Post on 06-Jul-2018
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
http://slidepdf.com/reader/full/indian-economy-by-sanjeev-verma-raz-kr 1/78
i
s
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o
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P
S
a
n
d
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ta
t
e
iv
il S
e
rv
i
c
e
s
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r
e
li
m
in
a
r
y
a
n
d
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a
i
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E
x
a
m
in
a
ti
o
n
s
l
s
o
u
s
e
fu
l
f
o
r
o
t
h
e
r
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m
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e
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it
iv
e
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a
m
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s
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m
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ti
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o
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rn
a
l
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c
to
r
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in
g
O
u
tw
a
r
d
s
G
lo
b
a
l
E
c
o
n
o
m
y a
n
d
O
u
tl
o
o
k
®
Indian
Economy
Revisited
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
http://slidepdf.com/reader/full/indian-economy-by-sanjeev-verma-raz-kr 2/78
C
H
P T
E
R
o
U
T
U
T
O
N
E
CO
N
OM
Y
O
N
P
T
OF
OU
TP
UT
W
hat
w
ould
w
c
un
der
stan
d i
f
w
e
were
to
ld
th
at
tod
ay
th
e
lar
ges
r
eco
nom
y
in
the
w
orl
d
is
the
U
S
Sure
ly
,
wc
w
ould
w
ond
er
on wh
at
param
eter
—
w
heth
er in
terms of
la
nd
are
a
o
r
population
or
output
In
eve
ry
eco
nom
y
go
ods
’
arc
b
ein
g
pro
duc
ed
th
at
is
.
raw
m
ater
ials ar
c
b
ein
g
co
nve
rted
into
fini
shed g
ood
s
a
gric
ultu
ra l
cro
ps
for
es tr
y
lives
tock
ste
el
,
ce
ment
,
ca
rs
cyc
les
b
read
etc
.
Sim
ilar
ly
se
rv ice
s
’
arc
al
so
b
ein
g r
end
ered
l
ike
ba
nkin
g
insu
ranc
e
sh
ipp i
ng
e
tc. All
o
f
thes
e
h
ave
a
m
onet
ary
val
ue
in
the
lo
cal c
urre
ncy
like t
he
USD in
t
he
US
an
d
the
IN
R
in
In
dia
Thus
ou tp
ut
per
sc
im
pli
es
ag
gre
gatio
n
of
mon
etary
valu
e
of
all
t
he
go
od
s
a
nd
se r
vice
s
p
rod
uced
in
an
e
cono
my
in
a
give
n
tim
e
p
erio
d
w
hich ma
y
be
a
quart
er
3
mo
nths
h
aif
a -
yc
ar
(
6
m
ont
hs
)
or
a
ye
ar
1
2
mo
nth
s
.
In
other
words
,
output
indudes all
goods
and
services
exchanged
for
money
.
For
ex
am
ple
a
fishe
rma
n
cat
chin
g
fis
hes
m
ay
use
som
e
of it for
sel
f
co
nsum
pti
on
an
d
th
e
re
ma
ining
may
be use
d
t
or
se
llin
g
in
the ma
rke
t
;
thus
,
ih
c
m
oneta
ry
val
ue
o
f
all
th
e
fish
es
w
oul
d
b
e cons
ider
ed
und
er
th
e
c
oncep
t
of
ou
tput
.
It
sou
nds s
imp
le
s
o far
.
bu
t
de
lvin
g
a
littl
e
de
epe
r
ou
tput
ma
y
as
w
ell
co
mpr
ise
of
in te
rm e
diat
e
g
ood
s
l
ike
s
teel
a
nd cem
ent
wh
ich
in tu
rn
ar
e
in
puts
fo r
o
ther
go
ods
refer
red
t
o
as
f
inal
goo
ds
’
. The
se
fin
al
go
ods
cann
ot
be
p
ut
to
f
urth
er
u
se
e
xcep
t
fo r
use
li
ke
c
ars
b
uild
ing
s etc
.
If
we were
to in
clud
e
bo
th th
e
inte
rmed
iate
a
nd
fin
al
g
ood
s
i
n
ou
r
de
finit
ion
o
f
outp
ut
,
then
that
would
effective ly
mean
counting the
same
thing
twice
and
in
the
proc
ess
inHatc
the
outp
ut
of an
econ
omy
. Fo
r
e
xam
ple
,
pr
odu
ctio
n
o
f
whe
at an
d
its
m
illin
g
as
fl
our
res
ults in
the
m
akin
g
of
b
read
;
thus
for
outp
ut
p
urpo
ses
on
ly
the
m
oneta
ry
v
alue
of
br
ead
wo
uld
be
con
side
red
a
nd
not
th
at
of
wh
eat
and f
lour
The
refo
re
w
c
ca
n
co
nclu
sive
ly
deri
ve
th
at
the
outp
ut
sh
ould
ha
ve
only
fina
l
g
ood
s
in
ord
er
to
avo
id
do
uble cou
nting
.
B
ut
w
hat
a
bout a
sal
e
of s
eco
nd
han
d g
ood
s
lik
e
s
ay
a
s
eco
nd
han
d
car
S
ho
uld
th
ey
be
refl
ecte
d
in
che
ou
tput
o
f
an
eco
nom
y
The
a
nswe
r
is
no
,
as
th
ey
h
ave
alre
ady
bee
n
in
clud
ed
o
nce
wh
en
ma
nuf
actu
red
an
d
the
refo
re
do
es
not a
moun
t
to a
fres
h pr
odu
ctio
n
T
hus,
outp
ut
of an
econ
omy
is
th
e
mone
tary
va
lue
of
the
fina
l
goo
ds
an
d
se rv i
ces
in
a
I
give
n
tim
e
p
erio
d
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
http://slidepdf.com/reader/full/indian-economy-by-sanjeev-verma-raz-kr 3/78
THE
IND
IAN
E
CON
OMY
OU
TPUT
f
AN
I
bu
w
h
o
«
v
b
®
in
„
5
„
.
n
riva
lcMH
O
M
*
.
Tin
t
BirU
.
R
djJnC
t
ev
en
g
ovcntn
u
n
.
li
ke
he
public
««
°
r
co
mp
.
ni«
ONG
C
.
SA
IL
e
tc
l
nciiistr
e
s
.
1
;
^
Nokia
.
So
ny
.
Samsu
ng
etc.
0
7
we
»
T
co
J
*
»
n
ioiietMy
vslut
ol
all
he
fi
nal
goodc
a
nd
.
onto
.
p
roduct
wi
,
hin
he
geographic
boundary
of
a
coun
ry
,
irrc
specuv
e
ol
who
.
he
pr
oducer
of
g
oods
and
se
rvices
ar
e
her
,
i
,
is
c
alled
do
nresri
c
our
pu
.
o
.
he
econom
y
H
u
,
*
in
the
I
ndian
c
ontext
,
domes
tic
out
put
con
sists
of
the
moneta
ry
value
of
al
l
fin
al
g
oods
and
serv
ices
p
roduc
cd
/
re
ndc rc
d
by
in
dividu
als
,
priva
te
sector
p
ublic
secto
r
and
f
oreign
comp
anies
.
.
.
Havin
g
l
ooked
into
wh
o
arc
t
he prod
ucers
in
an
e
conom
y
,
le
t
us look
no
w
at
how
the
g
oods
are
prod
uced
In o
rder
to
prod
uce
goods
,
at
first
w
e
nee
d
s
ome
pla
cc
/
infras
tructu
rc
where
th
e
g
oods
can
be
produ
ced
.
Thu
s
we
w
ould
need
to
hav
e a
som
e land
{
or
bu
ilding
;
m
oney
as
s
eed capi
tal
,
in
order to
bu
y
mach
ines
and
raw mater
ial
,
invest
in
marke
ting
,
arran
ge
for
r
eimpor
tation
etc
.
;
labo
ur
fo r
prod
uction
a
nd
th
en
a
pe
rson
w
hom
we
ca ll
t
he
en
trepren
eur
as
the
produ
cer
of
good
s
ihese
are
known
as
‘
factors
of
production
’
in
an
e
conom
y
.
Thu
s
in
a
pro
ductio
n
l
ife
cycle
’
each facto
r
of
pro
ductio
n w
ill ha
ve
an
ass
ociated
cost
be
it
th
e
see
d capit
al
for
inv
estmen
t
,
rent
for the
placc
/
in
frastru
cturc
,
or
for
that
m
atter rhe
l
abour
w
ages
and
sa
laries
;
as
an
entrep
reneur
the
p
rofit
th
at
an
e
ntrepren
eur gains
at rh
e en
d
o
f
the
d
ay
,
is
pr
incipa
lly
for
the
risk that
hc/
she
take
s
f
or
p
roduct
ion
.
It
is
imp
ortant
to
note
that
pro
fit
is
a c
ost for
a
ny
econ
omic
ac t
ivity
:
b
ut
t
hen
what
is
cost
is also
inc
om e
for
fact
ors of
produ
ction
.
F
or
e
xampl
e
,
re
nt is
an
income
f
or
land
,
interest
is
die income
for
capital
wages
and salaries
are
the
income
for
workers
and
superv
isors
a
nd
pr
ofit
per
se is
the in
come
fo
r
th
e
r
isks
take
n
b
y
the
en
trepren
eur
Let us
i
llustra
te
th
is
examp
le
fu
rdicr
wi
th
nu
mbers.
F
ollow
ing
are
the
deta
ils
of
a
m
anufa
cturin
g
comp
any
:
Land
rent
Labou
r
(
W
ages
Sa
laries
C
apital
in ter
es t
En
trepren
eur
Profit
T
otal
?
1
0.000
1
,
000
*
7
50
1500
12
,
25
0
theo
u
p
u
is
h
e
”
mc
T
^
‘
nc
ludtd
mre
p
encu
r
i
s
2
5
;
what
is
S
o
fa
r
,
we
ha
t dn
the
inc
om e
of
Indi
a
i
s
nece
ssary
r
n
Wi
t
a
ll th
e
In
dian
nation
bu
t
if
w
e
iinludi
lo
gical
to
ded
uct
if
referred
to
as
No
h
Dom
estic
P
rod
l
N
et
fac
tor
i
ncome
fi
i
ncome
o
f
Ind
ian
n
product
is
less
rhai
than
the
i
ncome o
f
An
i
ncreas
ed
lo
to
fore
ign
entitie
s
unch
anged
.
f
W
C
N EP
T
he
output
of an
are
consumed
eve
machi
nes
co
uld
b
capi
tal
stock
in
tlv
Le
t
us
as
sume
t
of cars
.
that
i
s.
t
ex
ample
a
car
is
i
or
consu
mption
c
onsum
ption
(
or
i
if
it is
acc
ounte
d
I
Accordingly
,
t
GDP
)
.
He
nce
,
Th
us
th
ere
ar
e
f
N
Dl
>
L
et
us
no
of growth
.
Tear
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
http://slidepdf.com/reader/full/indian-economy-by-sanjeev-verma-raz-kr 4/78
OUTPUT
OF
AN
ECONOMY
;
be
ere
,
,
the
So for
.
wsi
has discussed
about the
domestic
uuiput
/
produci
/
income
,
hut
what
about
the
income
oflndians
staying
abroad
?
For
a
more
comprehensive
analysis
of the
output
,
it
is necessary to look beyond the
geographic boundaries
that
would
include die
income of
ail the
Indian
nationals
irrespective
of the
country
they
currently
reside
lint
if
we
include
the
income of
Indian nationals outside the
country
,
it
will
also he
logical
to
deduct
the
Income
of
foreign nationals
residing
in
our
country
.
Tbit
is
also
referred
to as Net
Factor
Income From
Abroad
(
NHAP
),
Thus
,
final
and
Domestic Product
*
Income of
Indians
Abroad
Income
of
Foreigners
in
India
National Product
the
)
;
the
an
for
an
for
,
and
r
us
is
is
or
Domestic Product
(
+
/
-
)
NFIAD
=
National Product
Net foctor income from
abroad can
be
positive
or
negative
depending up
on
which
is
more
—
income
of
Indian
nationals
abroad
or
income
of
foreign
nationals
in
India
,
that
is,
national
product
is
less
than
the
domestic
product
,
if
the income
of
Indian nationals abroad
is Less
than the
income of
foreigners
in
India and vice versa
An
increased
foreign
currency
denominated
debrof
a
country
Or
selling
domestic
assets
to
foreign
entities
would tend to reduce
the national
product
leaving
domestic
product
unchanged
.
|
Q
C O N C E P T
O F
DEPRECIATION
The
output
of
an
economy
also
consists of
production
of machines /machineries
which
are consumed
every
year
,
referred
to
as
depreciation
and
much
of
the
output
of
such
machines could
be
replacement
in
nature and not
signilying
additions to machine or
capital
stock
in
the economy
Let us assume
that
cars
are
being
produced
in an
economy
and there
is
also
depreciation
of cars
,
iliac
is
,
the
cats
would
eventually have
to be
replaced
after
their
shell
-
life
For
example
,
a
car
is
priced
at ?
3.00
,
000 and
has a life of
,
say
10
years.
Then
,
depreciation
(
or
consumption
)
of car
is
?
30
,
000 a
year
Thus
,
if
the
output
of
an
economy
ignores
consumption
(
or
depreciation
)
of its machine
stocks
,
it is
referred
as
a
gross
’
concept
and
if
it is accounted
for
it
is known
as
‘
net
’
concept
Accordingly
,
there
is Gross
National
Product
(
CNF
)
and
Gross
Domestic
Product
(
GDP
)
.
Hence
,
GNP
-
Depreciation
=
Net
National
Product
(
NNP
)
GDP
-
Depreciation
=
Net
Domestic Product
(
NDP
)
Thus
,
there
are
four
concepts
in
the
output
of
an
economy
GNP
.
GDP
,
NNP
and
NDP
Let us
now
rry
to
understand which
method
is
technically
the
best measure
of
growth
.
Clearly
,
It
is
the NNP
as
it
first
covers
all the
nationals
of
a
country
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8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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O U T
P U T
O F
AN
E
CON O
MY
l
d
s
The
mom
ent
we
start
talking
a
bout
the
moneta
ry v
alue
c
ither
at
market
price
s
or
fact
or
cos
t
the
concept
of
infl
ation
b
ecomes
impo
rtant
In
simpler
term
s
inflatio
n is
incr
easing
prices
an
d
during infla
tionary
times
it
ten
ds
t
o
in
flate
th
e
value
in
n
ominal terms
.
Supp
ose
inf
lation
is at
10
p
ercent
,
it
implies
that
the
price
is
going
u
p
by 10
percen
t
,
that is
to
say
that
the fa
ctor
cost
is
al
so
incre
asing
,
which
would
incr
ease
t
he
output
ev
en
th
ough
there
is
no
p
hysical in
crease i
n
the
produ
ction
of
good
s
and
serv
ices
,
i
t
is
beca
use
of
thi
s
r
eason
that
th
e
o
utput
meas
ured
a
t
fac
tor
c
ost would have
to
b
e
a
djusted
to
actuall
y
reflect
the
i
ncrease
d
pr
oductio
n
of
go
ods
a
nd
services
in
an
eco
nomy
.
The
a
djustme
nt
is
a sta
tistical
ex
ercise
which
is
done
by
using
the
G
P
def
laror
that gives
th
e
out
put
t
factor cost
in
terms
of
consta
nt
prices
.
Ihc
output
at
constan
t
p
rices
r
efers
to the
ou
tput
ob
tained
after
being
adju
sted for
infl
ation
To
fu
rther
e
xplain
sup
pose
we
do
no
t
adjust
f
or
infl
ation
an
d
the
outp
ut
growth
for
an
yea
r
is
9
per cent
so
is
inflat
ion
It
m
eans
th
at
die
out
put
ha
s
nor
increas
ed
,
bu
t their
prices
have
incre
ased
With
out
adjusting
f
or inflation
,
the
increas
e
in
output
has
li
ttle or
no
signi
ficance
and
actually
could
be
misle
ading
This
adjus
tment
for
in
flation
is
als
o
known as
real
or ot
herwise
it
is
‘
n
ominal
’
and
i
s
generic
in
nature
Rea
l
growth
is
adjusted
for inflati
on
whi
le
nomi
nal grow
th
ignores
adjus
tment
for
infl
ation
Growth
by
definitio
n
has
to
be
‘
re
al
Sim
ilarly
,
the
re
is
‘
no
minal
’
and
‘
real
in terest
rate
incom
e
wag
es
but
there
is
no
con
cept
o
f
no
minal and re
al
g
rowth
as
grow
th
by
definitio
n has
to
be
adjus
ted
fo
r
infla
tion
This
is
implie
d
in
the
mea
ning
of the
word
growth
itse
lf
Ihe
use o
f the
word
gro
wth
’
in
the
Indian
contex
t implie
s increa
se in
G
DP
at
fac
tor
cost
at
constant
prices
In
India
the entire
compu
tation
is
the
re
sponsib
ility
of
the
Centra
l
S
tatistical
Or
ganisati
on
C
SO
Gov
ernment
of In
dia
The
es
timates
of
grow
th
arc
provi
ded
by
the
or
ganisati
on
on
quarterl
y
b
asis at
the
end
Marc
h
,
Jun
e
Sept
ember
and
Dec
ember
every year
and
the
ann
ual
grow
th
e
stimates
a
re
pr
ovided during
A
pril
-
March
every year
wh
ich is
als
o
refe
rred
ro as the
fin
ancial
year
c
alendar year
is
Janu
ary
D
ecemb
er
All
the
gov
ernment
and
corpora
te
acco
unting
in
Ind
ia
is wit
h refere
nce
to
the
financi
al
year
What
w
e
have
cov
ered
s
o
far is
a
simpl
e
e
xposure
t
o
Nat
ional
Inco
me
Agg
regates
also
referr
ed
as
‘
N
ational
Inc
ome
Ac
countin
g
for stud
ents
wh
o
do
n
ot
h
ave
exposure
to
economics
.
This
is
t
he
output
me
thod
of co
mputati
on
o
f
N
ationa
l
Inc
ome A
ccountin
g
.
T
here
are
other merh
ods
lik
e th
e
inco
me and
exp
enditur
e
m
ethod
releva
nt
for
th
e student
s
w
ho
want
to
pursue
a
career in
econom
ics
. For
further
study
on these topi
cs
,
refe
rence
can
be
m
ade
to
N
CERT
text
book
of Oass
X
and
X
II
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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TOWARDS
INCLUSIVE
GROWTH
constraints
,
These factors were a
handicap
earlier fo r
Indl
*
but
tiling
*
have
dunged
In
ih c
21
ST
century
.
The
21 si
century
has
been
good
for India
,
growth
rates
jyad
itaricd
moving
upwards
and
on were on the
verge
ol
achieving
a
double
-digit
growth
*
probably
h i
(
he iiiu
time
,
except
may
be for a
year
briefly
in
die
1980
s
,
Though
growth
rati
-
,
have
intreaicd
but
n
has
noimade
any
perceptible
impact
on
the
poverty
,
unemployment
,
inret-Zintra
-
region
;
.
I
jnd
income
imbalances
.
Despite
the
high
growth
mies
achieved
,
we
have
nor
got
die
desired
results
.
There has
been
a
distinct deceleration
in
growth
since 2010
sliding down
to the lowest
in
Last decade
of
percent
,
lim
die
larger
question
remains of
high
growth
achieved had not
yielded
tangible
benefits
to
the Indian
economy
This would
lead
us to
another
concept
ol
development
'
,
J low are
growth
an d
development
different from
each other
?
f
^
D E V E L O P M E N T
— I N C L U S I V E GROWTH
The
concept
of
development
is
qualitative
whereas
that
of
growth
is
quantitative
While
growth
is an
arithmetic
number
signifying
an increase in
the
output
of an
economy
,
development
includes distribution
of
output
or the
ability
of
the
increased
output
and
income to
reach the
bottom
-
most
stratum of
society
.
Development
also
implies
equitable
distribution
in
the
economy
,
Earlier it was
widely
believed that
initially
increased
growth
is
required
and then
development
would
happen
through
what
is referred as the
trickle
-
down
theory
'
This
means that
rhe increased
growth
would
percolate
down
to
the bottom
-
most stratum
of
society
and
provide equirablc
distribution
This is
the
significance
of the
word
growth
and
development
,
In
the earlier years
th e
problem
was
our
inability
to
push
up
rates
of
growth
and
the
emphasis
was on
increasing
growth
fo r the trickle
-
down
theory
to
work which would
have
allowed
for
development
and
equitable
distribution
,
J
3
ut
the
story
for India is
quite
different
since the
economic
reforms
initiated in
1991
and
since
2005
.
India
has
nor
only
broken
through
the low -
growth
cycle
hut
also
become
one of the fastest
-
growing
economies
after
China
.
Tlie
high
growth
rate
achieved
since
2005
questions
the trickle-down
theory
in
India
,
as
it has
not benefired
rhe Indian masses
in
terms
of
lowering
absolute
poverty
levels
significantly
,
creating
employment
opportunities
,
reducing
inier-Zintra-
regional
imbalances
(
rather it has
only
accentuated
)
There
are
reasons
to
understand
why
trickle
-
down
theory
’
has not
worked
fo r
India
,
firstly
,
the
Indian
economy
has
a
structural
problem
of
excessive economic
dependence
on
the
agricultural
sector
.
Over
65
per
cent of
the
population
is either
direcrly
/
indirectly
dependent
on this sector
The
contribution
of the
agricultural
sector
to
theoverall
gross
domestic
product
{
GDP
)
is
only
18
per
cent
The
largest
contribution
of
over
55
per
cent
comes
from
the
services
sector
and the
remaining
27
per
cent
is
contributed by
the
secondary
sector
of
which
only
14
per cent
is
by
the
manufacturing
sector
. The
sector
contributing
the
least to
GDP
has
the
maximum
dependence
(
agriculture
)
and
(
he
sector
contributing
the
most
,
has
the
least
dependence
(
services
)
.
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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C
H
P
T
E
R
o
T
O
W
A
R
D
S
I
N
L
U
S
I
V
E
G
R
O
W
T
H
Growth
and
D
e
v
e
l
o
p
m
ent
—
Q
G
R
O
W
T
H
R
A
T
E
O
F
I
N
D
I
A
N
E
C
O
N
O
M
Y
N
o
w
le
t
u
s
go
ba
c
k
to th
e
s
ta
te
m
en
t
m
a
d
e
in
t
h
e
b
e
gi
n
ni
ng
o
f
“
g
ro
w
th
ra
te
s s
lo
w
i
ng
d
ow
n
’
.
T
he p
hr
a
se
b
as
ic
a
ll
y
m
e
an
s
t
ha
t
t
h
e
o
ut
pu
t
o
f
a
n
e
co
n
o
m
y
is
i
nc
r
ea
si
n
g
b
u
t
a
t
a
decreasing
r
at
e
ov
e
r
th
e
pr
ev
io
u
s
q
u
ar
te
r
h
al
f
y
e
ar
/
y
e
ar
w
h
ic
h
ev
e
r
i
s t
he
r
e
fe
re
n
ce
p
er
io
d.
If
d
u
ri
ng
t
he
sa
m
e
r
ef
er
en
c
e
p
er
io
d
o
u
tp
ut
h
a
s
d
e
cl
in
e
d
th
e
n
it
is
r
ef
e
rr
ed
to
a
s
c
on
tr
ac
ti
o
n
of
o
u
tp
ut
C
on
ti
n
uo
u
s p
er
io
d
s
of
c
on
t
ra
ct
io
n
ov
e
r
tw
o
q
ua
rt
er
s
ar
e
k
n
ow
n as
re
ce
ss
io
n
a
n
d
s
ti
ll
lo
n
ge
r
p
e
ri
o
ds
o
f
co
n
ti
nu
o
us
re
ce
ss
io
n
a
re
k
no
w
n
a
s
d
e
p
re
s
si
on
,
U
n
t
il
n
o
w
th
e
w
or
ld
e
c
on
o
m
y ha
s
w
i
tn
es
s
ed
T
h
e
G
re
at
D
e
p
re
ss
io
n
d
u
ri
n
g
1
9
2
9
-
19
3
3
W
e
s
h
al
l d
is
c
us
s
m
o
re
ab
o
ut
t
hi
s
as
pe
c
t
i
n
t
he
C
h
a
pt
er
o
n
G
lo
ba
l
O
u
tl
oo
k
A
s
w
e
h
a
v
e
di
sc
u
ss
ed
e
ar
li
er
g
r
ow
th
p
la
y
s
an
im
p
o
rt
an
t
r
ol
e
in
an
ec
o
no
m
y
A
s
w
c
k
no
w by
n
ow
th
at
i
n
cr
ea
s
ed g
ro
w
t
h
m
ea
n
s
’
in
cr
e
as
e
d
ou
tp
u
t
an
d
i
nc
re
a
se
d
in
c
om
e
’
o
f
an
ec
o
no
m
y
w
it
h
in
c
re
a
se
d
i
nc
o
m
e fo
r
f
ac
t
or
s
of
p
ro
d
uc
ti
o
n
w
hi
ch
se
ts
o
ff
a
c
ir
cu
l
ar
motion
of further
increase
in
income
.
In
cr
e
as
ed
In
c
o
m
e
»
I
n
cr
ea
s
ed
p
ur
c
ha
s
in
g
po
w
e
r
I
n
cr
ea
s
ed
d
em
a
n
d
fo
r
g
o
o
d
s
a
n
d
s
er
vi
ce
s
-
»
I
n
cr
ea
s
ed
p
ro
d
u
ct
io
n
In
c
re
as
e
d
o
u
tp
ut
»
I
n
cr
e
as
e
d
in
c
om
e
In
c
re
as
ed
in
co
m
e
-
4
I
n
cr
ea
s
ed
s
a
vi
ng
s
I
n
cr
ea
s
ed
in
v
es
tm
e
n
t
In
c
re
as
e
d
o
ut
pu
t
In
c
re
a
se
d
in
c
om
e
U
n
is
in
c
re
a
sin
g
g
ro
w
t
h
o
f
a
n
ec
o
no
m
y
s
ig
n
if
ie
s
w
e
ll
b
ei
n
g
of
t
ha
t
e
c
on
o
m
y
.
J
o
b
s
g
e
t
c
re
a
te
d
in
c
om
e
le
v
e
ls
in
c
re
as
e
a
n
d
o
ve
r
al
l
w
ea
l
th
o
f
a
n
e
co
n
o
m
y
i
nc
re
a
se
s.
F
or
th
is v
er
y
re
as
o
n
e
v
e
ry
ec
o
n
om
y
w
ou
l
d
li
k
e to
i
n
cr
ea
se
i
ts
ov
e
ra
ll
g
ro
w
t
h
In
d
ia
w
a
s
be
l
ie
v
ed t
il
l
t
h
e
re
fo
rm
s w
er
e
in
iti
a
te
d
c
a
u
gh
t
i
n
a
l
ow
gr
ow
th
c
y
cl
e
w
it
h lo
w
l
e
ve
ls
o
f
incomes
th
er
eb
y
resulting
in low
savings
and
thus
low
inv
e
st
m
e
n
ts
u
lt
im
a
t
el
y
ag
a
in l
e
ad
i
ng
to
lo
w
in
co
m
e
an
d
a
ga
in
to
lo
w
s
av
in
g
s
w
h
ic
h
i
s
k
n
ow
n
a
s
t
h
e
lo
w
g
ro
w
t
h
c
y
c
le
t
w
a
s
a
ls
o
s
ai
d
d
u
ri
n
g
t
h
os
e
d
ay
s
th
a
t
I
n
d
ia
is
un
a
b
le
to
b
r
e
ak
t
h
ro
u
g
h
t
h
e
‘
H
in
d
u
r
t
e
of
g
r
ow
t
h
w
it
h
t
ts
in
a
b
ili
ty
to
g
ro
w
b
ey
o
n
d
3
.5
p
er
c
en
t
th
e
te
rm
w
a
s
c
oi
ne
d
b
v
ti
re
n
o
t
ed
nd
i
an
ec
on
o
m
is
t
la
t
e
P
r
o
f
R
aj
K
ri
sh
n
a
w
it
h
lo
w
in
co
m
e
a
n
d
in
c
re
a
si
n
g
p
o
p
u
la
t
io
n
e
ad
i
n
g to
i
n
cr
ea
s
ed
p
ov
e
rty a
n
d
u
n
em
p
lo
y
m
e
nt
i
n
th
e
co
u
nt
ry
,
r
eg
i
on
a
l
im
r
a
r
eg
i
o
n
a
i
m
b
a
la
nc
e
s
an
d
a
l
so
w
i
d
en
i
ng
o
f
in
c
om
e
in
eq
u
a
li
tie
s
.
In
a
bi
li
ty
o
f a
n
e
c
o
n
om
y
to
in
c
re
as
e
g
r
ow
t
h
ra
r
es
o
f
ec
o
no
m
i
es
is
n
ot
o
n
ly
d
u
e
t
l
ow
sa
vi
ng
s
an
d
i
n
ve
s
tm
e
n
t
b
u
t
al
so
du
e
to
la
c
k
o
f
resources
technology
and
infrastructure
T
O
W
R
S
co
n
st
ra
in
t
s
Ih
2
c
en
tu
ry
T
h
e 2
st
an
d
o
n
w
er
e
o
e
xc
ep
t
m
a
y
b
e
h
a
s
no
t
m
a
d
e
an
d
i
nc
o
m
e
ii
d
e
si
re
d
re
su
lt
s
r
o
t
h
e
l
ow
e
s
t i
a
c
h
ie
ve
d
h
ad
T
h
is
w
ou
i
d
ev
e
lo
p
m
en
t
i
D
E
V
E
The
concept
gr
o
w
th
is
an
de
v
el
o
pm
e
n
t
i
n
co
m
e
iu
r
c
d
is
tr
ib
ut
io
n
i
E
ar
li
er
it
d
e
v
el
o
pm
en
t
m
ea
n
s
h
a
t
t
l
s
o
ci
et
y
an
d
p
i
development
I
n th
e
e
a
rl
e
m
p
h
as
is w
i
ha
v
e
al
lo
w
e
d
d
i
ff
er
en
t
s
in
e
o
n
ly
b
r
ok
e
n
ec
o
no
m
ie
s
a
f
T
h
e h
i
gh
In
d
ia
a
s
i
t
h
l
ev
els
sign
fit
i
m
b
al
a
nc
e
s
i
d
ow
n
th
e
or
y
p
ro
b
le
m
o
f
C
J
t
h
e
p
op
u
la
ii
o
T
h
e
c
on
tr
i
is
o
n
ly
1
8
pc
i
se
ct
or
a
n
d th
14
p
er
ce
n
t
is
t
h
e
maximum
d
e
pe
n
d
en
c
e
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TOWARDS
INCLUSIVE
GROWTH
constraints
,
These factors were a
handicap
earlier fo r
Indl
*
but
tiling
*
have
dunged
In
ih c
21
ST
century
.
The
21 si
century
has
been
good
for India
,
growth
rates
jyad
itaricd
moving
upwards
and
on were on the
verge
ol
achieving
a
double
-digit
growth
*
probably
h i
(
he iiiu
time
,
except
may
be for a
year
briefly
in
die
1980
s
,
Though
growth
rati
-
,
have
intreaicd
but
n
has
noimade
any
perceptible
impact
on
the
poverty
,
unemployment
,
inret-Zintra
-
region
;
.
I
jnd
income
imbalances
.
Despite
the
high
growth
mies
achieved
,
we
have
nor
got
die
desired
results
.
There has
been
a
distinct deceleration
in
growth
since 2010
sliding down
to the lowest
in
Last decade
of
percent
,
lim
die
larger
question
remains of
high
growth
achieved had not
yielded
tangible
benefits
to
the Indian
economy
This would
lead
us to
another
concept
ol
development
'
,
J low are
growth
an d
development
different from
each other
?
f
^
D E V E L O P M E N T
— I N C L U S I V E GROWTH
The
concept
of
development
is
qualitative
whereas
that
of
growth
is
quantitative
While
growth
is an
arithmetic
number
signifying
an increase in
the
output
of an
economy
,
development
includes distribution
of
output
or the
ability
of
the
increased
output
and
income to
reach the
bottom
-
most
stratum of
society
.
Development
also
implies
equitable
distribution
in
the
economy
,
Earlier it was
widely
believed that
initially
increased
growth
is
required
and then
development
would
happen
through
what
is referred as the
trickle
-
down
theory
'
This
means that
rhe increased
growth
would
percolate
down
to
the bottom
-
most stratum
of
society
and
provide equirablc
distribution
This is
the
significance
of the
word
growth
and
development
,
In
the earlier years
th e
problem
was
our
inability
to
push
up
rates
of
growth
and
the
emphasis
was on
increasing
growth
fo r the trickle
-
down
theory
to
work which would
have
allowed
for
development
and
equitable
distribution
,
J
3
ut
the
story
for India is
quite
different
since the
economic
reforms
initiated in
1991
and
since
2005
.
India
has
nor
only
broken
through
the low -
growth
cycle
hut
also
become
one of the fastest
-
growing
economies
after
China
.
Tlie
high
growth
rate
achieved
since
2005
questions
the trickle-down
theory
in
India
,
as
it has
not benefired
rhe Indian masses
in
terms
of
lowering
absolute
poverty
levels
significantly
,
creating
employment
opportunities
,
reducing
inier-Zintra-
regional
imbalances
(
rather it has
only
accentuated
)
There
are
reasons
to
understand
why
trickle
-
down
theory
’
has not
worked
fo r
India
,
firstly
,
the
Indian
economy
has
a
structural
problem
of
excessive economic
dependence
on
the
agricultural
sector
.
Over
65
per
cent of
the
population
is either
direcrly
/
indirectly
dependent
on this sector
The
contribution
of the
agricultural
sector
to
theoverall
gross
domestic
product
{
GDP
)
is
only
18
per
cent
The
largest
contribution
of
over
55
per
cent
comes
from
the
services
sector
and the
remaining
27
per
cent
is
contributed by
the
secondary
sector
of
which
only
14
per cent
is
by
the
manufacturing
sector
. The
sector
contributing
the
least to
GDP
has
the
maximum
dependence
(
agriculture
)
and
(
he
sector
contributing
the
most
,
has
the
least
dependence
(
services
)
.
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TOWARDS
INC IU5
IVE
f iKOWIM
iMr
|
|
er
Ideally,
.
JJlt
|
,
,
>f
to
to
the
surfcc
in
a
Urge
in
formal
d abject
and
be
to
d faster
as
only
road
.
ische poorflhtabo
moving up
the ladder lit
imm
of
income
mid
welfare
,
even
(
bough
Irss
proponiimjiely
ihau
li t
-
privileged
vellum
nf
ilic
riminniy
.
As
long
as bnrh die
subsets
in
an
moving up
in
die
name direction
,
have
means
of livelihood
,
ate
economically
lieiicr
nil
and theit
basic
needs
are
mei
,
the
objective
of
equitable distribution
r
,
bring achieved
.
Hence
,
inequitable
distribution
would
mean the
rich
gening
richer and
the
poor
remaining
poor
,
or
the worse
,
still hemming
poorer
.
As
wc
have
been
discuss
log
that
Inclusive
growth Is oriented towards masses
,
what
should inclusive
growth give
)
or
when
can
we
ray
that
growth
ha s heroine
inclusive
and
begun
to
deliver
?
Inclusive
growth
should lead to
;
(
1
)
Employment
opportunities
lor
the
masse
*
at the
entry
level
,
providing
livelihood
,
means
;
ol
income
,
increasing
ihrir
purchasing
power
and
improving
their
well
-
heingness
/ tide dmuM result
In
reducing absolute
poverty
levels
.
(
2
)
Reduction
of
inter
/
inirj
-rcginnaJ
imbalances
.
(
5
)
Create
Opportunities
lor
shill development
(
form
at
ion
,
(
4
)
Better
dispe
rsd
of indusi
rits
,
(
5
)
Increased
agn
>
based industries
(
6
)
A
gradual
shill
away
from
the
excessive
economic dependence
oil th e agricvtUural
sector
through
employment
-
driven and
positive
migration
,
(
73
Increased
vocational
employment
(
carpentry
,
repairs
to
cars/scoorers/
TWiiiobllcs
,
gardening
,
etc
,
)
.
Inclusive
growth
would
also
require a
changed
perception
of
both
the
central
government
and
also
the state
governments
,
working
in
tandem
,
by
creating
an
‘
enabling
environment
’
fo r th e above
deliverables
,
Such an environ
mem
would
require
the
following
;
also
for
t
been
’
by
tbe
was
a
should
r
morf
Ibus
.
seen
*
s
through
.
fair
.
»
>
*
(
1
)
Pan
India road/rail links whichwould link
the
entire
country
and
provide
accessibility
and affordable
faster
mode
of
transport
for
people
and
goods
.
(
2
)
Providing accessibility
and
affordability
to
public
services
(
primary
health
care
and
education
)
,
public
utilities
electricity
,
drinking
water
and
sanitation
)
and
public
goods
(
social
assets
like
community
centres
,
etc
.
)
.
3
)
Re
-
energizing
the Industrial
Training
Institute
(
ITIs
)
for
skill
development
,
(
4
)
Policy framework
conducive
for
investment
by
private
sector
(
something
like
Tata
Motors for
their
NANO
car
project
in Gujarat
),
(
5
)
Focus
on
directly
creating
employment
opportunities
. The
government
has
already
launched
Mahatma
Gandhi
National Rural
Employment
Guarantee
Scheme
,
which
provides
employment
for
100
days
to
one
member from
every poor
family
/
household
in
every district
of the
country
.
the
creation
of
the
enabling
environment
by
the
govern
mem is a
key
prerequisite
,
which
would
largely
determine
India
s
ability
to achieve inclusive
growth
in
future
.
Growth
and
development
or
inclusive growth
ha s
always
been an
avowed
objective
of
the
government
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.
*
THE
INDIAN
ECONOMY
since
independence
-
Ihe difference
today is not
in
the
objective
but the
manner
in
which
it
is
being
sought
to
be
achieved .
Earlier
,
the
government
had
raken
tipT
both
the
responsibilities
of
increasing
growth
and
equitable
distribution
,
and
spread
scarce resources
across hoth
resulting
in
the
dilution
of efforts
and
achieving
neither growth nor equitable
distribution
.
The reforms
of 1991
mark
a
change
in
the
straregy
of letting
the
private
sector
play
a
major
responsibility
in the
investment
and
growth
while
on the ocherhand
the
government
would
concentrateon the welfare
measures
and create
the
e
n
ab
I ing
environ
meat I
OT
desired
inclusive
growth of
the
economy
in
future
.
This
is
also based
on the fact
rhat
more
and
better
growth
by
the
private
sector would mean
larger
tax
revenue base for the
government
which
would enable the
government
in expanding
the social
sector interventions
as
a
way
of
redistribution
to the
people
.
Inclusive
growth
is
not a new
concept
and is said to be
a
combination
of both ,
what
was earlier known
as growth
,
development
and
equitable
distribution
,
all
rolled
into a
new
terminology known
as
inclusive growth
,
specific
and
unique
to
India.
fn
future
,
the
challenge
would
lie
not
in
achieving
a
higher
growth
but to
provide
greater
industry
,
more
broad
-based
,
which
benefits
the
masses
.
Inclusive
growth
was
a
challenge
as
identified
by the
eleventh
five
-
year
plan
only
to
become
a
larger
challenge
in
the twelfth five
-year
plan
.
<
At
|
dev
is
1
inc
plai
ma
anc
to I
to
1
wh
;
the
i
(
K
<
of
It
a
sols
con
sh o
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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r
ich
th
n
y
a
d
t
v
C H P
T E R
O
SUS
T I
N
LE
V
L O PM
N T
AN
D
R N
G
DP
a
in
j
SU
ST IN
LE
DEVE
LOPM
ENT
At
proem
a
tew
new
icimino
logics
are
also
b
eing
used fo r
economic
s
such
as
sustai
nable
development
and
green
GOP
Sustainable
development
’
is a
global
terminology
which
is
be
ing
mod
to
address the
global
issues
of
global
warming
,
environm
ental
aspects
,
incre
ased
gloh
il
pol
lution
and
ecologica
l
im
balances
,
which arc
critical
fo
r
surviva
l
o
f
plan
et
ear
th and
is
thus
a
broade
r
concept
not
relating
to
any
on
e
count
ry
but for the
world
as a
w
hole
.
It
is
neither
the
prob
lem
of one
c
ountry
nor
can
it
b
e solved
by
on
e
coun
try
It
is
m
ore
macro
in nature
,
w
hich
requi
res
to
beadd
ressed
b
y
countries
collective
ly
t
hrough
a
dialogue
and a
c
onsensus
building
at
a
global
pla
tform
Ibis
is a
hunt
the
present
genera
tion
’
s
ability
to meet
’
its
ow
n
heeds
bu
t
without
com
promising
on
the abil
ity
of
the
future
gener
ation
to
meet
‘
its
’
needs
t
is
ilnuit
a
better
environment
for the
future
generation
rather than
w
hat
the
present
generat
ion
has inherited
to
say
the
leas
t
not a
worse than
that
inherit
ed
E
ven
though there
has
be
en
a
conscio
usness
on
the issue of
sustain
able
developm
ent
th
e
real th
rust
wa
s
provided
w
ith
the Earth
Summit
du
ring
1992
an
d
the
n
throug
h
various
in
ternationa
l
con
ventions
.
All
th
e conv
entions
m
entioned
so far
hav
e
flagg
ed
the
underly
ing
issues
esp
ecially
that
of
r
eduction
in gre
enhouse ga
ses
emission
,
which
is cr
itical for
s
ustainable d
evelopme
nt.
It also
ad
dresses
areas
of
c
leaner
energ
y
reduction
in
biodiversi
ty
losses
tree
planta
tion
solar
/
wi
nd
ener
gy
a
nd
other
such
glo
bal
iss
ues
i
n
sustainable
dev
elopment
It
is
not
about
flagging
of
issues
which
is
important
in
as
much
as
the
need
for collective
consensu
s
But
the
redu
ction
level so
arr
ived
through
consensus
for
different
countries
sho
uld
b
e
adher
ed
within
the
pres
cribed
time
lines. This is the
p
roblem
area of
a
sharp
divi
de between the rich
count
ries
and
the
cou
ntries
such
as
Indi
a
an
d
Chi
na
of achiev
ing
a
b
road
based
s
elf
imposed
red
uction
levels
w
here
eac
h and ever
y
convent
ions
have
been
failed
ll
the
rich
c
ountries
have
failed
to
m
eet
the deadline
s
repeated
ly
on all t
he m
ajor
is
sues
but most
importantl
y
on CiH
S
emission
reductio
n
le
vels
.
India
on
the
other
han
d
has
be
en
more
forth
right
in
its
approa
ch
a
lready having
low
levels of such
emissio
ns
an
d
the
projecte
d
level
of emi
ssions
even
by 2
031
lower
th
an
the
gl
obal
average
of
2005
Its
progres
s in
clean
er
n
r y
solar and wind
energy and
the
tree
pla
ntation
is
com
mendable
.
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TH
E
I
N D
IA
N
EC
O
N
OM
Y
H
ow
ev
er
th
ere
a
re
lar
ger
is
sue
s
for
I
nd
ia
T
he
w
or
ryi
ng
fa
ct
o
f
t
he
inc
rea
sed
g
row
th
,
e
xpa
nd
ing
si
ze o
f
ou
tpu
t
s
till
has
m
il
lio
ns
of
p
oor
p
eop
le
liv
ing
b
elo
w
U
S
1
p
er
day
and
In
di
a
b
ei
ng
h
om
e
to
th
e
lar
ges
t
n
um
be
r
of
po
or
pe
op
le
in
the
w
o
rld
is
v
ery
d
is
tu
rbi
ng,
Poverty and sustainable
development
can
not be
divorced
from
each
other
.
The
in
cre
as
in
g
n
um
be
r
of
slu
ms
wi
des
pre
ad
a
bse
nce
of h
ygi
en
ic
san
ita
tio
n
p
iti
abl
e
li
vin
g
c
on
di
tio
ns
co
nti
nue
d
use
o
f
pl
ast
ics
an
d pol
lut
ed
riv
ers
are
all
an
int
egr
al
p
art
o
f
s
us
t i
n
le
de
ve
lop
m
ent
so
fa
r as
In
dia
is
c
on
ce
rne
d
.
Q
G
R
EE
N
G
D
P
Gr
een
GD
P
ref
ers
to
a
national
accounting
s
ystem
o
f
the
uti
liza
tio
n
o
f
t
he
no
n
-
ren
ew
le
n
atu
ral
res
our
ces
of
any
cou
ntry
a
nd
is no
w
bei
ng
e
nv
isi
on
ed
as
a
pa
rt
o
f
su
sta
ina
ble
d
ev
elo
pm
en
t
Th
e
ob
jec
tiv
e
is
to
u
til
ize th
e
res
our
ce
s
opt
im
all
y
,
e
ffi
cie
ntl
y
an
d
e
ffe
ct
ive
ly
in
fur
the
rin
g
th
e
g
row
th
of
ec
ono
mi
es
an
d
t
the
sa
me
tim
e
a
rea
liza
tio
n of
th
ei
r
s
ca
rcit
y
va
lue
.
It is
als
o
b
eli
eve
d
tha
t s
uch
an
acc
ou
ntin
g
w
ill
a
lso
p
av
e
the
wa
y
f
or
gre
ate
r
R
D
fo
r
dev
el
opi
ng
v
ia
ble
alte
rna
tiv
es
to
the
f
ast
de
ple
tin
g
n
on
ren
ew
ab
le
n
atu
ral
r
eso
urc
es
o
f
th
e
co
untr
y
.
C
lea
rly
t
he
big
ge
st
is
sue
is
th
at
o
f
a
bso
lu
te
po
ver
ty
w
hi
ch
ha
s
to
b
e
add
re
sse
d
in
pri
or
before
one
can
talk
about broader
aspects
of sustainable
development
.
This
not to
say
that
In
di
a
s
ho
uld
n
ot
add
res
s
th
e
iss
ue
of
su
sta
in
abl
e
d
ev
elo
pm
en
t
bu
t
a
dd
res
sin
g
t
he
nee
ds
of
th
e
p
oo
r
i
s
un
qu
es
tio
nab
ly
th
e
p
rio
rity
o
f
g
iv
ing
th
em
th
e
me
ans
o
f
li
vin
g
a
nd
a
hy
gie
nic
dec
en
t
liv
in
g
s
tan
da
rds
.
Th
us
,
in
clu
siv
e
gro
wt
h
su
sta
in
abl
e
d
eve
lo
pm
en
t
an
d
gr
een
GD
P
a
re
a
ll
d
iff
ere
nt
t
erm
in
olo
gi
es
tot
ally
di
stin
ct
f
ro
m
eac
h
o
th
er
i
n
t
he
ir
me
an
ing
b
ut
cann
ot
b
e sai
d
to
b
e
i
nd
ep
end
en
t
b
ut
i
nte
r
-
re
lat
ed
in
t
erm
s
of
th
ei
r
i
mp
lic
ati
ons
.
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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w
th
a
nJ
i
ng
si
ng
o
n
s
a
bJ
c
a
b
lc
a
bl
e
ive
ly
rc
it
y
D
ts of
ri
or
,
I
th
at
ds
o
f
cn
ic
,
re
nt
I
to
b
e
H
P
T
E
R
P
O
V
E
R
T
Y
N
D
S
O
C
IA
L
S
E
C
T
O
R
W
H
T
IS
M
E
N
T
Y
P
O
VE
R
T
Y
I
N
D
I
P
ov
er
rv
is de
fin
ed
a
s
th
e
m
ini
m u
m
ba
si
c
c
on
su
m
pt
ion
l
ev
el
e
ss
en
tia
l
for s
ur
vi
va
l
It
ha
s
be
en d
ef
in
ed
by
i
hc
P
la
nn
in
g
Co
m
m
iss
io
n
of
In
d
ia
i
n te
rms
of
c
alo
ri
e
in
ta
ke
A
bs
olu
te
poverty
is
a
condition
,
where
the
caloric
intake
is
less
than 24
kcalories
per person
per
d
a
y
in
ru
ra
l
ar
ea
s an
d
2
k
ca
lor
ies
p
er
p
ers
on
p
er
d
ay
in
u
rb
an ar
ea
s
T
he
W
o
rld B
an
k
h
as
c
oi
ne
d
it
s
o
wn un
iv
ers
a
l
de
fin
itio
n
of
pov
ert
y
lev
el
s
as
p
e
r
p
ers
on
c
on
su
m
pti
on
of
les
s
tha
n
US
S
i
pe
r
d
ay
R
ela
tiv
e
pov
ert
y
is
acr
os
s
d
iff
ere
n
ce
in
in
co
m e
lev
els
of
the
ric
h
a
nd
t
he
re
lat
ive
p
oo
r
.
E
ve
n by
th
is
cru
d
e de
fin
itio
n
o
f
Pla
n
nin
g
C
om
m
is
sio
n
of ab
so
lu
te
p
ov
erty
,
it
is
e
sti
m
ate
d
th
at
ov
er
23
m
il
lio
n pe
o
ple
arc
liv
ing
be
low
po
ver
ty
lin
e
B
P
L
A
cc
o
rdi
ng
to
th
e de
fin
itio
n
o
f
W
o
rld
B
an
k
th
e
nu
m
be
rs w
o
uld inc
re
as
e
sig
ni
fic
an
tly
In
di
a
is
sa
id
r
o
h
av
e the
la r
ge
st
nu
m
be
r
o
f
p
eo
p
le
l
ivi
ng
B
P
L
Th
e
n
um
b
er
o
f
pe
op
le
BP
L
is
ev
en
m
ore
higher
than
the
entire
population
of
the US
.
Poverty
is
largely concentrated
in
states
such
as
U
P
Bih
a
r
,
O
ris
sa
M
P
,
We
st
B
en
ga
l
an
d
the
y
acc
oun
t fo
r
o
ve
r
5
pe
r
ee
nr
o
f
t
he
to
ta
l
po
ve
rty
in
In
di
a
.
D
es
pi
te
ov
er
s
ix
d
ec
ad
es
of ind
e
pe
nd
en
ce
,
wh
y
po
ve
rty
co
ntin
ue
s
to
e
xi
st
It
c
an
be at
trib
ut
ed t
o
th
e
la r
ge
ec
on
om
ic
de
p
en
de
nc
e
o
n th
e
a
gr
icu
lt
ura
l
s
ect
or
s
ub
sis
te
nc
e
tra
di
tio
na
l
a
nd
s
tag
na
tin
g
wh
ic
h
are
no
t
a
bl
e
to
pr
ov
id
e
e
no
ug
h
fo
r
th
e
de
p
en
de
nt
p
op
u
lat
ion
in
term
s
of em
pl
oy
m
en
r
o
pp
or
tun
iti
es
hi
gh
le
ve
ls
o
f
a
du
lt
ill
ite
rac
y
,
la
rg
e
n
um
b
er
of lan
dl
es
s
,
s
m
all
an
d
m
a
rg
in
al
fa
rm
e
rs
w
it
h
n
o
in
co
me
s
upp
ort
.
T
he
re
is
ab
se
nc
e
of
e
m
plo
ym
e
nt
op
p
ort
un
itie
s
in
the
m
an
uf
ac
tu
rin
g
s
ecto
r
.
It
is
n
ot
about
how
pov erty
is
measu red
crude
or
refined
It
is
the biggest
curse
of
post
in
de
pe
n
de
nc
e
I
nd
ia
of
no
t be
in
g
ab
le
t
o
a
dd
re
ss
the
lar
ge
s
c
le
p
ov
ert
y
in
t
he co
un
try
de
sp
ite
th
e
we
ll
in
te
nd
ed
sc
he
me
s
as
ca
n
be
s
ee
n
i
n
t
he
f
oll
ow
in
g
s
ec
tio
ns
E
S
O
I
L
S
E
TO
R
S
o
cia
l
sec
tor a
nd
p
ov
erty
ar
e
in
te
rre
la
te
d
a
s
i
t
la
rg
e
ly
c
om
p
ris
es
o
f
r
ho
se
B
P
L
an
d
a
ls
o
tha
t
s
eg
me
nt
o
f
th
e p
op
ul
ati
on
w
h
ich
i
s
ou
ts
ide
th
e
ma
in
str
ea
m
o
f d
ev
elo
p
me
nt
w
h
ich
c
on
sis
ts
of
the
un
de
r
p
ri
vil
eg
ed
al
wa
ys
at
th
e
r
ec e
iv
ing
e
nd
po
or
ba
ck
wa
rd
c
las
se
s
a
nd
s
ch
ed
ul
ed
c
aste
s
/
trib
e
s
.
I
t
wi
ll
als
o
h
av
e
landless
,
small and marginal
farmers
who
are
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Iffl
THE
INDIAN
ECONOMY
engaged
in
casual
work
in
the
informal
sector
,
living
virtually
on
a
daily
basis
.
Ihcy
a
,
c
the most vulnerable
section
prone
to
exploitation
,
domination
and
do
not
have
any
v
&
i
^
or
can
also
be known
as
'
silent
sufferers
'
or
a
mere
spcaator
'
to their pitiable
ami
pad
^
condition
oblivious
of
die
fact
that
India
is
today
one
of
the fastest
growing
economics
One
has
already
seen earlier
,
why
this
has
happened
.
Hut what
has
the t
lovcrnntem
done
about
this
?
It
has
adopted
a
three
-
pronged
strategy
to
address
the social
sectors
wllic
are as follows
:
(
1
)
Broad
Targeting
;
(
2
Narrow
Targeting
:
13
Social
Security
,
Broad
Targeting
Under
broad targeting
the
Government
has
two
ambitious
programmes
,
Hirst
is
the Bharat
Nirmart
(
2005
-
2010
)
which
ha
*
six sub
-
programmes
:
(
1
)
irrigation
—
to bring
an
additional
1
crorc
hectare
under
irrigation
facilities.
(
2
)
Rural
road connectivity
—
covering
al l
villages
with
population
more rhan
10
M
and
villages
in
hilly
and
tribal
areas
with
population
more than
500
.
(
3
)
Indira
Awas
Yojana
—
building
6
million houses
for the
poor
(
4
)
Potable water
—
providing
with
drinking
water
in
55
,
065
new habitations
5
)
Rural electrification
—
electricity to
1
,
25
,
000
villages
benefiting
223
million
households
.
(
6
)
Rural
telcphon
y
—
p
novi
di
ng
teiepho
ne
co
n n
ec
t
ion
to
66
,
8
22
vi
IJagcs
.
Second is ihc
programme
of
the UPA Government
,
which has
eight
ambitious
flagship
schemes:
(
1
)
San
a
Siksha
Abhiyan
—
all children
in
rhe
age
group
of
6
-
14
years
to be enrolled
in
school
by
2010
(
2
)
Mid
-
day
Meal scheme
—
provision
of one
wholesome
full
meal
to
the
children
in
school.
Ibis
is to
meet
both the
objective
of
malnutrition
amongst
children
and
also
to
give
a
boost to
the enrolment
ratio
in
schools
.
(
3
)
Mahatma
Gandhi
National
Rural
Km
ploy
merit
Guarantee
Scheme
(
MGN
REG
A
)
.
(
4)
Total Sanitation
Campaign
(
5
JawaharlaJ
Nehru
National
Urban
Renewal
Mission
(
JnNURM
)
.
6
)
Integrated
Child
Development
and
Services
ICDS
)
,
(
7
National
Rural
Health
Mission
(
NRHM
)
.
(
S
)
Rajiv
Gandhi
Drinking
Water
Scheme
.
Of all
the
above
,
the
Mahatma
Gandhi
National
Rural
Employment
Guarani
*
Scheme
MGNRtGA
)
is the
most
ambitious
project
of the
government
which
is
being
implemented
at
thd national level and
of
magnitude
not seen
anywhere in
the
world
.
It
h
the
brain
child of
Jean
Drezc
.
a
Belgian
economist.
This
scheme
has
now
been enacted
and
guarantees
unskilled
wage employment
of
100
days
TO one
person
in
every
rural
household
oovmy
AND
S
al
a
dnlmum
wage
vtMvmi
of
agrfcultui
dw
country
and
Is
,
l
»
poverty
al leviad
this
scheme
,
whid
hy
the
Gram
[
>
anc
provided
with the
(
allowance
of
one
-
1
rhcir
registration
,
schemes
for the
so
Critics
o
f
th e
*
fWl
{
>
y
pushing
u
urban
arras
,
advc
fuelling
iiiflatiOI
)
Narrow
Target
The
government
0
)
Wage Empk
(
2
)
Self
Emp lo
Yogana
SC
S SRY
m
D
)
hood
secur
citizens
.
Social
Securi
ftc
government
(
J
)
Aani
Adn
,
where one
premium
remaining
f or
natural
chi ldren
ol
quarter
.
(
2
)
Uni
versa
]
^
ng
impl
this
s
year
,
per p
i nd iv idua l
f ami l y
of
(
3
)
Janashrce
I
Insunukca
I
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OM
Y
hey
aF
e
y
vu i
Cc
at
hed
c
m
ies
rn
m
nt
w
hich
Rha
ra t
I
0
a
nd
il
lion
I
ship
d
in
in
d
also
A
.
m
e
e
ing
It
is
and
ho
l
P
V R
TY
AND
SO
CI L
SECT
OR
|
at
a
minim
um
wage
.
T
he
1
00
day
s
empl
oyme
nt
un
der
this
sc
heme
is
visua
lized
in
t
he
lea
n
seaso
n
of
agr
icultu
ral
activi
tie s
.
This
s
chem
e is
bei
ng
i
mple
ment
ed
in
all
the
di
stricts
of
th
e
co
untry
and
is
see
n
a
s a
m
ajor
step
in
creati
ng
th
e
em
ploy
ment
op
portun
ities
a
nd also
for
p
overty
al
levia
tion
in
the
cou
ntry
.
Wo
men 3
re
give
n
pr
efere
nce
for
em
ploym
ent
und
er
this
s
chem
e
whic
h
has n
o
m
iddlem
en or
co
ntracto
r
and
dir
ectly
be
ing
imple
men
ted
by
the
G
ram
Pan
chay
ats
an
d
the
wage
s
art
pa
id
in
the
bank
a
ccount
of
thos
e
wh
o
ar
c
provided
with
the
employment
The
state
gover
nment
s
are
required
to
give
unemployment
a
llowa
nce
of o
ne
thir
d
of the
w ge
s
if not
ab
le to
pro
vide
emplo
yme
nt
with
in
15 day
s
of
the
ir
regis
tratio
n
.
This
sch
eme
has
been
glo
bally
lau
ded
as
one
o
f
t
he
most
w
ell int
ende
d
sche
mes
for the
socia
l sector
a
nywh
ere
in
the
wo
rld
.
C
ritics
of
the
sch
eme
,
ho
weve
r
feci chat
s
uch
a
sc
hem
e
co
uld be
dama
ging
in th
e
lon
g
r
un
b
y
push
ing
u
p
th
e
min
imum
wage
s
and
incre
ase cost
in
r
he
agric
ultur
al
as
w
ell as
ur
ban
ar
eas
a
dve r
sely
af
fect
p
rodu
ctivity
and
also
pr
event
mig
ration
of
lab
our
bes
ides
fuellin
g
in
flatio
n
Narrow
Target
ing
The
g
overn
ment
is
at
tempt
ing
narro
w
targe
ting
which are
a
s
fo
llows:
1
Wa
ge
Emp
loym
ent
Sche
me
—
p
rimar
ily
throu
gh
Ma
hatm
a
G
andhi
NR
EGA
2
Se
lf
E
mplo
ymen
t
S
chem
es
—
p
rima
rily
throu
gh
S
wara
n
jay
anti G
rame
en
Sa
h
rozga
r
Yog
ana
SG
SY
in th
e
ru
ral
area
s a
nd
t
hrou
gh
Swa
ran
J
ayan
ti
Shah
ri
ozg
r
Yo
gana
S
SRY
i
n
the
u
rban
are
as
3
Food
secu
rity
—
prima
rily
thr
ough
TP
DS
AAY
,
An
napur
na
Sche
me
for
senio
r
c
itizen
s
.
S
ocia
l
Secu
rity
The
gov
ernmen
t
is
p
rovi
ding
so
cia l
sec
urity
unde
r
its
variou
s
prog
ramm
es
such as
:
1
A
am
Adm
i
Bima
Yo
jana
:
This
sch
eme is
targe
ted
at
the
r
ural
l nd
less
h
ous
ehold
s
w
here
one
earnin
g
mem
ber
w
ithin
the
ag
e
grou
p
of
1
8
39
year
s
is insu
red
at a
pr
emiu
m
of
T
200
per
y
ear
born
e
50
per
ce
nt
by
the
cen
tral
gove
rnmen
t
an
d
th
e
rem
ainin
g
50
pe
r
cent
to
b
e bor
ne
b
y
th
e
state
go
vernm
ents
.
T
he
cover
age
is
?
30
000
for
natural
death
and
?
75.0
OO
in
case
of
ccident l
death
As an
additional
incentive
,
child
ren of
the ins
ured
stud
ying
o
f
t
he
c
lass
9
-
1
2
wo
uld
g
et
scho
larsh
ip
of
?
30
G
per
qua
rter
2
Uni
versa
l
He
alth
In
suran
ce
S
chem
e
UH
IS
:
Th
is
sch
eme o
f
rhe Gove
rnme
nt
is
bein
g i
mple
men
ted by
th
e Ori
enta
l
In
sura
nce
Co
mpa
ny
aim
ed
a
r
BP
L
fa
milie
s
Th
is
s
chem
e
p
rovid
es
c
overa
ge
of
h
ospit
aliza
tion
expe
nses upto
T
30
,
000
p
er
ye
ar
,
p
er
pe
rson
insur
ed
und
er
th
e sch
eme
.
T
he
prem
ium
i
s
?
16
5 per
an
num
for
in
divid
uals
?
2
48
per
ann
um
for
a fam
ily
o
f 5 me
mber
s
a
nd
?
330
p
er
an
num
for
3
fa
mily
of
7
m
embe
rs
3
Jan
ash
ree
Bim
a
Y
ogan
a
JBY
:
Th
is
s
chem
e
is
being
impl
emen
ted
by
the
Life
In
sura
nce
Corp
oratio
n
of
Indi
a
L
C
aim
ed
at
BPL
fam
ilies
p
rovid
ing
in
su ran
ce
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POVERTY
A N D SOCIAL
SECTOR
D
insured
natural
of
th
«
for
i
}
0
T
provided
earlier
,
noi
that
they
arc bound IO
succeed
,
but
will
display
the
attitude
of
the
government
of
willing
to
experiment
to find Jong
-
lasting
solutions EO the
vexed
problem
*
.
Ih c
government
has
TO
keep
in
mind
that it
is not the
resources
which
matter but
in
their
efficient
spending
,
technology
-
enabled
monitoring
mechanism and
being
on the
learning
curve
each
year
,
reorienting
and
successfully
addressing
die
needs
of the
social sector
Lei
us also
admit
that
the
task
is
daunting
but
it
has to be
accomplished
one
way
or
the
other
,
a
major
challenge
for
the
governments
both the
centre and
state
collectively
.
argered
BE
M IC RO F IN A NC E
their
but
a
strict
not
for
the
sector
,
fo r
the
,
overlap
could
be
done
the
’
ienrcd
t
to
the
of
better
nd
will
and
no
*
of
the
and
tangible
beet
1
Given
that social sector
do
not
have access to
organize
sounxs of
finance
say
through
bonks and
also
given
their on
tensive
paper work
,
Cumbersome procedures
,
documentation requirenieni
-
the
micro
credit
institutions
are
today
seen
as
offering a
solution both for
the
social
sceior
as
well as
addressing
the
issues
of
poverty
These institutions
,
as
a
concept
have
their
genesis
in
Bangladesh
,
pioneered
by
Mohammed
Yunus
, for which
he
was
awarded
the
Nobd
Prize
,
as
successful
institutions for
reaching
out to
the
last Unit
of
any
economy
not
possible
through
banks and
directly
contributing
to
the
uplift
of the
poor
especially
rural
women
In
India
,
the SHG movement starred
in
1992 under
NABAJLD and with involvement
of
banks
Under
the
SHG
scheme credit is
linked to
savings
by
focusing
on
capacity
building
,
with
low interest rates
usually
8
-
10
per
cent
with
monthly
repayment
but
responsibility
of the
group
and not
individuals
SHGs
in
India cover
90
million
poor
households
and have extended
credit of
over
T2
5
,
000
crorc
Micro Finance
Institutions
(
MFIs
}
are institutions
which
provide
credit
to the
poor
but
at a
high
interest
rate but lower than
that
charged
by
the
money
lenders
MFIs
in
India
have
engaged
the attention of the
government
only
since
2003
and
in
the Last
7
years
,
have seen
an
exponential
expansion
to reach
30 million
and
credit
of over
?
30
,
000
crorc.
These
have been seen
as
partnering
SHGs
in
micro
finance
in
India
and also
a
major
way
through
which the
country
could
provide
‘
financial inclusion
that
is.
to
provide accessibility
to
organized
sources
of finance
to the
poor people
and reduce their
dependence
on
the
money
lenders
for their
income
generating
activities
enabling
them to
have source of income
,
employment
and also
get
out of
poverty
.
However
,
in
recent
times
,
MFIs
especially
in Andhra
Pradesh
,
have
given
a
new
dimension
and
raised the
following
fundamental
issues:
1
)
Their
prime
motive is to earn
profits
through
high
profit
margins
by
charging
high
interest rates but
slightly
lower than
that
charged
by
the
money
lenders
(
2
)
MFIs
have reached
out
to
those
ignored
by
the
banks and
also the
fact
they
are
not
complementing
the
efforts
of
the
banks
There
is
sizeable
concentration
of MFb
in
areas
where there is
banking
penetration
.
(
3
)
MFIs
are
finding
softer options
of
lending
like SHGs
,
which leads
to
multiple
financing
,
debt
burden
on the
borrowers
4
)
MF1
are
aggressive
and
are
more consumer
-
oriented
loans
,
Jess
productive
-
oriented
,
similar
like
a
private
bank
selling
consumer
Joans
or
the
US
banks
lending
to
sub
-
prime
borrowers
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T
H
IN
D
IA
N
O
N
O
M
Y
h
es
e
de
v
elo
p
m
en
ts
ha
v
e
fo
rc
ed
th
e
go
ve
rn
m
en
t
t
o
re
th
in
k
o
n
thi
s
m
od
e
l
o
f
fi
n
n
c
i
l
nc
lu
si
on
a
n
d
ad
d
in
g i
n
p
la
ce
re
gu
la
ti
on
s
fo
r
th
e
M
F
I
H
o
w
ev
er
at
a
b
ro
ad
er
lev
e
l
an
d
to
p
ro
v
id
e
g
re
t
er
i
nc
lu
si
vi
cy
th
e
n
at
io
na
li
ze
d
n
k
s
re
better
placed
than
the
MFIs
through
innovative
means
such
as
the
correspondent
an
k
in
g
rou
te
w
h
ich
w
ill
ke
ep
co
st
s
lo
w
of
r
ea
c
hi
ng
ou
t
w
ith
o
ut
t
he
ne
ed
fo
r
m
o
r
r
an
c
he
s
M
i
cr
o
fi
na
nc
e
th
r
ou
gh
M
F
Is
w
o
ul
d
th
us
r
eq
u
ire
r
ed
e
sig
n
u
t
th
e
ir
g
re
te
r
o
m
pl
em
e
nt
ar
y
an
d
c
o
m
pa
ti
bi
lit
y
r
o
le
wi
th th
e
ba
n
ks
w
o
ul
d
h
av
e
t
o
b
e
e
x
pl
or
ed
to
m
a
k
e
th
em
as
e
ffe
c
tiv
e
in
sti
tut
io
ns
o
f m
i r
o fin
a
nc
e
i
n
I
nd
ia
S
oc
ia
l
s
ec
tor is o
ne
o
f
th
e
ke
y
sec
tor
s
o
f
the
e
o
no
m
y
n
d
re
ac
hi
ng
o
ut
to
th
m
nd
dr
aw
in
g t
he
m
in
to
m
ai
ns
tre
am of d
e
ve
lo
pm
e
n
t
i
s
th
e
bi
gg
e
st
r
es
p
on
si
bi
li
ty
o
f
t
he
government
as
only
then
th
e
biggest
transformation of the
e
co
no
m
y
w
o
ul
d
happen
y
br
in
gi
ng
al
l
ro
u
nd
pr
os
pe
ri
ty
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ial
]
nks
ent
e
ter
ake
the
by
FOO
D
SE
CU
RIT
Y
Q
FO
OD SEC
UR IT
Y
The
first
aspec
t
of foo
d
s
ecurit
y
is the
d
omes
tic
a
vaila
bility
of food
gra
ins
N
o
coun
try
wo
uld
eve
r be
will
ing
to
dep
end
on
other
cou
ntries
fo
r their
re
quirem
ent
of
food
g
uilts
or
a
gricu l
tural
commodities
unl
ess
it
does
not h
ave
a
ny
other
option
Since
Independence
Indi
a
h
as
tra
velled
a
lon
g
way
tow
ards t
he food
securi
ty
,
fro
m
a
n
imp
orter
of
foo
d
guilt
s
,
w
hich has
no
w
achi
eved
‘
self
-
s
uffici
ency
’
in food
grain
s
th
rough
the
increa
sed
dom
estic
produ
ction
O
Buffe
r S
tock
o
f
F
ood
G
rains
Ind
ia
is on
e
am
ong
the
few
cou
ncries
in
the
worl
d
having
gover
nment
-
held
st
ock
of
foo
d
gra ins
,
for
the
following
reasons:
1
Buffe
r fo
r
me
eting
n
atural calam
ities
;
2
Price
s
tabiliz
ation
in cas
e of
crop
fa
ilures
;
3
)
Provi
ding
foo
d
gr
ains
unde
r
publi
c
distr
ibution
sys
tem
Th
e
g
overnm
en t
has
buffer
sroc
k norms
for d
iffere
nt
mo
nths
in
a
year
c
p
resent
,
the
maxim
um
s
tock of
the
f
ood
gra
ins
of w
heat
a
nd
ric
e a
re to be
held
b
y th
e
gover
nment
as
buf
fer
st
ock
is
mill
ion ton
nes
to
meet the afor
esaid
o
bjectiv
es
.
Fo
od
C
orpo
ration
of Indi
a
PC
I
)
ha
s th
e
prime
resp
onsib
ility
of
pr
ocurin
g
the food
gr ins
nd
the
procurement
is
done
at
minimum supporr
price
MSP
)
and
stored
in
its
w
areho
uses
at
d
ifferen
t
lo
cation
s
and
fr
om
ther
e
it
is
sup
plied
to
the
state
gov
ernmen
ts
in
te
rms
of
r
equire
ment
FCl
a
lso
s
ells
in
th
e
ope
n
m
arket ro
s
tabiliz
e
,
if
th
eir
prices
turn
v
olatil
e
esp
eciall
y
in
pe
riods
of
cr
op
failure
s
Certai
n
issu
es whi
h
ar
c a
round
bu
ffer stock
opera
tions
are
bri
efed
as
f
ollows
Firs
t
,
t
he
go
vernme
nt
is
curr
ently
holdin
g
ma
ny
mult
iples
more
than
that
re
quire
d
un
der
the
norms
of
arou
nd
ov
er
50
6 milli
on
ton
nes
even
whe
n
hig
her
stock
s
have
been
he
ld
in
t
he
p
ast
.
Why
do
es
rh
e
gover
nment
hold h
igher
stock
s
tha
n
req
uired
?
It is bec
ause
of
th
e
MS
P
of
food
g
rains
and
also
the
procur
ement
pric
e
;
a
nd
at
that
price
go
vernme
nt
is
mandatorily
required
t
o
procu
re
whatever arrives
to
FCI
If
there
is
a
bumper
crop
FCl
will
ha
ve
to
pr
ocure
t
he entire
s
tock
.
Ev
en
if
t
he
m
rket
pri
ce
of
the
foo
d
g
rain
is
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AGRICULTURE
SEC
C H A P T E R
O
AGRICULTURE
SECTOR
I wii
'
W H Y
'
IS
AGRICULTURE
SECTOR
IMPORTANT
FO R
INDIA
?
inflation
climbing
ovc
inflation
will
hurt
all
l
Agriculture
sector
ti
il l
only
keep
on
inci
factors
and
others like
Realizing the
impor
the
’
Green
Revolution
wheat
and
other
cereals
(
HYV
)
seeds
.
This
wa
measured applications
t
The
success
story
was
r
assured
/
adequate
water
Western
Uttar Pradesh
.
However
,
it
was
me
of
wheat
Muchof
the
:
In the previous
section
,
we had dealt
about
agriculture
sector
which
has
about
60
per
cent
.
, ,
plus
population
-
dependence
,
an
aspect
which
has
been
there
since Independence
Thh
,
,
,
,
.
1
1
.
. ,
,
.
.
,
I
and thetr
relative
impo
sector
provides
us with
food
security
and
raw
material
tor
in
an
u
taemnng
sector
.
Each
and
every
country
would
like to
be
self
-
sufficient
for
its
requirements
of
food
grains
,
pulses
,
sugar
,
edible
oils
.
milk
fruits
and
vegetables
.
White
Revolution
(
Yellow Revolution
(
India has the
largest
number
of
villages
of
over
6.00
,
000
.
Majority
of
our
population
I
*
Blue
Revolution
(
m
Golden
Revolution
esides
in
villages
.
No
other
country
has
so
many
villages
.
India
’
s
agricultural
sector
is
characterized by
traditional
,
subsistence
and
livelihood
[
*
Golden
Fibre Rcvol
rain
fed
farming
,
food
grain oriented
,
lacking
in
diversification and
commercialization
.
*
Silver
Fibre Rcvolut
Over
80
per
cent
of
the farmers
are
landless
small
and
marginal
farmers
with
cultivation
j
’
Brown Revolution
I
for
consumption
and
little
diversification
Agricultural
finance
is
informal
with
triunce
I
Morenxendy
.
Rainbow
on
the
money
lenders
.
It
is
said
about India
that
majority
of
our
economic
issues
aft
)
floriculture
,
plantation
<
primarily
of
poverty
and
unemployment
and
both
the
problems
and
their
resolution
lie
India
is
one
among
t
in
the
agricultural
sector
.
under
cultivation
and
Pt
There
is
enough
literature
assailable
on
agriculture
in standard
text
hooks
on
Indian
I
major
crops
which
is
no i
Economy
.
Ir
would
be
suffice
to
say here
that
the
key
issues
in
agriculture
are
to
increael
prices
.
It
is
not
sufficient
production
through
distinct
improved
productivity
.
ginger
,
turmeric
,
pepper
,
I
rice
,
wheat
,
ground
nut
1 domestic
demand
and
pi
Why
i
Productivity
Important
?
ifidia
«
b
]
c
scd
wilh
I
In
the earlier
years
production could be
increased
bv
bringing
in
more
and
more
bo
*
|
rural
pmducrio
under
cultivation
without
addressing
productivity
.
However
,
today
all
available
arable
I
diflerermaior
between
In
Whkh
~
~
-
*
—
*
•
-
d
L
W
ith
the
increasing
population
increased
incomes
especially
of
the
poor
in
At
would
increase
the
demand
for
agricultural
products
manifold.
What
should
product
^
does
no t
increase
?
It
would
mean
’
supply
not
sufficient
tor
demand
would
result
m
increased
prices
of
food
items
.
Z
happened in 2000-
2010
domestic
needs
.
Food
gr
tonnes
of
which
wheat
h
*
is
an
urgent
requirement
increased
productivity
H
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AGRICULTURE
SECTOR
‘
0
my
htiv
*
Mew
*
cent
;
And
,
.
ion
,
,
*
Cmp
diversification
.
commercialization
,
moving
up
th e
value
addition
chain
.
Intensification of
research and
should
ensure
their
effective
diiceminatiun
aiming
*armers
.
*
Agricultural
extension
service
which is
transmission
of
appropriate
technology
from
fab to land
,
has
virtually
collapsed
in
India
.
Less
than
1
percent
of
farmers
make
use
of
the
extension
services
f
Kris
hi
Vigyan
Kendra
)
Block
level
extension
services
are
not
equipped
with the
latest
advancements
in
Technology
There
is an
urgent
requirement
of their
integration
in
the
agriculture
sector
tt
>
dose th e
knowledge gap
*
Allowing
modern
science
,
biotechnology
,
organic
farming
to
be
blended within
the
agriculture
sector
*
{
farmers
to move
away
from
two
-
crop
cycle
to
shorter durarion crops
allowing
for
multiple
cropping
.
*
Stress
on
completion
ol
irrigation
projects
to
ge t
more and more land under irrigaiton
.
*
Increase both
on and off
farm
employment
.
Hocusing
on
rural
transportation
*
The farmer should
become the
fulcrum
and
efforts
made
m
improve
his
standards
of
living
and
in
his
prosperity
,
lies
the
prosperity
of
the
agriculture
sector
and
the
Indian
Economy
,
Dr
M
S
. Swamin at
ban
.
an
agricultural
economist
,
however
,
feels
that India needs
Ever
tlrecn
Revolution
'
for
long-
term
sustainability
. It cannot be
achieved
in
one shot but
Continuous shots at
improvingproduction
and
productivity
,
suitable blend of
(
he traditional
with modern
,
focused
on
locally
renewable
sources
of
energy
,
organic
farming
and
nuking
inputs
and
credit
available
to
the
farmers
,
as
fundamentally
more
important
today
.
Agrictilrure
sector
right
since
Independence
has
been a thrust area
,
with increased
investments
in each successive Jive
-
year
plans
,
but
problems
have
not
only
remained
unresolved
but
only
accentuated
over a
period
of time
with
large
-
scale rural
poverty
.
of
F
*
1
M
|
N
|
MUM
SUPPORT
PRICE
(
MSP
)
fa
51
*
^
The
government
announces
the
minimum
support
price
(
MSP
)
for
twenty
-
four
crop
*
including
rice
,
wheat
,
pokes
,
sugarcane
prior
to
harvest which is
to
say
that
the minimum
price
of
crops
in
th e
market
would
not
he
less
than
the
MSP
announced fo r the
cmp
Of
the
MSP announced
fo r
various
crops
,
the
government
through
Pood Corporacmn
of
India
,
as
discussed
in
an earlier
chapter
,
directly
procures
wheat
and
rice
for
meeting
buffer
stock
requirements
and
also TO
channelize
(
he
food
grains
to the
poor
through
various
government sponsored
schemes
.
For
(
he
remaining
crops
,
the
government
would ensure
a
price
which is
higher
than the
MSP in
the market
.
Fruits
and
vegetables
are
sold to
the
agriculture
produce
marketing
cooperatives
(
A
PMC
)
of
the
respective
state
govern
menu
,
which
also
fix
the prke
keeping
in
v
ew their
idative
cost
and
,
tko
ensure
the
farmer
obtains
a
fair
price
The
delivery channel
h
«
a
number
of
middle
men
who
retve
as
bottlenecks
and
responsible
for increased
prices
,
large
-
scale
hoarding
*
and
ibo
prevents
<
r
rmer
m
getting
benefits
of
increased
prices
.
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A G
R
I
C U
L
T
U
R
E
SE
C
TO
R
c
,
h
ry
t
o
ll
-
er
e
i
d
k
;
n
nt
es
y
r
e
d
t
o
v
r n
m
n
t
ni
ti
ti
ve
s
t
z
z
s
s
x
z
i
x
s
F
n
it
a
nd
ve
ge
ta
ble
p
roc
es
sin
g
i
nc
lud
in
g
fre
ez
in
g
an
d
deh
yd
rat
ion
*
Gr
ain
pro
ce
ssi
ng
P
roc
es
sin
g
of
f
ish
inc
lu
di
ng
ca
nn
ing
an
d
he
rri
ng
.
P
ro
ces
sin
g
a
nd
.
efr
igt
rat
ion
o
f
ce
rta
in
a
gri
cul
tur
al
p
rod
uc
ts,
d
air
v p
ro
du
cts
,
pou
ltr
y
a
nd
eg
gs
mea
t
an
d
m
eat
p
rod
uc
ts
.
*
In
du
str
ies
tha
t
ar
e
r
el
ate
d
to
b
re
ad
o
ilse
ed
s
,
me
als
edi
ble
,
bre
ak
fa
st
foo
ds
,
b
isc
ui
ts
c
on
fe
cti
on
ery
m
alt
e
xtra
ct
p
ro
tein
is
ola
te
,
h
igh
p
ro
tein fo
od
w
ea
nin
g
foo
d
a
nd
ex
tru
de
d fo
od
pro
du
ct
s
in
cl
ud
ing
ot
her
r
ea
dy
to
ca
r
foo
ds
*
Be
er
in
clu
di
ng
no
n
a
lco
ho
lic
bee
r
.
Alcoholic
drinks
from
no
n
-
m
ol
ass
es
ba
se
.
*
A
er
ate
d
wa
ter
and
so
ft
dr
ink
s
T
he v
isi
on
20
15
for
t
he
fo
od
pro
ce
ssi
ng
se
cto
r
aim
s
a
t
d
ie
fo
llo
w
ing
;
* E
nh
an
ci
ng
an
d
sta
bil
izi
ng
th
e
inc
om
e
le
vel
of
the
fa
rm
ers
Pr
ov
idi
ng
ch
oi
ce
to
c
on
sum
e
rs
in
t
erm
s
of
w
ide
v
ari
ety
a
nd
tast
e in
clu
di
ng
tr
ad
itio
na
l
eth
ni
c
f
oo
d
.
*
Pr
ov
idi
ng
gre
ate
r
as
sur
an
ce
in ter
ms
of
saf
ety a
nd
q
ua
lit
y
of
fo
od
t
o
co
nsu
m
ers.
O
n
pr
om
oti
ng
a
dy
na
m
ic
f
oo
d
p
roc
ess
in
g
ind
us
try
*
Enhancing
the
competitiveness
of
food
p
roc
ess
in
g
i
nd
us
try
in
b
oth
do
m
est
ic as w
el
l
a
s
in
tern
at
ion
al
ma
rk
ets
To
est
ab
lish
th
e
fo
od
pro
ce
ssi
ng
sec
tor
attr
ac t
ive
f
or
bo
th
d
om
e
stic
an
d
fo
re
ign
in
ve
sto
rs
.
A
ch
iev
in
g
int
eg
rat
ion
of
the
fo
od
pr
oc
ess
ing
i
nfr
as
tru
ctu
re
fro
m
fa
rm
t
o
ma
rke
t
av
in
g
a
t
ran
spa
ren
t
a
nd i
nd
us
try
f
rie
nd
ly
re
gu
la
tor
y
r
eg
ime
*
Ar
ran
gi
ng
in
p
la
ce
a
tra
nsp
ar
ent
sy
stem
of
s
ta
nd
ard
s
ba
se
d
on
scie
nc
e
.
Th
e
f
ol
low
in
g
sp
ec
ifi
c
tar
gets
ha
ve
b
ee
n
s
et out
fo
r
th
e
y
ear
2
01
5
:
*
In
cre
as
e
in
th
e
le
ve
l
o
f
pro
ce
ssi
ng
o
f
p
er
ish
ab
le
s
fro
m
6
to 20
per
cen
t
*
In
cr
ea
se
in
va
lu
e
ad
di
rio
n
fr
om
2
0
t
o
3
5
p
« c
ent
.
*
ha
re
in
g
lo
ba
l
f
oo
d
tr
ade
to inc
rea
se
fr
om
1
.5
to
3
p
er
c
ent
.
A
n
est
im
at
ed
i
nv
est
me
nt
of
f
1
00
.0
00
cro
ies
is
r
eq
uit
ed
to
ac
hi
eve
t
he v
isi
on
of
w
hi
ch
4
5
,
00
0
era
ses
is
ex
pe
ct
ed
t
o
co
m
e
f
ro
m
th
e
pr
iva
te
sec
tor
.
T
45
.0
00
cor
e
fro
m
fi
na
nc
ial
ln
^
:
:
;
o
ru
a
nd
?
10
.00
0
c
ro
rcs
fr
om
go
ver
nm
en
t
.
•
I
he
gov
ern
me
nt
n
ark
s
toc
rea
te
an
ap
p
rop
ri
ate
en
v
ira
nm
e
m
f
or
rn
rr
ep
ren
eu
rs
r
ose
,
u
p
f
un
d
p
m
,
up
in
du
str
ies
th
rou
gh
th
e
fol
low
in
g
:
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ECONOMY
AGRICULTURE
SECTOR
to
d
^
j
.
forward
—
^
understanding
opportunities
a
seamlc
^
of
front
which
,
in
[
grated
assist the
small
.
So
for
,
facilities such
a
S
infrastructure
;
. It will
include
processing
will
1JL
Jem
,
ind
¬
environmental
,
realization
for
in
wastage
,
1
supply
chain
industry
,
primary
,
under the
based
environmental
of increased
away
ft
*
111
.
The
changing
food
market
*
market
and
b
s
become
of
*
-
S
»
rproau
„
i
„
,
Coemption
patterns
in
India
have
be
undergoing
a
visible
shift
,
ELarlfe
,
the
share
0
fcereal
products
was the
highest
,
followed
by
milk
and
milk
products
,
vegetables
alible
0
]
|
and
moat
products
.
However
,
in
recent
years
,
the
growth
rates
for
fruits
,
vegetables
meat
and
da
.
ry
products
have
been
higher
than
cereals
and
pulses
.
Thisshift
in
mm
implies
That
there
is also
a
need to
diversify
the
food
production
base
m
match
the
changing
consumption
preferences
.
This shift
in
consumption
follows
the
pattern
observed in
developed countries
in
the
evolution
of
the
global
food
demand
There is a
shift from
carbohydrate
staples to animal
sources
and
sugar
On
following this
pattern
,
in
future
,
there
will
he
increasing
demand
for
prepared
meals
,
snack foods and
convenience
foods and
further on
the
demand would
shift
towards
functional
,
organic
and
diet foods
these
an
?
post
-
liberalization
trends
that
have
given
an
impetus
to the
sector.
Some
Structural Issues
Farmers
have
a
limited market for their
agricultural
produce
which
arc confined
to the
local
‘
Msndis
’
,
and
are
governedby
APMC under the
respective
state
government
;
and
the
farmers
can
only
sell to them
They
cannot
sell
directly
to
the
private
parries
for
further
processing
.
As
a
result
,
they
are
denied better
prices
and
also
prevent
food
processing.
They
also
have limited information
about
the
marketfs
),
prevailing
prices
and
operate
within
their
limited
knowledge
,
based
on their own wisdom
The
supply
chain
of
agricultural
produce
from
the
farmer to the ultimate consumer
lacks
transparency
and
passes
through
a
number
of
middlemen
raising
cost
through
commission
charges
,
resulting
in
higher
prices
without
any
value addition
.
Further
,
the
absence of
storage
/
warehousing
facilities
and
an inefficient
transport system
results in
wastage
,
which
only
add
up
to
higher
prices
There is
virtual no
use made
of
even the available
technology
let
alone
leveraging
technology
in
the
entire
supply
chain
There
is
no
quality
control
and
testing
mechanism
for
agricultural produce
which
reaches
the
consumer
.
The
extent
of use
of
fertilizers
,
hygiene
aspects
and whether
they
are
safe
for
human
consumption
is
not
seen
as anyone
’
s
responsibility
,
Remedial Measures
Tbe
government
ha
,
taken
,
he
firs
,
Hep
by
allowing
.
he FOI
in
nnS
.i
-
bn
.
nd retailing
.
TO
the
food
processing
industry
.
This
will
ako
ensure
a
larger
part
.
cpt
.
on
P
H
'
CIOJ
.
rl
(
be
enrire
chain
.
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T
I
N
I
N
O
N
O
M
y
H
o
w
e
v
e
r
t
h
is
s
e
ep
w
il
l
re
q
u
ir
e
a
c
ri
ti
c
a
l e
n
a
b
l
e
r
t
h
a
t
o
f
am
e
n
d
i
n
g
to
th
e
re
s
p
j
^
P
M
ac
t
o
f
t
h
e
re
s
p
e
c
ti
v
e
st
at
e
g
o
v
er
n
m
e
n
ts
.
T
h
is
a
m
e
n
d
m
e
n
t
w
i
ll
a
ll
o
w
fa
r
m
e
r
s
d
ir
e
ct
l
y
t
o
th
o
s
e
in
t
e
re
s
t
ed
i
n
f
o
o
d
p
ro
c
e
s
s
in
g
w
h
ic
h
al
l
o
w
p
ri
vate
sector
to
set
up
yards
for
pi
c
k
i
n
g u
p
p
ro
d
u
c
e
fr
o
m
th
e
fa
r
m
e
r
s
.
It
w
i
ll
a
ls
o
o
p
e
n u
p
th
e
su
p
p
l
y
c
h
a
i
n
I
t
is
o
r
t
h
is
r
ea
s
o
n
th
e
c
e
n
tr
a
l
g
o
v
e
rn
m
e
n
t
h
a
s p
e
r
m
it
te
d
t
h
e
F
D
I
su
b
j
e
c
t
to
co
n
s
et
y
o
f s
ta
te
g
o
v
e
rn
m
e
n
ts
I
n
re
ce
n
t t
im
es
th
e
r
e
h
a
s
b
e
e
n
a
b
io
t
e
c
h
n
o
lo
g
y
re
v
o
l
u
ti
o
n a
n
d n
o
w i
s
t
h
e
ti
m
e
o
r
fo
o
re
v
o
l
u
ti
o
n
a
r
o
u
n
d
f
o
o
d
p
r
o
c
es
s
in
g
i
n
d
u
s
tr
y
a
n
d t
h
is i
s
t
h
e
re
a
s
o
n
w
h
y
th
i
s
i
n
d
u
s
t
ry
u
k
n
o
w
n
as
a
‘
su
n
r
is
e
in
d
u
s
t
ry
’
in
v
ie
w
o
f
i
ts
p
o
te
n
t
ia
l
it
y
I
n
d
i
a
b
e
s
id
e
s
m
e
et
i
ng it
s
o
w
n
o
o
n
e
e
ds
in
te
r
m
s
o
f
q
u
a
li
ty
d
i
v
er
s
if
i
ed a
n
d
v
a
lu
e
a
d
d
e
d
p
ro
d
u
c
t
s
is
a
ls
o
ca
p
a
b
l
e
o
f
e
x
p
a
n
d
i
n
g
t
o
g
l
o
b
a
l
m
a
rk
e
t
s
.
T
h
e
f
o
o
d
m
a
r
k
et
c
an
n
e
v
e
r
h
a
v
e
a
d
o
w
n
tu
r
n
li
k
e o
t
h
e
r
m
a
rk
e
t
s
i
i
is
driven
as
a
basic
necessity
and
the
demand
will
always be
there for
the
same
.
The
rea
l
c
h
a
l
le
n
g
e
w
i
ll
be
fr
o
m
th
e
s
u
p
p
ly
s
id
e or
t
h
e
a
b
il
it
y
to fe
e
d
t
h
is
g
r
o
w
i
ng
m
a
r
k
e
t
.
T
h
e
fo
o
d
pr
o
c
es
s
in
g in
d
u
s
t
ry
i
n
I
n
d
ia
h
a
s
o
n
ly
be
c
o
m
e
t
o
ev
o
l
v
e
a
n
d
h
as
th
e
c
a
p
ab
i
li
ty
o
f
b
e
c
o
m
in
g
th
e
f
a
st
e
s
t
g
r
ow
in
g s
e
ct
or
in
t
h
e
f
u
tu
r
e
w
it
h
t
re
m
e
n
d
o
u
s
o
p
po
r
tu
n
i
ty a
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t
ia
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ls
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em
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re
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T
h
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n
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h
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r
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h
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re
m
ai
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n
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lu
d
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g
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ia
H
o
w
f
o
n
d
u
s
e
?
°
n
ly
1
7
p
«
P
b
u
t
a
r
e
a
u
nd
e
r
if
t
f
t
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ic
r
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c
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i
m
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im
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sector
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p
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la
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io
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P
bad
^
.
consent
r ‘
food
^
n
food
as
it
lic
real
and
issues
,
l
sector
LAND
REFORMS
—
ANOTHER
PERSPECTIVE
LAND
REFORMS
—
ASPECTS
Contemporary
land reforms
in
India
addressed
aspects
such a
abolition
of
me
Zimmdarf
system
,
land
ceiling
act
,
reforms
in
tenancy
,
rights
of
tenants
redistribution
of
surphis
land
and
land
consolidation
These
have
been a
focus
area
right
HJVX
Ir
-
depersdence
,
largely
within
the
state
government
domain
The
}
*
continue
ic
be
*
priority
area
with
prevalence
of
a large
number
of
small and
marginal farmers
*
r
.
d
also
a
large
number
of
landless
farmers
Tlic
objective of
this
chapter
is
to
bring
out
a
new
perspective
which
has
become
extremely
relevant and
also
would
require
to
be
addressed
on
an
equal
important priority
in
tandem
with
the
requirements
of
the
economy
.
The total
area
covered
under agriculture
is
around
60
per
cent
of
die
land
area of
India.
Various
articles
mention
a
declining trend
of
area
under
agriculture
,
as
a
disturbing
trend
.
The
forest cover
of
India
is around 20
per
cent
,
unreported
around
5
per
cent
and
the
remaining
13 per
cent
as
mountains
,
rivers
and
also
for
non
-
agricultural
purposes
including industries
.
Thus
,
a
total
land
area
for
industrial
/
service
setior
/
infrastructurc
activities
is only 11
per
cent
.
How
much
of
GDP
is
accounted
by
various
sectors
of
the
economy
in
relation
to
the
land
use
?
Agriculture
consumes
up
to
60
per
cent
of
the land
area whereas
contributes
only
17
per
cent of
GDP
,
while
industrial
/
service
sector
contribute
over 80
per
ceaz
of
GDP
but
has
only
11
per
cent
of the land
area.
Growth
in
future
will
require
large
land
area
under
non
-
agriculture
for
industries
,
service
sector
activities
and
also for
building
infrastructure.
This
is
no t
to
undermine
the
importance
of
agricultural
sector
in
India
.
The
issue
hes
in
improving
the
agricultural
productivity
,
rather
than
the area
under
agriculture
,
Hid
^
tor
is
important
for food
security
and
also
for
meeting
the
requirements
of
a
growing
population
,
however
,
at
the
same
time
it
cannot
become
a
driver
of
growth
.
Urn
has to
be
driven
around
a
widened
and
diversified
manufacturing
and
industrial
base
,
wfuch
will
Squire
freeing
up
ofland
under
agriculture
Ai
least
there
i
this
fact
.
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Resolving
land
issues
and land
reforms
largely
tall
in
domain
of
the
state
governments
,
as
a
result
,
progress
and
priority
accorded
to
this
sensitive issue
has not
been
uniform across
different
states
.
It
has
not
got
the
desired
attention
because
of
vested
*
interest
group
,
nexus
between
'
land
mafias
’
and
political
parties
.
There
is
a
need to rise
above
them
,
impart
a
decisive
thrust
and
a
resolve
,
of
implementing
land
reforms
,
in
the
national
interests
and
also
for
the
benefit
of
a
large
cross
section
of
people
,
the
land
less
and
the
poor
.
LAND
REFORMS
ANOTHER
PERSPECTIVE
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Economy
and
Indian
Economy
India and
are
country
and
the
country
to
thar
of
for
accelerating
is
not
seen
as a
the second
largest
to
the BRICS
.
More recently
,
the same
sratui
cconomyj
world countries
.
,
’
and
global
has
millions
of
Commission
e
country
,
of its
population
,
a
feature
which
to
the
global
^
large
proportion
in
social
of
favourable
d
stress
on
skill
sAL
eN T
FEATURES
—
'
‘
NEW
I ND I A
’
.
„
di
,
k
bdng
now
referred
ro
*
.
Wkc
,
economy
when
:
economic
deefeion
.
of
production
and
(
iricniB
arc
largely
rhrough
market
Foicci
of
demand
and
monly
lather
than
the
government
n
Ar
present
,
pricing
of food
grains
(
minimum
support
price
,
peiro
goods
such
as U
G
,
kerosene
and
diesel
(
administered
price
mechanism)
,
fertilizers
(
group
mention
price
scheme
)
and utilities are
regulated
by
government
and
pricing
of
the
remaining
products
are
marker
determined.
Prices
determined
ihrough
the
market
arc
said
to
be
efficient
1
.
Hie
afoncni
cn
lion
cd
arc some
of
t
he
emergi
ng
fea t u res
of
]
n
d ia
known as ib e
'
New
Ind
ia
’
Two
aspects
need
to be remembered
in
mind
.
First
,
the
global
perceptions
having
changed
about
India
give
*
;
i
new
perspectivfc
Secondly
,
they
reflect
the
‘
advantages
’ for
India but still
need
harness
ngt
hro
ugh
cducat ion
and
skill
form
at
ion to
bccon
verted
asop
portu
n
iries
.
o
rherwise
,
India
from
a
position
of
strength
in these
advantages
can
be taken Over
by
other
emerging
economics
However
,
then
in
our
steal
and enthusiasm
wc
should
not
forget
that
there
is
also
a
Real
India
which
one
has referred to
in
the earlier sections
,
too
which can
gloss
New India
It
may
be
useful
to
just
revisit
the
Real India
of
having
the
following
features:
*
Large
population
residing
in
d
Lakh
odd villages
in
the
country
completely
oblivious
of the
New
India
,
under
abject
absolute
poverty
,
undernourished
and
living
under
pitiable
conditions
.
*
Traditional
,
subsistence and
stagnating
agriculture
sector
*
Lack of
employment
opport
unities
in the
economy
with
large
-
scale
unemployment
*
A
large proportion
of the workforce of Over 90
per
cent
engaged
in
the
informal
sector
in
casual
work
for
livelihood
.
*
While sectoral
composition
of GDP
has
altered towards
service
sector
but economic
dependence
continues
to be on
the
agriculture
secror.
*
The
increased
growth
of recent
times as
well
as benefits
of
reforms
of
no r
having
touched them Or
an
exclusive
rather than
inclusive
growth
.
*
Completely
oblivious of
the
fact
that
there
is
an
international
perspective
of a
New
India
,
The
most
notable
aspect
of the
Real
India is
the
large
number
of
population
which
continues
to
Jive below absolute
poverty
levels
and
thar
India
continue
to
be
home
to
th e
largest
number
of
poor
people
in
the
world
While
we
can
draw
comfort
of
the New
India
w
should not
forget
the
'
Real India
'
which
is
where
the soul
of the
country
resides
.
The
biggest
challenge
for the
government
and
the
economy
is
to
integrate
ca
India
,
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THE
INDIAN
ECONQ
*
Six
since
setting
up
of
public
s
=
«
or
,
an il
be
said
they
have
delivered
or
athie
^
(
he
objectives
?
(
)
Broadly
They
have
delivered
in
creating
significant
capacities
1
in
all
core
arc
*
^
havingachieved
sell
-
reliance
in
dl
kinds of
industrial
goods required
in
theccoti
^
2
)
Today
,
India
can
safety
claim
that
it
is not
dependent
on
any
country
fer
^
requirement
of industrial
goods
largely
due
to
the
public
sector
(
3
)
I
hey
have
provided
gainful
employment
,
(
4
}
It has
also
facilitated
evolution of the
private
sector and
also been
responsible
fort
ht
levels of indusiHabitation
an d
industrial
maturity
reached
{
5
)
They
can
also be credited
for
malting
the industrial sector
a driver of
growth
an d
lifting
overall
rarcs of
growth
*
They
have had
[
licit own set
of issues too
*
but
many
of
rliem
cannot
be
directly
attributed
to
them
,
issuesof
capacity
utilisation
,
technology
-
related
*
time
and cost overruns but
ttiojt
importantly
,
ui
3
ny public sector
enterprises
arc
loss
making
.
Of the two hundred
twenty
odd
PSU one
third
arc
loss
making
with
high
levels of accumulated Josses
.
However
,
can we
realty
blame the
public
sector
fo r
being
loss
making
?
Public
sector
was
set
up
with
socio
-welfare
considerations
provided
the
objectives
of industrialization
,
self
-
reliance
,
employment
generation
,
development
of backwardftribal areas
,
Mon
fundamentally
,
government
ownership
and
profits
do
not
go
together
Profit is a
function
of
pure
businesses
and
public
sector
by
virtue
of
government
being
the owner
cannot
function
as a
pure
business
*
Similarly
,
to
comment
on th e
efficiency
levels of public
sector
is incorrect as
efficiency
levels
can
be
envisioned
amongst
the
'
comparables
One
can
comment
on
who
is
more
efficient
amongst
sa y
,
Pepsi
and
Coke
However
,
all
public sectors arc
operating
as
monopolies
in
terms of their scale of
operations.
Whom
would
you
compare
ONGC or
BHEL
or SAIL
with
?
This is true fo r all
public
sectors
It is
nor to
say
that
public
sector
is efficient
The
expression
conveyed
here
is that
it is nor
possible
to comment on
efficiency
levels of
public
sector based on
efficiency
levels
of the
private
sector
Further
comparison
of the
public
sector is
technically
incorrect as
private
sector
operates
as
a commercial
venture with an
explicit profit
motive unlike
the
public
sector
which also
have
social
objectives
to fulfil
Public sector has
not
to
be
envisioned
from
dir
perspective
of
pro
fit
-
making
or
efficiency
levels
but
in the larger
context
of
the
objective
?
which
arc
assigned
to
them when
they
were
set
up
We
won
Id revisit
public
sector a
bk
later after
developing
an
undcrstandingoftheindustml
policies
which have
defined the role of
public
sector an d also
path
of industrialization
.
INDUSTRIAL
POLICIES
Jhe
role of
public
and
private
sector
,
overall
direction to industrial
growth
and
the
int
^
rrialization has
been
guided
by
various
industrial
policies
of the
government
that
ha
?
her
announced
from dmc
-
to
-
rime in
view of
changing
priorities
starting
from 1948
on
*
?
INDUSTRIAL
SIC
However
,
c
1
«
rl
;
1956
which
has
gl
Policy
of 199
wh
:
|
>
e
required
IQ
go
1
suffice
to
see
i
lie sal
understanding
eft
contest
,
Industrial
Folic
{
I
)
The
industrii
licensing
syit
activity
, hesid
(
2
)
The
policy
oi
as
eighteen
at
allowed
but
sector
could
:
f
3
)
Thus
,
most
t
etc
,
,
were o
«
(
4
)
Bigger
priva
restrictive
rra
foreign
com
|
(
FERA
)
and
(
5
)
It was belies
to
monopoli
commencing
for
capacity
i
(
6
)
The earlier
|
control over
over
from
pi
industries wi
nationalized
(
7
)
ibc
pre
-
199
cement and
tS
)
Each
and
cv
,
which is
oo
-
tilted
toward
To
summarize,
th
dominance of th e
private
sector
con
EQ
NEW
EC
As
mentioned
ptr
idia
Though
id
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m
THI
INDIAN
ECOHO
^
but
nOT
seed
«
reforms
made
:
N D J
»
f
»
l A l
*
1
A
time
li
*
i
-
;
DoVlcV
3
t
greater
freedom
for
doing
businesses
outride
the
gov
*
,
,
^
y f
,
. .
>
r
and
larger
rule
for
^
„ explicit
in
the
polity
of J99
I
.
ft
is
also
kmnvn
a
*
dif
^
Industrial
Policy
or
the
New
Economic
Policy
,
and
also
known
*
the
polity
of
libera
^
*
n
1
end
oflicencc
/
pemiit
rajoreven
end
of
bureaucratic
control
over
functioning
of
the
th
—
«
-
*
»
.
h
-
u«
-
ouuut
*
.
Ji
[
i
also
imtiugn
dear
distinction
b
companies
,
This
lifted
all
bureaucratic
control
on
their
functioning
.
Price
regulate
[
ncrcmenul
in
veil
paved
a
way
to
the
market
determined
prices
for
most
of
the
industrial
goods
Hie
C
0
nCcnlUit
’
tm
ad
emphasized
on greater
competition
and
level
playing
field
for all
players
.
J
(
.
(
lfI
l
(
J
Ft
advocared
liberal
foreign
investment
policies
to
attract
foreign
investment
in
^
undcrmlnf
country
(
more
about
this
in
upcoming
sections
)
.
Broadly
,
the
New
Economic
Policy
or
frjVilte sector
in
<
1
die
Industrial
Policy 1991
has three broad
areas
which arc
as
follows
:
Public
Sectors
JJAhr
^
control
,
reduced
the
role
for
public
sector
,
dc
-
rcscrving
areas
and
larger
role
fo
,
,L
private
sector
,
doing
away
with MRTP
/
FERA
act
and
dispensing
with
MRTP
a
(
ltj
j
TTiit Jibed all
bureaucratic
control
on
their
functioning
,
Price
regnlj
,
.
{
]
}
Liberalisation
.
(
2
)
Public sector
.
(
3
)
Foreign
investment
.
Liberalization
It
is
widely
perceis
I opening
the areas
1
not
from
a
negativ
I
which
were reserv
Ihe
policy
of
Liberalization
as
a
policy
basically
dispensed with
the
earlier
licensing
and
the
registration
subsequently
in
k
system
providing
the
freedom to
private
sector to set
up
industries without either
(
hi
except
for
atomic
need for
a licence or
a need
for
registration
De
-
licensing
was
the most
important
aspeflj
sector would
be
sc
of
the policy
of liberalization.
Two
areas
,
atomic
energy
and
railways
would
not be
open
.
internal
accruals
<
for
private
sector
participation
.
Even while
doing away
with
the
licensing system
certain
would
be
made
critical
areas
still
require
a
licence but
opened
up for private
sector
participation which
'
companies
,
are
as
follows
:
S
there
was
a i
Appointments
cot
(
1
)
Any
kind
of
fire
arms and
ammunition
,
explosives
.
3
Chief
Executives a
2
Drugs
and
pharmaceuticals.
1
public
sectors
wei
(
3
)
Coal
mining
.
X
through
the
toncc
4
Defence
equipments
3
performance
and
(
5
)
All
kinds
of
wines
,
cigarettes
and
spirits
Mininavrattan
,
of
6
Hazardous
chemicals
,
jl
1
he
policy
has
i
there
would
be
nony
environment
degrading
and
polluting
industries
would
not
require a
licence
but
m
exceptional
dram
administrative
clearance from
the
respective
ministries
of
ccntral
/
statc
government
before
^
comwr
investment
Further
,
as
a
part
of
liberalization
there
was
now
no
restrictions
on captf
'
tf
of
public
sector
T
1
expansion
and
diversification
by
the
private
companies
.
The
policy
thus allowed
the
private
investment
which
sector to
operate
as
pure
businesses
with
minimal
bureaucratic
control and
be
driven
expand
operations
largely
by
demands
in
the
markets and
opportunities
available
.
Ojsjhi
/
Why was
this
done
?
ft
is
important
to
understand
that
even before reforms
,
despite
d
*
regulations
,
the
private
sector
struggled
,
operated
within
the
constraints
of
the
go
vertimc
^
Both
disinvestmen
but
survived
and
was
not
completely
eclipsed
by
the
public
sector
.
I
lie
changing
cc
0
”
t
,
[
^
llublic
sector
,
the
scenario
required
a
different
orientation
focused on
efficiency
,
productivity
ant
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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HDUSmiAL
SECTOR
AN
£
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raor
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ci
^
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beitet
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*
-
1
3
*
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ic
has
te
r
responsibilities
of
pnJvUiiDg
good
and
efficient
enabled
environment
,
addressing
the
welfare of
th e
mawa
.
wS
-
tifdj
ire
r
more
important
than
running
public
sector.
Especially
,
when
today
ricre
ts maturity and
competence
in
the
private
sector.
*
P
*
»
&
treking
public
sector
Privatization
is
not
about
profit
malting
cue
mtf
*
larger
reason of
whether
it
will
continue
to remain
profitable
in
future
with
incense
ind
fierce
competition
.
57
*
pftvariaamo
is
not
for
today
but for
a
brighter
future of
the
public
weror
in a
pr i
-
j
^
imsi environment
equipped
better to
meet
rhe
challenges
.
I
Any
;
CS
:MSS
requires
the
ability
to rake
prompt
business
decisions
,
ir
is
not
about
whether the
decision
was
right
or
wrong
.
Such decisions
will
always
have business
rctfcj
bur
whar
is
required
is the
ability
to take the decision
quickly
fhc
structure
pf
puhLc
rector
globally
is
such
that ir
suffers from
delays
in
decision
-
making
.
>
?
T
7
;
id
2
anon
is also about
handing
public
sector
no
a
‘
visionary
'
who
understands
tv
-
rincis
.
LmdfflRpds
priorities and
knows how ro make the
public
sector
grow
to
greater
heights
and
help
it
to
emerge
as
a
global
company
.
t
^
ruuig
tie
above
facts in
view
the
government
went for some big tidtci
privatization
like
due OC 3
ALCO
i
Vedanta
Group
)
,
VSNL
(
Taus
)
,
IPCL
Reliance Industries
),
Modem
Foods
Unilever
}
,
and
Maruti f
Suzuki
}
. Even Round
1
of
privatization
was
performed
tends
;
lot of
controversy
ranging
from
the
need
to
issues
of
valuation
Whv Lie
opposition
to
privatization
)
The
reasons
are
detailed
as follows
;
1
,
ft
wjs
tkared
that
government
owned
monopolies
would
be
replaced
by
private
sector
rr
onopdw
and
could result
in
exploitation
by
the
private
sector
The
government
has
scarified chat no
public
sector
operating
as
a
monopoly
would be
privatized
-
Only
those
whih are
operating
in a competitive
environment
would be
privatized
.
Until
they
arc
able to
operate
in
a
competitive
environment
there
would only
be
disinvestment
of
such
public
sector
2
,
f
;
a
also
feared
that
privatization
would
result
in a
large
number of
workers
kid
off
or
would lose
their
;
obs
thereby
adding
to
the
pool
of
unemployment
,
it
needs
ro
be
understood
that
public
sector
being
speeded
in
nature
,
he
workers
by
virtue
of
experience
have
acquired
a
dull
set
which
no
owner
would
like to
lose. Rather
than
retrench
.
her
would
be
redeployed
,
f
31
1
,
L
,
abo
widely
MW
*
*
P
‘
«
“
<
k
''
“
ived
fo
>
.
“
tflTTf
M
d
*
Mgfi
,
j
5
fici
‘
“
d
n
°
'
^
maaes or
used
to
create
social assets
in
the
economy
^
The
govern
men
i
has
already
set
up
the
National
Investment
Fund
(
N
1F
)
for
aarg
^
taa
investment
in
profitable
avenues
,
would
be
used
7
>
pet on
c
)
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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ygj
E
INDIAN
ECONOMV
asKtsind
the
fairing
25
per
cem
fo
ro
iv
.
l
of loss
making
public
sector
^
snd
meeting
the
expansion
needs
of
the
profitable public
rector
units ,
fc
)
Ihc
corpus
of
the
NIK
would
be
minted
by UTI
mutual
fond
,
SB
and
Lie,
4
)
Given
the
high
level
of fiscal
deficit
it
would
be
difficult for
the
government
to
d
„
irt
from
reducing
the
deficit
through
proceeds
of
disinvestment
and
privatization
.
Despite
th emerit
and
the
need for
privatization
the
government
right
folly
is not
eonsidni
^
ny further
privatization
and
would
rather watt
fo r
consensus
building
amongst
politic
)
parties
,
trade
unions before
privatization
as
it
is
a
long
protracted
process
spanning
seven
decades
.
Both liberalization
as
well
as privatize
lion are
the major
planks
of
the
economy
reforms
,
Ihe
government
by
pressing
the
‘
pause
button
oil
privatization
is
being
criticized
as
slowing
down of
reforms
or of
having
gone
‘
soft
’
.
Privatization should
not
be seen
as the
only
aspect
of
reforms.
Neither
should one
ocpeci
an
end
of all
economic
problems through
privatization
. A
similar
misplaced
belief
was
tlletc
when
public
sector was
se t
up
. Privatization at its
best
provide
only
for
an
efficient
and
competitive
domestic industrial base
and cannot
be
saidas the
‘
only
aspect
of
reforms
.
That
are so
many
oi
her softer
reforms
(
relatively
easy to
implement
through
an
executive order
of
the
government
) ,
which could have been
done
.
Despite
the
policy
of liberalization there
ate
still bureaucratic
hurdles
.
In terms
of
World
Bank survey
,
on the relative case
ofdoing
business
outside
government
approval
,
regulatory
clearances
,
India
’
s rank
is
a low
of
one
hundred
and
thirty
-
four
out
of one
hundred
and
cighty
-
threc countries.
Singapore
is
tanked
as
number
one among al l
other countries.
Similarly
,
‘
Licence
Raj
has
paved
way
to
‘
Inspector
Raj
.
Today
,
as
many
as
thirty
different inspectors
visit
the
factory
premises
under
various Acts
as
against
2
-
3
in
China
,
Getting
an
electricity
connection or a
no
objection
certificate
from
pollution
control
board is
still
difficult
,
Collection of
excise
duty
is
cumbersome.
There is still
a
lot
of
bureaucratic interface
for
performing
business
in
India
and
that
is
where the
government
needs
focusing
.
Thus
,
liberalization has
helped
but not
to that
levd
by
global
standards
.
It
is
rightly
said
that
what India
needs
is
‘
thousands of smaller
reforms
and
'
big bang
reforms
’
can wait till
acceptable
or
till
a need
for
them
is felt
.
Q
ROLE
OF
PUBLIC SECTOR IN
FUTURE
The
NEP
1991
has
given
rise
to certain
wrong
perceptions
about the
public
sector
,
mentioned
earlier
,
‘
clipping
of their
wings
’
,
or
'
diluting
the
status
of
public
sector
.
r
needs
to
be
clarified
first that
it
is
not
th e
clipping
of
wings
but
only a
larger
role
for
private
sector.
Neither
is th e
status being
diluted
given
the
huge
investments and asset
base
of
d
*
public
sector in
the
country
.
The
policy
should
not
be scon as
undermining
the
impound
of
public
sector
,
but
role
of
public
sector
would
undergo
a
change
as
mentioned
below
(
I
)
From
a
welfare
orientation
they
would
shift
to
function
as a
commercial
vennt
*
Pr
<
?
^
IS
^
an
objective
to
the
extent
feasible
as a
public
sector
,
U
}
hr
°
m
P
^
^
on
-
orienxed
they
would
become
productivity
-
orientd
.
iNDUSTRIAt
SEC
(
3
)
They
will
opt
operate
with
j
(
a
)
Many
r
Navratn
taking
ii
requiem
(
4
)
Ihcre
would
as
oil
compa
scale
and
hel
(
5
)
Many
publi
sector
to
be t
(
6
)
There
is
a
li
and
greater
(
7
)
The
chief
c
based
on
m
(8
)
There
woul
comperitioi
(
9
)
Gradually
,
companies
operate
alu
(
10
)
Efforts
wo
avenues
fc
so
that
thr
making
pi
privatizatii
(
11
)
However
,
ability
to
I
HI
EMER l
The
most notab
and
the
ability
c
It
can be
said
i
Industrial
Polic
Already
,
sint
companies
,
exp
They
have
beer
recent
times
.
H
U
)
A
larger
t
diversific
(
2
)
They
will
public
sc
eroding
t
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
http://slidepdf.com/reader/full/indian-economy-by-sanjeev-verma-raz-kr 59/78
ygj
E
INDIAN
ECONOMV
asKtsind
the
fairing
25
per
cem
fo
ro
iv
.
l
of loss
making
public
sector
^
snd
meeting
the
expansion
needs
of
the
profitable public
rector
units ,
fc
)
Ihc
corpus
of
the
NIK
would
be
minted
by UTI
mutual
fond
,
SB
and
Lie,
4
)
Given
the
high
level
of fiscal
deficit
it
would
be
difficult for
the
government
to
d
„
irt
from
reducing
the
deficit
through
proceeds
of
disinvestment
and
privatization
.
Despite
th emerit
and
the
need for
privatization
the
government
right
folly
is not
eonsidni
^
ny further
privatization
and
would
rather watt
fo r
consensus
building
amongst
politic
)
parties
,
trade
unions before
privatization
as
it
is
a
long
protracted
process
spanning
seven
decades
.
Both liberalization
as
well
as privatize
lion are
the major
planks
of
the
economy
reforms
,
Ihe
government
by
pressing
the
‘
pause
button
oil
privatization
is
being
criticized
as
slowing
down of
reforms
or of
having
gone
‘
soft
’
.
Privatization should
not
be seen
as the
only
aspect
of
reforms.
Neither
should one
ocpeci
an
end
of all
economic
problems through
privatization
. A
similar
misplaced
belief
was
tlletc
when
public
sector was
se t
up
. Privatization at its
best
provide
only
for
an
efficient
and
competitive
domestic industrial base
and cannot
be
saidas the
‘
only
aspect
of
reforms
.
That
are so
many
oi
her softer
reforms
(
relatively
easy to
implement
through
an
executive order
of
the
government
) ,
which could have been
done
.
Despite
the
policy
of liberalization there
ate
still bureaucratic
hurdles
.
In terms
of
World
Bank survey
,
on the relative case
ofdoing
business
outside
government
approval
,
regulatory
clearances
,
India
’
s rank
is
a low
of
one
hundred
and
thirty
-
four
out
of one
hundred
and
cighty
-
threc countries.
Singapore
is
tanked
as
number
one among al l
other countries.
Similarly
,
‘
Licence
Raj
has
paved
way
to
‘
Inspector
Raj
.
Today
,
as
many
as
thirty
different inspectors
visit
the
factory
premises
under
various Acts
as
against
2
-
3
in
China
,
Getting
an
electricity
connection or a
no
objection
certificate
from
pollution
control
board is
still
difficult
,
Collection of
excise
duty
is
cumbersome.
There is still
a
lot
of
bureaucratic interface
for
performing
business
in
India
and
that
is
where the
government
needs
focusing
.
Thus
,
liberalization has
helped
but not
to that
levd
by
global
standards
.
It
is
rightly
said
that
what India
needs
is
‘
thousands of smaller
reforms
and
'
big bang
reforms
’
can wait till
acceptable
or
till
a need
for
them
is felt
.
Q
ROLE
OF
PUBLIC SECTOR IN
FUTURE
The
NEP
1991
has
given
rise
to certain
wrong
perceptions
about the
public
sector
,
mentioned
earlier
,
‘
clipping
of their
wings
’
,
or
'
diluting
the
status
of
public
sector
.
r
needs
to
be
clarified
first that
it
is
not
th e
clipping
of
wings
but
only a
larger
role
for
private
sector.
Neither
is th e
status being
diluted
given
the
huge
investments and asset
base
of
d
*
public
sector in
the
country
.
The
policy
should
not
be scon as
undermining
the
impound
of
public
sector
,
but
role
of
public
sector
would
undergo
a
change
as
mentioned
below
(
I
)
From
a
welfare
orientation
they
would
shift
to
function
as a
commercial
vennt
*
Pr
<
?
^
IS
^
an
objective
to
the
extent
feasible
as a
public
sector
,
U
}
hr
°
m
P
^
^
on
-
orienxed
they
would
become
productivity
-
orientd
.
iNDUSTRIAt
SEC
(
3
)
They
will
opt
operate
with
j
(
a
)
Many
r
Navratn
taking
ii
requiem
(
4
)
Ihcre
would
as
oil
compa
scale
and
hel
(
5
)
Many
publi
sector
to
be t
(
6
)
There
is
a
li
and
greater
(
7
)
The
chief
c
based
on
m
(8
)
There
woul
comperitioi
(
9
)
Gradually
,
companies
operate
alu
(
10
)
Efforts
wo
avenues
fc
so
that
thr
making
pi
privatizatii
(
11
)
However
,
ability
to
I
HI
EMER l
The
most notab
and
the
ability
c
It
can be
said
i
Industrial
Polic
Already
,
sint
companies
,
exp
They
have
beer
recent
times
.
H
U
)
A
larger
t
diversific
(
2
)
They
will
public
sc
eroding
t
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
http://slidepdf.com/reader/full/indian-economy-by-sanjeev-verma-raz-kr 60/78
nil
,
|
|
t
;
»
«
«
I
*
4
U
|
bn
(
l
|
(
Hi
M
*
tvari
|
<
uH
|
|
t
>
wm
lit
.
u
.
tcm
hind
itu llicir
milr
i
u
|
their
alt
foul
< >
LU
aim
mg
all
fU
dimy
<
hum.
^
nun
ill
iMPUf
-
MlAt
fttCHQR AMO
MHtMAM
/
ATION
tf
)
Iky
will
Mill
«
wr
pmlrwfonalUm
and
well
rim
public
would
*
,
|
in
.
ii
.
wlili
opeudunul
'
inti
functional
autonomy
to
the
extern
feasible
,
Id
Mdliy
mint
-
|
>
nhlb
»
«
<
n i
would
acquire
the
xm
f
'
Mlnl
-
iuvranari
,
^
MJIUIHIMUV
,
ridding
ilicm
a
greater
degree
of
freedom for
u t \
m
inmmieiii decision
*
by
(
he
respective
boards of
public
rector
an d
not
n
i
|
iiiimy
wiwnnwiH
approval.
H
)
III
.
O
would
Iw
an d
likelihood of
mergers
amongst
public
sector
such
m
oil
C
.IIIH
|
IIIIH+
'
SH
iiarioi
milled
bank to
enable
them
to
achieve
greater
economies
of
v
-
ilt ami
help
<
InMI it
.
compete
whh
glolud
companies.
(
1
}
Many
publh
HLINTS
may
opt
lor
oversea
*
acquisitions
paving
the
way
fo i
public
sc
.
i
<
II
to become
glnh
.
il
players
,
[
rd
llt
<
t
‘
i
'
J
lil
. f
Uliiioil
ol
ptiMiL
set tor
getting
inm
jnim
ventures
with
private sector
Lm
.
ljjuLtiL
i
Joint
participation
In
key
areas
{
/
)
lb
.
CIIIL
'
I I
'
SL
-
Lillve
nllit
t
‘
1 ul
public
secroi
would
be
considered for
appointment
bawd
im
i
net
It
and
.
nmpcwncc
both
wiihin
as
well
as
outside
the
govern
mem
.
(
HI
I In
i
L
would
hr a
level
playing
field with the
private
sector allowing
for
healthy
compel
binii
.
pH
L
. r .
LiIndly
.
tlieli
monopoly
>1
,
0us would
gei
diluted
sviih
entry
of
private
and
foreign
companies
and
they
would not he ai
commanding
heights
of the
economy
but
npmre
along
whh
private
ami
hireign companies
(
10
)
If
flmis
would be made to
address the loss
making
public
sector
by exploring
all
avchires
toi
i
ben
revival
through
capital
infusion
,
giving off
accumulated
losses
so
dial
they
can
start alirsh on
a
clean
slate
,
However
,
all
such
iwivab
of
the loss
making
public
sector
may
come
wiih
a
Vidor
1
,
that
this revival would
he
subject
to
pdvadration
subsetpiemly
(
I II I
towevci.
ihe
biggest
challenge
before the
profitable
public
sector
would
b e th eir
ability
to be
LOI
11
pi
’
tilive
,
productive
ami
efficient
an d
remain
profitable
in future.
iliai
U
i
hm
level
rcloniu
'
*
CH
>
h
prlw
<
<
“
I
tht
1
*
5
vtnW
*
FT
EMERGING
ROLE OF
PRIVATE
SECTOR
lire
tunable
failure
nl
ihe
Industrial
Policy
of
(§
91
is
the
acceptance
of the
maturity
and
die
ability
ol
the
private
se c
n
>i
and
their
capabilities
to
shoulder higher
responsibilities
U
tan
be
said
that
ibe
emerging
u
>
lc
of
(
he
private
sector
has
been
crystal
tied
by
the
Industrial
l
\
iUcy
M
‘
)
l
,
Already
,
sjmc
die
List two
denies
n
domes
here
have
ken an Increased
number
of
“
'
mpjhks
,
expansion ami
divcndlicatfon
by
existing
companies
.
entering
imo
ke y
areas
M
have been
responsible
lor raising
industrial
gmwrii
and
aim
lifting
India
'
s
growth
in
,
Pl
«
U
times
,
I
hr
imoLc
will
thus
witness
the
following
:
ID
i i
lugL
I
LCspondbilitv
on
ih c
shuilldcrsnUhe
private
sector
fo r
tire reusing
investment
.
ulsi
.
ii
;
imlmtii
„
V
„
ill
i
L
U
.
K
/
LTiLtal
—
«
«
*
kk
«
«
Cfrtj
*
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(
HDUSTRIAL
SECTOR
AND
L I B E R A L I Z A T I O N
h
«
=
SSi
fc
COlUl
P
^
tr
*
^
;
°
*
W
.
ovtr
^
the
board
;
for
all
Ifa
director
moral
an:
,
reftm
:
f
biisiiws
-
over
in
tk
procutt
riaic
^
®
1
*
s
been
*
*
called
^
o
sf
*
1
tb
»
iR
^
*
co
^
o
»
^
thc
m
f
,
d
a
-
rr
WOukl
*
l
,
Jrfhcf
in
f
«
,
u
,
.
*
*
^
tTW
n
1
a
,,
d
priVi
,
t
:
*
*
*
*
*
ho
«
U
«
co
*
i
all
foe
key
areas
and
jointly
merging
industrial
and
overall
Krow
h
bf
hr
«
*
ro
my
The
mixed
economy
character
has
always
been
an
avowed
objective
of the
liP
Sin
«
the
first Industrial
Policy
of
1948
,
however
,
it
was
only
seen
.
s
JJ
}
inwitn
of
hr
government
,
more
on
paper
,
The
foturc
is
likely
to
see
foe
true
emergence
of
the
„„
,
H
economy
character
lire
policy
of
libera
lotion
has
imposed
g
/
ca i
confident
*
„
n
he
private
sector
,
os
becoming
partners
m
the
government
in
developmental
dfom
,
operating
wifo
a
code of
ethics
,
business
and
moral
responsibilities
,
transparency
in
operatfom.
It
is
UP
lo
thc
Pf
'
vart
sector to
rise
m
the
occasion
,
meet
he
expectations oJ
che
government
and the
people
and
ensure
that the
confidence
reposed
is
never
|
c
down
,
However
,
for the
private
sector
to
truly
emerge
as
visualized
in
the
policy
would
require
ihc
government
change
from a
direct
provider
of
goods
and
services
in
creating
that enabling
environment
,
to
permit
rather
than
prevent
,
to allow
rather
ihan
stop
,
The
challenge
before
the
private
sector
is
not
only
to
deliver
,
but
in
a
more
responsible
manner
realizing
rhat
business and moral
responsibilities
go
together
.
Exit
Policy
‘
It
is
often
said
that absence
of
an exit
policy
is a
cog in
he
wheels af
liberalization
,
'
What
is
an exit
policy
?
The
policy
of liberalization has
given
the freedom
of
entry
bui
aho
given
the
risks of businesses that
it is
not
necessary
for
al l
to
survive
,
some
may
die a
natural
death
,
some
industries may need
to
reorient
into different
businesses
by
closing
down
existing
businesses
and
there
l ies the
need
for
an
exit
policy
.
An
exit
policy
thus facilitates
companies
to
close
down
heir businesses
,
allowing
them
to reorient
*
restructure operations
,
in
terms
of market needs
,
with
minimum
restrictions
from
the
government
and
in
a
quick
time
frame
*
At
presenr
,
in
India there
is
no
exit
policy
and
closure
of
companies
is
complex
and cumbersome
with
multiple
government
bodies
and acts
’
making
closure
exrremcly
difficult
and
can
take over
several years
.
Realizing
its
importance
the
government
has set
up
the
National
Company
Law
Tribunal
’
as
a
one
stop
shop
,
single
reference
poinr
for
all
sick
companies
either
seeking
revival
or closure within a
period
of
twenty
-
four
months of
the case filed
with
NCU
,
Ih
s
would
bring
under
one
roof
all
the
multiple
bodies
together
to
work
in
a
coordinated
manner
cither for revival
or for
the
closure
of
companies
in
a time
bound
manner
.
I
he
NCLT
is
yet
to become
operational
as
ir
requires
amendments
to
various
act
and also
compliance
of
legal
formalities
.
An
cxi
.
policy
also
has a
ticklish
issue
which
is
labour
-
relaicd
and is
a
larger
freed
,,,
n
to
ihc
management
of
companies
in
addressing
lahour
rclaied
issue
.
Ihat
..
.
d
there
is
freedom
ro recruit
.
here
should
also
be
discretion
.
0
a
company
to
dismiss
an
the
larger
nucresrs
of the
company
Unfortunately
,
all
the
labour
la
»
s
ha
.e
been
enacted
during
1920s and 1930
s
to
protect
the
interns
*
of the
worker
,
n
rhe
'
dusmal
rerun
and
making
dismissing
labour
as
virrually
impossible
with
fears
of
.
.
nice
,
and
labour
unrest.
_
I
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I
N
U
S
T
R
I
L
S
E
C
T
O
R
N
L
I
E
R
L
I
Z
T
IO
N
s
a
fe
u
n
io
m
e
m
p
h
a
si
s
in
g
u
p
o
n
t
h
e
ne
e
d
f
o
r
s
u
c
h
r
e
fo
r
m
s
a
n
d
a
r
ri
vi
n
g
at
a
b
ro
a
d
ba
s
e
d
ons nsus
W
ha
t
i
s
a
p
p
a
ll
i
ng
is
t
h
e
g
ov
e
rn
m
e
nt
d
i
si
n
te
r
es
t
to
ev
e
n
s
ta
rt
t
h
in
k
in
g
o
n
t
he
s
e
lin
e
s
k
fc
o
u
r
re
f
o
rm
s
in
I
n
d
ia
i
s
th
e
h
a
rd
e
s
t
o
f
re
f
o
rm
s
a
nd
h
a
s th
e
p
ot
e
nt
ia
l
of
u
nl
e
as
h
i
ng
a
t
to
rm
a gr
e
at
u
p
h
e
av
a
l
a
n
d
c
a
n
h
a
v
e
a
g
ra
v
e p
o
l
iti
c
al
fa
l
lo
u
ts
an
d
h
a
s
t
o
tr
ea
d
c
ar
e
fu
ll
y
a
n
d
g
ra
d
u
a
l
ly
b
y
b
ui
ld
i
n
g
c
o
ns
e
n
su
s
s
te
p
b
y
-
ste
p
U
n
til
s
u
c
h
a
t
im
e
it
m
ay
d
el
a
y
f
u
rt
h
e
r
re
f
or
m
s
a
n
d
t
h
e
co
rr
ec
t
w
a
y fo
r
go
i
ng ah
e
a
d is
t
o m
a
k
e a
m
o
de
s
t
a
n
d
a
cc
e
p
ta
bl
e
b
e
gi
nn
i
ng
. A
t
th
e
s
a
m
e
ti
m
e
it
s
h
o
u
ld
al
s
o
b
e
ke
p
t
i
n
m
in
d
t
h
at
w
it
h
ou
t
c
h
a
n
gi
n
g
th
e
l
ab
o
r
e
n
vi
ro
n
m
e
nt
a
n
d
w
i
th
pr
es
e
nt
l
e
v
el
s
o
f
pr
o
te
c
tio
n
t
h
ro
u
g
h
m
u
lt
ip
le
t
ra
d
e
un
i
on
s
would
only
imply
not
getting
full
benefits
of
reforms
for which reforms
cannot
be blamed
.
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g
,
electr i
city
d
ports
and
of
ir
rigatio
n
in
frastru
cture
urban
ar
eas
)
ti
on
and sk
ill
but
in
ter
ms
of
ne
ed
for
mo
re
the g
rowth
of
m
mun ica
tion
*
characteristics
uctur
c
It
can
need
to
be
re
e
lectrici
ty
is
mainte
nance
dow
n
d
not
for
the
ould
beco
me
fr
om
the
pa
5
1
tha
t
in
tM
ve
r
ac
hie v
ed
high
ways
f jF
RAS
T
^
C
TUR
6
DEVE
LOPM
ENT
^
Hctice
,
what
one
has
g
ained
in
sav
ing
the
t
ime
a
,
rhe
airpo
,
his
,
inL
.
o
the
airpon
So
what
effects
infrastructure
imp
lies
„
w
h
£
b
uildin
-
^
sim
ultaneo
usly
start
the
proce
ss
of
cithe
r
wid
ening
the
roa
d
to
th
e
an
d
if
i
<
«
*
<
»
fca
siblc
cX P
lore
10
dtc
K
entr
y
poi
nt
ro
the
airpo
n
from
the
ci
rT
I S S
U E S
IN
I N D
I N
I N
F R
S T
R U C
TU
R E
1
Need
for
Long
-
term
R
esourc
es
—
it has
bee
n
estim
ated
by
the
Plan
ning
Com
missio
n
0
f I
ndia
th
at
an
inv
estment
of
US
1000
bil
lion
is
require
d
in
overa
ll
infras
tructu
re
alo
ne
over
the
ne
xt J
0
year
s
.
this
wil
l
b
e
USS
500
bi
llion
in t
he
next
five
years
or an
an
nual
inv
estmen
t
of U
5
S
100
billion
for
sustaining
the
present
:
levels of
growth
and
if
we
are
talking
about
highe r
levels
of
gr
owth
the
m
agnitu
de
of
invest
ment
w
ill
only incr
ease
furt
her
.
Thi
s
would
m
ean
that
investm
ent in
i
nfrastr
ucture
wh
ich
is
pr
esently
a
round
5
5
pe r
cent
of
GDP
would
h
ave
to b
e
more than
doub
le
to
12
.5
per
cen
t.
Infras
tructur
e
pro
jects
hav
e
lon
g
gestat
ion
pe
riod
ra
ising
su
ch
long
-
te
rm
reso
urces
on
an ong
oing
ba
sis
is a ma
jor
issue
.
Such
lon
g
term fun
ds
ar
e usua
lly
a
vailabl
e
in
insura
nce
and
pen
sion
fun
ds b
oth
of
whic
h
are
re
lativel
y
still
evolvi
ng
in
Ind
ia.
Insuran
ce
p
enetra
tion
is
very
low
and so are pen
sion funds
.
Banks
arc not
able to
ta
ke
expo
sures
giv
en
the
nee
d
for lon
g
te
rm
reso
urces
a
s
it
will resu
lt
in
mi
smatch
betwe
en
asset
s
an
d
liabi
lities
an
d
ca
n we
aken
the ba
nks
.
2
)
Prici
ng of
Infrastructure
—
another
issue
is
the
under
pricing
pricing
less
than
the
co
mmerc
ial
viab
ility
in term
s
of
the ma
rket
o
f
in
frastru
cture
which has
qu
estion
ed
i
ts
sustain
ability
in the
long
run
.
J
Abse
nce
of
V
isioning
-
a
s
m
ention
ed
pre
viousl
y
,
a
key
feature
o
f
infrastr
ucture
is
the
need
for
v
isionin
g
say
Infra
struct
ure
in
India 205
0
.
N
o
seriou
s
though
t
*
being
give
n
to
th
e
req
uireme
nt
of
infrast
ructur
e
o
ver
the
next 30
4
0
years
4
I
nfrastr
ucture a
s
a Natio
nal
Issue
infra
structur
e
deve
lopme
nt
con
tinues
to
be
d
riven
thro
ugh
v
arious
gove
rnments
in
term
s
of
their
own
prioriti
es
.
One
g
overnm
ent
may
fo
vour
bu
ilding
hig
hways
where
as
anothe
r
govern
ment
nt
ay
fed
making
r
ural ro
ads
a
pri
ority
.
Infra
structu
re
has
to
b
e
mad
e
apoit
cu
tting
across
pa
rty
l
ines
as
a
nat
ional
issu
e
.
s
R E
C E N
T
M
E S
UR
ES
T
K N
B Y
TH
G
OV
R
NM
N
T
1
he
gov
ernmen
t
real
iz ing
the
impo
rtance
of
i
nfras
tructu
ral
secto
r
has
ta
ken
a
num
ber
oi
^
that
are
brie
fed
b
elow
[
l
set
up
the
In
dia
Infr
astruct
ure
Financ
e
^
^
j
o
evera
ge
an
^
le
verag
ing
investm
ent
in
in
frastru
cture
proj
ects
‘
C
Mmcu
o
f
ove
r
^
50
,
000
crores
over
a
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riod
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time
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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T H E
I ND IAN
ECONO
*
(
2
)
(
3
)
°
fUS
$
5
bi
li
“
^
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Prf
i
d
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«
London
.
h
foods
of
USD
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oodS
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n
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i
«
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fo
,
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^
tmomK
proj
*
*
n
[
Finance
Company
(
IDFC
)
,
Citigroup
,
^
uneed
a
launch
of
US
$
5
billion
fond
to
(
4
)
Suing
Commission
oflodia
has
proposed
a USD
11
billion
mold
info
d
*
frmds
for
funding
infrastructure
projects
:
n
India
.
(
5
)
The
government
has
recently
announced
the
public private
sector
partnersh
.
p
(
PPP
|
model
for
i
n
frast
ruemre
projects
in I
ndia
*
(
a
) This
model
seeks
to
leverage
on
the
strengths
of
the
government
(
mter
-mimstt
*
clearances
,
environment
and
forest
clearances
,
shifting
of
vital
installations
and
land
acquisitions
)
,
b
The
private
sector
is then entrusted
the
task
of
building
the infrastructure
in
terms
of
government
specifications
by
using
their
own
resources
in
a
give
*
time
period
*
There
is
an
incentive
mechanism
for
projects
completed
ahead
of
schedule.
(
c
)
In
turn
,
it
allows the
private
sector to
levy
pie
-
agreed
Toll
'
{
for
toad
projects
}
or
‘
user
charges
1
(
airports
)
under
the
build
-
operatc
-
transfer
BOT
model
of
partnership
.
(
d
A
slight
variant to this is
design
-
build
-
finance
-
operate
(
DBFO
where
the
Competence
in
the
design
'
of
projects
is
also done
by
the
private
sector
rathe
than
by
the
government
,
(
c
)
Recently
,
the
government
under
the
PPP
model
has
also
initiated
levying of
negative
grants
'
for
highly
profitable
road
projects
.
(
f
The
private
companies
while
bidding
for
such
projects
would also have
to
provide the
amount
of
money
from
their
likely
future
earnings
they
are
willing
to
give
Up
-
front
before
the
contract is
awarded
by
the
government
,
as what
ii
known
as
negative
gram
.
L u
I N F R A S T R U C T U R E
AND
ITS
KEY
C H A L L E N G E S
c
;
ttx
:
^
:
^
f
ishKd
inf
—
1
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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to
.
,
c
.
^
»
<
iln
£
V
(
4
)
lire
I
]
1
|
>
moHd
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appreciable
but
cannot
substitute
,
NFRASTfiucrof ie
DEVELOPMENT
°
n
t
>
f
,
The
huge
magnitude
of
resources
required
,
*
pcndins
e
‘
ven
infrastructure
development
1
“
*
btet
a
suPP
iv
<
«
*
b
(
5
>
In
*
*
metro
i
„
fre
,,
rucmre of
Delhi
,
Mumbai
and
Chcnnai
«
virtually
collapsing
n
t
d
«
PlW
,
e fm
°
f
5tait
eov
^
mcm
.
Even she
major
urban
centres
are
\
Z2
,
«
vere
infrastructural
constraints
,
despite
having
the
jawaharld
Neh
National
IS
Urban
Renewal
Mission
(
JNNURM
(
6
)
That
is
,
to
say
the
government
cannot
absolve
itself
of
its
responsibilities
of
I
infrastructuredevelopment
{
LntCt
-
inscaji
Tlie
twin
challenges
arc
as
follows:
How
would
tlic
government
raise
resources
given
the
budgetary
constraints? The
infr
^
J
compulsions
of the
Fiscal
Responsibility
and
Budget
Management
Act
(
FRBMA
)
would
lrUcil
3
fT
nor
only
allow
it
to
raise
expenditure
to
keep
the
deficit level
under
cheek
Hie
government
l
r
I
1
/
-
-
f
ntvp
UIV
1
C
¥
5
I
UI
1
U C I
UltU
^
I IIV
.
gUV
(
_
i
.
ln
3
E
bas
a
legacy
of an inefficient
spender
in
the
economy with
as
many
as
three
hundred
P eted
a
le
|
(
I
government
projects
delayed
by
over
eight years
with a cost overrun of
f
49.000 crorcs
,
H
I
How
to
make the
government
an
efficient
spender
in
the
economy
? There are
myriads
road
proje
.
I issues
of
land
acquisition
,
inter
-
m inis
re
rial
coordination
and bureaucratic
delays
which
is
BOD
modi
I
inbuilt
in
any
government
functioning
,
Tire other
is
that
wc
have to learn from the Chinese
experience
in
infrastructure de
-
)
where
-
velopmeru
They
have
kept
the scale of
existing
ideas
,
instructive and unconventional
,
sector
|
something
as
ujibelievable
Globally
,
it was believed that trains
running
over 450
km
per
hour
was
technically
and
.
,
r
.
scientifically
not
possible
.
Die Chinese have
proved
every one
wrong
They
have constructed
I
Ground 17 bridges
over
one
river
which
is
100
years
maintenance
free
and
many
of
rhem
are
_
rhe
longest
in the
world
and
oomplcred
in
record time
,
also
hjvt
:
Qoij
;
ng
,
rhoir
capital
,
has
an
airport
which
is
bigger
than
Heathrow
of
London
and
they
are
«i
*
s
^
^
ent to mcct the
passenger
and
cargo
load for the next
25
years
Their
rail link
of
,
a
*
I
2000 from
majnland
China
to
Tibet
at
a
height
of over 15
,
000
ft
is
an
engineering
f
fear
in
itself
,
India
is
still
bogged
down
with
playing
around
with
existing
ideas
,
existing
knowledge
and
technology
. India
requires
innovative
infrastructure
,
the
impossible
infrastructure
,
J
beyond
conventional
and then
just
do
it
the
way
China
has
done and
thus
requires
,
1
.
-
0
S
infrastructure
visioning
,
making
it
a
-
political
,
cutting
across
political
panics
with
die
devd
p
ohjtct
vc of
providing
the
infrastructure
to
support
higher
rates
of
growth
and
at the
same
|
|
rime
not
only
world class
but
defining
newer
boundaries
of
infrastructure
3 9 1
#
^
1
62
-
ar
<
B
jjj
ENVIRONMENTAL
ISSUES
AND
INFRASTRUCTURE
A
still
larger
issue now
emerging
is the
Orissa
and
other
issue
MOW
r
J
in
Orissa
and
omer
H
around
the
infrastructure
projects
.
The
slJbii
<
also
the
nation
in terms
LiiWs
(
l
‘
projects
which
can
not
only
alter
the
face
rd
LVmit
>
ril
'
L
development
need
deeper
imrospcccion
I
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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THE
IND
IAN
E
CO
NO
M
,
iT
BU
C
tU
i
,
„
s
he
p
ore
nt
iaJ
0
K
-
viriu
ic
c
urb
an
de
^
*
«
-
*
*
;
•
bc
;
w
*
•
«
*
r
je
ts
How
ev
er
,
d
ew
lop
nie
nt
sho
uld
be
a
pri
me
co
nc
ern
d
earl
y
«
it
inv
olv
es ihc
p
eop
le
,
„
M
„
S
of
l
ive
liho
od
fo
r
th
em
as
fun
da
nic
ma
ll
)
m
or
e
im
|
ur
an
loda
y
1
,
nee
ds
to
b
e
rem
em
be
red
in m
in
d
rba
c
i
mp
rov
eme
nts
m
w
el fa
re
of
p
eop
le
S
tates
s
hou
ld
be
th
e
pri
me
co
ns
ide
rati
on
an
d
’
w
ay
out
’
sho
uld
be
f
oun
d
for
ad
dr
ess
in
g
th
e
env
iro
nm
ent
al
iss
ues
an
d
th
e
w
ay
out
sh
ou
ld
no
t be
by
abn
uio
n
ng
the
pr
ojec
t
bu
find
ing
b
e
w
ays
a
rou
nd
the
m
A
re
the
se
the
o
nly
en
viro
nm
en
tal
is
sue
s
?
Wh
at
ab
out
t
he
iss
ues
of sl
um de
velo
pm
ent
,
w
aste
man
age
men
t
b
ann
ing
u
se
of
pla
sti
cs
,
r
ura
l
/uth
an
h
ab
itat
ion
,
po
llu
ted
riv
en,
erosion
of
forest
cover
?
Are these
not
major
issues
?
Ind
ia
lia
s
my
ria
ds
of is
sue
s
of
une
mp
loy
men
t
,
acute
b
ack
wa
rdn
ess
o
f srate
s
,
d
eve
lop
me
nt
de
fici
t
,
inve
stm
ent
de
fici
t
dev
elo
pm
ent
di
vid
e
a
cros
s
ma
ny
sta
tes
a
nd
su
ch
ot
her
d
ivid
es
.
If
it
is
p
os
sibl
e
f
or
t
he
priv
ate
/
fo
reig
n
pla
yer
s to
pro
vid
e
ans
wer
s
fo
r su
ch
div
ides
,
ih
rii
pro
jec
ts
sh
ou
ld b
e
en
cou
rag
ed
ra
ther
rh
an
d
isc
ou
rag
ed
nd
a
w
ay
out
fou
nd
fo
r
the
m
.
Ib
is
is a
g
over
nme
nt
-
rela
ted
iss
ue
o
f
bein
g
sh
ort
si
ght
ed
in
the
gu
ise
of
env
iron
me
nta
l
iss
ues
ov
er
-
l
ook
ing
po
sitiv
e
and t
ang
ibl
e
w
elfa
re
g
ain
s
fo r
th
e
stat
es
a
nd
th
e
cou
ntry
i
s
a wh
ole ndi
,
rh
us
ha
s
a
num
be
r
of in
fras
truc
tura
l
re
late
d
i
ssu
es
w
hic
h
w
ill
sol
ely
get
co
mp
oun
ded
wi
th
inc
rea
sed
in
ten
sity as th
e
g
row
th
lev
els
b
egi
n to
acc
eler
ate
an
d
als
o
wi
th
the growing
population
exerting
greater
pressure
on
the infrastructure
Th
e
g
over
nme
nt
ca
n
als
o
co
nsid
er
of
hav
ing
a
se
para
te
b
udg
et fo
r
in f
ras
tru
ctu
re
.
Th
e
r
ai lw
ay
bu
dg
et
cou
ld
con
stit
ute
a
pa
rt
o
f this
b
udg
et
al
low
in
g
fo
r
gre
ater
c
om
ple
me
nta
rity
bet
we
en
v
ario
us
secto
rs
of
i
nfra
str
uc t
ure
T
her
e
is
a
n
eed
fora
grea
ter
bro
ad
-
b
ase
d
dis
cu
ssio
n
on
the
imp
era
tive
s
o
f
inf
ras
truc
tur
e
i
n
futu
re
as
othe
rw
ise
it
w
ill
be
com
e a
l
imi
ting
f
ac to
r
fo
r
gro
wth
.
a
s
V
P
OR
TS
IN
IN
DI
A
—
AN
EC
ON
OM
IC
PE
RS
PE
C
TIV
E
hr
^
^
t
T
li
Z
rh
°
re
a
d
°
,
h
«
«
«
“
^
nm
od
irte
«
volumes and
increase
cargo
movcmenTT
^
^
°
f
dcVcloPing
OUr
pom
to
handle
go
mo
vem
en
t
,
th
e
g
over
nme
nt
has
a
llo
wed
1
00
p
er
ce
nt
pri
^
ti
f
n
d
1
00
1
~
o
iner
<
«
I
cr
ce
nt
.
2
)
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h
T
o
i
ncre
ase
tn
glob l
shi
ppir
To
c
reat
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a
pc
2
5
MT
du
i
ij
)
To
brin
g
por
i
cap
ac
ity
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t
l
K
)
To
inc
reas
e
of
Ind
ian
sh
i
|
6
)
To
pr
om
ote
en
viro
nm
en
t
(
7
)
I
n
or
der
t
o p
c
oun
try
,
the
r
oute
f
or
:
•
Cap
tiv
e
•
Le
asin
g
c
•
L
eas
ing
c
•
Co
nst
r
ut
bu
lk/b
re:
c
ontat
nei
set
ting
u
As
way
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ce
nti
th
at
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i
nve
stin
g
e
nter
pris
es
w
hic
h
po
rts
,
in l
and
wat
In
dia
’
s
sh
ipp
ir
P
^
fog
re
spo
nsi
b
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«
o
r
wil
l
b
e
a
p
[
ser
vic
e
le
ve
ls
as wi
that
al
1
new
ma
jo
fc
6
s
tere
d
U
tld
cf
tD
r
“
’
’
ev
el
op
n
^
‘
“
“
blcro
proj
ee
8/17/2019 Indian Economy by Sanjeev Verma [Raz Kr]
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O
NO
y
i
,
uG
.
overn
^
on
wtw
ntry
the
th
e
tWt
P
^
plt
peop
le
and
ad
dres
sing
proje
ct
bu r
vcIo
pmjS
t
riven
v
elopm
ent
er
divid
es
,
ivides
,
thc
ii
o
r
diem
ir
onme
nnl
cou
ntry
u
i
ll
s
olely
g
el
d
a
lso
with
e.H
ie
lem
cnta
ftr
lrastrua
Utt
entry
opme
nt
o
f
expe
nse
pprov
ed
inor
valu
e
.
ties
are
a
ll
andle
la
^
p
n
^
NF
R
ST
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T
UR
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D
EVELO
PMEN
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wo
.
»
p
p
«
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pi
JL
t
L
g
^
tCr
4
To
inc
rease
India
’
s
s
hare
in
g
lobal
sh
ip
build
ing
t
5
^
^
1
,
3
To
creat
e
a
port
ca
pacity
of
aroun
d
3200
MT
ro
h
andle
the
e
xpecte
d
tr
affic
of
abou
t
2500
M
T
d
uring
20
20
.
(
4
)
T
o
b
ring
ports
at par
w
ith
the be
st
int
ernati
onal
po
rts
in
terms
of
perfor
mance
a
nd
c
apaci
ty
(
)
To
inc
rease
the
to
nn g
under
the
I
ndian
f
lag
a
nd
India
n
con
trol
and
a
lso
the
s
hare
of
India
n
s
hips
in
our cxim trade
61
To
p
romote
coast
al
ship
ping
as it
wil
l
hel
p
in
decon
gesti
ng
ou r
roads
a
nd
is
envir
onmen
t
frien
dly
.
fn
orde
r
to
pro
mote
private
participation
and
fore ign
direct
in
vestme
nt
FD1
in
the
c
ountry
th
e
Gove
rnmen
t
of
lndia
has
allow
ed
100
percent
FD
1
under
the
autom
atic
rou
te
fo
r
:
•
ptive
facil
ities
for
port
-
base
d indu
stries
•
Lea
sing
o
f
equip
ment
for
port
handl
ing
and
leasin
g
of
floati
ng
crafts
.
•
Lea
sing
of
exi
sting
as
sets
of
ports
.
•
Con
structi
on
/
crcat
ion
an
d
mainte
nance of
asset
s such
a
s
cont
ainc r
t
ermina
ls
bulk
/brcak
bul
k
/
mu
lti
-
purpo
se
a
nd
sp
eciali
zed
cargo
be
rths
,
w
areho
using
con
tainer
f
reight
s
tations
storag
e
faci
lities
and tank f
arms
handlin
g
equip
ment
setting
up
of
captive
power
plants
dry
docking
and
ship
repair
facilities
.
As
way
o
f
inc
entive
1
00
per
cent
exem
ption
fr
om
in
come
tax is a
lso
extend
ed to
co
mpanie
s
t
hat
arc
inv
esting
i
n
port
infr
astruc
ture
.
Fu
rther
a te
n
yea
r
tax
ho
liday
has
bee
n
g
iven
to
e
nterpr
ises
w
hich
arc
e
ngage
d
in
the
b
usines
s
of
de
velop
ing
ma
intaini
ng
and
ope
rating
p
ons
,
in l
and
wate
rways
and
inl
and
ports
.
India’
s
sh
ipping
m
inistry
is
con
siderin
g
in
rem
oving
the
ta
riff
fixi
ng
for
m
ajor
p
orts
Po
sing
r
espon
sibility
fo
r
this
t
o
th
e
po
rts
th
emse
lves
Ins
tead
a
ne
w
reg
ulator
for
the
S
tttor
w
ill
be
appo
inted
w
ho
w
ill b
e
res
pons
ible
for
setti
ng
mo
nitorin
g
and
regu
lating
service
le
vels
as
w
ell
as
techn
ical
and
per
forma
nce
s
tanda
rds
.
The
ministr
y
has
also
dec
ided
ha t
all
new
major
p
orts
would
be
constructed
through
a
corporate
structure
and
will
be
regis
tered
u
nder
the
C
ompa
nies
Ac
t
19
56
D
1
P
P
7
*
:
Co
nsoli
datctl
FDI
Po
licy
’
De
partm
ent
of
In
dustr
ial
Polic
y
a
nd
Promo
tion
P
ort
ev
elo
pme
nt
in
Tw
elfth
Fi
ve
-
Y
ear
Plan
^
j
r i
«
g
to
the
Plan
ning
Com
missio
n
ofln
dia
the
ca
pacity
of
In
dian
pons
will
^
”
^
MT
over
the
next
five
yea
rs
to
b
e
a
ble
£
th
e
o
}
lc
wtal
capacity of
the
port
sector
is
envisaged
to
be
2301
6
3
•
^
^
raJ
P
rojected
t
raffic
of
1758.
26
MT
by
20
16
-
2
017
as
pen
c
cent
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E
l
TH
E
IN
D
IA
N
E C
O
N
O
M
Y
[
k
o
f
th
e
pr
on
e
IQ
roadways
was
79
:
2
1
.
Th
e
r
ail
wa
ys
enj
oye
d
^
i
e
rat
io
of
Jrcight
rI
,
„
„
mM
U
mn a
nd
lo
np
hau
l
f
T
o
c
c
o
S
c
anto
a
s
w
ell
as
rer
ail
p
ar
ed
«
o
n
m
e
diu
m
a
nd
l
on
g
h
au
l
^
H
otv
ev
er
ov
er
th
e
last
60
-
od
d
ye
ars
,
t
he
rat
io
ha
s
b
een
co
mp
le
tel
y
r
eve
rs
ed
a
nd
no
w
r
e
*
L
tb
t
h
as
a
m
a
rke
t
s
ha
re
in
e
se
ess
o
f
8
0
p
er
c
ent
.
M
or
e
tm
ere
stt
ng
ly
,
r
oa
dw
ay
s
n
ow
h
,
,
p
er
cen
t
sha
re
of re
ta
il
p
arc
el
ca
rgo
t
ran
spo
rt
.
E
ven
in
bu
lk
m
ov
em
c
n
.
the
sh
tu
e
o
f
*
m
ov
em
ent
is
on
ly
35
pe
r
c
en
.
an
d
6
p
er
ce
nt
by
roa
d
.
In
C
hrn
a
fr
etg
h
m
o
ve
nte
nr
l
,
m
a
d
i
s
o
nly
2
2
p
er
cen
t
w
h
ile
i
n
U
S
it
is 3
7
pe
r
cen
r
.
I
bis
es
sen
tia
lly
tm
plt
os
tha
t
fre
ig
ht
movement
by
road
is
cheaper lhan
the
r
oil
in
I
nd
ia
un
lik
e
ot
her
c
oun
trie
s
suc
h
as
Ch
i
*
a
nd U
S
wh
ere
m
ove
me
nt
of
f
re
igh
t
by
rail
i
s
ch
ea
per
th
an
r
oa
d
.
T
hi
s
is
de
spi
te
th
e
fee
t
th
at
the
mo
vem
en
t
by
roa
ds
h
as
di
sad
va
nta
ges
,
su
ch
as
in
cl
em
en
t
w
ea
the
r
con
di
tio
ns
f
car
eo
fth
eft
.
ac
cid
en
ts
an
d
als
o in
vo
lv
es
inte
rsta
te
mo
vem
en
t
re
su
lti
n
,
in
cro
ssin
g
a
nd
c
he
cki
ng
at
oct
roi
c
hec
k p
oin
ts
,
w
hic
h
co
uld
r
esu
lt
in
h
ol
d
u
p
if
pa
pe
r
an
d
m
ate
ria
ls
a
re
n
ot
in
o
rde
r
.
roblems
of
Rail
reight
F
ir
st
a
nd
th
e
f
ore
m
ost
rea
son
for
this
is
t
he
h
igh
c
ost
of
r
ail
m
ove
me
nt
a
ris
ing
ou
t
of
po
lio
o
f
cro
ss
s
ub
sid
izat
ion
b
y
JR
.
P
ass
en
ger
fer
es
esp
ec
ial
ly
sl
ee
per
cla
ss
a
re
u
nd
erp
ric
ed
a
n
:
m
ad
e
u
p thr
ou
gh
in
cr
eas
ed
f
reig
ht
f
are
s
.
In
I
ndi
a
,
pa
sse
ng
er
ra
il
fe
res
are
hig
hl
y
pol
itic
al
^
en
sit
ive
.
H
ow
ev
er
,
th
is
i
s al
so
bec
au
se
of th
e
soc
ial
re
spo
ns
ibi
lity
c
har
act
er o
f
I
R
,
At
tl
x
sam
e
tim
e
,
a
ctu
al
c
ost
s
ho
uld
b
e re
cov
er
ed
.
If
f
ere
s
a
re
to
b
e
ke
pt
lo
w
,
eff
ort
s
sh
oul
d a
lso
be
m
ad
e to
b
rin
g
d
ow
n
cos
ts at
th
e
s
am
e
tim
e
.
If
pa
sse
ng
er
f
ere
s
a
re
to
be
lo
we
r
tha
t
costs
,
then
the
difference
should
be
recoverable
from
the
government
and
nor
from
freight
c
har
ge
s
.
Ac
co
rdi
ng to
t
he
fi
gu
res
c
om
pil
ed
by
th
e
W
o
rld
Ba
nk
,
th
e
f
rei
gh
t
rat
es
ch
ar
ged
by11
a
re
ex
tre
m
ely
h
igh
c
om
pa
red to ma
jor
fre
igh
t
ra
ilw
ay
s
suc
h a
s
U
S
Ra
ilr
oa
ds
,
C
hin
ese a
nd
R
uss
ian Ra
ilw
ay
s
.
I
n fac
t
,
th
e
rat
es
of
US
R
ail
roa
ds
a
re
o
nly
o
ne
-
f
ou
rth
of
t
hat
ch
ar
ge
d
by
IR
G
erm
an
y is
the
on
ly
cou
ntr
y
wh
ic
h
h
as
f
rei
gh
t
c
har
ge
s
h
igh
er tha
n
In
di
a
,
bu
t
it
is
n
ot
am
on
g
th
e
ma
jor
r
ail
wa
y
f
rei
ght
m
ov
ers
glo
ba
lly
.
T
his
is
ref
lec
te
d
in
a
fe ll
in
the
fere
-
freight
ratio
for IRover
the
last
five
years
from 0
,
32
®
0
,
2
6.
I
n
s
ha
rpe
on
tra
st
t
o t
his
,
t
hef
er
e
f
re
igh
t
r
atio
f
or
C
hin
a
is
1
.2
an
d
forS
ou
th Ko
rea
U
Td
ie
pa
^
eng
er
fer
es
to
fr
eig
ht
ra
tio
f
or
t
he
C
hi
ne
se
R
a
ilw
ay
s
i
s
fo
ur
ti
me
s
hi
gh
er
t
han
th
aid
n i
a
.
i
s
sho
w
s
tha
t
e
ven
a
C
om
m
un
ist
cou
ntr
y
su
ch
as
C
hi
na is
cha
rg
ing
r
em
un
era
d
*
0
m
^
nC
CW
O
rk
5
W
h
ic
h
d
ow
l
m
or
e
ef
fic
ien
t
th
an
th
at
oi
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IF
I
(
NFRASTRUCTUKE
DEVELOPMENT
I
*
«
2
S I
»
fc
*
•
*
•
•
p
”
'
«
<
J
*
artc
,
L
.
®
19
,
1
SlJ
^
bc
only
positive
factor
Mh
«
k
d
<
^
*
afa
^
“
“
“
oiWevjriAl
,
^
,
,
^
^
i
iv
*
i n
,
y
over
.
.
-
no
omy
positive
ractor
is
that
it
sloes
noi
have
variable
price
like
that
of
11
)
5
I tb
4
°
tW
,
r
1
l
)
t
u
-
i point
in
(
his is
the
diesel
and
electric
traction
cannot
be
seen
at
*
W
jgjjjk
lf
1
‘
.
St
hj
.
haul
-
^
d
nenv
—
w«
»
«
u
viceme
tuction
cannot
be
seen
as
alternates
ic
^
1
1
,
w
,
cllKius
anti
A
mix of
say
50
:
50
,
given
rhe
vulnerability
of
supply
and
prices
•
si
ZZZrfrZr
slv
-
5
Uttuf
SI
either
mode
is
another
method
,
the
objective
is
to
give
equal
imports
,
w
^
1
flexibility
of diesel
traction
is
Us
main
advantage
Diesel
traction is
highly
flexible
and
nsChj
as
indent
nesdu
up
,
if
our of
pd i
,
j
a
poliiS
f
IR
.
At ir.
should
ill
lower
duf
from
iretf
:
byl
chained
i
but
ith
*
Korci
thanth
*
c
o
*
*
*
?
°
£
<
ii
,
,
rtb
?
TO
•
*
«
*
»
P
*
~
n
«
f
mfet
lor
«
ben
6
pacta
,
a
„
j
freight
fjflit
hir
diced
traction.
/
Ulwatlng
5
|
*
cific
operetta
.
*
and
gcgrepl
,
-
,
,
ic
areas
ec
to
both
the
adiipwble
to future
technological
advancements
such as
the
'
fuel
cell
’
technology
posed
as
j
promising
alternative source
of
energy
in the
near
future
.
Under
this
technology
,
a
simple
device
combines
hydrogen from
a
variety
of
fuels with
oxygen from
air
to
produce
electricity
This requires
no
moving
parts
,
and does
not
produce
noise
or
smoke
.
Diesel
locomotives
can
be
easily
converted
by
replacing
engine with fuel cell
.
According
to the
International
Railway
Journal
,
fuel
cell trains
shall
be
a
reality
in
the
near
future
.
All
overhead
wires will then
become
redundant
A
breakthrough
has
already
been
achieved
by
BHEl
,
Hyderabad
.
As and
when
it is
imbibed
all
controversies
around
diesel
versus
electric
traction would cease
.
It is
ofvital
importance
that
for the
moment
,
we
do
not
ignore
the
fact
that
both diesel
as
well
as electric
traction
can
meet
the needs
of
the
1R
with
equal
efficiency
.
IF
electric
traction
Has a
high
capital
cost
,
diesel traction
is
highly
sensitive
to
diesel
prices
.
Had diesel
prices
been
that
of
the
eighties
,
one
could
say
diesel
i
preferable
but
not at
today
’
s
prices
.
Thus
,
there
should
be
no
attempt
at
developing
one
mode at
die
cost of the
other
.
Whatever
is the
mode
of
movement
either
by
road
or
rail
,
the entire
logistics
sector has
a
large
number
of
inefficiencies
,
as
a result
the
cost of
logistics
in
India
remains
high
at
13
-
14
per
cent
of
GDP
as
against
7
-
S
per
cent
of
GDP
in
developed
countries
including
China
.
Remedial
Measures
First
and the foremost
arc
the
passenger
fares
that
need
to
be
raised
to
cover
costs
of
*
t
Jj
J
t
_
«
.
AvifVL
i
kf
>
I
r
,
r
5t
me
roremosi
«
ue
sue
0
-
3
^
'
I
°
Pefat
'
ons
especially
for
steeper
class
in
general
.
Higher
classes
should
be
seen
from
the
-
v
-
i
il
commercial
angle
and
not
as
part
of
social
responsibility
If
at
al l
,
any
cross subsidization
1 J
m
utie
*
*
e
Z
JM
1
ol
a
?
,
“
mirncrcr
.
il
angle
anti
nor
M
YV
»
r
.
should
be
there
,
it
may
be
’
inter
class
'
,
between
sleeper
class
and
the
higher
classes
.
Secondly
,
it
needs
to
streamline
its
freight
operation
and
rafic
the
share
in
freight
Movement to
around
50
per
cent
from
the
present
level
of 35
per
cent
which
can
be
‘
one
through PPP
model
and
wherever
possible
rhrough
privatization
Towards
this
the
f
ovcrnmcnt has
taken
a
few
steps
in
recent
times
.
pnvate
Sector
Participation
,
.
r
,
imin
and
terminal
operations
to
b
'
dian
railways
has announced
opening
up
of
8
and
special
freight
tram
private
firms
.
Under
the
new
private
freight
terimn
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industrial
corridor
10
augment
and
create
THE
INDIAN
ECONO
*
*
social
and
physical
infrastructure
on
the
r
(
*
lt
CHA
p T E R
txsr
a
reliable
power
,
qual
^
M
;
mJ
provide
a
globally
eompetirive
environment
conducive
for setring
up
businesses
.
An
Investment
Region
would
be a
specifically
delineated
indnstnal
tegtonwtth
a
nunmrnn
,
area
of
over
200
sq
.
km
(
20
,000
hectares
)
,
while
an I
As
would
be developed
with
*
minimum
area
of
over
100
sq
. km
(
10
,
000
hectares
)
.
As
mentioned
earlier
,
it
is
very
ambirious
project
and
once
completed
it
will
redefine
freight
movement
,
providemultipliers
to
increase
growth
,
create
employment
opportunities
and also
the
beginning
of
making
IR
a
basis for
all
round
development
with
an
efficient
mode
of
state
-
of
-
the
-
art
transportation
facilities
.
Despite
these
recent
initiatives
,
there are
still other issues
which IR
needs to
address
over
a
certain
period
of
time
.
Railways
have to
become
a
part
ofa
holistic
‘
national
logistic
policy
’
covering
all
mode
of
transport
with
linkages
and
complementarities
between
rail
,
road
and
sea
.
Expansion
of
rail
network
should
keep
the
economic
rather
the
political
perspective.
The
government
should
expedite
establishing
rail
links
especially
in
th e
NEstatcs
and
also
with
neighbouring
countries
.
This
would
provide
for
better
links
and
relations
in
and
around
the
region
.
It
should
also
review
the
practice
of
having
a
separate
budget
fo r
railways
,
a
practice
initiated
by
the
British
rule
since
1924
.
Budgetary
allocation
made
to
defense
,
oil
sector
are
much
more
than
allocations
made
to
railways.
By
the
same
token
,
there
should
also
be
a
separate
budget
for
defense
.
Or
is
it
that
IR
is
more
important
than
defense
.
These
are
some
aspects
which
the
government
should
examine
.
To
conclude
,
railways
,
porss
and
roads
have
ro
become
a
parr
of
nrulri
modal
logistic
n
India
,
for
ach
.
ev
.
ng
efficiency,
cur
down
timeand
costs
,
in
tramportaiion
ofgoods from
he
producers
to
the
ultimate
user
both
in
India
and
overseas
an
TRAD
Having
discussc
bring
them
all
t
together
and
al
;
like
India
.
Contempon
growth
a
funct
overall levels
ol
post
-
independi
low
growth
.
Ir
through
this
C
)
Investment
ws
largely
by
the
such
economi
It
may
be
income
and
c
securities
sha