INDIA’S PERFORMANCE ON MDG’s

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India has halved its incidence of extreme poverty, from 49.4 per cent in 1994 to 24.7 per cent in 2011, ahead of the 2015 deadline set by the U.N.

The reduction in poverty is still less than that achieved by several of India’s poorer neighbours. Pakistan, Nepal and Bangladesh have each outstripped India in poverty reduction.

India is on track to achieving the hunger targets, the nation remains home to one-quarter of the world’s undernourished population, over a third of the world’s underweight children, and nearly a third of the world’s food-insecure people.

India has achieved 11 out of 22 parameters in the report — spanning education, poverty, health, education and so on — and is on track to achieve one more by 2015-end.

Though India has halved its incidence of extreme poverty, the nation is categorised as making “slow” progress on the other 10 parameters, including maternal mortality and access to sanitation

On the environment front, India is one of the few countries that have reduced its carbon dioxide emissions in relation to its GDP. India emitted 0.65 kg of carbon dioxide per $1 of GDP in 1990, which fell to 0.53 kg in 2010.

India is still lagging on several health parameters such as maternal mortality, infant mortality and basic sanitation.

Although the infant mortality rate fell drastically from 88.2 deaths per 1,000 live births in 1990 to 43.8 in 2012, the annual progress on this had been slow.

The same could be said for the maternal mortality rate, which fell from 560 per lakh live births in 1990 to 190 in 2013.

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INDIAN FOREX RESERVES

FOREX RESERVES

PHASE I- GENERAL AWARENESS

PHASE II- ECONOMIC AND SOCIAL ISSUES

TOPIC- BALANCE OF PAYMENTS

What are forex reserves?

Foreign exchange reserves (Forex reserves) are generally defined as assets held by RBI which is denominated in other foreign currencies.

Forex reserves include foreign currency assets, gold, special drawing rights (SDR) and reserve position in IMF.

  • Foreign currency assets are investments in foreign bonds, Tbills, deposits with foreign central banks etc.

It is maintained in major currencies like US dollar, Euro, Pound sterling, Japanese Yen etc and valued in terms of US dollar.

It accounts for around 89% of total forex reserves.

  • Gold reserves are passively managed by RBI and accounts for around 9% of total reserves.
  • SDR is international reserve created by IMF which is allocated as per the member country’s quota at IMF.
  • Reserve position in IMF is a reserve where India can draw upon to purchase other foreign currencies from the fund.

Generally, preferred level of forex reserves is that a country’s reserves should equal short-term external debt so that a country has enough reserves to resist a massive withdrawal of short term foreign capital1.

RBI publishes data on forex reserves every week (on Friday).

 Why maintain forex reserves?

  • To enhance capacity to intervene in foreign currency market.
  • To limit external vulnerability by proving foreign currency liquidity to help absorb shocks during times of crisis including national disasters or emergencies.
  • For backing domestic currency.
  • To maintain confidence in monetary and exchange rate policies.
  • To provide confidence to the markets especially international credit rating agencies that external obligations can always be met, thus reducing the overall costs at which foreign exchange resources are available to all the market participants.

 Trend in Forex Reserves

We can observe that India’s forex reserve has changed over the years.

  • In 1991, gold contributed to around 60% of the total forex reserves while foreign currency assets share was around 38%.
  • This has drastically changed over the years with gold share dropping to around 9% and foreign currency assets share increasing to around 89% in 2013.
  • See below for latest data

Chart below shows trend in forex reserves from 1991 till 2013.

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From the above chart, it’s seen that India’s forex reserves have increased significantly since 1991.

The level of forex reserves has steadily increased from US $ 5.8bn in 1991 to US $ 349bn in 2015.

India has the 8th largest Forex reserves.

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BREAK UP OF FOREX RESERVES ACCORDING TO THE DATA RELEASED ON 2 OCTOBER 2015

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Kindly note that the correct decreasing order of India’s FOREX composition is:

Foreign Currency Assets > Gold > SDRs > Reserve position in IMF

NATIONAL MANUFACTURING POLICY, 2011

PHASE I- GENERAL AWARENESS

PHASE II- ECONOMIC AND SOCIAL ISSUES

ECONOMIC REFORMS- INDUSTRIAL POLICY

NATIONAL MANUFACTURING POLICY

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Summary

  • Manufacturing’s share in India’s GDP has been stuck at 16% since the 1980s.
  • The policy aims to increase the share of manufacturing in the country’s GDP from the current 16% to 25% by 2022.
  • It aims to create 100 million additional jobs in the next decade.
  • It envisages establishment of National Investment and Manufacturing Zones (NIMZ) equipped with world-class infrastructure that would be autonomous and self-regulated developed in partnership with the private sector.
  • Each National Investment and Manufacturing Zones to have 5,000 hectares.
  • Land will be selected by State Governments. Preference would be given to uncultivable land.
  • Both state and central Government would fund trunk infrastructure.
  • The policy embodies an easy exit policy and single window clearance in zones
  • The NIMZ would be managed by special entity
  • The policy has envisaged fiscal sops to boost manufacturing.
  • Small & medium enterprises to be reimbursed for technology purchase.
  • Industrial training and skills development programmes
  • Flexible labor laws and simplified & expeditious exit mechanism for sick units
  • Relaxation in environmental regulations
  • Financial and tax incentives to small and medium enterprises
  • Incentives to states for infrastructure development
  • Incentives for Green Manufacturing
  • Rationalization of business regulations to reduce burden of procedural and regulatory compliance on businesses
  • Increased focus on employment intensive industries, capital goods industry, industries with strategic significance and those in which India enjoys a competitive edge and the SME sector.
  • Make industrial land (land acquisition) available through creation of land banks by states.

How the Policy would achieve the above objectives?

  • Foreign investments and technologies will be welcomed while leveraging the country’s expanding market for manufactured goods to induce the building of more manufacturing capabilities and technologies within the country.
  • Competitiveness of enterprises in the country will be the guiding principle in the design and implementation of policies and programmes.
  • Compliance burden on industry arising out of procedural and regulatory formalities will be reduced through rationalization of business regulations.
  • Innovation will be encouraged for augmenting productivity, quality, and growth of enterprises; and Effective consultative mechanism with all stake holders will be instituted to ensure mid-course corrections.

Which Industry verticals will be give special attention?

  • Employment intensive industries such as textiles and garments; leather and footwear; gems and jewellery; and food processing industries
  • Capital Goods such as machine tools; heavy electrical equipments; heavy transport, earth moving and mining equipments.
  • Industries with strategic significance such as aerospace; shipping; IT hardware and electronics; telecommunication equipment; defence equipment; and solar energy.
  • Industries where India enjoys a competitive advantage such as automobiles; pharmaceuticals; and medical equipment.
  • Small and Medium Enterprises: The Small and Medium Enterprises (SME) segment of manufacturing has in particular attracted due attention in the new policy as can be seen from the various financial and development incentives that have been envisaged therein. The need for special focus on the segment arises from the fact that currently, 8% of overall GDP, 45% of manufacturing output and 40% of the country’s exports originate in more than 26 million SME units across the country. These SME units are engaged in the production of more than 6000 products, 22% of which are food products, 12% are chemicals and chemical products, 10% basic industry metals, 8% metal products, 6% each of electrical and machinery parts and rubber and plastic products (36% of miscellaneous products).
  • Public Sector Enterprises specially in defense and Energy sectors.

THE FRBM ACT

PHASE I- GENERAL AWARENESS

PHASE II

ECONOMIC AND SOCIAL ISSUES

FISCAL POLICY

FINANCE AND MANAGEMENT

THE UNION BUDGET- FRBM, ETC

FISCAL RESPONSIBILITY AND BUDGETARY MANAGEMENT ACT (FRBM)

Fiscal Responsibility and Budget Management (FRBM) became an Act in 2003.

Background

Indian economy faced with the problem of large fiscal deficit and its monetization spilled over to external sector in the late 1980s and early 1990s.

The large borrowings of the government led to such a precarious situation that government was unable to pay even for two weeks of imports resulting in economic crisis of 1991.

Consequently, Economic reforms were introduced in 1991 and fiscal consolidation emerged as one of the key areas of reforms.

After a good start in the early nineties, the fiscal consolidation faltered after 1997-98. The fiscal deficit started rising after 1997-98. The Government introduced FRBM Act,2003 to check the deteriorating fiscal situation.

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Objectives

  • To ensure inter-generational equity in fiscal management,
  • Long run macroeconomic stability,
  • Better coordination between fiscal and monetary policy, and
  • Transparency in fiscal operation of the Government.

FRBM Act provides a legal institutional framework for fiscal consolidation.

Provisions:

  • Reduction of fiscal deficit to 3% of the GDP by 2008-09 with annual reduction target of 0.3% of GDP per year by the Central government.
  • Revenue deficit has to be reduced by 0.5% of the GDP per year with complete elimination to be achieved by 2008-09.
  • The Act binds not only the present government but also the future Government to adhere to the path of fiscal consolidation.
  • The Act prohibits borrowing by the government from the Reserve Bank of India, thereby, making monetary policy independent of fiscal policy.

The Act bans the purchase of primary issues of the Central Government securities by the RBI after 2006, preventing monetization of government deficit.

  • The Act also requires the government to lay before the parliament three policy statements in each financial year namely Medium Term Fiscal Policy Statement; Fiscal Policy Strategy Statement and Macroeconomic Framework Policy Statement.
  • It is now mandatory for the Central government to take measures to reduce fiscal deficit, to eliminate revenue deficit and to generate revenue surplus in the subsequent years.
  • The Government can move away from the path of fiscal consolidation only in case of natural calamity, national security and other exceptional grounds which Central Government may specify.
  • It is the responsibility of the government to adhere to these targets. The Finance Minister has to explain the reasons and suggest corrective actions to be taken, in case of breach.

Implementation

Government of India was on the path of achieving this objective right in time. However, due to the global financial crisis, this was suspended and the fiscal consolidation as mandated in the FRBM Act was put on hold in 2007-08.

The crisis period called for increase in expenditure by the government to boost demand in the economy. As a result of fiscal stimulus, the government has moved away from the path of fiscal consolidation. However, it should be noted that strict adherence to the path of fiscal consolidation during pre crisis period created enough fiscal space for pursuing counter cyclical fiscal policy.

Amendments to FRBM Act

Through Finance Act 2012, it was decided that in addition to the existing three documents, Central Government shall lay another document – the Medium Term Expenditure Framework Statement (MTEF) – before both Houses of Parliament

Amendments to the FRBM Act were introduced subsequent to the recommendations of 13th Finance Commission.

Concept of “Effective Revenue Deficit” and “Medium Term Expenditure Framework” statement are the two important features of amendment to FRBM Act in the direction of expenditure reforms.

Effective Revenue Deficit is the difference between revenue deficit and grants for creation of capital assets. This will help in reducing consumptive component of revenue deficit and create space for increased capital spending. Effective revenue deficit has now become a new fiscal parameter.

“Medium-term Expenditure Framework” statement will set forth a three-year rolling target for expenditure indicators.

As per the amendments in 2012, the Central Government has to take appropriate measures to reduce the fiscal deficit, revenue deficit and effective revenue deficit to eliminate the effective revenue deficit by the 31st March, 2015 and thereafter build up adequate effective revenue surplus and also to reach revenue deficit of not more than 2 % of Gross Domestic Product by the 31st March, 2015 and thereafter as may be prescribed by rules made by the Central Government.

Further, the Central Government may entrust the Comptroller and Auditor-General of India to review periodically as required, the compliance of the provisions of FRBM Act and such reviews shall be laid on the table of both Houses of Parliament.

Vide the Finance Act 2015, the target dates for achieving the prescribed rates of effective deficit and fiscal deficit were further extended. The effective revenue deficit which had to be eliminated by March 2015 will now need to be eliminated only after 3 years i.e., by March 2018. The 3% target of fiscal deficit to be achieved by 2016-17 has now been shifted by one more year to the end of 2017-18.

UIP AND MISSION INDRADHANUSH

BELOW IS A SNIPPET FROM THE DOCUMENT ON GOVERNMENT SCHEMES AND PROGRAMMES THAT HAS BEEN COMPILED UNTIRINGLY BY OUR TEAM!

PHASE I- GENERAL AWARENESS

PHASE II- ECONOMIC AND SOCIAL ISSUES

TOPIC- SOCIAL SECTORS IN  INDIA- HEALTH

Universal Immunization Programme (UIP)

  • Immunization programme was introduced in 1978
  • Became universal in 1985
  • Government of India is providing vaccination to prevent seven vaccine preventable diseasese.
  • Diphtheria,
  • Pertussis,
  • Tetanus,
  • Polio,
  • Measles,
  • severe form of Childhood Tuberculosis and
  • Hepatitis B
  • In addition, Japanese Encephalitis (JE vaccine) vaccine was introduced in 112 endemic districts in campaign mode in phased manner from 2006-10 and has now been incorporated under the Routine Immunization Programme
·         4 new vaccines have been added as part of this programme (July 2014)

·         These are:

·         Rotavirus vaccine

·         Rubella vaccine

·         Polio (injectable) vaccine

·         Adult vaccine against JE

MISSION INDRADHANUSH

  • Launched in 2014 by Ministry of Health and Family Welfare
  • To achieve target of full immunisation of un-vaccinated subjects from 7 diseases by 2020.
  • ‘Mission Indradhanush’ will be a nationwide initiative with a special focus on 201 high focus districts.
  • These districts account for nearly 50% of the total partially vaccinated or unvaccinated children in the country.
  • Out of 201 districts, 82 districts are from 4 states of UP, Bihar, Rajasthan and MP, which are nearly 25% of the unvaccinated or partially vaccinated children of India.mi1
  • Mission Indradhanush will provide protection against seven life-threatening diseases (diphtheria, whooping cough, tetanus, polio, tuberculosis, measles and hepatitis B).
  • In addition, vaccination against Japanese Encephalitis and Haemophilus influenza type B will be provided in selected districts of the country. Vaccination against tetanus will be provided to the pregnant women.
  • The Mission focuses on interventions to rapidly increase full immunization coverage of children by approximately 5% annually and to expand full immunization coverage to at least 90% children in the next five years.
  • WHO, UNICEF, Rotary International and other donor partners will provide technical support for Mission

    Four special vaccination campaigns will be conducted from 7th of every month staring from April, 2015 and this will cover all children less than two years of age and pregnant women for tetanus toxoid vaccine in these selected 201 districts.

BUDGET 2015-16- KEY POINTS PART 2

PHASE I- GENERAL AWARENESS

PHASE II

PAPER- FINANCE AND MANAGEMENT

TOPIC- UNION BUDGET

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Kindly note the following points:

  • Additional 2% surcharge on people earning above Rs 1 cr
  • Wealth tax abolished
  • DTC (Direct taxes Code) dropped
  • To lower corporate tax to 25% over the next 4 years
  • GAAR implementation to be deferred by 2 years to April 2017
  • Service tax rate hiked to 14% from 12.36%
  • To achieve fiscal deficit target of 3% of GDP by 2017-18 (3.9% in 2015-16 and 3.5 % in 2016-17)
  • Revenue deficit to be 2.8% in 2015-16
  • Current Account Deficit to be below 1.3% of GDP for 2014-15
  • GST to be put in place by 1st April, 2016

Budget 2015-16 – Key points Part 1

PHASE I- GENERAL AWARENESS

PHASE II

PAPER- FINANCE AND MANAGEMENT

TOPIC- THE UNION BUDGET

budget 2

On the revenue side, kindly note that Corporation Tax is expected to fetch 20 paise and Income Tax 14 paise in 2015-16. 

Borrowing and other liabilities is expected to form the major chunk of 24 paise.

On the expenditure side, States’ share of taxes and duties is expected to occupy the major share of 23 paise followed by Interest Payments 20 paise

ALL ABOUT SUSTAINABLE DEVELOPMENT GOALS (SDG’S)

PHASE I- GENERAL AWARENESS

PHASE II- ECONOMIC AND SOCIAL DEVELOPMENT

ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

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What are the Sustainable Development Goals (SDGs)?

Twenty years after the Rio Summit, the world met in June 2012 at the UN Conference on Sustainable Development, the so-called Rio+20.

The key takeaway was a document titled The Future We Want, in which the idea of a new agenda for the post-2015 era was posted.

World leaders committed to migrate from the Millennium Development Goals (MDGs) to the SDGs.

An Open Working Group of nations was set up, and the next three years saw negotiations leading to a 24-page document including 17 Sustainable Development Goals with 169 targets.

The SDGs are to be achieved between January 2016 and 2030.

What are these 17 goals?

1) End poverty in all forms;

2) end hunger, achieve food security and improved nutrition and promote sustainable agriculture;

3) ensure healthy lives and promote well-being for all ages;

4) ensure inclusive and equitable quality education;

5) achieve gender equality and empower all women and girls;

6) ensure availability and sustainable management of water and sanitation for all;

7) ensure access to affordable, reliable, sustainable and modern energy for all;

8) promote sustained, inclusive and sustainable economic growth, full and productive employment;

9) build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation;

10) reduce inequality within and among countries;

11) make cities and human settlements inclusive, safe, resilient and sustainable;

12) ensure sustainable consumption and production patterns;

13) take urgent action to combat climate change and its impacts;

14) conserve and sustainably use the oceans, seas and marine resources;

15) protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss;

16) promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels;

17) strengthen the means of implementation and revitalize the global partnership for sustainable development.

How are SDGs different from MDGs?

To begin with, much of the world, including the developing world for whom the MDGs were designed, heard of them towards the end of the 15-year period during which they were to be achieved.

SDGs have seen much more effective consultation.

SDGs are also wider in nature, and include, for the first time, specific goals on economic indicators.

They also offer a paradigm shift in tune with a world in flux, where new groupings of nations seem set to render the old world order of western dominance obsolete.

But most significantly, the SDGs are universal — they are for all nations, not just for the developing world.

While this ensures unprecedented accountability, the universality principle has also become contentious: the G77 and China, or the “developing nations”, expect the principle of Common But Differentiated Responsibilities (CBDR) to apply to the SDGs. [CBDR means that while the responsibility towards the Earth is commonly shared, it is the developed countries, in view of their historical and greater contribution to environmental degradation, that must do the heavy-lifting of responsibility.]

Additionally, as resource mobilisation for implementing the SDGs will focus on nations’ capacities instead of the traditional categorisation of ‘developed’ or ‘developing’, the old North-South relationship could be challenged over the next 15 years.

What will be the constraints?

The UN’s description of the MDGs as the most effective anti-poverty initiative in history notwithstanding, there has been little international assessment of their overall impact. The SDGs, for now, also suffer from lack of clarity on evaluation, accountability and transparency, though these are to be addressed soon.

There are other worries: 17 seems too many, and 169 target indicators might be difficult to monitor even for countries with good data collection mechanisms. The big concern, though, remains resources.

The inclusion of the chapter on the ‘Means of Implementation’ — basically a framework of financial resources and technology transfer to developing nations, and structural reform of international financial and trade architectures — nearly caused the three-year negotiations on the SDGs to collapse when the developed world resisted.

ALL ABOUT ASTROSAT

PHASE I- GENERAL AWARENESS
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In its thirty first flight (PSLV-C30) conducted on September 28, 2015,  India’s Polar Satellite Launch Vehicle successfully launched ASTROSAT, the country’s Multi Wavelength Space Observatory along with six foreign customer satellites.
This was the thirtieth consecutive success for PSLV.

PSLV was launched in its heaviest ‘XL’ version with six strap-on motors of the first stage.

Through 30 successful flights during 1994-2015 period, PSLV has launched a total of 84 satellites including the latest seven satellites successfully launched.

The vehicle has repeatedly proved its reliability and versatility by successfully launching satellites into a variety of orbits including polar Sun Synchronous, Geosynchronous Transfer and Low Earth orbits of small inclination thereby emerging as the workhorse launch vehicle of India.

So far, 51 satellites have been launched by PSLV for customers from abroad.

ASTROSAT is India’s first dedicated multi wavelength space observatory. This scientific satellite mission endeavours for a more detailed understanding of our universe. ASTROSAT is designed to observe the universe in the Visible, Ultraviolet, low and high energy X-ray regions of the electromagnetic spectrum simultaneously with the help of its five payloads.

ASTROSAT was realised by ISRO with the participation of all major astronomy institutions including Inter University Centre for Astronomy and Astrophysics (IUCAA) of Pune, Tata Institute of Fundamental Research (TIFR) at Mumbai, Indian Institute of Astrophysics (IIAP) and Raman Research Institute (RRI) of Bangalore as well as some of the Universities in India and two institutions from Canada and the UK.

ALL ABOUT INS KOCHI

PHASE I- GENERAL AWARENESS

INS Kochi is the second ship of the Kolkata-class (Project 15A) Guided Missile Destroyers.

The first of this class, INS Kolkata, was commissioned in August last year.

The third warship, INS Chennai, will be inducted towards end-2016.

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Designed by the Navy’s in-house organisation, Directorate of Naval Design, and constructed by Mazagon Dock Ship builders Ltd in Mumbai, the ship is christened after the vibrant port city of Kochi.

With a displacement of 7,500 tons, the majestic ship spanning 164 metres in length and 17 metres at the beam, is propelled by four gas turbines and designed to achieve speeds in excess of 30 knots.

The ship has a complement of about 40 officers and 350 sailors 

The ship is one of the few warships of the world and the second in the Indian Navy to have Multi-Function Surveillance and Threat Alert Radar to provide target data to Long Range Surface to Air Missile system. 

Destroyer INS Kochi has the motto: Jahi Shatrun Mahabaho (Armed to conquer the enemy)!