

The structure of the economy has also undergone significant changes over time. Between 1950-51 and 1980-81, the industrial sector registered a higher growth rate than the services sector. The converse has been the case since then. This resulted in the share of the industry sector in GDP increasing by around 9 percentage points from 16.6 per cent to 25.9 per cent during the period from 1950-51 to 1980-81. The share of the services sector increased from 30.3 per cent in 1950-51 to 38 per cent in 1980-81. It started growing rapidly thereafter and this phenomenon became more pronounced in the 1990s. Consequently, since 1980-81, the share of the industry sector has remained in the range of 26 to 28 per cent of GDP, while the entire decline in share of agriculture has been balanced by an increase in share of the services sector. Thus, the resilience of the economy to shocks owe to the services sector which has the largest share and most consistent growth performance.

Agriculture and Food
Agriculture, including allied activities, accounted for 13.9 per cent of GDP at 2004-05 prices in 2011-12, as compared to 14.5 per cent in 2010-11. In terms of composition, out of a total share of 14.5 per cent in GDP in 2010-11, agriculture alone accounted for 12.3 per cent, followed by forestry and logging at 1.4 per cent, and fishing at 0.7 per cent. Notwithstanding the declining trend in agriculture’s share in GDP, the importance of the sector to the economy is best understood with reference to its share in employment and in terms of its criticality for macro-economic stability. While the former was well known, the latter became manifest with rising growth in incomes since the mid-2000s.

Hence, growth in agriculture and allied sectors remains an important objective and a ‘necessary condition’ for inclusive growth. The average annual growth in agriculture and allied sectors realized during the Eleventh Plan Period was 3.3 per cent, against the targeted growth rate of 4 per cent. The sector recorded slightly lower average growth than targeted in the Eleventh Plan period due to severe drought experienced in most parts of the country during 2009-10 and drought/deficient rainfall in some States, namely Bihar, Jharkhand, eastern UP, and West Bengal in 2010-11. However, timely and corrective measures taken by the government helped boost agricultural production and growth in the sector reached 7.0 per cent in 2010-11, the highest growth rate achieved during the last six years. In 2011-12 agriculture and allied sectors are estimated to achieve a growth rate of 2.5 per cent. However, it is a matter of concern that agricultural growth is still, to a certain extent, characterized by fluctuations due to the vagaries of nature, though there has not been actual decline in terms of output since 2002-03.

In 2010-11 a significantly high level of 244.78 million tonnes of foodgrains production was achieved. As per the second AE, production of foodgrains during 2011-12 has been estimated at 250.42 million tones, owing to increase in the production of rice in some of the major rice-producing states of the country, namely Assam, Bihar, West Bengal, Jharkhand, and Uttar Pradesh.

The stock position of foodgrains in the central pool, as on February 1, 2012 was 55.2 million tonnes, comprising 31.8 million tonnes of rice and 23.4 million tonnes of wheat, which is adequate for meeting the requirements under the targeted public distribution system (TPDS) and welfare schemes 2011-12. The higher levels of agricultural output and ample food stocks augur well for bringing down headline inflation.

Industry and Infrastructure
Industrial growth, measured in terms of the index of industrial production (IIP), shows fluctuating trends. Growth had reached 15.5 per cent in 2007-08 and then started decelerating. Initial deceleration in industrial growth was largely on account of the global economic meltdown. There was, however, a recovery from 2.5 per cent in 2008-09 to 5.3 per cent in 2009-10 and 8.2 per cent in 2010-11. Fragile economic recovery in the US and Europe and moderately subdued expectations at home affected the growth of the industrial sector in the current year.

Cumulative growth in April-January 2011-12, in eight core sectors has been 4.1 per cent, as compared to 5.7 per cent during the corresponding period of the previous year. While four sectors, namely coal, fertilizers, cement, and electricity, showed positive growth during January 2012, other four sectors—crude oil, natural gas, refinery products and steel—registered negative growth.

Electricity generation by power utilities during 2011-12 was targeted to grow by 5.4 per cent to reach 855 billion units. Growth in power generation during April-January 2011-12 was 8.6 per cent, as compared to 5.2 per cent during April-January 2010-11. Production of crude oil is estimated at 38.19 million metric tonnes (MMT), which is about 1.33 per cent higher than the 37.70 MMT produced during 2010-11. Domestic crude oil production during April-December 2011-12 was 28.70 MMT, showing a growth of 1.9 per cent over the same period of the previous year.

The telecom sector continued to grow, with the total number of telephones increasing from 206.8 million on March 31, 2007 to 926.95 million on December 31, 2011. Tele-density has increased from 18.2 per cent in March 2007 to 76.8 per cent in December 2011.

Services Sector
The share of services in India’s GDP at factor cost (at current prices) increased from 55.1 per cent in 2010-11 and 56.3 per cent in 2011-12, as per Advance Estimates. Trade, hotels, and restaurants as a group, with 16.9 per cent share, is the largest contributor to GDP among the various services sub-sectors, followed by financing, insurance, real estate, and business services with 16.4 per cent share.

While agriculture continues to be the primary employment-providing sector, the services sector is the principal source of employment in urban areas. As per the National Sample Survey Organization’s (NSSO) report on the ‘Employment and Unemployment Situation in India, 2009-10’, for every 1,000 people employed, 679 and 75 people are employed in agriculture sector in rural and urban areas, respectively, (measured in terms of usually working persons in the principal status and subsidiary status). On the other hand, the services sector accounted for 147 and 582 of every 1,000 persons employed in rural and urban areas, respectively.

Prices
Headline WPI inflation remained persistently high and relatively sticky at around 9 per cent during 2011. The major contributory factors to headline inflation during the current financial year include (a) higher primary articles prices driven by vegetables, eggs, meat, and fish due to changing dietary pattern of consumers; (b) increasing global commodity prices especially metal and chemical prices which ultimately led to higher domestic manufactured prices; and (c) persistently high international (Brent) crude petroleum prices in the last two years averaging around $ 111 per barrel (/bbl) in 2011 (January-December) as compared to $ 80/bbl in 2010 (January-December).

Compared to a relatively stable inflationary period in the earlier part of the last decade, average headline WPI inflation started to rise in 2008-09 and persisted. The pressure was mainly from primary and fuel products with average inflation in these commodities remaining continuously in double digits for a major period since 2008-09. In comparison, inflation in manufactured products remained relatively stable, dropping sharply in 2009-10 because of the global economic crisis and its impact in India, before it started to pick up and exceed its long-run average of around 5 per cent in early 2011-12. Among individual product groups, inflation in food products, beverages, textiles, chemicals, and basic metals remained elevated mainly on account of high global commodity prices.

Reining in inflation and containing inflationary expectations were the dominating objectives of monetary policy during 2011-12. The RBI hiked the repo rate 13 times between March 2010 and January 2012, cumulatively by 375 basis points (bps). With supply-side factors feeding into food inflation and an uncertain economic scenario in advanced countries necessitating repeated liquidity injections by these countries to counter recessionary trends, the task of monetary policy calibration was particularly challenging. Sustained rate increases have, to an extent, impacted growth negatively. However, the period from December 2011 to January 2012 marked a reversal of the cycle with the RBI in its Third Quarter Review of Monetary Policy keeping the repo and reverse repo rates unchanged at 8.5 per cent and 7.5 per cent, respectively. The cash reserve ratio (CRR), however, has been reduced from 6.0 to 5.5 per cent in order to ease the liquidity situation and aid revival of growth.

Financial Markets
The weak global economic prospects and continuing uncertainties in the international financial markets had their impact on emerging market economies like India. Sovereign risk concerns, particularly in the euro area, affected financial markets for the greater part of the year, with the impact of Greece’s sovereign debt problem spreading to India and other economies by way of higher-than-normal levels of volatility.

Subdued foreign institutional investor (FII) inflows into the country led to a decline in Indian markets and contributed to the sharp depreciation of the rupee in the forex market, though much of the depreciation was due to ‘flight to safety’ by foreign investors, given the meltdown in Europe and inflation in emerging market economies. Moderation in the growth rate of the economy also affected market sentiments.

International Trade
The resilience of India’s trade can be seen from the fact that the growth of exports and imports, which was (-)3.5 per cent and (-)5 per cent, respectively, in 2009-10 as a result of the 2008 global economic crisis, rebounded to 40.5 per cent and 28.2 per cent in 2010-11. India not only reached pre-crisis levels in exports but also surpassed pre-crisis trends in export growth rate, unlike many other developing and even developed countries. India’s share in global exports and imports also increased from 0.7 per cent and 0.8 per cent, respectively, in 2000, to 1.5 per cent and 2.2 per cent in 2010.

The highlight of BoP developments during 2011-12 was merchandise exports of US$ 150.9 billion in the first half of the year, which represented an increase of over 40 per cent over the corresponding period in 2010-11. Imports of US$ 236.7 billion during April-September 2011 recorded an increase of 34.3 per cent over April-September 2010. The trade deficit was higher at US$ 85.8 billion (9.4 per cent of GDP) during the first half of 2011-12, vis-à-vis US$ 68.9 billion (8.9 per cent of GDP) in the first half of 2010-11. This was mainly on account of increase in international prices of imported commodities, namely oil and gold and silver during the first half of 2011-12.

Net capital flows at US$ 41.1 billion in the first half of 2011-12 remained higher as compared to US$ 38.9 billion in the first half of 2010-11. Under net capital flows, foreign direct investment (FDI) has shown considerable increase at US$12.3 billion during the first half of 2011-12, vis-à-vis US$ 7.0 billion in the corresponding period of 2010-11. Similarly, ECBs increased to US$ 10.6 billion during the first half of 2011-12, as against US$ 5.7 billion in the first half of 2010-11. Portfolio investment, mainly comprising FII investments and American  depository  receipts (ADRs)/global depository receipts (GDRs), however, witnessed large decrease in inflows to US$ 1.3 billion in the first half of 2011-12 vis-à-vis US$ 23.8 billion in the first half of 2010-11

In fiscal 2010-11, foreign exchange reserves increased by US$ 25.7 billion, from US$ 279.1 billion at end March 2010 to US$ 304.8 billion at end March 2011. Of the total increase in reserves, US$12.6 billion was on account of valuation gains arising out of depreciation of the US dollar against major currencies and the balance US$ 13.1 billion was on BoP basis. In 2011-12, the reserves increased by US$ 6.7 billion from US$ 304.8 billion at end March 2011, to US$ 311.5 billion at end September 2011. Out of this total increase, US$5.7 billion was on BoP basis and the balance US$1.0 billion on account of valuation effect.

External Debt
India’s external debt stock stood at US$ 326.6 billion at end-September 2011, recording an increase of US$ 20.2 billion (6.6 per cent) over end March 2011 estimates of US$ 306.4 billion. This increase was primarily on account of higher commercial borrowings and short-term debt, which together contributed over 80 per cent of the total increase in the country’s external debt.

The maturity profile of India’s external debt indicates the dominance of long-term borrowings. The long-term external debt at US$ 255.1 billion at end September 2011 accounted for 78.1 per cent of the total external debt, while the remaining 21.9 per cent was short-term debt. Government (sovereign) external debt stood at US$ 79.3 billion, while non-government debt amounted to US$ 247.3 billion at end September 2011. India’s external debt has remained within manageable limits as indicated by the external debt to GDP ratio of 17.8 per cent and debt service ratio of 4.2 per cent in 2010-11. This has been possible due to an external debt management policy of the government that emphasizes monitoring of long- and short-term debt, raising sovereign loans on concessional terms with long maturities, regulating ECBs through end-use and all-in-cost restrictions, and rationalizing interest rates on NRI deposits.

Future Prospects
The financial crisis in Europe, along with certain exogenous shocks like the Japanese nuclear disaster, resulted in a sharp global economic slowdown during 2011-12. There is no doubt, however, that a part of India’s slowdown is rooted in domestic causes. The persistent inflation that remained over 9 per cent for much of the year and needed to be tamed played a role. There were also the pressures of democratic politics, which slowed reforms.

The main reason for the recovery to be initially slow is the slight decline in investment rate. In the third quarter of 2011-12, gross fixed capital formation as a ratio of GDP was 30 per cent, down from 32.3 per cent one year ago. But as fiscal consolidation gets back on 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 the RBI, which would encourage investment activity that could have a positive impact on growth. These factors, along with the fact that India’s investment rate at 35.1 per cent, is still an impressive figure, should result in growth consolidating in 2012-13 and picking up rapidly thereafter. Preliminary calculations suggest that the growth rate of GDP in 2013-14 will be 8.6 per cent. Long-term forecasts, of course, always come with a larger margin of error. 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 per cent higher.

Agricultural growth in the Eleventh Five Year Plan has been less than the target of 4 per cent despite a clear improvement compared to the previous plan periods. Though agriculture has now shrunk as a proportion of GDP to 13.9 per cent, as is only to be expected of a growing economy, it is vital sector and provider of livelihood for more than 50 per cent of the population. How this sector performs also has large implications for overall prices and, hence, it is a sector deserving of special attention. The area under foodgrains production has declined over the last three decades. That in itself is not worrying, but what is of concern is the low productivity of Indian agriculture. In yield parameters, India is lagging behind global levels in most crops. Concerted and focused efforts are required for addressing the challenge of stagnating productivity levels in agriculture. A holistic approach, simultaneously working on agricultural research and development, dissemination of technology, and provision of agricultural inputs such as quality seed, fertilizers, pesticides, and irrigation, would be important. Above all, the need is to raise investment in agriculture.

It is also important to understand that productivity itself will get a fillip if the supply chain from farm to consumer can be improved. This will lead to farmers getting a higher price for their products and be an incentive for them to invest and produce more. The crux of an improved supply chain is not for government to try to provide this directly by the public service delivery authorities but to take policy steps that facilitate private players to provide this vital service.

In 2010-11 and 2011-12, there was a slight moderation in services growth, mainly due to the steep fall in growth of public administration and defence services, creating some fiscal space for the government. Growth in trade, hotels, and restaurants is more robust at 11.2 per cent. If interest rates remain elevated, there would be some concern about growth in real estate, ownership of dwellings, and business services which has started decelerating. The outlook for some of the services in the economy is also linked to the global prospects. While software services exports have continued to be steady, the unfolding events in the euro area could lead to some sluggishness in this sector. The growth in fair-weather business services which has already shown signs of deceleration may not get better. Among the other two major services, transportation has already been affected with the Baltic dry index at an all-time low, though this may be of a passing nature. While travel and tourism could also be affected, it could also lead to a shift in tourist inflow pattern with increased inflow of holiday backpackers searching for cheaper destinations like India. The rise in tourists from South Asia, East Asia, and South East Asia could further help this sector.

The recent regulatory prescriptions for European banks have brought in fears of de-leveraging. Indian banks are not expected to have any direct impact on account of their negligible exposure to the troubled zone. However, there could be indirect impact on account of funding pressures. The scope for counter-cyclical financial policy could be explored in financial regulations in order to minimize the negative impact of accumulated financial risks. This will go a long way in providing needed stability to the financial system.

Going forward, fiscal consolidation would need to be anchored in a framework that addresses some of the risks like rise in crude prices. Besides, micro-foundational reforms are needed for achieving desired macro-economic outcomes.

This feature is based on Economic Survey 2012

Welfare Schemes for Women

A number of welfare schemes for women have been undertaken by the Government of India. The details of such schemes under implementation by Ministry of Women and Child Development are as under:

RAJIV GANDHI NATIONAL CRECHE SCHEME FOR THE CHILDREN OF WORKING MOTHERS (RGNCS) provides day care facilities to the children in the age group 0-6 years from families with monthly income of less than 12000/-. In addition to being a safe space for the children, the crèches provide services such as supplementary nutrition, pre-school education and emergency health care, etc.

 

CENTRAL SOCIAL WELFARE BOARD : The main women welfare Related schemes and programmes being implemented by CSWB are as under:-

 

 Family Counselling Centres: It was introduced in 1983.  The centres provide counselling, referral and rehabilitative services to women and children who are victims of atrocities, family maladjustment and social ostracism. They also provide crisis intervention and trauma counselling in case of natural disasters.

 

 Awareness Generation Programme: This scheme aims at creating awareness amongst women and the community at large on rights, status and problems of women in particular and other social concerns.

 

Condensed courses of education for women: This scheme caters to the needs of girls/women who could not join mainstream education system or who were drop outs from formal schools.  The scheme aims to provide educational opportunities to girls/women above the age of 15 years along with additional inputs of skill development/vocational training.  The contents of the course are need based and modified according to local requirement.

 

NATIONAL MISSION FOR EMPOWERMENT OF WOMEN (NMEW) is an initiative of the Government of India for empowering women holistically. It is a Centrally Sponsored Scheme sanctioned in April 2011 and acts as an umbrella Mission with a mandate to strengthen inter-sectoral convergence and facilitate the process of coordination of all the women’s welfare and socio-economic development programmes across Ministries and Departments. NMEW is being implemented in all the 35 States and Union Territories.

 

WORKING WOMEN’S HOSTEL (WWH) Scheme envisages provision of safe and affordable hostel accommodation to working women, single working women, women working at places away from their home-towns and for women being trained for employment. The scheme has been revised recently.

 

SUPPORT TO TRAINING AND EMPLOYMENT PROGRAMME (STEP) for Women was launched as a Central Sector Scheme during 1986-87. It aims at making a significant impact on women by upgrading skills for self and wage employment. The target group includes the marginalized assetless rural Women and urban poor. This also includes wage labourers, unpaid daily workers, female headed households, migrant labourers, tribal and other dispossessed groups, with special focus on SC/ST households, women headed households and families below the poverty line.

 

RASHTRIYA MAHILA KOSH (RMK) with a corpus of Rs.100 crore extends micro-finance services to bring about the socio-economic upliftment of poor women. Credit is provided to the poor women beneficiaries through Intermediary Microfinancing Organisations (IMOs) working at grass root level such as NGOs, Women Federations, Co-operatives, not for profit companies registered under Section 25 of the Companies Act and other Voluntary/Civil society organisations etc. by following a client friendly, simple, without collateral, for livelihood and income generation activities, housing and micro-enterprises.

 

WOMEN’S EMPOWERMENT AND LIVELIHOOD PROGRAMME IN MID-GANGETIC PLAIN (WELP) also called Priyadarshini is being implemented with assistance of International Fund for Agricultural Development in 13 Blocks spread over 5 Districts in Uttar Pradesh i.e. Bahraich, CSM Nagar, Raebareli, Shravasti and Sultanpur and 2 Districts Madhubani and Sitamarhi in Bihar. It aims at holistic empowerment of vulnerable groups of women and adolescent girls in the project area through formation of Women’s Self Help Groups (SHGs) and promotion of improved livelihood opportunities. Over 1,00,000 households are to be covered under the project and 7,200 SHGs will be formed during the project period ending 2016-17. The beneficiaries are expected to be empowered to address their political, legal and health issues through rigorous capacity building. National Bank for Agriculture and Rural Development is the lead programme agency for implementation of the programme which became effective in December 2009.  

 

 INDIRA GANDHI MATRITVA SAHYOG YOJANA (IGMSY) is a Conditional Cash Transfer scheme for pregnant and lactating (P&L) women introduced in the October 2010 to contribute to better enabling environment by providing cash incentives for improved health and nutrition to pregnant and nursing mothers. It envisages providing cash to P&L women during pregnancy and lactation in response to individual fulfilling specific conditions. It addresses short term income support objectives with long term objective of behaviour and attitudinal change.  The scheme attempts to partly compensate for wage loss to P&L women both prior to and after delivery of the child. The scheme is being implemented initially on pilot basis in 52 selected districts using the platform of ICDS. 12.5 lakh P&L women are expected to be covered every year under IGMSY. The beneficiaries are paid  4000/ in three  instalments per P&L women between the second trimester till the child attains the age of 6 months on fulfilling specific conditions related to maternal and child health .

 

 SWADHAR GREH SCHEME: The Ministry of Women and Child Development had been administering Swadhar scheme since 2001 for Women in difficult circumstances. Under the Scheme, temporary accommodation, maintenance and rehabilitative services are provided to women and girls rendered homeless due to family discord, crime, violence, mental stress, social ostracism. Another scheme with similar objectives/target groups namely Short Stay Home (SSH) was being implemented by Central Social Welfare Board.  Being similar in objectives and target groups, both the schemes have been merged to Swadhar Greh scheme with revised financial parameters.

 

 UJJAWALA is a comprehensive scheme for prevention of trafficking and rescue, rehabilitation and reintegration of victims of trafficking for commercial sexual exploitation. Funds are released to NGOs as the scheme is being implemented mainly through NGOs.

Award of projects under NHDP / VGF Schemes under PPP Mode

In the year 2011-12, National Highways Authority of India (NHAI) has awarded 49 projects of 6491 Kms. In addition, Ministry of Road Transport & Highways (M/o RT&H) has awarded 9 projects of 908 Kms. through state agencies. Thus 58 projects of 7400 Kms. have already been awarded. This is about 40% more than the best ever that was in the last year. 

In addition, 3 projects in NHAI of 318 Kms. and 5 projects in the Ministry of 664 Kms. i.e. 982 Kms. in all, bids have been received, which are under evaluation and decision is to be taken soon. 

Per Capita Power Consumption

The per capita consumption of electricity in the country during the year 2009-10 was 778.63 kWh per annum as against the global average of 2730 kWh for the year 2009. 

As per the National Electricity Policy 2005, per capita availability of electricity is to be increased to over 1000 units by 2012. However, it is estimated that per capita consumption in the country would reach 1257 units by the end of the 12th Plan (2016-17). 

As per the report of Working Group on Power for the 12th Plan, capacity addition requirement during 12th Plan is 75,785 MW on all India basis, based on the Mid-Term Appraisal capacity addition target of 62,374 MW during 11th Plan. The capacity of 75,785 MW comprises 9,204 MW hydro, 63,781 MW thermal and 2,800 MW nuclear capacity. In addition, a grid interactive renewable capacity addition of about 18,500 MW during 12th Plan has been considered for the generation planning studies. 

Several steps have been taken to improve the power situation including per capita power availability in the country. These include delicensing of thermal generation, introduction of Ultra-Mega Power Projects (UMPP), investor friendly New Hydro Policy 2008, initiatives for augmentation of domestic manufacturing capacity of power plant equipment, adoption of super-critical technologies, liberalization of mega power policy, enhancing availability of skilled and trained manpower and acceleration in generation capacity addition. 

Rating Agencies

Presently, six credit rating agencies (CRAs) are registered with SEBI, namely: 

1. CRISIL Limited 

2. Fitch Ratings India Private Ltd. 

3. ICRA Limited 

4. Credit Analysis & Research Ltd. (CARE) 

5. Brickwork Ratings India Pvt. Ltd. 

6. SME Rating Agency of India Ltd. (SMERA) 

SEBI (Credit Rating Agencies) Regulations, 1999 have prescribed a comprehensive Code of Conduct to be followed by all SEBI registered CRAs which, inter alia, states that a CRA shall at all times exercise due diligence, ensure proper care and exercise independent professional judgment in order to achieve and maintain objectivity and independence in the rating process. 

SEBI has mandated a half yearly internal audit for credit rating agencies which covers all aspects of CRA operations and procedures, including investor grievance redressal mechanism and compliance with the provisions of the securities laws. The Board of Directors of CRAs is required to consider the report and take appropriate measures to rectify the deficiencies and the CRAs send the Action Taken Report to SEBI. 

SEBI has prescribed various transparency and disclosure requirements for CRAs. These provide the various disclosures like rating procedure, default studies, income from rating services and non-rating services, measures to deal with conflict of interest, obligations in respect of rating of structured products, unsolicited credit ratings, etc. SEBI has also standardized rating symbols and definitions to be followed uniformly by the CRAs. 

Telecom Penetration in Rural Areas

The Minister of State for Communications & Information Technology SHRI MILIND DEORA, informed Rajya Sabha today that at present the rural tele-density is approximately 38% as compared to urban tele-density of 168%. Under the Report of the Working Group on the Telecom Sector for the 12th Five Year Plan, for increasing telecom penetration in rural areas, following are proposed: 

- Mobile access to all villages and rural density of at least 60% by 2017. 

- Completion of National Optical Fibre Network (NOFN). 

- Initiate necessary policy changes for encouraging the sharing of active and passive infrastructure in order to address the various infrastructure issues related to rural areas.

- Development of Broadband kiosks, on the lines of STD PCOs, in the rural areas to provide easy access to rural people to Broadband services. 

- Encouragement for use of facilities like m-banking and e-governance projects. 

- Development of low cost customer premises equipment and application in regional languages. 

It is, therefore expected that rural areas of the country will offer high growth opportunity in the 12th Five Year Plan. 

The cellular Operators Association of India have suggested the following for consideration: 

- Ensuring provision of Low cost Handset. 
- Development of Regional Content.
- Affordability of service through rationalization of levies and duties. 
- Reduction in Universal Service Obligation (USO) Levy. 
- Financial inclusion through Mobile Banking. 
- Automating Government Services and Government Service delivery mechanism. 

Jan Aushadhi Stores

The Government India, Department of Pharmaceuticals, launched Jan Aushadhi Campaign in November, 2008 by way of opening up of Jan Aushadhi Stores in the Government Hospitals to make available quality medicines at affordable prices to all, by way of supply of medicines through Central Pharma Public Sector Undertakings (CPSUs) and others. To begin with, at least one Jan Aushadhi Store in each district is intended to be opened, wherever the State Governments taking into account their prevailing Health Policy, extend their support and cooperation in allotting the space in the Government Hospitals or any other suitable locations and also identifying the agencies amongst NGOs, Charitable/cooperative/Hospitals and Government Bodies, to manage such stores. 

Presently, Jan Aushadhi Stores have presence in the States of Punjab, Haryana, Odisha, Andhra Pradesh, Rajasthan, Delhi, Uttrakhand, West Bengal, Chandigarh, Jammu & Kashmir and Himachal Pradesh. 

Schemes to make Indian Agriculture Climate Resilient

Ministry of Agriculture has intensified implementation of various schemes/programmes to make Indian Agriculture climate resilient by embedding and mainstreaming various adaption measures. Notable among these schemes/programmes are Macro Management of Agriculture, Rashtriya Krishi Vikas Yojana, National Food Security Mission, National Horticulture Mission and National Mission on Micro Irrigation.

Further, Ministry of Agriculture has been implementing National Network Project on Climate Change and has also launched National Initiative on Climate Resilient Agriculture for studying impacts of climate change on Indian Agriculture. 

Agro produce has not registered any decline due to climate change and advancement of the seasonal cycle period. On the contrary, production of food grain has reached a record level of 244.78 million tonne during 2010-11. During the same period, country has also witnessed highest ever production in wheat, pulses, oilseeds and cotton. 

National Sample Survey Office

The National Sample Survey Office (NSSO) under the Ministry of Statistics & Programme Implementation was established in 1950, with the objective of obtaining comprehensive and continuing information relating to social, economic, demographic, industrial and agricultural statistics through sample surveys on countrywide basis.  It has been, therefore, instrumental in developing a strong database that has helped the Central as well as State Governments in development planning and policy formulations.

The NSSO has four Divisions namely, Survey Design & Research Division (SDRD), Data Processing Division (DPD), Field Operations Division (FOD) and Coordination & Publication Division (CPD) to carry out different responsibilities.  Each of these Divisions, except the CPD, is headed by Additional Director General.  All these four Divisions function under the guidance of Director-General & Chief Executive Officer (DG&CEO).  SDRD located at Kolkata is responsible for planning of the survey, finalization of sample design, schedules, instructions and tabulation programme, report writing, etc.  DPD with its headquarters at Kolkata process the data collected through socio-economic surveys through its six Data Processing Centres across the country.  The Field Operations Division (FOD) is responsible for collection of data from the field on various surveys of the NSSO.  The FOD with head quarters at New Delhi functions through a network of 6 Zonal Offices, 49 Regional Offices and 116 Sub-Regional Offices spread throughout the length and breadth of the country. CPD coordinates the activities of all the Divisions.

The National Sample Survey Office (NSSO) functions under the overall direction of National Statistical Commission (NSC). The National Statistical Commission has the requisite independence and autonomy of decision making in the collection; processing and the publication of NSS data. The autonomy includes the choice of subjects or items on which data have to be collected in a given field of investigation or in a given period, the frequency with which the data on any item are to be collected, the preparatory or pilot work to be undertaken on different subjects, the sample design to be adopted, the tabulation to be prepared, the form in which the data are to be collected and processed and the analysis and publication of results.

Every year NSSO conducts not only large-scale sample surveys in the form of NSS Rounds covering a variety of socio-economic topics, but also other important surveys in the field of Industrial Statistics (Annual Survey of Industries), Agricultural Statistics and Retail Prices.

Employment in Tourism Sector

An Inter-Ministerial Coordination Committee has been constituted under the Chairmanship of the Principal Secretary to the Prime Minister to facilitate resolution of Inter-Ministerial issues involved in the development of tourism in the country.

As per the Tourism Satellite Account for India (2002-03), the contribution of Tourism in the Gross Domestic Product (GDP) and employment of the Country, in 2007-08, has been estimated to be 5.92% and 9.24% respectively. 

In addition to various other initiatives, the Ministry of Tourism has taken the initiative of identifying developing and promoting the nascent/upcoming niche products of the tourism industry such as Cruise, Adventure, Medical & Wellness, Golf, Polo, Meetings Incentives Conferences and Exhi8bitions (MICE) and Film Tourism. This is done in order to overcome the aspect of ‘seasonality’ to promote India as a 365 days destination, attract tourists with specific interests and to ensure repeat visits for the products in which India has comparative advantage. 

Credit Guarantee Fund Scheme

The Credit Guarantee Fund Scheme is being operated by Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). CGTMSEexamines and approve the proposals received from the Member Lending Institutions and also monitors the implementation of the scheme and undertakes awareness programmes amongst the stakeholders.  

Cargo Traffic at Major Ports Register Growth Despite Slow Down in the Global Economy

Cargo Traffic at India’s 12 major ports during April – February, 2011-12 was 510.8 million tones, which was 1.59 per cent more than the cargo traffic of the same period last year. This was achieved despite the slow down in the global economy. This was stated by Union Minister of Shipping, Shri G.K. Vasan while addressing the Consultative Committee meeting of his Ministry, here today. Shri Vasan said at the overall commodity level during April – February, 2011-12, Coal, Container, Other Cargo, Fertilizers and Fertilizer Raw Material and POL cargo posted growth of 9.4%, 6.7%, 5.9%, 1.9% and 0.2% respectively.

The Shipping Minister informed the Members that during April-February, 2011-12, Ennore Port recorded highest growth in traffic at 47%. Cochin Port stood second at 13.7% followed by VO Chidambarnar Port at Tuticorin in Tamil Nadu at 13.2%. He said, amongst the major Ports, Kandla Port handled the maximum cargo of 75.4 million tones with a share of 14.8% in total cargo handled at major ports followed by Visakhapatnam with a share 12.2% and JNPT with a share of 11.8% which stood second and third respectively.

Shri Vasan informed the meeting that around 95% of India’s foreign trade by volume and 70% by value is transported through sea. He said 12 Major Ports account for 75% of the total cargo by volume handled at Indian Ports. The volume of cargo traffic handled by Ports is mainly shaped by the levels and changes in both global and domestic activities.

Cargo traffic in iron ore (mainly export) in particular was adversely affected during April-February, 2011-12 and dropped by 28.6 per cent. In terms of composition of cargo traffic handled at major ports, the largest commodity group (with share in percent in total cargo handled) was POL (32.0%) followed by Container traffic (21.4%), other cargo (17.8%), Coal (14.0%), Iron ore (11.0%) and Fertilizer & FRM (3.8%). Major ports which recorded negative growth in traffic during April-February 2011-12 were: Mormugao (20.0%), Haldia Dock Complex (HDC) (9.5%), Chennai Port (7.8%), Kolkata Dock System (KDS) (3.8%) and Paradip (1.6%).

The Members of Parliament participating in the discussion while appreciating the efforts of the Ministry of Shipping in the handling of major ports in the country gave various suggestions for improving the working of these ports. There was a suggestion for urgently filling up the Class III and Class IV vacancies in various ports in the country. One Member suggested that various Ports should take adequate pollution control measures. Another Member was of the view that security of Indian shipping personnel in International waters should be of utmost priority. There was a suggestion for proper Disaster Management Policy also. While thanking the Members for their valuable suggestions for the development of the maritime sector, Shri Vasan said that these suggestions would guide the Ministry of Shipping in optimising the cargo mix at our ports.

Size of the Indian Economy

The share of different countries in world GDP based on purchasing power parity (PPP) in 2010 is as under:

Country	Advanced Economies	United States of America	United Kingdom	Germany	Japan	India
Share	52.1%	19.5%	2.9%	4.0%	5.8%	5.5%

Source: World Economic Outlook, database IMF.

         As per news release dated 26^th December, 2011 of Centre for Economics and Business Research Ltd. London, United Kingdom, India will move from being the 9^th largest economy in 2010 to become the 5^th largest economy by 2020.

         The Approach Paper to the Twelfth Five Year Plan (2012-17) proposes a faster, more inclusive and sustainable growth with a target of 9 per cent increase in GDP.  The key requirements for achieving the goal are better performance in agriculture (at least 4 per cent growth), faster creation of jobs in manufacturing, development of appropriate infrastructural facilities, strong efforts at health, education and skill development, improving the implementation of flagship programmes and focus on backward region and vulnerable groups.  In this connection, certain specific measures taken by government inter alia, include enhancing higher level of investment for agriculture sector including irrigation projects, promoting Micro Small & Medium Enterprises (MSME) sector by way of higher allocation of funds, enhancing investment in the infrastructure sector focusing on Public Private Partnership and a number of legislative measures to develop the financial sector etc.  

Employment Guarantee Scheme

The Minister for Housing and Urban Poverty Alleviation Kumari Selja has said that the Scheme of Swarna Jayanti Shahari Rozgar Yojana (SJSRY) in implementation from 1997 has been revamped recently in the year 2009. The livelihoods conditions in urban areas are vastly different from those in rural areas.

In a written reply in the Lok Sabha today she said, in the urban areas what is perhaps more required is skill development of the urban poor as well as facilitation of sustainable self-employment opportunities for them instead of focusing on unskilled wage employment as is the case in Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS). The recently revised guidelines of SJSRY lays considerable focus on skill development of the urban poor to enhance their employability, so as to enable them to take advantage of increasing job opportunities in the urban areas.

Definition of Slum

The Minister for Housing and Urban Poverty Alleviation Kumari Selja has said that the Ministry of Housing and Urban Poverty Alleviation set up a Committee to look into various aspects of Slum Statistics / Census and issues regarding conduct of slum census 2011 under the chairmanship of Pranab Sen. The Pranab Sen Committee submitted its report on 30th August, 2010. The Committee has defined Slums as:

“A Slum is a compact settlement of at least 20 households with a collection of poorly built tenements, mostly of temporary nature, crowded together usually with inadequate sanitary and drinking water facilities in unhygienic conditions”.

In a written reply in the Lok Sabha today she said, this definition has been adopted for Rajiv AwasYojana with a special dispensation for North Eastern & special category states, where such settlements of 10 -15 houses would be considered as slums.

She said, the Government of India launched the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) on 3rd December, 2005 to assist cities and towns in taking up housing and infrastructural facilities for the urban poor including slum dwellers in 65 cities in the country under the Basic Services to the Urban Poor (BSUP) Programme for the urban poor in the country. For other cities/towns, the Integrated Housing and Slum Development Programme (IHSDP) was launched with the objective to strive for holistic slum development, with a healthy and enabling environment by providing shelter and basic infrastructure facilities to the slum dwellers. The Mission period is from 2005-2012.

Kumari Selja said, the Ministry is also implementing the Interest Subsidy Scheme for Housing the Urban Poor (ISHUP), which is meant to provide 5% interest subsidy on loans upto Rs.1.0 lakh for construction and purchase of houses for the EWS and LIG beneficiaries of the urban poor including Slum dwellers. This Scheme has now been dovetailed with Rajiv Awas Yojana.

She said, in pursuance of the Government’s vision of creating a Slum-free India, a new scheme ‘Rajiv Awas Yojana’ (RAY) has been launched on 02.06.2011. The Phase I of Rajiv Awas Yojana is for a period of two years from the date of approval of the scheme with an outlay of Rs.5,000 crores while Phase II will be for the remaining period of the twelfth plan period.

The Minister said, the Scheme will provide financial assistance to States that are willing to assign property rights to slum dwellers for provision of decent shelter and basic civic and social services for slum redevelopment, and for creation of affordable housing stock. Fifty percent (50 %) of the cost of provision of basic civic and social infrastructure and amenities and of housing, including rental housing, and transit housing for in-situ redevelopment – in slums would be borne by the Centre, including operation & maintenance of assets created under this scheme. For the North Eastern and Special Category States, the share of the Centre would be 90% including the cost of land acquisition, if required.

She said, the Affordable Housing in Partnership Scheme, which encourages public private partnerships for the creation of affordable housing stock, has been dovetailed into RAY. Under this scheme, central support is provided at the rate of Rs.50,000 per unit of affordable dwelling unit or 25% of the cost of civic infrastructure (external and internal), whichever is lower.

Introduction on Interst Free Banking

The Reserve Bank of India (RBI) has received references from the India Centre for Islamic Finance for introducing interest-free banking in the country in order to ensure inclusive growth with innovation in accordance with recommendations of the Raghuram Rajan Committee.

RBI has informed that in the current statutory and regulatory framework, it is not legally feasible for banks in India to undertake Islamic banking activities in India or for branches of Indian banks abroad to undertake Islamic banking outside India.

New Base Rate System

The Reserve Bank of India (RBI) has issued guidelines on Base Rate system replacing the Bench Prime Lending Rate system (BPLR) with effect from July 1, 2010. In terms of these guidelines, banks determine their actual lending rate on loans and advances with reference to the Base Rate. All categories of loans are priced only with reference to the Base Rate, which are announced by banks after seeking approval from their respective Boards. Since the Base Rate will be the minimum rate for all loans, banks are not permitted to resort to any lending below the Base Rate.

The Base Rate is aimed at enhancing transparency in lending rates of banks and enabling better assessment of transmission of monetary policy.

Management of Funds Under NPS

The investment of pension funds of Government employees, who are covered as subscribers to the New Pension System (NPS), was hitherto being made through a pooling arrangement whereby the funds of such employees were credited to a pool account (pending reconciliation of subscribers’ contribution details) from which such funds were allocated to pension fund managers for immediate investment in the best interest of the subscribers. These funds of the Government employees are being managed based on the investment Pattern prescribed by the Government.

The pension funds of the Government employees, who are covered by NPS, are managed by three pension fund managers, namely, SBI Pension Funds (Pvt.) Limited, UTI Retirement Solutions Limited and LIC Pension Fund Limited.

The Pool account is proposed to be discontinued from 1st May, 2012. Thereafter, it would be possible for the individual subscribers to exercise their individual choices regarding investment pattern and the pension fund manager.

NPS is a defined contribution based pension system where the actual returns would be determined by the market based returns.

Scheme for Training of Agriculture Students to Establish Agri-Clinics and Agri-Business Centres

Government has launched a scheme ‘Establishment of Agriclinic and Agri-business Centres’. The Scheme aims to:

(i)           Provide gainful self-employment opportunities to unemployed agricultural graduates, agricultural diploma holders, intermediate in agriculture and biological science graduates with PG in agri-related courses;

(ii)         Support agricultural development; and

(iii)       Supplement efforts of pubic extension by necessarily providing extension services to the farmers as per local needs of farmers.

            Since inception of the scheme, 27,894 candidates have been trained and 9,949 of them have established agri-ventures up to February, 2012.

Salient features of the scheme:

(i)        The National Institute of Agricultural Extension Management (MANAGE) is the Implementing Agency for training component of the Scheme. Two months’ free residential training is imparted to the selected eligible candidates on Agri-Entrepreneurship Development followed by one-year handholding support after completion of training, .through Nodal Training Institutes.

(ii)      The Scheme has a provision of credit support (start up loan) upto ` 20 lakhs for individual projects and  ` 100 lakhs for a group project. 

(iii)    There is a provision of credit linked back-ended composite subsidy on the bank loan availed by trained candidates under the Scheme. The subsidy is 44% in respect of women, SC/ST & all categories of candidates from North-Eastern and Hill States;  and 36% in respect of all other categories

(iv)    National Bank for Agriculture and Rural Development (NABARD) is the Implementing Agency for disbursement of subsidy and monitoring the credit support to agri-clinics and agribusiness centres through the banks.     

Measures to Promote and Develop Co-Operative Sector in the Country

Government has taken various steps to promote and develop the co-operative sector in the country. These include inter-alia, framing of national policy on co-operatives, enactment of Multi-state Co-operative Societies Act, 2002, enactment of the Constitution (Ninety Seventh Amendment) Act, 2011, implementation of recommendation of Prof. Vaidyanathan Committee for revival of short term cooperative credit structure, constitution of high powered committee on co-operatives etc. Besides, the Government is implementing two plan schemes namely the Central Sector Scheme for Cooperative Education & Training through the National Cooperative Union of India (NCUI) and National Council for Cooperative Training (NCCT) and the Central Sector Scheme for assistance to National Cooperative Development Corporation (NCDC) Programmes for development of cooperatives.

The main objectives of the Central Sector Scheme for Cooperative Education & Training are to create awareness about cooperatives amongst the general public, training to the employees working in the cooperative societies and to apprise the members and non-officials of cooperatives about their rights and duties.

The objective of the Restructured Central Sector Scheme for assistance to NCDC programmes for Development of Cooperatives is development of agriculture and rural development through cooperatives. The scheme has three main components namely i) marketing, processing, storage programmes in cooperatives under the least developed States, ii) share capital participation in growers’ / weavers’ cooperative spinning mills and iii) integrated cooperative development projects in selected districts. Under the scheme, the subsidy is provided by the Government and loan component is provided by NCDC from its own sources.