Credit Rating

Credit rating is done for debt instruments such as debentures, fixed deposits, commercial papers, bonds, etc.
The company which issues debt instruments is called an issuer or issuing company. The issuer, issues these instruments to collect finance from the investors.
The investor looks at the credit rating of the instrument and the issuer before investing. If the credit rating is a high, investor will invest in the company. That is, he will purchase the debentures, etc. issued by that company. If the credit rating is low, he will not purchase the debentures, etc. of that company. So, credit rating guides the investor while investing.
Credit rating is an opinion about a debt instrument and its issuer. It tells the investor, whether the debt instrument is safe or risky. That is, it tells whether the company will be able to pay the interest and repay the principal amount in time. Credit rating is only an opinion. It is not a recommendation. It does not ask an investor to buy, hold or sell an instrument.
So, credit rating is an opinion about the future ability and legal obligation of the issuer to make timely payments of principal amount and interest on their debt instruments. Credit rating is done by independent credit-rating agencies like S & P, which is based in USA, while CRISIL, CARE and ICRA Ltd., which are based in India. Credit rating is done by experts after examining various factors. The rating is expressed in alphabetical or alphanumeric symbols. For e.g. if the rating of debenture is AAA (Triple A), then it is considered to have the highest safety for the investor. However, if the credit rating is D, then the debenture is considered to be very risky for the investor. The issuing company asks the credit-rating agency to rate its instrument. This is done before issuing the instrument. The agency collects and studies information about the issuing company. Then it gives a rating for the instrument. This rating is not permanent. It is reviewed periodically.

Benefits of Credit Rating to Investors

The advantages, importance or benefits of credit rating to the investors are:

1. Helps in Investment Decision : Credit rating gives an idea to the investors about the credibility of the issuer company, and the risk factor attached to a particular instrument. So the investors can decide whether to invest in such companies or not. Higher the rating, the more will be the willingness to invest in these instruments and vise-versa.
2. Benefits of Rating Reviews : The rating agency regularly reviews the rating given to a particular instrument. So, the present investors can decide whether to keep the instrument or to sell it. For e.g. if the instrument is downgraded, then the investor may decide to sell it and if the rating is maintained or upgraded, he may decide to keep the instrument until the next rating or maturity.
3. Assurance of Safety : High credit rating gives assurance to the investors about the safety of the instrument and minimum risk of bankruptcy. The companies which get a high rating for their instruments, will try to maintain healthy financial discipline. This will protect them from bankruptcy. So the investors will be safe.
4. Easy Understandability of Investment Proposal : The rating agencies gives rating symbols to the instrument, which can be easily understood by investors. This helps them to understand the investment proposal of an issuer company. For e.g. AAA (Triple A), given by CRISIL for debentures ensures highest safety, whereas debentures rated D are in default or expect to default on maturity.
5. Choice of Instruments : Credit rating enables an investor to select a particular instrument from many alternatives available. This choice depends upon the safety or risk of the instrument.
6. Saves Investor's Time and Effort : Credit ratings enable an investor to his save time and effort in analyzing the financial strength of an issuer company. This is because the investor can depend on the rating done by professional rating agency, in order to take an investment decision. He need not waste his time and effort to collect and analyse the financial information about the credit standing of the issuer company.

Benefits of Credit Rating to Company

The merits, advantages, benefits of credit rating to the issuing company are:

1. Improves Corporate Image : Credit rating helps to improve the corporate image of a company. High credit rating creates confidence and trust in the minds of the investors about the company. Therefore, the company enjoys a good corporate image in the market.
2. Lowers Cost of Borrowing : Companies that have high credit rating for their debt instruments will get funds at lower costs from the market. High rating will enable the company to offer low interest rates on fixed deposits, debentures and other debt securities. The investors will accept low interest rates because they prefer low risk instruments. A company with high rating for its instruments can reduce the cost of public issue to raise funds, because it need not spend heavily on advertising for attracting investors.
3. Wider Audience for Borrowing : A company with high rating for its instruments can get a wider audience for borrowing. It can approach financial institutions, banks, investing companies. This is because the credit ratings are easily understood not only by the financial institutions and banks, but also by the general public.
4. Good for Non-Popular Companies : Credit rating is beneficial to the non-popular companies, such as closely-held companies. If the credit rating is good, the public will invest in these companies, even if they do not know these companies.
5. Act as a Marketing Tool : Credit rating not only helps to develop a good image of the company among the investors, but also among the customers, dealers, suppliers, etc. High credit rating can act as a marketing tool to develop confidence in the minds of customers, dealer, suppliers, etc.
6. Helps in Growth and Expansion : Credit rating enables a company to grow and expand. This is because better credit rating will enable a company to get finance easily for growth and expansion.

Demerits of Credit Rating

The disadvantages, limitations or demerits of credit rating are listed below.

1. Possibility of Bias Exist : The information collected by the rating agency may be subject to personal bias of the rating team. However, rating agencies try their best to provide an unbiased opinion of the credit quality of the company and/or instrument. If not, they will not be trusted.
2. Improper Disclosure May Happen : The company being rated may not disclose certain material facts to the investigating team of the rating agency. This can affect the quality of credit rating.
3. Impact of Changing Environment : Rating is done based on present and past data of the company. So, it will be difficult to predict the future financial position of the company. Many changes take place due to changes in economic, political, social, technological, legal and other environments. All this will affect the working of the company being rated. Therefore, rating is not a guarantee for financial soundness of the company.
4. Problems for New Companies : There may be problems for new companies to collect funds from the market. This is because, a new company may not be in a position to prove its financial soundness. Therefore, it may receive lower credit ratings. This will make it difficult to collect funds from the market.
5. Downgrading by Rating Agency : The credit-rating agencies periodically review the ratings given to a particular instrument. If the performance of a company is not as expected, then the rating agency will downgrade the instrument. This will affect the image of the company.
6. Difference in Rating : There are cases, where different ratings are provided by various rating agencies for the same instrument. These differences may be due to many reasons. This will create confusion in the minds of the investor.

Structure of Indian Money Market

The entire money market in India can be divided into two parts. They are organised money market and the unorganized money market. The unorganised money market can also be known as an unauthorized money market. Both of these components comprise several constituents. The following chart will help you in understanding the organisational structure of the Indian money market.

Components, SubMarkets of Indian Money Market:

After studying above organisational chart of the Indian money market it is necessary to understand various components or sub markets within it. They are explained below.

1. Call Money Market : It an important sub market of the Indian money market. It is also known as money at call and money at short notice. It is also called inter bank loan market. In this market money is demanded for extremely short period. The duration of such transactions is from few hours to 14 days. It is basically located in the industrial and commercial locations such as Mumbai, Delhi, Calcutta, etc. These transactions help stock brokers and dealers to fulfill their financial requirements. The rate at which money is made available is called as a call rate. Thus rate is fixed by the market forces such as the demand for and supply of money.
2. Commercial Bill Market : It is a market for the short term, self liquidating and negotiable money market instrument. Commercial bills are used to finance the movement and storage of agriculture and industrial goods in domestic and foreign markets. The commercial bill market in India is still underdeveloped.
3. Treasury Bill Market : This is a market for sale and purchase of short term government securities. These securities are called as Treasury Bills which are promissory notes or financial bills issued by the RBI on behalf of the Government of India. There are two types of treasury bills. (i) Ordinary or Regular Treasury Bills and (ii) Ad Hoc Treasury Bills. The maturity period of these securities range from as low as 14 days to as high as 364 days. They have become very popular recently due to high level of safety involved in them.
4. Market for Certificate of Deposits (CDs) : It is again an important segment of the Indian money market. The certificate of deposits is issued by the commercial banks. They are worth the value of Rs. 25 lakh and in multiple of Rs. 25 lakh. The minimum subscription of CD should be worth Rs. 1 Crore. The maturity period of CD is as low as 3 months and as high as 1 year. These are the transferable investment instrument in a money market. The government initiated a market of CDs in order to widen the range of instruments in the money market and to provide a higher flexibility to investors for investing their short term money.
5. Market for Commercial Papers (CPs) : It is the market where the commercial papers are traded. Commercial paper (CP) is an investment instrument which can be issued by a listed company having working capital more than or equal to Rs. 5 cr. The CPs can be issued in multiples of Rs. 25 lakhs. However the minimum subscription should at least be Rs. 1 cr. The maturity period for the CP is minimum of 3 months and maximum 6 months. This was introcuced by the government in 1990.
6. Short Term Loan Market : It is a market where the short term loan requirements of corporates are met by the Commercial banks. Banks provide short term loans to corporates in the form of cash credit or in the form of overdraft. Cash credit is given to industrialists and overdraft is given to businessmen.

Indian Money Market - Features

Every money is unique in nature. The money market in developed and developing countries differ markedly from each other in many senses. Indian money market is not an exception for this. Though it is not a developed money market, it is a leading money market among the developing countries.

Indian Money Market has the following major features or characteristics :-

1. Dichotomic Structure : It is a significant aspect of the Indian money market. It has a simultaneous existence of both the organized money market as well as unorganised money markets. The organized money market consists of RBI, all scheduled commercial banks and other recognized financial institutions. However, the unorganized part of the money market comprises domestic money lenders, indigenous bankers, trader, etc. The organized money market is in full control of the RBI. However, unorganized money market remains outside the RBI control. Thus both the organized and unorganized money market exists simultaneously.
2. Seasonality : The demand for money in Indian money market is of a seasonal nature. India being an agriculture predominant economy, the demand for money is generated from the agricultural operations. During the busy season i.e. between October and April more agricultural activities takes place leading to a higher demand for money.
3. Multiplicity of Interest Rates : In Indian money market, we have many levels of interest rates. They differ from bank to bank from period to period and even from borrower to borrower. Again in both organized and unorganized segment the interest rates differs. Thus there is an existence of many rates of interest in the Indian money market.
4. Lack of Organized Bill Market : In the Indian money market, the organized bill market is not prevalent. Though the RBI tried to introduce the Bill Market Scheme (1952) and then New Bill Market Scheme in 1970, still there is no properly organized bill market in India.
5. Absence of Integration : This is a very important feature of the Indian money market. At the same time it is divided among several segments or sections which are loosely connected with each other. There is a lack of coordination among these different components of the money market. RBI has full control over the components in the organized segment but it cannot control the components in the unorganized segment.
6. High Volatility in Call Money Market : The call money market is a market for very short term money. Here money is demanded at the call rate. Basically the demand for call money comes from the commercial banks. Institutions such as the GIC, LIC, etc suffer huge fluctuations and thus it has remained highly volatile.
7. Limited Instruments : It is in fact a defect of the Indian money market. In our money market the supply of various instruments such as the Treasury Bills, Commercial Bills, Certificate of Deposits, Commercial Papers, etc. is very limited. In order to meet the varied requirements of borrowers and lenders, It is necessary to develop numerous instruments.

Recent Reforms in Indian Money Market

Indian Government appointed a committee under the chairmanship of Sukhamoy Chakravarty in 1984 to review the Indian monetary system. Later, Narayanan Vaghul working group and Narasimham Committee was also set up. As per the recommendations of these study groups and with the financial sector reforms initiated in the early 1990s, the government has adopted following major reforms in the Indian money market.

Reforms made in the Indian Money Market are:-

1. Deregulation of the Interest Rate : In recent period the government has adopted an interest rate policy of liberal nature. It lifted the ceiling rates of the call money market, short-term deposits, bills rediscounting, etc. Commercial banks are advised to see the interest rate change that takes place within the limit. There was a further deregulation of interest rates during the economic reforms. Currently interest rates are determined by the working of market forces except for a few regulations.
2. Money Market Mutual Fund (MMMFs) : In order to provide additional short-term investment revenue, the RBI encouraged and established the Money Market Mutual Funds (MMMFs) in April 1992. MMMFs are allowed to sell units to corporate and individuals. The upper limit of 50 crore investments has also been lifted. Financial institutions such as the IDBI and the UTI have set up such funds.
3. Establishment of the DFI : The Discount and Finance House of India (DFHI) was set up in April 1988 to impart liquidity in the money market. It was set up jointly by the RBI, Public sector Banks and Financial Institutions. DFHI has played an important role in stabilizing the Indian money market.
4. Liquidity Adjustment Facility (LAF) : Through the LAF, the RBI remains in the money market on a continue basis through the repo transaction. LAF adjusts liquidity in the market through absorption and or injection of financial resources.
5. Electronic Transactions : In order to impart transparency and efficiency in the money market transaction the electronic dealing system has been started. It covers all deals in the money market. Similarly it is useful for the RBI to watchdog the money market.
6. Establishment of the CCIL : The Clearing Corporation of India limited (CCIL) was set up in April 2001. The CCIL clears all transactions in government securities, and repose reported on the Negotiated Dealing System.
7. Development of New Market Instruments : The government has consistently tried to introduce new short-term investment instruments. Examples: Treasury Bills of various duration, Commercial papers, Certificates of Deposits, MMMFs, etc. have been introduced in the Indian Money Market.

These are major reforms undertaken in the money market in India. Apart from these, the stamp duty reforms, floating rate bonds, etc. are some other prominent reforms in the money market in India. Thus, at the end we can conclude that the Indian money market is developing at a good speed.

Public Debt In India

During recent years, public debt in India has been growing at an alarming rate. The under developed nature of the economy & institutional credit deficiencies makes the financing of economic development a complicated problem.  Hence the government has to play a key role in stimulating the rate of capital formation & in promoting the economic development of the economy.

So public debt can be used by the government as means for mobilising the resources.
  

Internal Debt

The internal debt is a major component of public debt of the central government of India.
The following are the various components of internal debt. 

1. Market Loan
These have a maturity period of 12 months or more at the time of issue and are generally interest bearing. The government issues such loans almost every year. These loans are raised in the open market by sale of securities or otherwise. Total market loans as at the end of March 2005 are estimated at Rs. 7,58,999 crores. 

2. Bonds

The Government borrows funds by way of issue of bonds. The government obtains funds through the issue of bonds such as National Rural Development Bonds, Central Investment Bonds. The bonds are issued at different maturity periods, which may range from 3 years to 10 years period. They provide medium-term to long-term funds to the government.

3. Treasury Bills
A major source of short-term funds for the government is obtained by issue of treasury bills. At present, government issues 91 day and 364 day treasury bills. The treasury bills are purchased by commercial banks and others. 

4. Special Floating and Other Loans

These represents India's contribution towards share capital of international financial institutions like IMF, World Bank, International Development Agency and so on. These are non-negotiable and non-interest bearing securities. The Government of India is liable to pay the amount at the call of these institutions. Accordingly, it is a short-term debt upon the Government of India.

5. Special securities issued by RBI
The government obtains temporary loans for a period of maximum 12 months from RBI and issues special securities, which are non-negotiable and non-interest bearing. Such securities provide short term funds to the Government.

6. Ways and Mean Advances
The Government of India obtains ways and means advances from the Reserve Bank of India to meet its short period expenditure. These debts are purely temporary in nature and are usually repaid within three months.

7. Securities against small savings

Since 1999-2000, under the new accounting system, national small savings have been converted into the Central Government securities. As a result there has been a sharp increase in internal debt and corresponding decline in small savings.

External Debt

External debt refers to the liabilities of the Indian Government, public sector, private sector and financial institutions to overseas parties.
The government of India has raised foreign loans from U.S.A, U.K, France, U.S.S.R, Japan, etc.
External Debt rose from Rs. 31,525 crores in 1990-91 to Rs. 68,392 crores in 2005-06.
The external debt can be broadly divided into two groups :

A. Long term debt :

1. Multilateral borrowings,
2. Bilateral borrowings
3. Loans from IMF, World Bank, etc.

B. Short term debt :
It is to be noted that the overall external debt of India comprises of Government debt and Non-government debt. The Government debt is owed by Govemment authorities, both Central and State Governments, whereas the non-Government debt is owed by private parties in India. In terms of composition, India's external debt has shifted in favour of private debt over the last decade.

 Other Internal Liabilities

The government does not include liabilities under Public Debt. However, the government is liable to make repayment of these liabilities. 

1. Small Savings

In recent years small savings have increased due to rising money income in the economy.
Recently the Government of India launched a number of small savings instruments. These include 9% Relief Bonds 1987, Kisan Vikas Patras, Indira Vikas Patras, etc.

2. Provident Funds
Provident funds are divided into two categories :-

1. Employee Provident Funds meant for employees.
2. Public Provident Funds meant for general public.

3. Other accounts

Other accounts include Postal Insurance and Life Annuity Fund, Borrowings against Compulsory Deposits, Income Tax Annuity Deposit, Special Deposit of Non-Government Provident Fund and Outstanding Amount.

4. Reserve Funds and Deposits
Reserve Funds and Deposits are divided into two categories :-

1. Interest bearings and
2. Non-interest bearings.

They include depreciation and reserve funds of Railways, Department of Post, Telecommunication, Deposits of Local Funds, Departmental and Judicial Deposits, Civil Deposits, etc.

NSTFDC and SBI Sign Refinance Agreement

The National Scheduled Tribe Finance and Development Corporation (NSTFDC) and State Bank of India (SBI) signed a Refinance Agreement on August 1 in the presence of Shri V. Kishore Chandra Deo, Union Minister of Panchayati Raj and Tribal Affairs. The agreement was signed by the Shri Gur Saroop Sood, Chairman-cum-Managing Director of NSTFDC and Shri A. Krishna Kumar, Managing Director and Group Executive (NB) of SBI. On the occasion, Shri Kishore Chandra Deo said that this is a significant occasion when State Bank of India, the largest Public Sector Bank in the country, has entered into an arrangement with NSTFDC for channelizing concessional loans to the Scheduled Tribes. This also reflects positively on the SBI that they not only cater to the large business houses and high net worth individuals and industrialists but are also committed to economic upliftment of the weaker sections of the society.

The Minister said that today’s arrangements would open a new era towards micro financing of needy Scheduled Tribes by NSTFDC through SBI. Under the arrangements, NSTFD would provide refinance to SBI for loans extended to Self Help Group comprising all ST members. ST beneficiaries would pay concessional interest rate of 6% p.a. only. This arrangement would open doors of more than 14000 branches of SBI to the needy Scheduled Tribes Community for seeking loans upto RS. 5 lakh at the concessional rate.

He informed that the NSTFDC is an apex organization or economic development of Scheduled Tribes, was set up in April 2001 under the Ministry of Tribal Affairs. This Corporation provides financial assistance to Scheduled Tribes at concessional rates of interest for taking up income generation activities. The Corporation in its 11 years of operations has sanctioned financial assistance for schemes costing around Rs. 2200 crore. of this NSTFDC share is around Rs. 1200 crore, while the balance has been met by way of margin money/subsidy/promoters contribution. This financial assistance has benefited around Rs. 5 lakh STs throughout the country.

Shri Deo said that most of the STs are geographically isolated and under-privileged on most of the development indices. This calls for specific need based intervention from developmental agencies and not a ‘one size fit all’ approach. He said that within the framework of schemes of NSTFDC, a tribal can take up any vocation suited to his/her aptitude, skill set, habitat etc. There is a complete flexibility in this regard. He can opt to obtain assistance for agricultural or services or transport or even industrial sector activity. NSTFDC’s recently launched Education Loan Scheme is also calibrated to empower ST students for obtaining professional/technical education and for pursuing Ph.D in India. The NSTFDC is not only implementing its schemes through State Channelizing Agencies but is also increasingly exploring the avenues of reaching out through Public Sector Banks and Regional Rural Banks who have entered into agreements with NSTFDC.

United States all set to become biggest supplier of Gold to India

India's lust for gold is legendary. Indian households hold over $950 billion of the yellow metal, revealed a recent research by Macquarie research. India imports most of its requirements: a quarter of all the gold sold globally is imported by us.

But in recent times, another country has matched India's hunger for gold. China, the largest producer of the precious metal, became a net importer in 2011, as domestic demand soared.

Sometime this year, China is expected to overtake India as the largest gold consumer. China, which is among the top producers of gold globally, has high entry barriers for private miners and also uses its production for building up national reserves.

Entry barriers for entrepreneurs are high in Russia as well. South Africa and Australia, both big producers of the yellow metal, are becoming unpopular due to, respectively, high taxation and high production costs.

Some European gold reserves, for example the Rosia Montana in Romania, the largest untapped reserves in Europe, are facing problems due to environmental regulations.

That begets the question: where will India get its gold from? The US, and other countries in the Americas. North America has always been significant in the global gold stakes.

Globally, there have been 99 significant gold discoveries (defined as a deposit containing at least 2 million oz of the metal) during 1997-2011.

The Americas hold the greatest share in these discoveries—not surprising given that the Americas have accounted for more than half the industry's discovery-oriented gold exploration spending during the period.

In 2010, the gold exploration budget rose to $5.4 billion, which was 59% more than in 2009. In 2011, mines in the US produced gold worth about $12 billion.

Gold mining companies are again flocking to the Americas. In Canada, miners are making huge new discoveries as well re-starting old mines that were deserted due to lack of funds. In 2011, production rose 21% year-on-year to Canada's highest output in five years. Mexico's large mineral belts have been equally attractive for gold miners.

North America Accounts for Lion's Share

With 2011 production coming in at an estimated 85 mt, Mexico has seen a 254% increase in output. In all, North America was responsible for 16% of mine production in 2011.

And with a year-on-year production growth of 9%, well above the global average, along with a bevy of ongoing junior exploration, North America will be pumping out gold from a lot of new mines.

Post office to launch mobile remittance scheme

Postal Department is launching an instant money remittance scheme, mobile remittance scheme, in tie-up with the BSNL infrastructure by next month, Chief Postmaster General (Kerala Circle) Sobha Koshy said today.

In the first phase the scheme will be implemented in selected states like Kerala, Bihar, New Delhi and Punjab, Koshy told reporters after releasing a special postal cover in connection with the ruby jubilee celebrations of Kottayam Press Club.

In Kerala the scheme will be implemented in selected 30 post offices in Idukki, Aluva and Pathanamthitta. As per the scheme a person can send money through the post office which will send a message to the other post office about the amount to be given to the other person, she said.

Koshy said the process of computerising the entire postal network in the country, numbering 1,55,000 post offices, was going on. In Kerala out of 1507 post offices, except 29 post offices rest are computerised.

The department is also planning to implement a range of products including e-post facility instead of letter, electronic money order scheme by which upto Rs 5000 will be sent with a small message, M O Videsh and pick-up service.

IT-BPO, A Key Sector of Indian Economy

The year 2011-12 was marked by growing global uncertainties. Global recovery has stalled, growth prospects have dimmed and downside risks have escalated. By contrast, the Indian IT-BPO Industry (including hardware) continued to exhibit resilience. It weathered uncertainties in global business environment and reached a significant milestone in the year 2011-12 by aggregating revenue of US $ 101 billion, a growth of about 14.7 per cent over the previous year. Thus, the year 2011-12 is a landmark year for the IT-BPO Industry.

The Indian software and services export including BPO exports is estimated at US $ 68.7 billion in 2011-12, an increase of 16.4 per cent. The IT services exports is estimated to be US $ 39.8 billion, showing a growth of 18.8 per cent. BPO exports are estimated to grow to US $ 15.9 billion in 2011-12, a year-on-year growth of about 12 per cent. IT services contributed 58 per cent of total IT-BPO exports in 2011-12, followed by BPO at 23 per cent and Software products/engineering services at 19 per cent.

USA continues to drive IT-BPO exports growth. Growth is being driven by higher demand for IT services and support. Continental Europe and UK, the second largest markets for Indian IT-BPO exports are seeing their share decline in the last three years. Indian service providers have been aggressively growing business in the Asia-Pacific (APAC) market. Aimed at reducing their geographic dependency and spread currency risk, APAC is growing fastest at nearly 18 per cent; its share in total IT-BPO exports is expected to increase to nearly 8 per cent.

The IT-BPO market is being driven by demand across all key consumer segments. Notwithstanding the growth witnessed in the IT-BPO domestic segment, it accounts for a little over 21 per cent of overall industry revenues. India continued its dominant position as the leading sourcing market as compared to other emerging economies. Its share is global sourcing stood at 58 per cent in 2011.

The IT-BPO sector has become one of the key sectors for the Indian economy because of its economic impact. The sector is responsible for creating significant employment opportunities in the economy. Direct employment within the IT-BPO sector reached 2.77 million, with over 2,30,000 jobs being added in 2011-12.

The spectacular growth performance in the IT-BPO industry in the last decade has helped the industry contribute substantially to India's GDP. In 2011-12, this sector’s contribution to GDP is estimated to be 7.5 per cent. The IT-BPO industry has played a key role in putting India on the world-map. This segment has enormous potential to grow in the year to come. By 2012-13, this would have developed to a potential to touch US $ 100 billion in revenues as compared to US $ 87.7 billion in 2011-12, a growth of about 14 per cent.

Financial Inclusion

In his Budget Speech 2010-11, the Finance Minister had directed all banks to provide appropriate banking facilities to habitations having population in excess of 2000 by March, 2012 using various models and technologies including branchless banking through Business Correspondents (BCs). The Financial Inclusion Campaign has been named ‘Swabhimaan’. The Banks formulated their road maps for Financial Inclusion through the mechanism of the State Level Bankers Committee (SLBCs) and had identified approximately 74,000 habitations across the country having a population of over 2000 for providing banking facilities. These habitations were allocated to Public Sector Banks, Regional Rural Banks, Private Sector Banks and Cooperative Banks for extending banking services by March, 2012. As per information received from SLBC Convener Banks, out of 74,398 villages identified under the campaign, 74,194 villages have been covered and 3.16 crore Financial Inclusion bank accounts have been opened by end of March, 2012.

Further, the banks have been advised to set up Ultra Small Branches in villages covered under Business Correspondent model where the officer designated by the bank would be available with a lap top on predetermined day and time in a week. While the cash services would be offered by the Business Correspondent Agent, the bank officer would offer other services to be offered by the bank, undertake field verification and follow up the banking transactions.

The Government issued Strategy and Guidelines on Financial Inclusion in October, 2011, vide which it was, inter-alia, advised to banks to open bank branches by September 2012 in all habitations of 5,000 or more population in under banked districts and 10,000 or more population in other districts. As per reports received from the Convener Banks of State Level Bankers Committees (SLBCs), of the 3,905 bank branches to be opened, 739 bank branches have been opened by end of April, 2012.

Regional Rural Banks (RRBs) have also been advised to work out branch expansion plan such that there is an increase of 10% in bank branches in 2011-12 and also in 2012-13 over the respective previous years. As per provisional data, RRBs opened 914 branches during 2011-12.

Of the 71 unbanked blocks in the country, as on 31 March, 2011, with the persistent efforts of the Government, banking facilities have been provided in all unbanked blocks by March 31, 2012. As a next step it has been advised to cover all those blocks with Business Correspondents and Ultra Small Branch which have so far been covered by mobile banking only.

NRHM KEY ACHIEVEMENTS

Some of the key achievements under National Rural Health Mission are:
1. Accelerated improvements in key reproductive health indicators e.g. Maternal Mortality Ratio (MMR), Infant Mortality Rate (IMR), Total Fertility Rate (TFR) and Institutional Delivery Rate.
2. Upgradation and operationalization of 8250 Primary Health Centers (PHCs) as 24X7 facilities
3. Operationalization of 2312 FRUs which includes Community Health Centers (CHCs), Sub District Hospitals and District Hospitals for providing OPD and 24*7 indoor facilities especially for comprehensive emergency obstetric and newborn care.
4. 374 Special Newborn Care Units, 1638 Newborn Stabilization Units, and 11432 Newborn Care Corners have been established at different levels of health facilities.
5. Augmentation of the availability of skilled manpower by means of different skill- based trainings such as Skilled Birth Attendance for Auxiliary Nurse Midwives/Staff Nurses/Lady Health Visitors; training of MBBS Doctors in Life Saving Anaesthetic Skills and Emergency Obstetric Care including Caesarean Section.
6. Over 1.4 lakh Human Resources have been engaged across the country on contractual basis under National Rural Health Mission which includes- ANMs, Staff Nurses, Paramedics, AYUSH Doctors, Doctors, Specialists and AYUSH Paramedics.
7. Engagement of 8.61 lakhs Accredited Social Health Activists (ASHAs) to generate demand and facilitate accessing of health care services by the community.
As per the Health Management Information System (HMIS) under the National Rural Health Mission, total institutional deliveries at public and private accredited health facilities increased from 1.62 Crores in the year 2009-10 to 1.68 Crores in the year 2010-11.
The key strategies adopted by the Government of India to strengthen NRHM are:
• Creation of strong institutional mechanisms at National and State level through Mission Steering group, State/District Health Mission.
• Strengthening Programme Management units for effective public health management through State, District and Block Programme management units.
• Enhanced fund allocation to NRHM for additional funding to States.
• Preparation of inter-sectoral District Health Plans.
• Integrating vertical Health and Family Welfare programmes at National, State, District and Block levels.
• Supporting States through united funds for the functioning of Village Health Sanitation & Nutrition Committees and thereby focusing on creation of Village Health Plans.
• Promoting access to healthcare at household level through ASHA.
• Supporting the States to train and enhance capacity of Panchayati Raj Institutions.
• Strengthening facilities from PHCs and above through grants to RogiKalyanSamitis (RKS).
• Promotion of Public Private Partnership through NRHM to improve service delivery.

CENSUS 2011 Major Data's

India's 15th National census has began on May 1, 2010. The census was conducted in two phases. According to the provisional reports released on March 31, 2011, the Indian population increased to 1.21 billion with a decadal growth of 17.64%. Adult literacy rate increased to 74.04% with a decadal growth of 9.21%. India's population is now pegged at 1.21 billion, an increase of more than 181 million in the last 10 years, according to the provisional 2011 Census report released on March 31 2011. The population comprising 623.7 million males and 586.5 million females is almost equal to the combined population of the United States, Indonesia, Brazil, Pakistan, Bangladesh and Japan put together. The population has increased by more than 181 million during the decade 2001-2011, the report said.

CENSUS OF INDIA 2011 PROVISIONAL POPULATION TOTAL

Distribution of population sex ratio density and decadal growth rate of population 2011

Administrative division of India

The growth rate in 2011 is 17.64 percent in comparison to 21.15 percent in 2001. Growth of population 2001-2011

The 2001-2011 period is the first decade -- with exception of 1911-1921 -- which has actually added lesser population compared to the previous decade, Registrar General of India and Census Commissioner of India C. Chandramauli said in presence of Home Secretary Gopal K Pillai in New Delhi. However, the percentage decadal growth during 2001-2011 has registered the sharpest decline since independence -- a decrease of 3.90 percentage points from 21.54 to 17.64 percent.

The percentage decadal growth rates of the six most populous states have declined during 2001-2011 compared to 1991-2001.

Uttar Pradesh (25.85 percent to 20.09 percent), Maharashtra (22.73 per cent to 15.99 per cent), Bihar (28.62 per cent to 25.07 per cent), West Bengal (17.77 per cent to 13.93 per cent), Andhra Pradesh (14.59 per cent to 11.10 per cent and Madhya Pradesh (24.26 per cent to 20.23 per cent).

Among the states and Union territories, Uttar Pradesh is the most populous state with 199 million people and Lakshadweep the least populated at 64,429. The combined population of UP and Maharashtra is bigger than that of the US. Population share of States and Union Territories India 2011

The highest population density is in Delhi's north-east district (37,346 per sq km) while the lowest is in Dibang Valley in Arunachal Pradesh (just one per sq km).

Child sex ratio in 2011 is 914 female against 1,000 male--the lowest since Independence. Sex Ratio of Total population and child population in the age group 0-6 and 7+ years - 2001 and 2011

According to the data, literates constitute 74 percent of the total population aged seven and above and illiterates form 26 percent. 

The literacy rate has gone up from 64.83 percent in 2001 to 74.04 percent in 2011 showing an increase of 9.21 percent. 

Interestingly, the addition of 181 million population during 2001-2011 is slightly lower than the total population of Brazil, the fifth most populous country in the world.

While China has 19.4 percent of the world's total population, India has 17.5 percent of the world population.

Apart from UP, other most populous states are -- Maharashtra (112.3 million), Bihar (103.8 million), West Bengal (91.3 million) and Andhra Pradesh (84.6 million).

Besides Lakshadweep, smallest UTs and states are - Daman and Diu (2,42,911), Dadra and Nagar Haveli (3,42,853), Andaman and Nicobar Islands (7,79,944) and Sikkim (6,07,688).

"For the first time, there is a significant fall in the growth rate of population in the Empowered Action Group states after decades of stagnation," Chandramouli said.

The EAG states are: UP, Bihar, Rajasthan, Uttarakhand, Jharkhand, Madhya Pradesh Chhattisgarh and Orissa.

The Indian Census is the largest single source of a variety of statistical information on different characteristics of the people of India. With a history of more than 130 years, this reliable, time tested exercise has been bringing out a veritable wealth of statistics every 10 years, beginning from 1872 when the first census was conducted in India non-synchronously in different parts. To scholars and researchers in demography, economics, anthropology, sociology, statistics and many other disciplines, the Indian Census has been a fascinating source of data. The rich diversity of the people of India is truly brought out by the decennial census which has become one of the tools to understand and study India.

Census of India has been conducted in India since 1872 and 2011 marks the first time biometric information was collected.

India's population is projected to overtake China's by 2025 and its large youth population means it can look forward to a demographic dividend that includes ample supply of labour, rising productivity and plenty of younger workers to fund the pensions of those who have retired.

The responsibility of conducting the decennial Census rests with the Office of the Registrar General and Census Commissioner, India under Ministry of Home Affairs, Government of India. It may be of historical interest that though the population census of India is a major administrative function; the Census Organisation was set up on an ad-hoc basis for each Census till the 1951 Census. The Census Act was enacted in 1948 to provide for the scheme of conducting population census with duties and responsibilities of census officers. The Government of India decided in May 1949 to initiate steps for developing systematic collection of statistics on the size of population, its growth, etc., and established an organisation in the Ministry of Home Affairs under Registrar General and ex-Officio Census Commissioner, India. This organisation was made responsible for generating data on population statistics including Vital Statistics and Census. Later, this office was also entrusted with the responsibility of implementation of Registration of Births and Deaths Act, 1969 in the country.

 

Census-2011 Data Summary

Area

Area of India : 3,287,240 Sq km.*

Largest State Rajasthan 342,239 Sq km Smallest State Goa 3,702 Sq km Largest Union Territory Andaman & Nicobar Islands 8,249 Sq km Smallest Union Territory Lakshadweep 32 Sq km Largest District Kachchh (Gujarat) 45,652 Sq km Smallest District Mahe ( Pondicherry ) 9 Sq km * The area figure exclude 78,114 sq. km. under the illegal occupation of Pakistan, 5,180 sq. km. Illegally handed over by Pakistan to China and 37,555 sq.km. under the illegal occupation of China in Ladakh district.

Administrative Divisions

Administrative Divisions :

No. of States 28 No. of Union Territories 7 No. of Districts 593 No. of Sub-districts 5,463 No. of CD Blocks 3,799 No. of Urban Agglomerations / Towns 4,378 No. of Urban Agglomerations 384 No. of Towns 5,161 No. of Inhabited Villages 593,731 No. of Uninhabited Villages 44,656

Population in 2011

Persons 121,01,93,422 Males 62,37,24,248 Females 58,64,69,174 Highest / Lowest Population  State with Highest Population Uttar Pradesh 19, 95, 81,477(16.49%)  State with Lowest Population Sikkim 6, 07,688 (0.05%)  UT with Highest Population Delhi 1,67,53,235  UT with Lowest Population Lakshadweep 64,429  District with Highest Population Thane (Maharashtra) 1,10,54,131  District with Lowest Population Yanam (Pondicherry) 55,616

 Population Density

Persons / Sq. Km
		India	382
State with Highest Population Density		Bihar	1,102
State with Lowest Population Density		Arunachal Pradesh	17
UT with Highest Population Density		Delhi	11,297
UT with Lowest Population Density		Andaman & Nicobar Islands	46

Sex Ratio

Sex ratio (females per thousand males)
		India	944
		Rural	946
		Urban	900
State with Highest Female Sex Ratio		Kerala	1,099
State with Lowest Female Sex Ratio		Sikkim	883
UT with Highest Female Sex Ratio		Pondicherry	1,047
UT with Lowest Female Sex Ratio		Daman & Diu	589

Govt. Programms & Schemes

1.Community Development Programme (CDP) -1952: Overall development of rural areas and people's participation.
2. Intensive Agriculture Development program (IADP)-1960-61: To provide loan for seeds and fertilizers to farmers.
3. Intensive Agriculture Area programme (IAAP) 1964-65: To develop special harvest in agriculture area.
4.  Credit Authorization Scheme (CAS) -1965: Involved qualitative credit control of reserve bank of India.
5. High yielding variety programme (HYVP) 1966-67: To increase the productivity of food grains by adopting latest varieties of inputs of crops.
6.Green Revolution -1966-67: To Increase productivity. Confined to wheat production.
7. Rural Electrification Corporation-1969: To provide electricity in rural areas
8. Scheme of Discriminatory Interest Rate- 1972: To provide loan to the weaker sections of society at a concessional interest rate of 4%.
9. Accelerated Rural water Supply Programme (ARWSP)-1972-73: Providing drinking water in villages.
10. Drought Prone Area Programme - 1973: Protection from drought by achieving environement balace and by developing ground water.
11. Crash Scheme for Rural Employment (CSRE)-1973: For rural employment
12. Marginal Farmer and Agriculture Labor Agency (MFALA)-1973-74: Technical & financial assistance to marginal farmers
13. Small Farmer Development Scheme SFDS- 1974-75: Technical & financial assistance to small farmers
14. Command Area Development Programme  (CADP)- 1975:  Better utilization of irrigational capacities
15. Twenty Point Programme (TPP)- 1975: Poverty eradication and an overall objective of raising the level living
16.  National Institution of Rural Development-1977: Training, investigation and advisory for rural development
17.Desert Development Programme (DDP)- 1977-78 : *To control the desert expansion by maintaining environment balance
18.  Food For Work Programme-1977-78:providing food grains to labor
19.Antyodaya Yojna-1977-78 : Scheme of Rajasthan, providing economic assistance to poorest families
20.Training Rural Youth for Self Employment TRYSEM-15th August 1979 : educational and vocational training
21. Integrated Rural Development Programme :IRDP -October 2, 1980: Overall development of rural poor
22. National Rural Development programme NREP- 1980 : employment for rural manforce
23. Development of Women & Children in Rural Areas (DWCRA)- 1982: sustainable opportunities of self employment to the women belonging to the rural families who are living below the poverty line.
24. Rural Landless Employment Guarantee Programme (RLEGP) - August 15, 1983: employment to landless farmers and laborers
25. Farmers Agriculture Service Centers FASCs-1983-84: Tell the people use of improved instruments of agriculture
26. National Fund for Rural Development - 1984 : To grant 100% tax rebate to donors and also to provide financial assistance for rural development projects
27.  Comprehensive Crop Insurance Scheme-1985: Crop Insurance
28. Council of Advancement of People's Action & Rural Technology (CAPART)- 1986: Assistance to rural people
29.  Self Employment Programme for the Poor SEPUP-1986: Self employment through credit and subsidy
30. 1986: National Drinking Water Mission: For rural drinking water renamed and upgraded to Rajiv Gandhi National Drinking Water Mission in 1991.
31.  Service Area Account* Rural Credit -1988
32. Jawahar Rozgar Yojna (JRY)-1989:  Employment to rural unemployed
33. Nehru Rozgar Yojna NRY- 1989: Employment to Urban unemployed
34. Agriculture & Rural Debt Relief Scheme: ARDRS-1990:  Exempt Bank loans up to Rs. 10000 for rural artisans and weavers
35. Scheme for Urban Micro Enterprises (SUME)-1990: Assist urban small entrepreneurs
36. Scheme of Urban wage Employment (SUWE) -1990: Scheme for urban poor's
37.Scheme of Housing and Shelter Upgradation (SHASU): Providing employment by shelter Upgradation
38.National Housing Bank Voluntary Deposit Scheme- 1991: Using black money by constructing low cost housing for the poor.
39.  National Renewal Fund- 1992: This scheme was for the employees of the public sector
40.Employment Assurance Scheme (EAS) -October, 2, 1993: Employment of at least 100 days in a year in villages
41.District Rural Development Agency (DRDA) -1993: To provide financial assistance for rural development.
42. Members of parliament Local Area Development Scheme MPLADS -December 23, 1993: Sanctioned 1 crore per year for development works
43.District Rural Development Agency (DRDA)-1993: Financial assistance to rural people by district level authority
44. Mahila Samridhi Yojna -October 2, 1993: Encourage rural women to deposit in Post office schems
45. Child labor Eradication Scheme- 1994 :Shift child labour from hazardous industries to school
46. Education Department and District Primary Education Program (DPEP)-1994: To revitalise the primary education system and to achieve the objective of universalisation of primary education for young children.
47. Prime Minister Integrated Urban Poverty Eradication programme (PMIUPEP)-1995: To eradicate urban poverty
48. Mid day Meal Scheme- 1995: Nutrition to students in primary schools to improve enrolment, retention and attendence
49.National Social Assistance programme - 1995: Assist BPL people.
50. Ganga Kalyan Yojna-1997-98; Provide financial assistance to farmers for exploring ground water resources
51. Kastoorba Gandhi Education Scheme15 August 1997: Establish girls schools in low female literacy areas (district level)
52. Swaran Jayanto Shahari Rojgar Yojna-1997: Urban employment
53. Bhagya Shree Bal Kalyan Policy-1998: Upliftment of female childs
54.Annapurna Yojna -March 1999 : 10 kgs food grains to elderly people
55. April 1999: Swaran Jayanto Gram Swarojgar Yojna: Self employment in rural areas
56. April 1999:-Jawahar Gram Samriddhi Yojna: Village infrastructure
57. August 2000 - Jan Shree Bima Yojna : Insurance for BPL people
58.  Pradhan Mantri Gramodaya Yojna-2000: Basic needs of rural people
59. December 25, 2000 - Antyodaya Anna Yojna: To provide food security to poor 60. December 25, 2000- Pradhan Mantri Gram Sadak Yojna: Connect all villages with nearest pukka road.
61. September 2001-Sampoorna Grameen Rozgar Yojna: Employment and food security to rural people
62. December 2001-Valmiki Ambedkar Awas Yojna VAMBAY: Slum houses in urban areas
63. Universal health Insurance Scheme:- 2003: Health insurance for Rural people 64. Vande mataram Scheme VMS -2004 :Initiative of public Private partnership during pregnecy check up.
65. National Food for Work programme-2004: Supplementary wage as foodgrains for work
66.Kastoorba Gandhi Balika Vidyalaya-2004: Setting up residential schools at upper primary levels for girls belonging to predominantly OBC, SC & ST
67. Janani Suraksha Yojna-2005: Providing care to pregnant women
68. Dec.16 , 2005 -Bharat Nirman-Development of India through irrigation, Water supply, Housing, Road, Telephone and electricity
69. National Rural Health Mission -2005: Accessible, affordable, accountable, quality health survices to the porest of the poor on remotest areas of the country.
70. Rajeev Gandhi Grameen Vidyuti Karan Yojna-2005: Extending electrification of all villages and habitations and ensuring electricity to every household.
71. Jawahar Lal Nehru national Urban Renewal Mission (JNNURM)-2005: Click here to read more
72. February 2 ,2006: National Rural Employment Guarantee Scheme NREGS: 100 days wage employment for development works in rural areas.
73.Rastriya Swasthya Bima Yojna-2007:  Health insurance to all workers in unorganized area below poverty line.
74. Aam Aadmi Bima Yojna-2007: Insurance cover to the head of the family of rural landless households in the country.
75 Rajiv Awas Yojna-*2009:: To make India slum free in 5 years

India received its First Investment through Qualified Framework Investor Route worth $ 5m

Following the deal struck by Kotak Mahindra Bank worth $5 million India received its first investment through the qualified framework investor (QFI) route. The deal formally put an end to speculation that India’s attempt to get investors to buy shares directly will go kaput.
Kotak Mahindra Bank has concluded the deal worth $5 million for a US-based client, said a finance ministry official. The scheme to attract investment through the Qualified Framework Investor route is expected to attract investment worth about $30 billion in 2012-13 period thereby helping the country fund a chunk of the current account deficit pegged at 4.2% of GDP in 2011-12.
The finance ministry had in the recent past conducted road shows in five countries in the Gulf region--Riyadh, Dubai, Muscat, Kuwait and Bahrain - to project India as the incredible investment destination for wealthy investors.
Qualified Foreign Investors (QFI): A person or a trust resident in a country which is a member of the Financial Action Task Force (FATF) can invest directly in India. Such a person or trust is termed as Qualified Foreign Investors.
Investment Regime for QFI (QFI): QFIs have been permitted to invest in all the three segments of the Indian Capital Market namely- Mutual Funds (MFs), Equity and Corporate Debt.
Reason why Government is promoting QFI route: The wealthy investors, the finance ministry felt should be encouraged to invest directly so that the stable in-flows could fund the current account deficits

New measure of inclusive wealth

A new measure of “inclusive wealth”, which stretches beyond Gross Domestic Product (GDP) and the Human development Index (HDI), puts India sixth from the top of the 20 selected countries, the economic performance of which was assessed between 1990 and 2008. India’s rise of 4.3 per cent per year in GDP per capita in this period came second only to China, which stood at 9.6 per cent. The Inclusive Wealth Index (IWI) looks at a full range of assets, such as manufactured, human and natural capital, which indicates a country’s true wealth and sustainability.

World to have 440 rising global cities in 2025

Urbanisation will lead to the creation of one billion new city consumers by 2025, according to a study by McKinsey Global Institute (MGI). The study said these will live in some 440 dynamic emerging market cities (the ‘Emerging 440’), that are set to generate close to half (47 per cent) of expected global GDP growth between 2010 and 2025. Among these, 36 cities are from India.

The report says that while China is right in the middle of its sweeping urbanisation, India is in the early stages of the process.

The study pointed out that growing consumer classes will accelerate growth in demand for many goods and services. It explained that many large emerging economies, including China and India, were seeing higher shares of their populations moving into income segments where the consumption of many goods and services takes off rapidly. Indian cities alone are expected to contribute nearly 10 per cent of global growth in residential and commercial floor space demand to 2025.

To cater to their new urban consumers’ needs, cities will have to invest heavily in infrastructure. “Cities will require annual physical capital investment to more than double from nearly $10 trillion today to more than $20 trillion by 2025.”

By 2025, municipal water demand in large cities is expected to have to rise by 40 per cent from today’s level—a rise of almost 80 billion cubic meters, more than 20 times what New York consumes today. The top two cities by expected growth in municipal water demand between 2010 and 2025 globally are Mumbai and Delhi.

The report said companies need to take a more scientific approach to locating the most promising markets for their businesses and then allocating resources pro-actively to capture the opportunities they offer. Identifying fast-growing segments in emerging cities not currently on the radar will be a necessary skill.

Drug abuse kills two lakh people a year
Some 27 million people worldwide are problem drug users, with almost one percent of them dying every year from narcotics abuse, according to the 2012 World Drug Report of the UN Office on Drugs and Crime (UNODC).

Global production and use of illegal drugs remained relatively stable in 2011, the report found. However, this masked shifts in trafficking and consumption that were “significant and also worrying... because they are proof of the resilience and adaptability of illicit drug suppliers and users,” the UNODC warned.

Cannabis remained the most widely used drug with up to 224 million users worldwide, although production figures were hard to obtain.

Europe was the biggest market for cannabis resin, most of it coming from Morocco, although Afghanistan is becoming a major supplier and domestic production in Europe is also rising.

Opium production in Afghanistan, the world’s biggest producer with 90 percent of the global share, meanwhile jumped by 61 per cent in 2011, to 5,800 tonnes, from 3,600 tonnes in 2010, when the crop was hit by disease.

Navi Mumbai, Goa and Kannur as Greenfield airports

The Union government has decided to make Navi Mumbai, Goa and Kannur as Greenfield airports. It has also decided to turn Delhi and Chennai into airline hubs.

Bihar has emerged as the fastest growing State

Bihar has emerged as the fastest growing State for the second year running, clocking a scorching 13.1% growth in 2011-12. Among the top five States, Bihar is followed by Delhi (11.3%), Puducherry (11%), Chhattisgarh (10.8%) and Goa (10.7%).

Schemes for Capacity Building and Employment in Rural Areas

Rashtriya Gram Swaraj Yojana (RGSY)

The Rashtriya Gram Swaraj Yojana is a Centrally Sponsored Scheme being implemented by the Ministry of Panchayati Raj with the objective of assisting efforts of the State Governments for training and capacity building of elected representatives of Panchayati Raj Institutions.  Funding of the scheme is applicable only for the non-BRGF districts.  The scheme focuses primarily on providing financial assistance to the States/UTs for Training & Capacity Building of elected representatives (ERs) and functionaries of Panchayati Raj Institutions (PRIs). Assistance is provided for Distance Learning infrastructure for the ERs and Functionaries of the PRIs including Satellite based training infrastructure. In respect of Hill States and States in the North Eastern Region, assistance is also given for capital expenditure on establishment of Panchayat Resource Centres/ Panchayat Bhawans at Block/Gram Panchayat levels. The scheme has a small component of Infrastructure Development under which the construction and renovation of Panchayat Ghars in all the States is funded. The scheme is demand driven in nature and provides for funding on 75:25 sharing basis between the Central and State Governments concerned. Assistance under the Training component is also given to Non-Governmental Organizations (NGOs), where the central assistance may be 100% and such proposals are required to be forwarded with the recommendations of the State Government concerned.

Rural Business Hub (RBH)

Rural Business Hub is aimed to eradicate rural poverty and create employment opportunity in rural India. This initiative would give a fillip to village enterprises that add value to economic activities in rural areas.

There is a steady influx of rural people to urban areas in search of employment and economic opportunity.  Also, there is a wide gap between rural and urban areas in terms of public services like health and education, in the quality of life and levels of income.  This gap is perceived to be widening.  The 73^rd Constitutional Amendment, 1992, has mandated Panchayats as Institutions of Self Government, to plan and implement programmes of economic development and social justice.  Government of India has recognized that Panchayati Raj is the medium to transform rural India 700 million opportunities.  There is also a felt need to ensure that the benefits of rapid economic growth, unleashed through the reforms of the last two decades, need to flow to all sections of society, particularly to rural India.

The Ministry of Panchayati Raj has adopted the goal of "Haat to Hypermarket" as the overarching objective of the Rural Business Hubs (RBH), initiative aimed at moving from more livelihood support to promoting rural prosperity, increasing rural non-farm incomes and augmenting rural employment.  RBHs set up in association with Panchayati Raj Institutions (PRIs) could thus constitute the fulcrum of "inclusive growth" - the theme of the 11^th Plan.

Panchayat Mahila Evam Yuva Shakti Abhiyan (PMEYSA)

In order to address the empowerment of EWRs and EYRs in a systematic, programmatic manner, the Ministry of Panchayati Raj, Govt. of India, has launched a new scheme with the approval of the competent authority in the 11th Five Year Plan.  The objective of PMEYSA is to knit the EWRs in a network and through group action, empower themselves, so that both their participation and representation on local governance issues, improves.  PMEYSA aims at a sustained campaign to build the confidence and capacity of EWRs, so that they get over the institutional, societal and political constraints that prevent them from active participation in rural local self governments.

It is a Central Sector Scheme.  The entire amount is funded by the Ministry of Panchayati Raj for organizing the various activities under this scheme.  Fund is released to the State Panchayati Raj Department in two equal installments in the ratio of 50:50.  The balance amount (second installment of 50%) is released only on furnishing of (1) Utilization certificate in respect of funds released and (2) Audited Statement of account on the expenditure (item-wise) incurred by the State Government/SSC.