Home Daily Updates 16-MARCH-2012
16-MARCH-2012
Written by Administrator   
Friday, 16 March 2012 02:01
Economic Survey Pegs Industrial Growth at 4-5% in the Current Financial Year
Survey Calls for Boosting of Business Sentiments,
Encouraging Investment and Identifying Bottlenecks
Industrial Sector Expected to Rebound During Next Financial Year

The Economic Survey 2011-12 tabled in the Lok Sabha here today by the Finance Minister, Shri Pranab Mukherjee has projected the industrial-sector growth during the current financial year to be between 4 to 5%. At this rate, says the Survey the annual growth rate will be less than the annual growth rates achieved in the recent past and far below the potential growth rate.

The Survey has said that the challenge for the sector in the short term would be to shore up of business sentiments, spur investment in productive activities and identify bottlenecks that can be removed in a reasonably short period of time. With the easing of headline inflation, moderation in commodities prices in the international market, and revival of manufacturing performance in recent months in the major economies, India’s industrial sector is expected to rebound during the next financial year.

According to the Survey, the long term average annual growth of industries comprising mining, manufacturing and electricity has in general remained aligned with the overall GDP growth rate during the post reform period between 1991-92 and 2011-12, averaging 6.7% as against GDP growth of 6.9%. The share of industry (including construction) and manufacturing in GDP remained generally stable at 28% and in the 14-16% range respectively during this period. The share of industry in total employment, however, increase from 16.2% in 1999-2000 to 21.9% in 2009-10 largely on account of expansion of employment opportunity in the construction sector from 17.5 million in 1999-2000 to 44.2 million in 2009-10.

The Survey has highlighted that the industrial growth, measures in terms of Index of Industrial Production (IIP) during April-December 2011 reached 3.6% compared to a growth of 8.3% in the corresponding period of previous year. There was a contraction in production in the mining sector, particularly in the coal and natural gas segments. The electricity sector witnessed and improvement in its growth in the current year. Growth also moderated in the manufacturing sector from 9.0% in April-December 2010 to 3.9% in April-December 2011. The Survey also points out that the basic goods and non-durables goods had a relatively better growth at 6.1% compared to the growth in the corresponding period of previous year. There was a moderation in growth in other segments of IIP and negative growth was observed in capital goods and intermediates segments.

As per the Economic Survey 2011-12, the share of Gross Capital Formation (GCF) in industry as percent to the overall GCF, after peaking to a level of 54.9% in 2007-08, moderated to 48.3% in 2010-11 the manufacturing GCF growth rate declined to 7% in 2010-11 from 42% in 2009-10. In the current year, the rate of growth of banking sector credit flow to industries moderated significantly. On year-on-year basis, credit growth to industry decelerated to 19.8% in December 2011 from 31.6% in December 2010. Moderation in rate of growth of credit was particularly large for the infrastructure and manufacturing sectors.

The Survey has stated that in medium to long term several challenges remains for the sector. The Planning Commission has projected growth rates of 9.8% and 11.5% in manufacturing sector required to achieve 9 % and 9.5% economy growth respectively. Commenting on the National Manufacturing Policy (NMP) which has envisaged even higher growth of 14% per annum so as to take the share of manufacturing in GDP to 25% and increase the absorption of labour in this sector from 50 million as of today to more than 150 million by 2022. The Survey notes that to achieve this policy objectives, several policy measures will have to be pursued simultaneously such as resolving issues of land availability and infrastructure for the proposed national investment and manufacturing zones (NIMZs); strengthening backward and forward linkages of manufacturing sector with agriculture and services sectors respectively; acquiring depth in manufacturing sector by focusing on high value addition industries; and prompting FDI to fill the saving-investment gap etc.

 

Achievements in Some Infrastrucutre Sector ‘Remarkable’
Need to Attract Large Scale Investment into Infrastructure

The Economic Survey 2011-12 tabled in Lok Sabha today by the Finance Minister Shri Pranab Mukherjee, says that the overall performance in creation of infrastructure in physical terms, in some sectors, during Eleventh Five Year Plan, have been remarkable as compared to the previous Five Year Plan, though there have been slippages in some sectors. The success in garnering private sector investment in infrastructure through the public-private partnership (PPP) route during the Plan has laid solid foundation for a substantial step in private-sector funding in coming years. PPPs are expected to augment resource availability as well as improve the efficiency of infrastructure service delivery. The Planning Commission has projected an investment requirement of over Rs. 45 lakh crore (about US $ 1 trillion) during the Twelfth Plan (2012-12). It is projected that at least 50% of this investment will come from the private sector as against the 36% anticipated in the Eleventh Plan and public sector investment will need to increase to over Rs.22.5 lakh crore as against an expenditure of Rs. 13.1 lakh crore during the Eleventh Plan. Financing infrastructure will, therefore, be a big challenge in the coming year and will require some innovative ideas and new models of financing, says the Survey.

The Survey has pointed out that the performance of broad sectors and sub sectors in key infrastructure areas in the current year presents a mixed picture. There was improvement in growth in power, petroleum refinery, cement, railway freight traffic, passenger handled at domestic terminals and upgradation of NHAI. Coal, Natural Gas, Fertilizers, handling of Export Cargo at airports and number of cell phone connections show negative growth. Steel sector witnessed moderation in growth.

According to the Survey, the performance in core and infrastructure sector is still to a large extent dependent in public sector projects the flash report for the month of October 2011 tracks the progress report of 583 projects in different sectors of which-only 7 are a head of schedule, 166 are on schedule, 235 are delayed and remaining 175 projects have been sanctioned without specifying any commissioning schedule. This has implied of cost over run of 15.3%. The Survey says that such delays increase project risk and cost, and could be minimized.

As per to the Survey, credit growth to the infrastructure sector turned negative in the current financial year. The incremental credit flow to the infrastructure sector during April-December 2011 was nearly 61% of the credit to this sector during April-December 2010. A significant reduction in credit flow was observed for the power and telecom sectors. The total FDI inflows into majors infrastructure sectors during April-December 2011 however, registered a growth of 23.6% as compared to the FDI inflows during April-December 2010. Power (43.6%), Non Conventional Energy (338 %) and Telecommunications (499%) were the preferred sectors for foreign investors. Other sectors, however, failed to share the buoyancy in FDI inflows.

The Survey has commented that in the coming years, financing of infrastructure also need to consider the plateauing of the domestic savings and macro availability of resources. There is need for introducing more innovative schemes to attract large-scale investment into infrastructure. In view of the massive requirements of funds, all efforts need to be made to attract big ticket long-term investors such as strategic investor, private equity funds, pension funds, and sovereign funds. Strengthening domestic financial institutions and development of a long-term bonds market may be critical. Besides financing, the infrastructure sector has also suffered due to a time lag in physical capacity creation and time over-run. These not only delay availability, but also raise pricing and affordability issues. Infrastructure costs as these are often non-tradable may also affect competitiveness of economy in long run. The Survey has stated that a harmonized list of main sectors and sub-sectors of infrastructure approved by the Government to serve as a guide for all agencies responsible for supporting infrastructure, is a welcome move.

 

Empowerment of Women:Major Advancements over the Years

The Finance Minister Sh. Pranab Mukherjee, in the Economic Survey 2011-12, tabled in the Lok Sabha today has outlined some major advancement in the empowerment of women over the years. They are outlined below:

Women & Education: The Sarva Shiksha Abhiyan (SSA) has had positive outcomes for girl child education leading to an increase in the gender parity index( GPI) in primary (0.94) as well as upper primary (0.92) education, Enrolment of girls at primary level and upper primary level increased over the years. Data also shows that the number of girls in schools in the age group of 5-14 years has increased from 79.6 per cent in 2004-05 to 87.7 per cent in 2009-10. Similarly, the number of girls in the educational system in 15-19 years age group increased from 40.3 per cent to 54.6 per cent over the same period. The challenge is to translate the high enrolment into high attendance rates.

The National Literacy Mission or Saakshar Bharat targeted female literacy as a critical instrument of women’s empowerment. This has led to an increase in literacy amongst women from 53.67 per cent (Census 2001) to 65.46 per cent (Census 2011). For the first time, out of the total of 217.70 million literates added during the decade, women (110.07 million) out numbered men.

Women & Health: Implementation of the National Rural Health Mission (NRHM) has resulted in an improvement in many development indicators for women. As per the India Human Development Report, fertility rates have come down and have reached replacement levels in a number of states; Maternal Mortality Ratio (MMR) has come down to 212 per 1,00,000 live births in 2009 from 301 in 2003. Infant Mortality Rate (IMR), though still high, has fallen to 50 per 1000 in 2009. Institutional deliveries have risen from 39 per cent in 2006 to 78 per cent in 2009. Women & Economy: An important strategy for financial inclusion of women, which is crucial for their integration into the economy, has been micro-finance. The model encourages access of SHGs to banks both as a means of savings and as providers of loan services. By March 2010, 69.53 lakh Self Help Group (SHGs) including those formed under the SGSY had been covered under the National Bank for Agricultural and Rural Development’s (NABARD) SHG-bank linkage programme. Of these 76 per cent are exclusively women SHGs, accounting for 72.5 per cent of savings and 82 per cent of outstanding loans.

Promoting Gender Mainstreaming Through Gender Budgeting (GB): Recognizing that women, constituting 48 per cent of India’s population, lag behind men on many social indicators like health, education, and economic opportunities and warrant special attention due to their vulnerability and lack of access to resources, GB, as a tool for achieving gender mainstreaming, has been adopted by the government in 2005. The magnitude of GB allocations as a percentage of total budget has also gone up from 2.79 per cent in 2005-06 to 6.22 per cent in 2011-12.

National Mission for Empowerment of Women (NMEW): The NMEW, an umbrella mission 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, was launched on 8 March 2010 to ensure economic and social empowerment of women. The NMEW is piloting the ‘convergence model’ across the country in 32 select districts with the aim of bridging the gap between demand and supply of women-related services by undertaking realistic estimates of the demand, creating greater awareness about women-bsed schemes and programmes of the Government, augmenting the demand for various services/schemes for women, and connecting them with the service providers. The model includes introduction of convergence-cum-facilitation centres for women at district, tehsil/block and village levels. The first such pilot convergence project was launched in Pali district in Rajasthan on 16 September 2011 with the opening of 150 village-level centres.

 

Public Health Investment Increases Substantially

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

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

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

 

Mgnrega:Coverage Increases to 5.49 Crore
Households During 2010-11
Government Sets up Committee for Developing Index for Fixing Mgnrega Wage Rates
13 Crore Aadhar Numbers Generated

The coverage under the MGNREGA has consistently increased from 4.51 crore households during 2008-09 to 5.49 crore households during 2010-11 with averaged employment of 47 persondays per household. Average wage has consistently increased from Rs 65 in 2006-07 to Rs. 100 in 2010-11. Women person days have been 48 percent during the last three years against the stipulation of 1/3 as per the Act. This is stated in Economic Survey 2011-12, presented by the Finance Minister, Sh. Pranab Mukherjee in the Lok Sabha today.

The Survey states that to strengthen transparency and accountability in the implementation of the MGNREGA, the Government has initiated a service delivery project for Information and Communication Technology (ICT) and biometrics related works of the MGNREGA on PPP basis. In pursuance of the announcement in Budget 2009-10 to provide a real wage of Rs 100 per day as an entitlement under the MGNREGA, the Government has set up a committee for developing an index for fixing MGNREGA wage rates and their periodic revision. Its report is awaited. Till such time a satisfactory index is proposed by the committee and accepted by the Government, a decision has been taken to index wage rates notified under MGNREGA to the Consumer Price Index for agricultural labour. Accordingly, the revised wage rates of MGNREGA 2005 were notified on 14th January, 2011.

The Survey points out that for the Swarnajayanti Gram Swarozgar Yojana, which has been reshaped as National Rural Livelihood Mission, about 42.05 lakh SHGs have been formed since its inception. Under SwarnaJayanti Shahari Rozgar Yojana, a total of 3.64 lakh beneficiaries have been assisted during 2011-12. Under PMGSY, over 19,443 km of all-weather roads have been completed during 2011-12 (up to December). Under Indira AwasYojana, unit cost norms have been revised w.e.f. 1st April 2010 from Rs. 35,000 to Rs. 45,000 for plain areas and from Rs. 38,500 to Rs. 48,500 for hilly/difficult areas. During 2010-11, 27.15 lakh houses were constructed against the target of 29.09 lakh. About 72 percent of rural habitations are fully covered with safe drinking water. About 13 crore Aadhaar numbers have already been generated.

 

Education: Reform Process Continues in 2011-12
Aakash, Low Cost Computing Device Launched

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

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

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

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

 

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

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

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

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

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

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

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

 

Lower Carbon Sustainable Growth
to be Central Element of 12th Plan
Economic Survey Seeks More Sensitivity from Developed Countries to Carbon Emissions

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

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

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

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

Services Sector Proves Saviour of

Indian Economy During the Global Crisis

Grows by 9.4% Despite Slowing GDP Growth

The global recession only partially succeeded in slowing the Indian economy thanks to the continual offsetting growth of service sector to nearly 10% in the year 2010-11. The Economic Survey 2011-12 presented in the Lok Sabha today, suggests that the Services Sector continues to remain growth engine for Indian Economy. The Economic Survey points out that the Services Sector grew by 9.4% which was little higher than 9.3% in the previous year. The dampening effect of international investment into industry sector slowed the GDP growth rate to 6.9% unleashing a flurry of worries for the Government. The industry sector contributes nearly 26% to the GDP. However, maintaining the growth momentum the Service Sector recorded expected growth rate to bottom out the industrial slow down across the globe. The Sector along with the agricultural sector, placed India in the top fastest growing economies of the world despite Euro zone crisis and North American economic instabilities.

The Survey clearly says that the economy has successfully navigated the turbulent years of the recent global economic crisis because of the vitality of this Sector in the domestic economy and its prominent role in India’s external economic interactions. The Survey reveals that the share of services in India’s GDP at factor cost (at current prices) increased from 33.5 per cent in 1950-1 to 55.1 per cent in 2010-11 and to 56.3 per cent in 2011-12 as per Advance Estimates (AE). If construction is also included, the Service Sector’s share increased to 63.3 per cent in 2010-11 and 64.4 per cent in 2011-12. Projecting the employment figures the Survey says that while agriculture continues to be the primary employment-providing sector, the Services Sector (including construction) is in second place. As per the National Sample Survey Organisation’s (NSSO) report on Employment and Unemployment Situation in India 2009-10, on the basis of usually working persons in the principal status and subsidiary status, for every 1000 people employed in rural and urban India, 679 and 75 people are employed in the agriculture sector, 241 and 683 in services sector (including construction) and 80 and 242 in the industrial sector, respectively.

The combined FDI share of financial and non-financial services, computer hardware and software, telecommunications and housing and real estate is 41.9 per cent of the cumulative FDI equity inflows during the period April 2000-December 2011. With the inclusion of the construction sector (6.5 per cent), the share of services in FDI inflows increases to 48.4 per cent. Following the general trend in FDI inflows, FDI inflows to the Services Sector (top five sectors including construction) have also slowed down in 2009-10 and 2010-11, with negative growths of -7.5 per cent and -42.5 per cent respectively in rupee terms. In 2011-12 (April to December), again following the trend of overall FDI inflows, which increased by 50.8 per cent to reach US$ 24.19 billion, FDI inflows to the top five Service Sectors (including construction) also increased by 36.8 per cent to US$ 9.3 billion to the Services Sector in 2011-12 (April-December).

Analysing the States’ performance in the Service Sector the Economic Survey 2011-12 notes that the highest growth rates of the Services Sector are in the north-eastern States of Arunachal Pradesh (34.9 per cent) and Sikkim (30.1 per cent). Among the other States, Goa with 20.1 per cent and Bihar with 16.6 per cent growth top the list. This is over and above their very high growth rates in 2008-09. Other States with higher than national average growth in the sector are Kerala, Tamil Nadu, Maharashtra and Mizoram.

The Survey, while outlining the performance of major services like Tourism including hotels and restaurants, Shipping, IT and ITeS and Construction Services expresses no cause for worry despite a slight moderation in services growth to 9.4 per cent (as also in 2010-11). It says this moderation is due to the steep fall in growth of public administration and defence services reflecting fiscal consolidation. In fact growth in trade, hotels and restaurants is more robust at 11.2 per cent and retail-sector growth is expected to be more robust in 2012-13. With hardening of interest rates, the real worry would be with the real estate ownership of dwellings and business services segment, the growth of which has started decelerating and construction services with growth falling by nearly half. The outlook of the Services Sector in the domestic economy is linked to the prospects of the sector externally. While software service exports have continued to be steady, the unfolding events in the euro area could lead to some sluggishness in this sector. The fair-weather business services exports which have already shown signs of declaration may not get better, observes the Economic Survey.


Public Sector Banks Show 19 Per Cent
Growth in Priority Sector Lending
Credit Disbursement to Agri Sector Exceed Target by 19 Per Cent; Over 127 Lakh
New Farmers Benefitted 98 Per Cent Public Sector Bank Branches Fully Computerised

Despite the demanding operational environment, the Indian banking sector demonstrated continued revival from the peripheral spill over effects of the recent global financial turmoil. The banking sector—both public and private—showed impressive increase in priority sector lending during 2010-11. The flow of agricultural credit headed north, with close to 12.5 million new farmers brought under the banking system. As of today, save 2 per cent, the rest of the Public Sector Bank branches stand fully computerized. The Self Help Group- bank linkage programme has emerged as the major micro finance programme in the country. These are some of the highlights of the Economic Survey 2011-12 presented by the Finance Minister, Shri Pranab Mukherjee in Lok Sabha today.

Capital is a key measure of bank’s capacity for generating loan assets and is essential for balance sheet expansion. The Economic Survey says Rs 12,000 crore has been provided in the Revised Estimates 2011-12, under Plan, for capital infusion in Public Sector Banks (PSBs) to enable them to maintain a minimum Tier 1 CRAR at 8 per cent on 31st March 2012, and also to increase shareholding of the Government of India in the PSBs to 58 per cent. During Financial Year 2011-12 growth in bank credit extended by Scheduled Commercial Banks (SCBs) stood at 8.2 per cent as on 16 December 2011, with year-on-year growth at 17.1 per cent. The outstanding priority sector advances of PSBs rose by almost 19 per cent between March 2010 to March 2011. The increase was from Rs 8,63,777 crore to Rs 10,28,614 crore. The advances of Private Sector Banks showed a growth of 15.9 per cent during the same period.

The Economic Survey 2011-12 underlines the fact that flow of agricultural credit has been impressive. The Indian banking system disbursed credit of Rs 4,46,779 crore to the agricultural sector as against a target of Rs 3,75,000 crore in-2010-11, thereby exceeding the target by around 19 per cent. The extension of credit has taken the total number of new farmers brought under the banking system to 127.26 lakhs.

The Self Help Group-bank linkage programme is being implemented by Commercial Banks, Regional Rural Banks (RRBs) and Cooperative Banks. Under this, as on 31 March 2011, over 74 lakh SHGs held bank accounts with total savings of nearly Rs.7,000 crores as against 69.5 lakh SHGs with savings of Rs 6,200 crores as on 31 March 2010.

Thanks to computerization and adoption of core banking solutions, 98 per cent of Public Sector Bank branches are today fully computerized. In 2010-11, the number of ATMs witnessed a growth of 24 per cent over the previous year.

¬ According to the Survey, to facilitate flow of funds into infrastructure projects, broad guidelines were issued on September 23, 2011 for setting up of Infrastructure Debt Funds. Further, guidelines on credit default swaps for corporate bonds were also issued on May 23, 2011. The agenda of Financial Inclusion has been actively pursued by the Government. Detailed strategy and guidelines on Financial Inclusion have been issued on 21 October 2011. The Survey notes that resource mobilization through the primary market witnessed a sharp decline over the year 2010-11, with equity public issue mobilization standing at Rs 9,683 crore as compared to Rs 48,654 crore. Upto 31 December 2011, 30 new companies (IPOs) were listed at the National Stock Exchange and Bombay Stock Exchange.

The development of the financial sector is critically dependent on financial inclusion, which is seen as an important determinant of economic growth. Banks need to take into account various behavioural and motivational attributes of potential consumers for a financial inclusion strategy to succeed. Besides, access to financial products is constrained by lack of awareness, unaffordable products, high transaction costs, and products which are not customized and are of low quality. A major challenge in the times ahead would be to meet financing requirements, particularly of the unorganized sector and the self-employed in the micro and small business sector.

 

Volatality in Global Financial Markets

Likely to Tighten Availability and Cost of Foreign Funding
Indian Banks Maintain Robustness Amidst Euro Zone Crisis
Government Measures Mitigate Liquidity Stress

Given the weak global economic prospects and continuing uncertainties in the international financial markets, the availability and cost of foreign funding for banks and corporate is likely to be negatively impacted. Indian financial markets, especially currency and equity, performed under pressure during the year. Global market turmoil resulted in rising risk aversion and moderation in capital inflows that resulted in currency stress during August-December 2011. Although liquidity situation tightened, but countervailing steps helped mitigate the strains. Apart from global economic developments, rising trade imbalance, pace of reform initiatives to boost capital flows, and domestic growth concerns are likely to influence the movements in the Indian financial markets. These are some of the significant high points in the Financial Intermediation and Markets sector of the Economic Survey-2011-12, presented by the Finance Minister, Shri Pranab Mukherjee in Lok Sabha today.

While pointing out that sovereign risk concerns, particularly in the Euro countries, have affected financial markets for the greater part of the year, the Survey points at Greece’s sovereign debt problem spreading to India and other economies by way of higher- than- normal levels of volatility. Emphasising that in a financial system which is bank dominated, the ability of this institution to withstand stress is critical to overall financial stability, the Survey says that Indian banks however remained robust and the financial infrastructure continues to function without any major disruption. However, the Survey cautions that with further globalization, consolidations, deregulation and diversification of the financial system, the banking business may become more complex and riskier. Issues like risk and liquidity management coupled with skill enhancement, therefore, assumes greater significance.

An important reason India emerged largely unscathed from the global crisis of 2008 is the strict external commercial borrowings (ECB) policy that places all-in-cost, end-use and maturity restrictions on foreign borrowings by the corporate. The corporate, were therefore not exposed to balance sheet recession that could have happened due to excessive foreign borrowings. The liberalization of ECB policy, however has to keep in view the need to maintain sustainable levels of external debt. Other challenges include: innovative steps to bring corporate bond market at the centre stage of infrastructure financing and to meet financing requirements, particularly of the unorganized sector/self-employed in the micro/small business sector.


Forex Reserve at Us $ 293 Billion
External Debt Stock at US $ 326 Billion
Rupee Declines by 12.4 Per Cent Against Dollar on Month-to-Month Basis
Oil, Gold And Silver Prices Contribute to Modest Rise in Current Account Deficit

As India integrates into a seamless world, it cannot remain impervious to developments abroad. The unfolding of the Euro zone crisis and uncertainty surrounding the global economy have impacted the Indian economy causing drop in growth, higher current account deficit and declining capital inflows. Export growth has slowed in the third quarter of fiscal 2011-12, while imports remained high, partly because of continued high international oil prices. At the same time, foreign institutional investment flows have declined, straining the capital account and the rupee exchange rate. These and other details emerged in the Economic Survey 2011-12, presented by the Finance Minister, Shri Pranab Mukherjee in Lok Sabha today.

In the current fiscal 2011-12, on month-to-month basis the rupee depreciated by 12.4 per cent from 44.97 per US dollar in March 2011 to 51.34 per US dollar in January 2012. Rupee reached a peak of 43.94 on July 27, 2011, and lowest at 54.23 per US dollar on December 15, 2011 indicating a depreciation of 19 per cent.

During fiscal 2011-12, forex reserves reached all time high level of US $ 322.2 billion at end August 2011. However, it declined to US $ 292.8 billion at end January 2012 indicating a fall of US $ 12.0 billion from US $ 304.8 billion at end-March,2011. The decline in reserves is partly due to intervention by the Reserve Bank of India to stem the slide of Rupee against US dollar.

India’s external debt stock increased by US $ 20.2 billion (6.6 per cent) to US $ 326.6 billion at end-September 2011 vis-à-vis US $ 306.4 billion at end-March 2011, primarily on account of higher commercial borrowings and short-term debt. The long-term external debt at US $ 255.1 billion accounted for 78.1 per cent of the total external debt while the short-term debt was at 21.9 per cent. Government (sovereign) external debt stood at US $ 79.3 billion, while non-Government debt amounted to US $ 247.3 billion at end-September 2011.

The current account deficit was US $ 32.8 billion (3.6 per cent of GDP) in H1 of 2011-12, as compared to US $ 29.6 billion (k3.8 per cent of GDP) during the corresponding period of 2010-11. This was mainly on account of the trade deficit of US $ 85.8 billion (9.4 per cent of GDP) due mainly to increase in international prices of imported commodities viz oil and gold and silver. As per the latest data, export growth has slowed down in recent months while imports remained at elevated level, resulting in higher trade deficit.

The momentum gained in exports and imports during 2010-11 continued during the first half (H1-April-September 2011) of the current fiscal with exports recording 40.6 per cent and imports 34.3 per cent increase during H1 of 2011-12 over the corresponding period last year. Supportive government policy, diversification in terms of higher value-added products in engineering and petroleum sectors and destinations across developing economies were responsible for resilient export performance.

Net capital flows at US $ 41.1 billion (4.5 per cent of GDP) in the first half of 2011-12 remained higher as compared with US $ 38.9 billion (5 per cent of GDP) in the first half of 2010-11. FDI (US $ 12.3 billion) and external commercial borrowing (US $ 10.6 billion) have shown increasing trend during H1 of 2011-12 over the corresponding period of 2010-11. Portfolio investment, however, witnessed large decrease in inflow to US $ 1.3 billion in H1 of 2011-12 vis-a-vis US $ 23.8 billion in H1 of 2010-11.

According to the Economic Survey, a trade deficit of more than 8 per cent of GDP and current account deficit of more than 3 per cent is a sign of growing imbalance in the country’s BOP. High share of volatile FFI flows is an added external shock. The rupee’s high volatility impairs investor confidence, necessitating a more aggressive stand to check its volatility.

 

India’s Cumulative Export Growth up 23.5 Per Cent

During April 2011–Jan 2012; Total Exports US $ 242.8 Billion

Exports from Sezs up 14.5 Per Cent at Rs. 2,60,973 Crore upto Dec 2011

The Economic Survey 2011-12 was tabled by the Finance Minister, Shri Pranab Mukherjee in the Lok Sabha, here today. The Economic Survey states that during the period April 2011 - Jan 2012, India’s cumulative exports grew at a rate of 23.5 per cent reaching US $ 242.8 billion. The growth in exports, which was moving robustly at 40.6 per cent during the first half of this fiscal, began to decelerate during the months of October and November owing to the Euro zone crisis before recovering back to 6.7 per cent and 10.1 per cent in Dec 2011 and Jan 2012 respectively.

During April- Dec 2011, the export sectors that have done well were petroleum and oil products registering a growth of 55 per cent; gems and jewellery 38.5 per cent; engineering 21.6 per cent; cotton fabrics made ups etc. 13 per cent; electronics 21.1 per cent; readymade garments 23.7 per cent and drugs 21.5 per cent.

The Economic Survey observes that the great changes in the sectoral composition of the country’s export basket seen in the 2000’s decade have accelerated in the beginning of this decade. While the share of petroleum crude and products increased by 11.8 percentage points during the ten-year period from 2000 - 01 to 2009 -10, it further increased by 4.8 percentage points from 2009-10 to the first half of 2011-12. The share of the other two sectors, i.e. manufactures and primary products fell almost proportionately by 11.6 and 1.1 percentage points respectively during the first decade.

Imports during April - Jan 2011-12 were valued at US $ 391.5 billion, which was 29.4 per cent higher than the level of US $ 302.5 billion during the same period last year. During this period, POL (petroleum, oil and lubricant) imports at US $ 118 billion grew by 38.8 per cent while non-POL imports at US $ 273.5 billion grew by 25.7 per cent. Gold and silver imports of US $ 50 billion grew by 46.2 per cent. Trade deficit during April-Jan 2011-12 was US $ 148.7 billion as against US $ 105.9 billion during the same period in the last fiscal.

In the case of imports, there are no major compositional changes other than the sudden rise in share of gold and silver imports from 9.3 per cent in 2000-01 to 13.3 per cent in the first half of 2011-12. However, a fall in the share of pearls, precious and semi-precious stones has been observed during this period.

As regards the country’s direction of trade, the Economic Survey observes that India is a success story in terms of diversification of export and import markets. The share of Asia and ASEAN in the total trade increased from 33.3 per cent in 2000-01 to 57.3 per cent in the first half of 2011-12, while that of Europe and America fell from 42.5 per cent to 30.8 per cent. This has helped India weather the global crisis emanating from Europe and America. An interesting development in the direction of India’s trade is that USA, which was in the first position in 2007-08 has been relegated to the third spot in the following years, with the UAE becoming India’s largest trading partner, followed by China.

India’s services exports, which had recorded a contraction of 9.4 per cent in 2009-10 due to the global financial crisis bounced back to grow by 38.4 per cent to US $ 132.9 billion in 2010-11. However, growth in export of services moderated during the first half of 2011-12 to 17.1 per cent compared to 32.7 per cent during the first half of 2010-11.

Giving an outlook of the prospects for India’s trade sector which has had to bear the brunt of deepening Euro zone crisis during the second half of the current fiscal, the Survey observes that while India has successfully diversified its markets with reduced dependence on the EU and the US, Europe still has a 19.5 per cent share in India’s exports. Besides, some of India’s trading partners are dependent on Europe, thus affecting the country’s trade indirectly. The software exports too may show some sluggishness as the Euro zone accounts for 30 per cent of the total tourist arrivals in India. Travel exports may also suffer, says the Economic Survey.

The Economic Survey points out that while some of the challenges for India on the trade front are due to the current emerging global situation, the others are systemic and long-term in nature. If the global situation worsens, the pressure for stimulus measures could again resurface and protectionist measures from trading partners could increase. The Survey advises that a lot more needs to be done on diversification of India’s export basket as its export presence is limited in the top items of world trade.

It also points out that greater trade facilitation by removing the delays and high costs due to procedural and documentation factors, besides infrastructural bottlenecks is another major challenge. The Economic Survey also observes that India’s push towards regional and bi-lateral agreements should result in meaningful and result-oriented Free Trade Agreements (FTAs) and Comprehensive Economic Cooperation Agreements (CECAs). The challenges for India on the trade front are daunting but need to be addressed with speed and dexterity as the opportunities are equally great and untapped.

As regards the Special Economic Zones (SEZs), the Economic Survey states that as on 31 Dec 2011 i.e. during the first three quarters of the current financial year, the total physical exports have been to the tune of Rs. 2,60,972.90 crore, registering a growth of 14.5 per cent over the exports of corresponding period of the previous year. The total investment in SEZs till 31 Dec 2011 is Rs. 2,49,630.80 crore, including Rs. 2,31,160 crore in the newly notified zones. In a short span of about five years since the SEZs Act and Rules were notified in Feb 2006, formal approvals have been granted for setting up of 583 SEZs out of which 380 have been notified. Out of the total employment provided to 8,15,308 persons in SEZs as a whole, incremental employment generated after Feb 2006 i.e. when the SEZ Act came into force is 6,80,609 persons.

 

Government Takes Calibrated Steps to Rein in Inflation
Survey Emphasises the Need for Rapid Fiscal Consolidation
Growth Rate Expected to Pick up in 2012-13
India’s Cris Rating Improves by Nearly three Percent

The Economic Survey 2011-12 suggests policies to put India on a surer footing for sustained, inclusive growth and all-round development. The Survey takes note of the Government fighting malaise of inflation with numerous calibrated steps which constituted a combination of policies to improve supply, especially of food and basic agricultural products and curb fiscal and revenue deficits. Independently, the Reserve Bank of India tightened the monetary policy. While the battle against inflation had some slowing down effect on growth, there were no signs of major long-tem damage or rise in unemployment. The Government thus is in a position to turn its attention more exclusively to inclusive growth, notes the Survey. The Survey recommends that Government’s primary concern now has to be to advance the economy’s productivity and improve income distribution.

The fiscal year 2011-12 saw several initiatives to improve agricultural productivity and management of supply chains which have yielded results and contributed to containment of food price inflation. Deregulation of savings bank interest rates since October 2011 have contributed to control the Wholesale Price Index (WPI) inflation rate. The Survey suggests that rapid fiscal consolidation is the only way out to keep inflation down and aim for robust growth. “The principle way in which this has to be achieved is by raising our tax-GDP ratio and cutting down wasteful expenditures”, says the Survey. The centre’s gross tax-GDP ratio (BE 2011-12) stood at 10.5 per cent. “Our aim must be to cross 13 per cent by 2016-17” adds the Survey. The Economic Survey 2011-12 also notes that critical task of inclusion cannot be left to the free market. For Government the role has to be that of enabler, the Survey reiterates

According to the Economic Survey 2011-12 the growth rate is expected to pick up from the second quarter of 2012-13. “We expect growth in 2012-13 to be 7.6 (+/-0.25) per cent” says the Survey. The Survey also projects “ in 2013-14 it is expected that there will be further recovery for India and the nation will virtually be on the growth path it was on before the global recession of 2008”. The major drivers of growth – the savings and investment rates as percentage of GDP – after showing a down turn in 2011-12 will rebound quickly as India consolidates fiscally and continues to rise slowly thereafter as the ratio of India’s working age population to overall population rises because of the demographic dividend.

On the issue of ‘comparative rating index for sovereigns’ (CRIS), the Economic Survey 2011-12 notes that India’s CRIS has seen a rise from 23.81 in 2007 to 24.52 in 2012. Since the CRIS is a comparative rating score, it means that vis-à-vis the rest of the world, India’s rating has risen by 2.8 per cent says the Survey. The changing profile of CRIS score across the world tells a major story about the changing map of the world economy in which emerging economies are moving into centre stage and becoming drivers of the global economy, notes the Survey.

With respect to investment in infrastructure sector, the Survey points out that Planning Commission has talked about a target of one trillion dollars of infrastructural investment during the Twelfth Five-Year Plan with about half of this being raised from the private sector.

The Economic Survey 2011-12 recommends contracts as central driver of modern economy. It also sees benefits of transparent pricing formula over price control. The Survey also says that land acquisition issues are vital for India’s manufacturing and industrial sector. “Keeping in mind the incentive structure in markets, the government’s aim must be to create a level playing field, provide the essential infrastructural facilities and a non-interfering bureaucracy and then enable the industrial sector to flourish on its own” recommends the Survey.

 

Options to Ensure Price Stability in Food Items

Economic Survey

According to Economic Survey 2011-12, compositional shift in food basket of common household has increased demand of some food items. There are some constraints also in supply side which have been exposed during the recent episode of inflation in vegetables and fruits The Economic Survey has suggested following options to address these constraints.

• Extension programmes and guidance to farmers regarding fertiliser and insecticide uses an alternate cropping pattern based on soil analysis could be undertaken and intensified.

• As a strategy, regular imports of agriculture commodities in relatively smaller quantities with an upper ceiling on total quantity could be considered. The upper ceiling can be decided annually, relatively well in advance, after assessing the likely domestic situation in terms of production and consumption requirements.

• Setting up special markets for special crops in states/regions/areas producing those crops would facilitate supply of superior commodities to the consumers.

• Improved Mandi governance is an area of concern. A greater number of traders must be allowed as agents in mandis. Anyone who gets better prices and terms outside the Agricultural Produce Marketing Committee (APMC) or its farmgate should be allowed to do so.

• For promoting interstate trade, a commodity for which market fee has been paid once must not be subjected to subsequent market fee in other markets including that for transaction in other states. Only user charges linked to services provided may be levied for subsequent transactions.

• Perishable food items could be taken out of ambit of the APMC Act. The Government regulatory mandis sometimes prevent retailers from integrating their enterprises with those of farmers. In view of this perishable may have to be exempted from this regulation.

• Considering significant investment gaps in post harvest infrastructure of agriculture produce, organised trade and agriculture should be encouraged and the FDI in multi brand retain once implemented could be effectively leveraged towards this end.

• The Government should step up creation of modern stories facilities for food grains.


Economic Survey Forecasts 2.5 Percent

Growth for AGRO Sector
Survey Suggests FDI in Multi Brand Retail to Address Infrastructure GAPS

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

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

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

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


Inflation to Moderate Further in 2012
Renewed Focus on Supply Side Measures Essential for Price Stability – Economic Survey

Wholesale Price Index (WPI) which remained persistently high throughout 2011 due to increasing global commodity prices and high crude prices has started showing signs of moderation and it is expected to touch 6.5 to 7 percent by March 2012. It may further moderate during 2012-13 due to tightening of monetary policy and other measures put in place by the Government. Taking stock of the price situation, Economic Survey 2011-12 has observed that in the current financial year the gap between WPI and CPI inflation has significantly narrowed due to drastic fall in food inflation. CPI-IW inflation, after remaining in single digit from August 2010 to August 2011, briefly touched double digits at 10.1 percent in September 2011 but came down to 6.5 percent in December 2011.

The Survey says that the major drivers of food inflation during the current financial year were milk, eggs/meat/fish, gram and edible oils. WPI food inflation (weight 24.31 percent) has significantly dropped from 20.2 percent in February 2010 to 1.6 percent in January 2012 mainly on the back of seasonal fall in fruits & vegetables prices and good harvest leading to lower inflation in cereals

The Survey comments that the objective of monetary policy during 2011-12 has been to rein in inflation and contain inflationary expectations. With supply side factors feeding into food inflation and an uncertain economic scenario in advanced countries, the task of monetary policy calibration has been particularly challenging.

Liquidity conditions have generally remained in deficit during 2011-12. However, the RBI has addressed liquidity concerns via the use of its standard tools. The monetary market has, in general, remained orderly during 2011-12 with the rates in collateralised segments moving in tandem with the call rate, but generally remaining below it.

The Survey suggests that there is a need to examine the linkages and trade-offs between policy rate changes and inflation in the Indian context, for better calibration of monetary policy. There is also scope to further sharpen monetary policy and macro prudential tools to deal with asset price bubbles in the real estate and stock markets and the risks associated with these, which carry implications for the real economy.

Commenting on the outlook in the area of price management the Survey says that Monetary policy remained focussed on controlling inflation and anchoring inflationary expectations, which has slowed growth. These effects, coupled with a favourable base effect in prices and continued global slowdown, are expected to moderate inflation to around 6.5 to 7.0 percent by March and further moderate in the months ahead, barring unexpected shocks, such as oil prices in international markets.

The Survey observes “Looking at, vigilance is called for in getting back to a low inflation/sustained high growth path in India, by renewed focus on supply side measures and include fiscal consolidation, including stepped up regular adjustments in domestic energy prices.” It says that high level of food stocks and producers responses to higher protein and other food prices should help to maintain overall price stability in the country.

 

Summary of Economic Survey
Survey Pegs GDP Growth At 6.9% in 2011-12
Outlook Brighter for Next Fiscals

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

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

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

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

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

 

Highlights of Economic Survey 2011-12

Following are the highlights of Economic Survey 2011-12 :

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

Sustainable development and climate change concerns on high priority.

Quick Summary

Economic Survey is an annual commentary on the state of the economy of India which is put together by Finance Ministry of India. It is a document which presents economic development during the course of the year.

The draft of the survey is prepared by Department of Economic Affairs and cleared by Chief economic Advisor and the secretary Economic Affairs.

The final version is vetted by Finance secretary and Finance Minister.

Economic survey is presented every year shortly before presenting the Union Budget of Govt. of India. Economic Survey 2011-12 was presented by finance minister Pranab Mukherjee in Parliament on March 15, 2012. Here is a quick summary for all aspirants of all examinations.

Important Figures:

India's Economic Growth

6.9 per cent in the Fiscal 2011-12

7.6 percent (plus or minus 0.25 percent) in 2012-13

8.6 percent in 2013-14.

Growth in Agriculture

2.5 % in Fiscal year 2011-12.

Share of Agriculture, allied activities in GDP

13.9 % in FY 12

Production of food grains

250.42 million tones (FY 12)

Food grains stocks

55.2 million tonnes

Growth in Service Industry

9.4 %, in FY 12 (and its share in GDP stands at 59%).

Industrial Growth

To be 4-5% in FY 13

Central spending on social services

18.5% in FY 12 (It was 13.4% FY 07)

Coverage of MGNREGA

5.49 Crore household (by 2011-12)

Gross capital formation in Q3 of FY 12 as a ratio of GDP

30% (it was 32% in FY 11)

Balance of Payments

USD 32.8 Billion in first half of FY 12 (It was USD 29.6 Billion in FY 11)

India's Forex Reserves

USD 293 Billion, it was USD 305 Billion in March 2011 & USD 279 Billion in March 2010

Inflation

Expected to moderate at 6.5-7% by March end

Employment in Industry

21.9% in 2009-10 (in comparison to 16.2% in 1999-2000). Growth mainly due to construction

sector.

Growth in Basic goods and non-durables

6.1%

Gross Capital Formation in industry

48.3% of overall GCF moderated in FY 11

Decline in Manufacturing GCF growth rate

7% in FY 11 Vs 42% in FY 10

Share of services in GDP

56.3% in FY 12 (it was 55.1% in FY 11)

Share of Financial & non-financial services, IT, Telecom, Real Estate in Total FDI inflows

41.9 % (during April 2000-December 2011)

Growth in trade, hotels and restaurants

11.2%

Growth in FDI inflows in FY 12 (April-Dec)

36.8 % (stands at USD 9.3 billion)

Growth in India's Exports (April 2011 - Jan 2012)

23.5% (stands at USD 242.8 Billion)

Growth in India's Imports (April 2011 - Jan 2012)

29.4% (stands at USD 391.5 Billion)

India's Largest Trading Partner

United Arab Emirates (followed by China)

Growth in India's Service Exports

17.1 & in H1 of FY 12 (It was 38.4 % @ USD 132.9 Billion in FY 11)

Top performing Sectors in Export

Petroleum and oil products, gems and jewellery, engineering, cotton fabrics, electronics,

readymade garments, drugs

Top performing Sectors in Import

POL (petroleum, oil and lubricant), gold and silver.

External Debt Stock

USD 326 Billion

Net capital flows

USD 41.1 billion

Share of Net Capital Flows in GDP

4.5% (in the H1 of FY 12)

External commercial borrowing

USD 10.6 billion (in H1 of FY 12)

Trade Deficit as part of GDP

More than 8%

Current Account Deficit as part of GDP

3% (these two figures hint imbalance that is growing)

Fall in Rupee against dollar

12.4 % (From 44.97 per USD in March 2011 to 51.34 per USD in January 2012)

Total Investment in SEZ

Rs. 2,49,630.80 crore (31 Dec. 2011)

Number of Approved SEZ

583 (out of them 380 notified)

Growth in Priority Sector Landing

19%

Share of Computerised banks among all banks

96%

Capital infused in public sector banks in 2012

Rs. 12,000 Crore

Growth in bank credit extended by Scheduled Commercial Banks

17%

Survey notes:

Survey is optimistic about the fiscal consolidation and says that fiscal consolidation is likely to get back on track from 2012-13, when savings and capital formation will also begin to improve.

High priority to Sustainable development and climate. Incorporates a new chapter this year.

Global economic environment turns adverse since September 2011 due to Euro-zone crisis.

Indian Economy slows down due to global as well as domestic factors.

Recovery is slow , reason for slow recovery is decline in overall investment rate.

Global economy seems to remain fragile.

G-20 should make more efforts for global financial stability.

India gets more closely integrated with the world economy

India's foreign trade performance remained key driver of growth.

Share of trade to GDP (of goods and services) in world tripled in 20 years (1990-2010).

Inflation expected to moderate.

Gap between WPI and CPI inflation narrows.

Consumption pattern main driver of food price inflation. Milk, eggs/meat/fish, gram & edible oils responsible.

Monetary market remained orderly. RBI addressed the liquidity concerns of markets

There are threats from asset price bubbles in real estate and stock markets

Oild prices threat inflationary pressures.

India has high level of food stocks , which shall help maintain overall price stability

Industrial growth less than recent past and far below potential.

Industrial sector expected to rebound during next financial year with inflation easing, moderation in commodities prices in international market and revival of manufacturing performance

Contraction in production in the mining sector, particularly in coal and natural gas segments, improvement in electicity.

Moderation in growth in other segments of IIP, Negative growth in capital goods and intermediates segment, Moderation in rate of growth of credit in infrastructure and manufacturing sectors.

Services sector proves saviour during global crisis and hero of Economic Growth. It has slight moderation though, due to the steep fall in growth of public administration and defence services reflecting fiscal consolidation.

India's Software service exports steady and face threat from Eurozone.

Negative growth in Coal, Natural Gas, Fertilizers, handling of Export Cargo at airports and number of cell phone connections

Low growth in steel.

Credit growth to infrastructure sector turned negative

There has been reduction in credit flow in power and telecom sectors.

Foreign funding to remain sluggish. Equity and currency markets remained under pressure.

Indian Banks have Robust fundamentals.

Banking may become a risky business, thanks to global integration.

Credit Disbursement to agro sector exceeded target by 19 %, 12.7 Million new farmers got farm credits.

Self Help Group- bank linkage programme gets thumping success.

Climate change, food security, water security, energy security and managing urbanization are main challenges.

Recommendations: Inflation & Monetary Policy:

Progressive deregulation of interest rates on savings accounts . Deregulation of interest rates on savings accounts to help raise financial savings and improve transmission of monetary policy.

Domestic financial markets, especially corporate bond markets need deepening.

There should be more efforts to attract dedicated infrastructure funds.

There should be renewed focus on supply side measures essential for price stability

There should be substantial Monetary policy challenge to rein-in inflation.

There is a need to examine linkages between policy rate changes and inflation.

There are threats from asset price bubbles in real estate and stock markets. To address them, RBI should further sharpen monetary policy.

Recommendations: Agriculture

Government should take measures for guiding farmers on fertilizers, insecticide, alternate cropping patterns, for price stability in food items.

There should be regular imports of agriculture commodities in smaller quantities for price control.

There should be special markets for special crops.

Mandi Governance needs to be improved; interstate trade in agro commodities should be promoted.

Perishable food items should be taken out of ambit of the APMC Act

Survey thumbs up the FDI in multi brand retain , says it will fill infrastructure gap during harvest period

Modern store facilities need to created for food grains.

There should be adequate investment in R&D in Agriculture.

Recommendations: Industry , Infrastructure & Exports

Business sentiments should be boosted. There should be encouragement to investments and identify and wipe-out bottlenecks.

Land acquisition and infrastructure issued should be dealt on priority basis.

Real estate ownership of dwellings and business services segment are worrisome segments.

There should be further diversification of India's export basket.

The procedural delays and red tape should be addresses to facilitate trade.

Infrastructural bottlenecks need to be removed

There is a need to attract large scale investment into infrastructure, looking at investment requirement at USD 1 trillion during Twelfth Plan.

PPP has been a successful model, should be promoted in Infra segment.

Sustainable levels of external debt should be maintained.

Government should take innovative steps to bring corporate bond market at the centre stage.

Government should promote the infrastructure financing and financing of unorganized micro/small business sectors.

Recommendations: Climate Change

Low carbon growth should be central element of 12th Five Year plan.

India's per capita CO2 emissions much lower than those of developed countries, world needs more sensitivity from developed countries to carbon emissions.

 


Acquisition of Ore-Mines by SAIL

The Minister of Steel, Shri Beni Prasad Verma has said that the Steel Authority of India Limited (SAIL) has been granted 13 iron ore mining leases (Chiria-6 leases, Gua-4 leases and Kiriburu-Meghahatuburu mines-3 leases) in the State of Jharkhand. The renewal of mining leases is pending with State Government except one lease i.e. Budhaburu lease of Chiria for which in-principle approval has been granted.

In a written reply in the Rajya Sabha today he said, Environmental Clearance (EC) has been obtained for 3 leases Kiriburu-Meghahatuburu mines and for 3 leases of Chiria mine. Environmental Clearance proposals for 1 lease of Chiria and 1 lease of Gua mine are awaiting approval of Ministry of Environment and Forests (MoEF). In respect of 3 leases of Gua, MoEF has asked State Government to take appropriate control measures.

He said, similarly, Forest Clearance (FC) for 2 leases of Kiriburu and Meghahatuburu mines is valid. However, for main working lease, Stage-I Forest Clearance has been granted by MoEF for existing as well as new pits (South-Central Blocks) for which compliance of conditions is pending because of finalization of Wildlife Conservation Plan (WCP) by the State Government. Forest Clearance for Dhobil lease of Chiria mine is valid. However, for another 3 leases, Stage-I Forest Clearance has been granted by MoEF for which compliance of conditions is under progress. Forest Clearance of 2 leases of Gua are pending with MoEF for grant of Stage-I Clearance. However, for another two leases MoEF has asked State Government for clarifications.

 

LPG being Supplied in All 628 Districts and PNG in 10 States

The Minister of State for Petroleum and Natural Gas Shri R.P.N.Singh informed the Lok Sabha in a written reply today that Oil Marketing Companies (OMCs) are supplying LPG through their LPG distributors in all the 628 districts of the country. City Gas Distribution (CGD) companies are supplying Piped Natural Gas (PNG) in 10 States namely, Andhra Pradesh, Assam, Delhi, Haryana, Gujarat, Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh and Tripura, covering 51 Geographical Areas”, he added.

Shri Singh also referred to vision 2015 adopted by this Ministry which envisages raising the country’s LPG population coverage from 50% to 75 %, by releasing 5.5 crore new LPG connections between 2009 and 2015 especially in rural areas and under-covered areas.

“`As far as extension of PNG facilities to different towns and cities in the country is concerned, the implementation timeframe is subject to interalia, availability of natural gas through a gas transmission pipeline, technical and commercial feasibility and availability of clearances from various authorities, such as digging permission from the civic authorities, etc,” the Minister said.

 

Action taken against Erning LPG Distributors
for Mal-Practices in Release of New Gas Connections

The Minister of State for Petroleum and Natural Gas Shri R.P.N. Singh informed the Lok Sabha in a written reply today that based on the established complaints of forced sale of hot plate or other items/equipment, refusal to register for new LPG connections, action has been taken in 44 cases against LPG distributors in the country during the last three years and the period April 2011 to January, 2012 under the provisions of Marketing Discipline Guidelines (MDG)/Distributorship Agreement.

He emphasised that Government has formulated Domestic LPG marketing Discipline Guidelines (MDG) which, inter-alia, provide following action against the distributor for forced sale of hot-plate to the prospective customer:-

• Fine of Rs.10,000 and recovery of Rs.2000 per customer to whom forced sale is made for 1st offence.

• Fine of Rs.25,000 and recovery of 2,000 per customer to whom forced sale is made for 2nd offence.

• Termination of the distributorship for 3rd offence.

Shri Singh further stated that the details of rates for availing new LPG connection are displayed at the distributor’s show-room and this is also mentioned in the intimation letters sent to prospective customers for release of connection.

 

Commodity-Wise Freight Revenue by Railways
goes up by 9.17 per Cent during April 2011

The Railways have generated Rs. 61215.49 crore of revenue earnings from commodity-wise freight traffic during April 2011 to February 2012 as compared to Rs. 56073.37 crore during the corresponding period last year, registering an increase of 9.17 per cent. Railways carried 875.60 million tonnes of commodity-wise freight traffic during April 2011 to February 2012 as compared to 832.66 million tonnes carried during the corresponding period last year, registering an increase of 5.16 per cent. The Net Tonne Kilo Metres (NTKM) went up from 548917 million during April 2010 to February 2011 to 579063 million during April 2011 to February 2012, showing an increase of 5.49 per cent.

Out of the total earnings of Rs. 5832.69 crore from commodity-wise freight traffic during the month of February 2012, Rs. 2505.58 crore came from transportation of 40.22 million tonnes of coal, followed by Rs. 418.72 crore from 8.11 million tonnes of iron ore for exports, steel plants and for other domestic user, Rs. 587.40 crore from 9.29 million tonnes of cement, Rs. 451.06 crore from 4.26 million tonnes of foodgrains, Rs. 304.78 crore from 3.29 million tonnes of petroleum oil and lubricant (POL), Rs. 350.94 crore from 2.94 million tonnes of Pig iron and finished steel from steel plants and other points, Rs. 382.84 crore from 4.74 million tonnes of fertilizers, Rs. 94.54 crore from 1.21 million tonnes of raw material for steel plants except iron ore, Rs. 291.18 crore from 3.26 million tonnes by container service and Rs. 445.65 crore from 6.44 million tonnes of other goods.

 

Upgradation and Strengthening of Railway Protection Force

Upgradation and strengthening of the Railway Protection Force (RPF) is being done by way of provision of funds for procurement of latest security equipment, creation of additional manpower, upgradation of training centers, specialized training in training centers of other Forces etc.

Prevention and detection of crime and maintenance of law & order in station premises and trains is the responsibility of respective State Governments which they discharge through Government Railway Police (GRP). RPF supplements the efforts of GRP. On an average, 1275 important Mail/Express trains are escorted by the RPF personnel and 2200 Mail/Express trains are escorted by the GRP personnel daily. Based on crime trend analysis and availability of man power, escorts are provided after consultation between the RPF and the GRP. A total number of 14189 posts in various ranks are presently vacant in the RPF. These vacancies include 5134 newly created non-gazetted posts. Recruitment process for filling up of these vacancies has already commenced. During last three years, recruitment was completed for filling up vacancies of 1393 posts of Constables and 65 posts of Public Prosecutors and Assistant Public Prosecutors.

Security has been identified as one of the priority areas of Indian Railways. Steps taken to strengthen/upgrade the RPF include procurement of modern security related equipment, creation of additional posts, establishment of new Railway Protection Special Force (RPSF) battalions, setting up of commando training centers, networking of security control rooms, setting up of all India Security Help Line etc.


Present Status of High Speed Rail Corridors

The present status of the prefeasibility studies for High Speed Rail Projects in the country, corridor-wise, is as under:

1. Pune-Mumbai-Ahmedabad – The prefeasibility study has been completed

2. Delhi-Chandigarh-Amritsar – The technical evaluation of the offers has been completed and financial bid is under finalization.

3. Delhi-Agra-Lucknow-Varanasi-Patna – The study is in progress. Consultant has submitted Inception Report, Interim Report No. I and II and Draft Final Report to the Ministry.

4. Howrah-Haldia – The study is in progress. Consultant has submitted Inception Report, Interim Report No. I & II and Draft Final Report to Ministry.

5. Hyderabad-Dornakal-Vijaywada-Chennai – Consultant has been engaged and study is in progress.

6. Chennai-Bangalore-Coimbatore-Ernakulam-Thiruvananthapuram – Technical bids have been evaluated and financial bids are under evaluation. India will need technical and financial cooperation from countries which are already operating High Speed systems, including Japan.

The draft bill for the formation of National High Speed Rail Authority (NHSRA) has already been moved for approval of the Government.

National High Speed Rail Authority will initiate steps for pre-construction activities. No time-frame has been set for it.


Financial Assistance from States in Railway Projects

State Governments of Andhra Pradesh, Chhattisgarh, Haryana, Jharkhand, Karnataka, Maharashtra, Rajasthan, Uttarakhand and West Bengal have come forward for taking up projects on cost sharing basis and presently 31 projects covering a length of about 5000 kms are being executed on cost sharing basis with State Governments.

Due to huge throwforward of ongoing projects and limited availability of resources, efforts are made to generate extra budgetary resources through participation by the State Governments/beneficiaries, Public Private Partnership, funding as additionality for National Projects, revival of Capital Fund and implementation of bankable projects through Rail Vikas Nigam Limited. Execution of four projects has been taken up with participation from industry as Special Purpose Vehicle.

To expedite completion of projects, forestry and other clearances have been taken up at highest level. Regular coordination meetings are held with State Governments for providing adequate security at work sites. Empowerment of field units has been taken up to expedite completion of projects.


Railways Take Measures to Prevent Misuse
of General and Tatkal Reserved Tickets

The following steps have been taken Indian Railways to prevent the misuse of general and Tatkal reserved tickets:

1. Revised Tatkal scheme has been implemented w.e.f. November 21, 2011 which necessitates passengers to indicate prescribed proof of identity at the time of booking and carry the same during the journey. Other measures under the scheme include non issuance of duplicate tickets, prohibition of booking Tatkal tickets by agents between 0800 hrs. and 1000 hrs. and not granting refunds on confirmed Tatkal tickets.

2. With a view to preventing cases of travelling on transferred tickets, Indian Railways have made carrying one of the prescribed proofs of identity (in original) mandatory, during journey by AC-III tier, AC-II tier, AC Chair Car, Executive and 1st AC classes, by any one of the passengers travelling on a tickets.

The following are the prescribed proofs of identity:

Voter Photo Identity Card issued by Election Commission of India
Passport
PAN card issued by Income Tax Department
Driving Licence issued by RTO
Photo Identity card having serial number issued by Central/State Government
Student Identity Card with photograph issued by recognized school/college for their students.
Nationalised Bank Passbook with photograph
Credit Cards issued by Banks with laminated photograph.

Unique Identification Card “Aadhaar”

 

Conference on Mobile Web Initiative

in Indian Languages gets Underway

One day conference on mobile web initiative in Indian languages got underway here today to debate and discuss the various critical aspects of providing Indic languages support over the Mobile Web and developing Mobile Web Best Practices (MWBP) standard. Speaking on the occasion Shri Sachin Pilot, Minister of State, Communications and Information Technology said that India is the 3rd largest telecom user after China and USA and future of computing technology belongs to handheld devices. It is the volume of users and not the technology that will decide the standards in the times to come, he added. Referring to infrastructure that has been created in India, the minister said that huge opportunities exist in the field of content creation. Shri J. Satyanarayan, the new secretary Department of Electronics and Information Technology was also present on the occasion.

Mobile Web integrated with Voice Interface would be the next paradigm shift in computing technology. The increasing processor speed, embedded with the latest signal processing capability for voice, data and multimedia signals makes it the preferred medium of service delivery, increasing focus on client side features.

With the advent of 4G and LTE technologies, the internet and web access through mobile media would receive a tremendous boost. This momentum would further be accelerated if people could use their own language to communicate over the mobile. In India there are 22 constitutionally recognized languages, and a large number of dialects. Therefore, the next giant leap from present user base and beyond has to be primarily driven by Mobile Web and Internet content in the local language which will be used by mostly rural population of India, from where the next surge of mobile penetration is set to grow. This would also usher in governance paradigm shift of citizen centric service delivery through m-governance platform.

Seamless Access of Indian languages over the mobile web would be possible if we address the specific Issues for enabling mobile ecosystems in are addressed quickly. This requires active involvement of all stake holders ranging from mobile device manufacturers, service providers, Research community and the users.

There is a need to create a common frame work of Mobile Standards in India for seamless data interchange , the basis of which should be the Unicode , which is the industry standard for text interchange. Since many of the citizen centric services would be built on SMS / MMS/ IM based systems, due to advent of m-governance framework of Govt. of India , common standard /best practices need to be evolved urgently taking into account the Indian languages requirements.

W3C Works with all major Mobile Standardization Bodies and works mainly in Application Interface Domain. W3C SMIL (Scalable Multimedia Integration Language) incorporated in 3GPP2, LTE and 4G- LTE Advanced standards. W3C is presently reviewing the Mobile Web Best Practices (MWBP) standard for incorporating the new computing paradigm shift and device capabilities. W3C India is currently working on Development of Best Practices and Guidelines for Seamless Mobile Access in Indian Languages. W3C India has recently come out with three consultation papers in the areas pertaining to (i) Enabling Mobile Devices in Indian Languages (ii) Service providers perspective and (iii) Mobile VAS Content development. This daylong Conference will debate and discuss the various critical aspects of providing Indic languages support over the Mobile Web. Businesses have to succeed to bring forth more and more people; for these best practices have to be followed.

Internet and Mobile Association of India (IAMAI) along with W3C India is holding this daylong event to address issues and challenges being faced by the Digital Industry with regard to content in Indian languages being deployed over mobile web. Development, proliferation and deployment of other W3C standards will complement these efforts further and will support all our ICT implementations enabled with Indian Languages such as Mobile technologies, Voice Browser, Web Accessibility and Web Services. About two hundred delegates/ state holders are participating including the official of the Department of Electronics and Information Technology.

 

India Aviation 2012

Industry Captains Outline the Roadmap for Civil Aviation
India is Likely to Emerge as Third Largest Aviation Market by 2029

India is likely to emerge as the third largest aviation market by 2029. Dr. Rafael Echevarne, Director, Economics and Programme Development, Airports Council International (ACI) said this at the second day of India Aviation 2012 at Hyderabad today. Issues pertaining to shaping the Indian civil aviation’s future, impact of financial and airlines’ debt crises on aviation industry, ensuring affordable and sustainable connectivity for passengers and freight, were discussed at the business session on ‘Roadmap for Civil Aviation: Turbulence and Recovery’.

Dr. Rafael Echevarne highlighted the growth trajectory of aviation in India during the last five years in which the country improved its rank from 101st in 2007 to 12th in 2010 in terms of airport maintenance, traffic handling and passenger facilities. In order to sustain this, India would require putting in place a regulatory framework that encourages investment, ensures safety and facilitates development of tourism.

Emphasizing on restoring Indian Aviation competitiveness during his keynote address Tony Tyler, IATA’s Director General and CEO suggested that airlines purchases should be aligned with international principles. In addition he recommended infrastructure expansion, rationalization of airport charges, investment policies which enable 49% direct investment by foreign carriers.

The groundwork done by the Ministry of Civil Aviation in consultation with the industry stakeholders towards a National Aviation Policy was appreciated by the industry captains. Mr. Amber Dubey, Director Aviation, KPMG, which is the knowledge partner of India Aviation 2012, said initiatives like formulating an Air Cargo Promotion Policy, proposal to set up a full-fledged aviation university, investments in MRO hubs are positive steps taken by the Government. He added there is urgent need to develop no-frill airports in tier 2 and 3 cities in keeping with the potential increase in air passengers in India.

Dr. Nasim Zaidi, Secretary, Ministry of Civil Aviation released two Knowledge Reports on Indian Civil Aviation Industry titled ‘India: The Emerging Aviation Hub’ by KPMG and ‘Economic Benefits from Air Transport in India’ by Oxford Economics. Mr. Yap Ong Heng, Director General, Civil Aviation Authority of Singapore, Mr. Umesh Kumar Baveja, Chairman, Regional Airport holdings International Ltd, Mr.Ilya Gutlin, Vice President SITA also spoke.

 

Tourism an Export Growth Engine and Employment

Generator says Economic Survey 2011-12

Tourism is not only a growth engine but also an export growth engine and employment generator. According to the Economic Survey 2011-12 presented in Lok Sabha today, the sector has capacity to create large-scale employment both direct and indirect, for diverse sections in society, from the most specialized to unskilled workforce. It provides 6-7 per cent of the world’s total jobs directly and millions more indirectly through the multiplier effect as per the UN’s World Tourism Organization. Since tourism does not fall under a single heading in India’s National Accounts Statistics, its contribution has to be estimated. Its contribution to GDP and employment in 2007-08 was 5.92 per cent respectively as per Tourist Satellite Account Data.

In India, the tourism sector has witnessed significant growth in recent years. During the period 2006 to 2011, the CAGRs of foreign tourist arrivals (FTA) and foreign exchange earnings (FEE) from tourism (in rupee terms) were 7.2 per cent and 14.7 per cent respectively. FTAs in India during 2010 were 5.78 million compared to 5.17 million during 2009, posting a growth of 11.8 per cent, much higher than the growth of 6.5 per cent for the world in 2010. FEEs from tourism in rupee terms during 2010 were Rs. 64,889 crore compared to Rs. 54,960 crore during 2009 with a growth rate of 18.1 per cent. Despite the slowdown and recessionary trends in the economies of Europe and America, FTAs during 2011 were 6.29 million with a growth of 8.9 per cent over 2010 and FEEs in 2011 were Rs. 77,591 crore with a growth of 19.6 per cent. In the cae of outbound tourism, the number of Indian nationals’ departures fromIndia during 2010 was 12.99 million with a growth of 17.4 per cent for the year. Domestic tourism has also emerged as an important contributor to the sector providing much needed resilience. Domestic tourist visits during 2010 are estimated at 740.2 million, with a growth of 10.7 per cent.

Hotels and restaurants is an important component of the tourism sector. As on 31 December 2011, there were 2,895 classified hotel having a capacity of 1,29,606 rooms in the country. Availability of good quality and affordable hotel rooms play an important role in boosting the growth of tourism in the country. The share of the hotel and restaurant sector in overall economy increased from 1.46 per cent in 2004-05 to 1.53 per cent in 2008-09 and then decreased to 1.46 per cent in 2010-11. However, if the contribution of this sector only in the service sector is considered, its share decreased from 2.75 per cent in 2004-05 to 2.64 per cent in 2010-11 as other service sectors grew faster than this sector. It CAGR was 8.44 per cent during 2004-05 to 2009-10 and the growth rate in 2010-11 was 7.7 per cent. Health tourism, the new entrant in the sector is a niche area where India has good potential.

As is natural, with the growth of this sector, components like air travel and hotel stay have been included under service tax. The Economic Survey 2010-11 has listed the major policy decisions taken in recent years. However, a lot more needs to be done to make India a major tourist destination. Some of the problem areas in this sector include the following. States impose luxury tax ranging from 5 per cent to 12.5 per cent. In some cases, the luxury tax is applicable on printed room rates whereas actual hotel rates offered to guests are much lower. With a view to rationalizing luxury tax on hotels, the Government of India has requested the states to work towards rationality and uniformity of taxes so as to make their destinations more competitive. They have been also requested to exempt room tariff below Rs. 2500 from luxury tax and charge luxury tax at a uniform rate of 4 per cent on actual tariff. Construction of hotels is primarily a private sector activity which is capital intensive and has a long gestation period. A major constraint being faced by the hotel industry in addition to the high cost and limited availability of land is the procurement or multiple clearances/approvals required from Central and State Government agencies for hotel projects. Varying from state to state, in some cases as many as 65 clearances/approvals are required for hotel projects.

A Hospitality Development and Promotion Board has been set up at central level. The main function of the Board will be to monitor and facilitate clearances/approvals for hotel projects both at central and state government levels. The Board will be a single window for receiving applications for various clearances, approving/clearing hotel projects in a time bound manner, and reviewing hotel project policies to encourage the growth of hotel/hospitality infrastructure in the country. State Governments have also been requested to set up similar boards under the Chairmanship of their Chief Secretaries. So far Mizoram, Manipur, and Maharashtra have set such boards. Other measures in this sector could include rationalizing the fees for entry to monuments and using the fees for their maintenance; focusing on safety of tourists; and promoting wellness tourism.

 

Projects in Tamil Nadu

A proposal of water resources consolidation project of Tamil Nadu was received in 1996-97 for AIBP funding. During 1996-97, Water Resources Consolidation Project (WRCP) of Tamil Nadu was brought under Accelerated Irrigation Benefits Programme (AIBP) and Central Loan Assistance (CLA) of Rs. 20.00 crore was released to the project. However, the State Government has discontinued the project under AIBP. No further proposals have been received from State Govt. of Tamil Nadu for inclusion under AIBP for Major/ Medium irrigation Projects.

Also, Government of India has approved two schemes on Repair, Renovation and Restoration (RRR) of water bodies (i) one with external assistance with an outlay of Rs. 1500 crore and (ii) the other with domestic support with an outlay of Rs. 1250 crore for implementation during the XI plan period but no funds have been released to the State Government of Tamil Nadu under the scheme of RRR of the water bodies with domestic support. However, under the scheme of RRR of water bodies with external assistance World Bank Loan Agreement has been signed with Tamil Nadu for Rs.2182 crore to restore 5763 water bodies having a CCA of 4 lakh hectares. As per the latest information received work has been completed in 2407 water bodies.

Two numbers of major/medium irrigation project proposals as follows have been received from State Government of Tamil Nadu for appraisal in Central Water Commission (CWC):

(i) Excavation of Link Canal to interconnect Ponnaiyar River with Palar River through Cheyyar River and augmenting supply to Nandan canal in Thiruvannamalai District of Tamil Nadu.

The Detailed Project Report of the project was received in Central Water Commission in February 2009. There were number of correspondences between CWC and Project Authorities/ State Government. The observations in respect of relevant aspects of the project were sent to the Project Authorities/ State Government during February 2009 to May 2009 and latest observations in December 2011. Further, the statutory Environment and Forest clearances of Ministry of Environment and Forest (MoEF) are awaited for the project proposal from Project Authorities. Project Authorities have informed in January 2012 that necessary actions are being taken for compliances of observations of Central Water Commission.

(ii) Formation of flood carrier canal from Kannadian Channel to drought prone area of Sathankulam, Thisaiyanvilal, by interlinking Tamiraparani, Karumeniyar and Nambiyar rivers in Tirunelveli and Thoothukudi Districts of Tamil Nadu.

The revised cost estimate (at 2011-12 Price Level) of the project was submitted to CWC in November 2011. The observations of CWC on various aspects of the project have been sent to the State Government during November 2011 to February 2012. Further, the statutory Environment clearance of Ministry of Environment and Forest (MoEF) is awaited for the project proposal from Project Authorities.

Apart from above, no revised estimate of any irrigation project has been received from Govt. of Tamil Nadu for appraisal in CWC. This information was given by the Minister of State for Water Resources & Minority Affairs Shri Vincent H. Pala in a written reply to a question in Lok Sabha today.

 

Upper Krishna Project-III

As per information from Government of Karnataka, the Detailed Project Report (DPR) for Upper Krishna Project-Stage-III has been prepared by Govt. of Karnataka for an estimated cost of Rs. 17,207.00 crores based on the price level of 2010-11 to provide irrigation for 5.30 lakh ha. This information was given by the Minister of State for Water Resources & Minority Affairs Shri Vincent H. Pala in a written reply to a question in Lok Sabha today.

 

Pranahita-Chevella Irrigation Project

The Detailed Project report of Dr. B.R. Ambedkar Pranahita Chevella Sujala Sravanthi Project, AP was received in Central Water Commission for techno-economic appraisal in October, 2010. As per the CWC guidelines the DPR has been returned to the State Government /Project Authorities in February,2012 with the remarks that revised DPR may be submitted after finalizing the water availability, constitution of Joint Committee and finilisation of inter- state Agreement with Government of Maharashtra and obtaining various Statutory clearance .

The Project proposal is covered under the Godavari Water Dispute Tribunal Award (GWDT AWARD). The Project Authority / State Government of Andhra Pradesh have not set up the Joint Committee and have not reached the Inter -state Agreement with the Government of Maharashtra so far for the Project proposal as per the final order of GWDT Award.

No reference has been received in Central water Commission from State Governments opposing the Dr. B.R. Ambedkar Pranahita Chevella Sujala Sravanthi Project on account of likelihood of water logging to their areas. This information was given by the Minister of State for Water Resources & Minority Affairs Shri Vincent H. Pala in a written reply to a question in Lok Sabha today.

 

Floods from Rivers Originating from Nepal

Construction of big dams/reservoirs on rivers at suitable locations are considered as one of the solutions to floods, especially if dedicated flood cushion is provided in the storage reservoirs. Big dams moderate the floods in downstream by way of releasing controlled discharge through spillway.

Pancheshwar Multipurpose Project on river Sharda (Mahakali in Nepal), Saptakosi High Dam Project on river Kosi and West Rapti (Naumure) Multipurpose Project on river West Rapti are under discussion with the Government of Nepal. These high dam projects, on implementation, would provide benefits to people of India and Nepal, both, in the form of hydro-power, irrigation and flood moderation.

Rehabilitation of villagers affected by the floods falls under the domain of the State Government concerned. This information was given by the Minister of State for Water Resources & Minority Affairs Shri Vincent H. Pala in a written reply to a question in Lok Sabha today.


Utilisation of River Water

Due to seasonal, geographical and annual variation in availability of water as well as lack of adequate storage, substantial quantity of water, especially during monsoon season, remains unused and flows into sea. As per present assessment, the average annual water availability in the country is 1869 BCM. Further, it has been estimated by Central Water Commission (CWC) in the year 2009 that about 450 BCM of surface water and by Central Ground Water Board (CGWB) in the year 2009 that about 243 BCM of ground water are being utilized for various purposes. The rest of the water could be considered to be flowing down to sea.

Government of India provides technical and financial assistance to the State Governments for increasing storage as well as utilization of water for irrigation, domestic and industrial uses, etc. As per available information, storage capacity of about 253 billion cubic meter (BCM) has been created in the country so far. The total estimated storage capacity of the various projects under construction is about 51 BCM. Further, the State Governments have identified various other schemes for investigation and planning and the estimated storage for such schemes is about 110 BCM. This information was given by the Minister of State for Water Resources & Minority Affairs Shri Vincent H. Pala in a written reply to a question in Lok Sabha today.

Survey of Ground Water

Central Ground Water Board (CGWB) under the Ministry of Water Resources has conducted 13 conjunctive use studies for optimal utilization of Ground Water in various irrigation commands in the country.

Details of conjunctive use studies carried out by CGWB are given below:

1. Indira Gandhi Nahar Paryojna, Stage - I, Rajasthan

2. Sarda Sahayak Irrigation Project, U.P.

3. Tungabhadra Canal Command Area, Andhra Pradesh and Karnataka

4. Ghataprabha Canal Command Area, Karnataka

5. Hirakud Canal Command Area, Orissa

6. Mahi- Kadana Canal Command Area, Gujarat

7. Nagarjuna Sagar Project, Andhra Pradesh

8. Indira Gandhi Nahar Pariyojna Stage - II, Rajasthan

9. Kosi Canal Command Area, Bihar

10. Gandak Canal Command, Bihar

11. Sriram Sagar Canal Command Area, Andhra Pradesh

12. Western Yamuna Canal Command Area, Haryana

13. Rushikulia Canal Command Area, Orissa

These studies have established that isolated use of surface water ignoring optimal ground water use in irrigation command has resulted into various problems like water logging, soil salinity etc. Water being the State subject, the optimal plan for conjunctive use of ground water and surface water is implemented by the respective State Governments. This information was given by the Minister of State for Water Resources & Minority Affairs Shri Vincent H. Pala in a written reply to a question in Lok Sabha today.


Water Management

Water being a state subject, the responsibility for efficient and optimal utilization of water resources lies with the respective State Governments. Government of India provides technical and financial assistance to the State Governments through various schemes/programmes. Several measures for development and management of water resources in an efficient manner are undertaken by the respective State Governments, which include creation of storages, restoration of water bodies, rainwater harvesting, artificial recharge to ground water, adoption of better management practices etc. to cater to the domestic and industrial needs.

Measures particularly taken in domestic and industrial sectors to increase the efficient/ optimal use of water include levy of user charges on volumetric basis, metering of supplies, benchmarking framework for improving efficiency, rain water harvesting, recycling of treated wastewater to achieve zero discharge etc.

The long term average water availability in the country is more or less constant. The recycling, efficient water use and reduction of wastages & leakages result in larger spread of available water. This information was given by the Minister of State for Water Resources & Minority Affairs Shri Vincent H. Pala in a written reply to a question in Lok Sabha today.

 

World Consumer Rights Day Celebrated

Funds to Spread Consumer Awareness in Rural and Remote Areas

Prof. K.V. Thomas, Minister of Consumer Affairs, Food & Public Distribution has said that funds are being released to State Governments to spread consumer awareness in the local languages through the local media to ensure that the message reaches rural and remote areas. He said that a well-informed community aware of pitfalls in the market place can keep in check unscrupulous elements’ presence in the market that is detrimental to consumers’ interests. Prof. Thomas was addressing a conference on the occasion of the “world consumer rights day” here today.

Following is the full text of the minister’s address:

“I welcome you all to the Conference and am delighted to be in your midst today at the inaugural ceremony of the “World Consumer Day,” celebrated every year on the 15th March when we join the consumer organizations and governments worldwide to endorse and re-dedicate ourselves to the guidelines for consumer protection adopted by the United Nations in 1985. We all know that the U.N. guidelines on consumer protection of 1985 laid the foundation that led many countries, including ours, to start consumer protection movements in the right earnest.

During the post-independent period, consumer welfare was of paramount concern to the Government. Policies were formulated and legislations enacted to protect the interests of consumers to facilitate their right of choice, safety, information on and mechanism for redressal of grievances in respect of products and services available in the market. It was to this end in view that the Government had created a separate Department to pay special attention to the protection of consumer rights and promotion of standards in goods and services. It was an indication of the importance the Government attached to safeguarding the interests of consumers with the care that it deserves. States and UTs had also been advised to create a separate Department for consumer affairs on the lines of the Centre. The responsibility for setting up the State Commissions, District Fora and the State Consumer Protection Councils and the District Consumer Protection Councils and their effective functioning rests with the State Governments/UT Administrations. However, I must admit with much regret that this is yet to take place in many of the States. I would request States/UTs to make use of financial assistance provided by the Department of Consumer Affairs to strengthen its consumer protection mechanism in whatever way it may be possible.

The 11th Five Year Plan has seen a significant ramp up of budgetary support for consumer awareness and protection. In the 11th Plan, the total allocation was significantly revised upwards to Rs. 409 crores. The Department had taken up the challenge by implementing in right earnest the Plan scheme during the period. The significant achievement of the 11th Plan had been in the area of broad-basing the publicity campaign. The Department started with the publicity on Core subjects/issues which are within the administrative jurisdiction of the Department such as creating an awareness of Consumer Protection Act, Grievances Redressal mechanism, Standardization (ISI, Hall Mark etc.), Weights & Measures, Comparative Testing, etc. The Department had subsequently taken up the issues of consumer interests that fall within the jurisdiction of other Government Ministries and agencies, and regulatory authorities such as Telecommunication, Banking, Insurance and Financial Services, Medicines, Real Estate, Education and so on. Similarly, funds are also being released to State Governments/UTs to spread consumer awareness in the local languages through the local media to ensure that the message reaches rural and remote areas. A well-informed community aware of pitfalls in the market place can keep in check unscrupulous elements’ presence in the market that is detrimental to its interests.

There are 629 District Fora, 35 State Commissions and one National Commission in place in the country for inexpensive and quick redressal of consumer grievances. Out of over 36 lakhs cases filed before the consumer disputes redressal agencies, 89.77% of the cases stand disposed of. This is quite a commendable achievement. However efficient functioning of Consumer Forums can only come about when the disposal of complaints is done within the stipulated time frame of 90 days and 120 days. A study conducted on the disposal level reveals, unfortunately, that the stipulated time frame for disposal of consumer disputes was not being strictly adhered to. In fact, only 19 per cent (16% new and 3% old) of over all cases at State Commissions, 9 per cent at District Forums (Urban) and 21 per cent at District Forums (Rural) were found to have been disposed within the stipulated time. This issue needs to be given a serious thought to ensure that the credibility of consumer justice system does not suffer, as justice delayed is considered justice denied.

6. It is also seen that while awarding costs, a conservative approach had been adopted by the Commissions/Forums. In appropriate cases, the amount of compensation awarded should be in commensurate with the loss and injury suffered by the complainant/respondent. In addition, the provision relating to punitive damages are taken recourse to in public interest. It is also noticed that the number of complaints being filed in relation to unfair trade practices, restrictive trade practices, hazardous goods/services, misleading advertisements, etc., are nil. As a result the reliefs provided and introduced by the Third Amendment to the Consumer Protection Act are not taken advantage of. It is absolutely essential that the consumer is encouraged to file complaints for redressal of grievances. Here, the role of State governments and NGOs/VCOs is of prime importance particularly in absence of suo moto power to the Commissions/ Forums.

In yesterday’s meeting, I had mentioned about establishment of State Consumer Help-lines in all the States and UTs by making use of software provided free of cost by the Centre and of training the staff handling the Help-lines of States/UTs at the nodal centre put in place at the IIPA, New Delhi. I hope the States/UTs will make full use of the software and the training facility for the staff. A project for Computerization and Computer Networking of Consumer Fora, (CONFONET) was being implemented since the 10th Plan by the National Informatics Centre (NIC) on a turnkey basis. I understand that out of 629 locations being covered under the scheme, 519 Consumer Fora are uploading cause lists while 450 Consumer Fora are uploading judgments. There is a need to cover remaining areas as quickly as possible as during 12th Plan we propose to make filing of complaints online.

It has been brought to our attention by the President, NCDRC that complaints of similar nature do come up at regular intervals before forums at various levels. It is felt that the issue relating to the provision for class action suits will enable better disposal of such cases. Such cases can be identified through an analysis carried out by the District forums and State Commissions. Some kind of Institutional arrangements/concurrent committees could be formed to look into these issues to arrive at appropriate policy decisions/advisories and class action suits.

We have also set up consumer advice centers on a pilot basis in four States mainly to cater to rural consumers as an extended arm of State Help-lines and provide consumers with up-to-date, reliable information and independent consultation. The consumer advice center in the Districts will be the first point of contact for comprehensive consumer information and independent advice. In another joint initiative with FICCI and GTZ, Mediation Advisory Centre (MAC) is being established in four States on a pilot basis. MAC is expected to cater to pending cases referred to by consumer and new cases coming directly or through the registrar. This is likely to bring down the number of cases going in for litigation. We propose to integrate all these into an integrated Consumer Advice Network during the 12th Plan.

 

Prices of Fertilizers

The Government has taken following steps to check the rise in the prices of fertilizers:

(i) The Nutrient Based Subsidy for the year 2011-12 has been increased as compared to that of the year 2010-11 keeping in view the international price trends of DAP, Urea, MOP and Sulphur.

(ii) The Government also provides freight subsidy on fertilizers covered under the subsidy scheme.

(iii) The Government announced 5% countervailing duty on all imported goods which was rolled back to 1% in case of fertilizers to reduce its impact on prices of fertilizers in the country.

(iv) As per the NBS scheme, the market price of subsidized P&K fertilizers are open and fertilizer companies are allowed to fix MRPs at reasonable level. The fertilizer companies are regularly reporting the MRPs of fertilizers fixed by them through web based “Fertilizer Monitoring System”.

 

Opening of Jan Aushadhi Outlets

In the first phase of the Revised Business Plan (RBP) on Jan Aushadhi Campaign subject to observations/suggestions of Planning Commission the Government proposes to focus on 11 States for opening of Jan Aushadhi Stores where the scheme has shown some success, namely Punjab, Haryana, Uttrakhand, Odisha, Rajasthan, Himachal Pradesh, Andhra Pradesh, West Bengal, Jammu & Kashmir, Union Territories of Chandigarh and Delhi. There are a total of 204 districts in these 11 States and it is proposed to open at least 3 Jan Aushadhi Stores (JAS) in each district of these States. Thus, a total of 612 JAS are proposed to be opened in the first phase to be accomplished in two years time. Thereafter, the Scheme is proposed to be extended to open at least five stores in every District/Sub-division of all the States including Karnataka and UTs, i.e., a total of 3150 Stores all over the country.

 

Funds for Capacity Expansion of Ports

Union Minister of Shipping, Shri G.K. Vasan informed the Rajya Sabha today in a written reply to a question that the expansion of capacity in terms of development of terminals, berths etc. in Major Ports in the country is done predominantly on Public Private Partnership (PPP) mode with investments from private sector.

The Minister further stated that the Ministry receives no funds from the private sector. The funds are invested by private sector in Major Ports for the port sector project on Public Private Partnership (PPP) mode. Out of the 23 Public Private Partnership (PPP) projects with an investment of Rs. 16743.92 crores and capacity of 231.63 MTPA identified for award in the year 2011-12, three projects with estimated cost of Rs. 7977.58 crores have been awarded.

 

Abolition of Manual Scavenging

Employment of persons as manual scavengers is prohibited under "The Employment of Manual Scavengers and Construction of Dry Latrines (Prohibition) Act, 1993", and is a criminal offence under it. Remaining manual scavengers, identified by concerned State/UT, are meant to be rehabilitated under the Central Sector Self Employment Scheme for Rehabilitation of Manual Scavengers.

During a Conference of State Ministers of Welfare and Social Justice held in June, 2011, the Prime Minister had, in his inaugural address, urged States to eliminate manual scavenging within the next six months. Certain instances of manual scavenging have been brought to Ministry of Social Justice & Empowerment’s notice, which have been referred to concerned State Governments viz. Assam, Bihar, Jharkhand, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Uttar Pradesh and Uttarakhand, for verification and rehabilitation of remaining manual scavengers.

 

Rehabilitation of Mentally Challenged Persons

The Deendayal Disabled Rehabilitation Scheme (DDRS) is being implemented since 1999 with the objective of ensuring effective implementation of the Persons with Disabilities Act, 1995, by creating an enabling environment and encouraging Non-Governmental Organizations (NGOs) through financial assistance for undertaking projects for providing education, vocational training and rehabilitation of persons with disabilities, including mental disabilities. Further, under the National Mental Health Programme (NMHP) implemented since 1982, a total of 123 Districts in 30 States/UTs have been covered. The NMHP provides for various components like (i) schemes for up-gradation of psychiatry wings of government hospitals/ medical colleges, their modernization, monitoring and evaluation, research and training, information, education and communication activities, (ii) setting up of centers of excellence in mental health and establishment of PG training departments in mental health specialties & (iii) suicide prevention services, work place stress management, life skills training and counseling in schools and colleges etc. In addition, there are three mental health institutes run by Government of India, 40 State run mental hospitals along-with 335 Departments of Psychiatry in various medical colleges across the country, equipped to treat patients suffering from mental illness.

 

Performance of MSME

As per ‘Quick Results : Fourth All India Census of Micro, Small & Medium Enterprises 2006-2007’ the  total number Micro, Small & Medium Enterprises (MSMEs) in the country is 261.01 lakh.  The percentage share  of registered MSMEs is 5.94.

As per the data available from Central Statistics Office, Ministry of Statistics and Programme Implementation, the estimated percentage share of Micro and Small Enterprises ( MSEs) sector in the Gross Domestic Product stands at 5.84,5.83,7.20,8.00 and 8.72 for the years 2004-05, 2005-06, 2006-07, 2007-08 and 2008-09 respectively (latest available).

The Government monitors employment generation in MSME sector by conduct of All India Census of MSMEs periodically in the country. The latest Census (Fourth Census) was conducted with reference year 2006-07. The total employment generated by registered MSMEs, as per ‘Final Result Fourth All India Census of Micro, Small & Medium Enterprises 2006-07: Registered Sector’ is 93.09 lakh persons whereas the total employment generated by unregistered sector as per ‘Quick Results: Fourth All India Census of Micro, Small & Medium Enterprises 2006-2007’  is 502.57 lakh persons. As per ‘Economic Survey 2010-11’ total employment in organized sector of the economy, as on 31st March 2007, is 272.76 lakh persons.

The registration of MSMEs is a necessary condition for availing of the benefits of financial assistance schemes of the Ministry of MSME. However, the unregistered MSMEs are eligible for availing of assistance from the banking sector.

The Reserve Bank of India (RBI) has issued detailed guidelines to all scheduled commercial banks on lending to MSMEs which, inter alia, provide for a time frame for disposal of loan applications and loan limit for dispensing the collateral requirement for MSEs.

As per data available from RBI, outstanding credit   by   public sector banks to MSEs and its percentage share in total bank credit are as given below:

At the end of March

Outstanding credit to Micro and Small Enterprises(MSEs)

( Rs. In Crores)

Credit to MSEs as Percentage of total  Bank Credit

2005

67,800

9.5

2006

82,434

8.1

2007

1,02,550

7.8

2008

1,51,137

11.1

2009

1,91,408

11.3

2010

2,78,398

13.4

2011(Provisional)

3,76,625

15.1

As per recommendations of the Task Force on MSMEs under the chairmanship of the Principal Secretary to the Prime Minister, RBI has advised the banks to achieve a 20 per cent year-on-year growth in credit to MSEs and a 10 per cent annual growth in the number of Micro Enterprises accounts. In order to ensure that sufficient credit is available to Micro Enterprises within the MSE sector, as per the RBI’s extant guidelines to banks, 60 per cent of MSEs advances should go to the Micro Enterprises. The banks have been advised that the allocation of 60 per cent of the MSEs advances to the Micro Enterprises is to be achieved in stages viz., 50 per cent in the year 2010-11, 55 per cent in the year 2011-12 and 60 per cent in the year 2012-13.

 


Khadi Institutions

Khadi and Village Industries Commission (KVIC), a statutory body under the administrative control of the Ministry of Micro, Small and Medium Enterprises runs various schemes and programmes for the holistic development of the khadi sector. Schemes for increasing the demand and production of khadi include (i) Product Development, Design Intervention & Packaging (PRODIP), (ii) Market Development Assistance (MDA), (iii) Khadi Reforms and Development Programme (KRDP), (iv) Strengthening Infrastructure of Existing Weak Khadi Institutions and Assistance for Marketing Infrastructure, (v) Scheme for Enhancing Productivity & Competitiveness of Khadi Industry and Artisans and (vi)Scheme of Fund for Regeneration of Traditional Industries (SFURTI).

KVIC conducted a study through Indian Institute of Technology (IIT), New Delhi on quality assurance norms for khadi. Inter alia based on the study, KVIC devised and circulated quality assurance norms to ensure availability of uniform quality of khadi at sales outlets run by khadi institutions.

As per data maintained by KVIC, the total number of khadi institutions operational in the country during the last three years is: -

S.No.

Year

Number of Khadi institutions

1.

2008-09

1958

2.

2009-10

2065

3.

2010-11

2220

Srikant Jena Inaugurates all India Training of Trainers for the NSS 69th Round of Socio-Economic Survey
The Minister of State (Independent Charge) for Statistics & Programme Implementation Shri Srikant Kumar Jena here today inaugurated two-day All India Training of Trainers for the NSS 69th Round of Socio Economic Survey. The NSSO and the State Directorates of Economics & Statistics will carry out the 69th Round programme for the Central and State samples respectively for a period of six months starting from 1st July, 2012.

Other dignitaries attending the Conference include Professor R. Radhakrishna, Chairman, National Statistical Commission, Prof. Amitabh Kundu, Centre for the Study of Regional Development, JNU, New Delhi and Chairman, Working Group of 69th Round, Dr. T. C. A. Anant, Secretary, MOSPI, Shri J. Dash, DG & CEO, NSSO, Shri S. K. Das, DG, CSO and Members of the National Statistical Commission and Working Group on 69th Round. Senior officers of Central Statistics Office (CSO) and NSSO from Hqrs, offices at New Delhi and Kolkata and field offices, as also the State Directorates of Economics & Statistics and representatives from Central Ministries/Departments, are also attending the training for trainers programme.

Following is the text of the Minister’s speech:

“It is a matter of great pleasure for me to be amidst you on the occasion of All India Training of Trainers for NSS 69th round. During this Round, NSSO will collect data on “Drinking Water, Sanitation, Hygiene and Housing Condition”, the sectors, which are very crucial for overall improvement in the quality of life.

The Government envisions that all Cities and Towns become hygienically livable and thus, is making all round efforts to improve the living conditions of people by way of providing the basic necessities to one and all. Sustainable good public health with a focus on hygiene and affordable sanitation facilities is a matter of concern, not only for urban poor but also rural population. In rural areas the Government aims to provide support to States in their endeavor to make available basic facilities and services like safe drinking water and improved sanitation facilities.

Such data and information becomes much more essential in view of a number of schemes and projects in both urban and rural areas being implemented by the Government like “Total Sanitation Campaign” and “Accelerated Rural Water Supply Programme”. Success of these programmes depends upon timely availability of reliable data. Similarly, for monitoring the impact of the Governmental schemes and projects, statistics plays a vital role for planners and policy makers for taking necessary corrective action and modifying the programmes, if required. I am confident that data generated by this Round of NSS shall be useful to Government in its endeavour to ensure total sanitation, and making available safe drinking water to the common man both in rural and urban areas.

The basic objective of the Ministry in general and NSSO in particular is to generate statistics which are timely and accurate, cost effective and reliable for making policies for comprehensive improvement in the developmental processes. Such surveys and their successful completion are of paramount importance in scheme of things to update the requisite database.

It is important for us to meet the challenges and responsibility that has been bestowed upon us to face the ever growing data needs. In fact, there has been a paradigm shift in the way quality and standards of data are being re-defined. Consequently, changes in the role and responsibility of NSSO in meeting these demands appear to be the most pertinent issue today. These expectations are required to be met with innovation in data collection methodology.

The success of any survey of this kind largely depends upon the techniques used by the field officials and the resultant cooperation from the respondents. Awareness among people about survey and its use is extremely important to get their cooperation and elicit information. Several publicity measures have been taken to increase the awareness about National Sample Surveys through mass media like TV and news papers and in future also we would be expanding the scale of publicity. I am sure that these measures would improve the credibility of the organization as also have desired impact on the response from the public.

As regards today’s Conference, the importance of training of trainers for an all India survey of this magnitude covering various subjects and maintaining uniform concepts and definitions hardly needs any emphasis. The efficacy of the survey in terms of correctness and reliability of results depends primarily on how appropriately these ideas are actually implemented in the field. I personally find this annual event of the NSSO, where all the implementing partners, namely Centre and States, Planners and decision makers are involved, to be of significant importance, especially in view of Large Scale Sample Survey. It is the responsibility of all present here, who are being trained, to impart effective and thorough training to field workers so that the high standard of survey and quality level of data is maintained.

We should feel proud that the combined efforts of Center and the States form critical inputs into decision making for the welfare of people. There is a need to pool our expertise and experiences in order to provide reliable and timely data. Though, we are amongst the best and most innovative National Statistical System in the world, the entire statistical fraternity requires gearing up to meet new challenges by providing dependable data in timely manner for making effective usage by Policy makers and Planners, especially in the area of Drinking Water, Sanitation, Hygiene and Housing Condition, the sectors, which are very crucial for overall improvement in the quality of life.”

The NSS 69th Round will be devoted to the subjects “Drinking Water, Sanitation, Hygiene, Housing Conditions (including slums)”.

The main objective of the survey is to obtain reliable data on housing condition and facilities for living for the Government and Planning Bodies for formulating efficient planning. Particulars of living facilities available to the dwelling such as major source of drinking water, availability of bathroom and latrine, hygienic conditions prevailing in dwelling and its surroundings, availability of electricity, ventilation of the dwelling, construction and repair details including cost and source of finance etc. are to be collected through the survey on Housing Condition. Some information on quality of drinking water and other hygiene related data would also be collected from the households. Condition of urban slum, both notified and non-notified, with respect to infrastructural facilities like the area where the slum is located, roads within and approaching the slum, electricity, drinking water, sewerage, drainage, garbage disposal, etc. and data on change in the condition of some of these facilities, and source of the improvement, if there is such improvement over the last five years, would be collected under Survey on slums.

The Survey will cover the whole of the Indian Union except some inaccessible areas of Nagaland and Andaman and Nicobar Islands. All the State Governments and Union Territories (except A & N Islands, D&N Haveli, Chandigarh and Lakshadweep) will participate in this activity by taking up the survey with a common set of schedules and sampling design.

Funds for Development of North Eastern Region

The Union Minister of State (Independent Charge) for Development of North Eastern Region (DoNER) Shri Paban Singh Ghatowar has said that out of the total 1385 projects, sanctioned at cost of Rs. 11389.26 crore under the NLCPR scheme and special BTC package, 663 projects at a total cost of Rs. 3726.44 crore have been completed.

In a written reply in Rajya Sabha today he said, out of the remaining ongoing projects, in 425 projects completion has not been achieved on the target date. A State-wise list of these projects is enclosed at Annexure-I. These projects are at various stages of implementation. For the timely completion of these projects their progress is reviewed with the State Governments from time to time. To encourage the State Government for their expeditious completion, an incentive in terms of additional retention of Rs. 20.00 crore projects as per State choice, for the best performing State in terms of completion of projects have been introduced. A State-wise list of projects sanctioned by the North Eastern Council, Shillong, whose completion have been delayed beyond their target dates, is enclosed at Annexure-II. Annexures I and II have been put on the website of the Ministry

Limited Liability Partnership

The Minister of State in the Ministry of Corporate Affairs Shri R.P.N. Singh today informed the Lok Sabha that the Limited Liability Partnership Act, 2008 (LLP) which came into effect from March 31, 2009, provides for any individual or body corporate to be a partner under LLP Act, 2008. Whereas a joint venture LLP between Government and private sector is possible, there is no concept of “Government LLP” in the LLP Act, 2008. As such no data is maintained of joint ventures Limited Liability Partnership between the Government and private sector under the provisions of the LLP Act.

Audit of Limited Liability Partnership is conducted by the member/member firm of The Institute of Chartered Accountants of India as per rule 24 of LLP Rules, 2009.

The Minister war replying to a written question whether joint ventures between the Government and private sector under limited liability partnership exist in the country; the date from which the said policy came into effect; the number of such joint ventures functioning in the country by the end of December, 2011 and the amount of capital invested by the Government and private sector therein; and the name of the agency entrusted with the audit of the account of the said joint ventures.

ICAI National Cost Convention-2012
RPN Singh calls for public friendly Accounting

Shri R.P.N. Singh, Minister of State for Corporate Affairs has emphasized upon public friendly Accounting. Inaugurating the three day long 53rd National Cost Convention of Cost and Management Accountants (CMA) for the year 2012 organised by the Institute of Cost Accountants of India (ICAI) here in New Delhi today Shri Singh called upon the Cost Accountants to work with utmost integrity and observe transparency in account dealings. He also requested them to file the f Balance Sheet and Profit and Loss statement in XBRL format only. He said the ministry will support the ICAI in all its ventures.

The theme chosen for the convention is Sustainability Framework-Integrated Reporting Imperatives for CMAs. It is to bring into account the integrated Sustainability Management and involves managing opportunity and risk, measuring and managing performance, providing insight and analysis to support decision making.

Over 1000 delegates including eminent national and international experts are attending the convention.. The eminent speakers include Shri Naved Masood, Secretary Corporate Affairs, Shri M.Gopalakrishnan President of ICAI, Shri Raj Purohit, Vice Chancellor, Jai Narayan Vyas University, Jodhpur, Shri Kashi Balachandran, Prof. Stern School of Business, NY, USA, Mr. Vittorio Lusvarghi,Member, PAIB,IFAC, and Shri.S.Jayaraman, Member, CERC.

The Technical Committee of the Convention under the chairmanship Shri Arvind K. Awasthi, Deputy Comptroller & Auditor General of India will discuss on the following sub-themes:

Policy Intervention for Sustainable Development with CMA as an Enabler

Enhancing Corporate Governance Framework to Integrate Sustainability and Strategy: Performance Management and Compliance

Deepening Capital Markets through Responsible Investment Supporting Sustainability:

From Financial Reporting to Integrated Reporting- Paradigm Shift

Climate Change, carbon emissions and Management Accounting, Carbon Accounting

CMA as a game changer in supporting sustainable strategies: Risk Management, Whole Life Costing

The Institute of Cost Accountants of India (ICAI) is a statutory body established under the Cost and Works Accountant Act, 1959 passed by the Parliament. The Act has been amended from time to time and was last amended in January 2012 this year.

National Mission on Monsoon

The Ministry of Earth Sciences (MoES) has finalized a detailed project report (DPR) to take up National Mission on Monsoon (NMM) to develop the most representative and advanced dynamic model framework for India for forecasting monsoon rainfall and its variability in various space and time scales. Replying to a question in Lok Sabha today the Minister of state of Earth Sciences Dr. Ashwani Kumar stated further that the approval of the Union Cabinet is being sought for this proposal upon obtaining the approval of the Expenditure Finance Committee (EFC) and appropriate administrative and financial competent authorities of the Government.

In response to another question in the house Dr.Ashwani Kumar informed the members that India Meteorological Department (IMD) operates a national network of seismological stations to monitor earthquake activity in the country on a 24x7 basis to receive various observed earthquake parameters in real time at the Central Receiving Station (CRS), Delhi. Making use of the earthquake records, the magnitude and other source parameters of earthquakes are estimated and disseminated to various user agencies

Automatic Weather Stations
The Central Government has proposals to set up Automatic weather Stations (AWS) in the country. The Minister of State for Earth Sciences Dr. Ashwani Kumar stated in Lok Sabha today that The India Meteorological Department (IMD) had already set up AWS network of 677 stations in the country among which 49 stations have been located in the state of Maharashtra. AWS records hourly data of air temperature, wind speed and direction, sea level pressure, relative humidity and 15-min data of rainfall. In addition, Agro-AWS records global radiation, soil temperature, soil moisture at 20m depth, leaf wetness and leaf temperature.

The Minister hoped that integrated observing systems, that include AWS network, will facilitate for nowcasting of coastal hazards.

Dr. Ashwani Kumar further Said that AWS network along with other observing systems comprising Doppler Weather Radars (DWR), satellite etc. provide real time monitoring of ever changing adverse weather conditions associated with hydro-meteorological hazards.

Protection of Marine Resources

The Central Government is taking various steps to protect the marine resources. Detailing the measures the Minister of state for Earth Sciences Dr. Ashwani Kumar said in Lok Sabha that the government has enacted the legislations for protection and regulation of marine resources. The Territorial Waters, Exclusive Economic Zone and other Maritime Zones Act, 1976 of Government of India provides for specific designated areas for the protection of marine environment and resources in the Exclusive Economic Zones and the continental shelf. The Offshore Areas Mineral (Development and Regulation) Act, 2002 of Ministry of Mines provides for development and regulations of mineral resources in the territorial waters, continental shelf, Exclusive Economic Zones and other maritime zones of India. Regarding living resources, Maritime Zones of India (Regulation of Fishing by Foreign Vessels) Act, 1981 provides for the regulation of fishing by foreign vessels in certain maritime zones of India. Further, Potential Fishing Zone advisories for the adjoining sea off the East coast, West coast, Lakshadweep Islands and Andaman and Nicobar Islands are not issued during the breeding season with a view to protect juvenile fishes.

Dr. Ashwani Kumar informed the house that the above-mentioned legislations are broadly following the provisions contained in the UN Convention on Law of the Sea, signed and ratified by India.The Minister said that India is also party to the other international conventions having the bearing on marine resources which includes Agreement related to Part XI of the UN Convention on Law of the Sea, 1995 Fish Stock Agreement and Convention for the Conservation of Antarctic Marine Resources and related agreements.

Rehabilitation Package for Displaced Persons

The land acquisition for National Highways is done under the provisions of the National Highways Act, 1956 which involves due consultation with the stake holders as per the provisions of the Act. Highways are linear projects that involve widening of existing roads and opening of new road for bypasses, and have a long and narrow corridor of impact. The linear acquisition of land results in minimal displacement of families and loss of livelihood. On the other hand, development of highways results in the socio-economic development of the area, ultimately benefiting the local population.

Relevant provisions of National Policy on Rehabilitation and Resettlement, 2007 in relation to Land Acquisition of National Highways provides that in case of linear acquisitions, in projects relating to railway lines, highways, transmission lines, laying of pipelines and other such projects wherein only a narrow stretch of land is acquired for the purpose of the project is utilized for right of ways, each khatedar in the affected family shall be offered by the acquiring body an ex-gratia payment of such amount as the appropriate Government may decide but not less than twenty thousand rupees, in addition to the compensation or any other benefits due under the Act or programme or scheme under which the land, house or other property is acquired. Provided that, if as a result of such land acquisition, the land-holder becomes landless or is reduced to the status of a ‘small’ or ‘marginal’ farmer, other rehabilitation and resettlement benefits available under this policy shall also be extended to such affected family.

Awarding of National Highways Projects

Highway projects for a length of 7994 km were targeted for award in the year 2011-12 by the National highways Authority of India (NHAI) under National Highways Development Project (NHDP). The length completed depends on quantum of work available for completion. NHAI awarded only 5237 km in 2007-08 to 2009-10. This comparatively lower quantum of award in previous years resulted in lesser length available for completion and lower targets/completion rates in subsequent years. The award of projects has since been accelerated and 5059 km were awarded in 2010-11. To meet the target of construction at an average rate 20 km per day i.e. almost 7,000 km per year, it is essential that at any given point of time, there should be almost three times this length, i.e. approximately 20,000 km awarded and under construction.

With the increase in pace of award, length available for completion and actual completed length is expected to increase. Progress in implementation has also been affected by poor performance of some contractors, delay in obtaining forest/wild life clearances from Ministry of Environment & Forest, railway clearances for Road Over bridges (ROB’s), law & order problems in some states, delay in land acquisition etc.

Grant-in-AID for Driving Institutes

In the Eleventh Five Year Plan, ten model Institutes of Driving Training & Research (IDTRs) are being set up. Sanction has already been accorded by the Ministry of Road Transport & Highways for setting up IDTR in Himachal Pradesh, Madhya Pradesh, Rajasthan, Maharashtra, Gujarat, Haryana, Tamil Nadu, Bihar and Tripura. A proposal for setting up an IDTR in UP is in process. The Ministry intends that the IDTR should serve as a “Mother Institute” with a cluster of small institutes in the surrounding districts /areas.

The Central Government proposes to sanction and finance one Mother/ Model Institute in each State & Union Territory. However, one such Institute cannot cater to all the drivers in States/UTs. State Governments are expected to sanction / finance the cluster Institutes by presenting the Model Institute as a business model for replication in the private sector.


Highlights of Economic Survey 2011-12

Economic Survey -2011-12

Following are the highlights of Economic Survey 2011-12 :

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

Last Updated on Friday, 16 March 2012 04:36
 

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