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Registered Office: 14 Local Shopping Centre, Panchsheel Park, New Dethi 110 017, India Laser typeset by Tantla Composition Services, Chandigarh Printed in India at Gopsons Papers Limited€.160__ThePearson General Knowledge Manual [. The expanses of water {b) Mizoram {ch Nagave (9) Jhunjhunw, surrounding the Peninsula (©) Tepura 239, Which of the following mountains 11. The Himalayan Mountains (d) Arunachal Pradesh are the oldest according to I, The vastness of the country | 235. Teosta forms a part of which major geological history? IV, The presence ofthe Indian fiver system? {a} Nilginis Ocean (a) Ganga (b) Krishna tb} Satpura Range wa wn (2) Cooney (@) Brahmaputr to) Windhyas {3} Vand md All four 236. What isthe mast important ‘dt Arwvall 231. The ‘Khetri Project’ in Rajasthan is geographic use of the Himalayas to | 240. Which amang the following is the for the production of indiat biggest city of Inca? fa) Zine (b) Steel {a) Prevention of invasians fa) Mumbai (b) Bangalore (©) Copper (d) Aluminium (b) Valuable source of timber fe) Anand (d) Noida 232, By what name is the Ganga known {(c} They prevent the monsoons 241. Which of the following peninsular in Bangladesh? {rom crossing to the non and fiver i westward flowing? (a) Padma ao serve as a reseroir of a Mahenad! (b) Godevarl (b) Bhagirathi water from which our perennial ted Tapti (d) Cauvery (©) Rupnarayan rivers flow , (@) Nubra {) They protect India from the icy | 242+ WwhiER place in India is famous for 233. Which state leads in the production cold north winds far Bangalore of tobacco 237. Nuclear Power Station in Rajasthan {tb} Chandigarh (a) Andhra Pradesh: sated at 4c) Ahmedabad {b) Madhya Pradesh (a) Kora te) Luckresw (e) Punjab {b) Pokhara vat i (¢) Uttar Pradesh {e) Ranatbhata 303, tore aie nea would you 234, Which of the following do not (a) Jaioue ‘a1 Himalayan region have a cornmom boundary with | 238. Rajasthan has rich deposit of copper 1b} Peninsuloe Plateae Bangladesh? in dlarct of {e) Valleys (a) Meghalaya (a) Jaipur, (b} Bikaner Ad) Everywhere 16) 2.0) B® 46 S@) ® 26 &@ 9b We) La 2 Ba MWe Iw ® 7G %e Me me 2@) 20) BA) HA | @ 2% @) BW) 3, 3h@) 52G) RE) 3S Ga} ©) 2) RE) — 4H Oo) hb) OH) 0) AT) RG) A) 50. © he) SR) SEG) Sw) (2) Sd) BH) B.S) 80. oe) BA) ORG) BHO) (0) 6) GR) 69. Ga) 70. @) TG) AHH) TE) 2) TE) TH) TS) 8B ® Ri) BY BL) BR © A RG) BHD — WD) 924) 9) RBG.) (@)— 102.(a) 103. (2) 10H.) 10S. (GH) 106. (a) 107.) ORs) 08. LO. (@) © 1b) AG UG) US) GHA) BR), DG) ) 2) 1) SG) HG) G28. 180.) © M6 6 BL 26 BO BL BLO BO 10. 2) A) SD.) (ASR) ISK) SH. (@) TSS.) HSH (&) AS (@) SB HY SH) HHH. (a) ©) 162, (8) 163. (>) 16K. (O) 16S. (0) HO. (e) HT. Ge) 168, bY 169. )——A7O. Co), G@) AG) Ge) ATG) 17K (a) ATH (BY AT. TRH.) ABD. (0), (©) ) 18. 1H.) 18S.) 18H. Cb) AT. Ge) BB (YB. G) 9H. 191. (@) 192193. (0) 1H) 19) HL] ) 1H) 19% (a)——-20, (OY 201. (b) 202. (a) 203. (4) 204. (e) (©) 206. (6) 207. fe) 208 (a) 308. (a) 210. (a 2H) BIR (c) HBG) A (a) IS) 6. (YH) MR Ga) NH (e)——-2O. (HY NL) A) 2B.) A) «MS — DE) I.) BR (280. 23 (©) BZ (a) 233. (a) TH. IS.) 236. (©) (BSH (DBR (24D. (a 2A (6) BAB (DY 2B. CO)Text Highlights Planning in India Currency System Public Fir Banking System ne Disinvestment Policy Indian Economy Stock Exchanges Mints and Presses Industrial Finance Institutions Industries Mixed Economy A policy of mixed economy is followed in the country. In a mixed economy, the public sector (Govemment- owned) business enterp [EUPEANNINGININDIA — 1.1 Historical Background 1934 1M, Visvesvaryyainhisbook Planned Economy af India advoosted necessity of planning inthe country much before Independence. Planning and Development Department was set up under the chairmanship of A. Dalal Interim government set up the Planning ‘Advisory Board. Economic Programme Committee was set up under the ehairmanship of Pt Jawaharlal Nehru. Planning Commission was set up after Independence. 1944 1946 1947 1950 3 1.2 Planning Commission Year of Constitution In March 1950, Government of India constituted statutory body, with the Prime Minister of India as its chairman, called the Planning Commission of India, es exist alongside private sector to achieve a socialistic pattern of society state. ‘The Planning Commission was set up in accordance with Article 39 of the directive principles of the Constitution of Indi First Chairman Pt Jawaharlal Nehru was the first Chairman, ‘of the Planning Commission by virtue of his being the Prime Ministerof India. Funetions (@ Assessment of the material, capital and human resources of the country, including technical personnel, and formulation or proposals for augmentation of such resources. Gi) Formulation of plans for effective and balanced utilization of resources. (Gii)_ Defining stages in which the plan should’be carried out, iv) Determination of nature of the machinery necessary for implementation ofthe plans, (8) Appraisal from time to time of the progress achieved.€.162_ThePearson General Knowledge Manual (si) Public cooperation in national development. (vit) Perspective planning, National Planning Council Is an advisory body attached to the Planning Commission and was established in 1965. It includes experts representing a cross-section of the Indian cxonomy. National Development Council Chief Ministers of the states logethet with the members of the Planning Commission constitute the National Development Council. The Prime Minister of India presides over the Council 1.3 Five-Year Plans The development plans drawn by the Planning Commission to establish India’s economy in phase of five-ycars periods are called Five-Years Plans. The organizations set up to formulate hase eeonomie policies, draft plansand wateh its progress and implementation consist of: (2) Planning Commission of India (b)_ National Plasiting Courscil (¢) National Development Council and State Planning Commissions In India, we have opted for a five-year medium term plan, anchored in a rolling prospective plan normally, of 18 years as an instrument for bringing about planned soci economic development. So far, nine five year plans have been implemented and we are in the midst of the Tenth Five Year Plan. A Five-Year plan is an indieative plan of aetion over the ensuing five years reflecting largely the intent ofthe Goverment for that period at the national, regional and the sectoral level. The provisioning of the indicated plan outlay and the annual break-up of the physical targets in respect of various Programmes and schemes, if any, are operationalised through, allocations made in each of the anmual plans eonstituting that petiad. Plan outlays by heads of development for Centre, States, and UTS for the successive five year plans are followed by the ‘underlying financing pattem of the public sector plans. Keeping in view the large-scale imports of foodgrains in 1951. and inflationary pressures on the economy, the First Plan (1951-56) accorded the highest priority to agriculture as weil, as irrigation and power projects, About 44,6 percent ofthe total outlay of Rs 2,069 crore in the public sector (later raised to Rs. 2,378 crore) was allotted for such development. The Plan also ‘timed at inereasing the rate of investment from five to about sever percent of national income. TableC.6.1 Five Year Plan Outlays (in crores) Five Year Period Oaitoys Plan Cente Sates Uh Tot First Plan 1951-36 1,241.00 328.00 2,069.00 Second Plan 1956-61 258912 2240.88 = 4,800 “Third Phan 1961-66 3,600.00 3728.00 175.00 7,500.00 Fousth Plan 1969-74 8870.00 6606.47 428.00 15,902.16 Fifth Plas 1974-79 19,984.10 18,265.08 634.06 38.88324 Sinth Plan 1980-8 47,250.00, 48,600.00, 1,650.00 97,500.00, Seventh Plan 1045.90 95,534.00 30.6980, 3,788.00 180,600.00 gt Plan 1992-97 247,865.00 179,985.00 6.25000 444,100.00 ‘ih Plan 1997-2002 489,301.00 369,839.00 . 83920000 ‘Fen Plan 2002-2007 8.93,83.00 632,456.00 525,039.00 1,212,802 Eleventh Plan 2007-2012 21,56,571.00 1.48,88.47.00 364471800) * The state outlay for Sth Plan includes the Figure of UT : Table C.6.2 Annual Plan Qutlays (én crores) “tnnnal Period ‘Ouitags Plan Centre States Us Total ‘Annual Plan 1966-67 1,089.37 931,72 0043 2081.34 Annieal Plan 1967-68 1417200 1010.00 64.00 2,246.00 Anowsal Plan 1968-69, 132000 974.00 65.00 2,359.00 Annual Plan 1979-80 64181 3,910.33 2749 12,549.63First plan (1931-52 t0 1955-56) Objectives It gave priority to development of agriculture, irrigation, power and transport in onder to-ereate a base forrupid industrial growth ofthe country. Achievernents (1) National income rose 18 percent (2) Percapits income rose LI per cent (3) Foodgrain production rose 20 per cent (A) Industrial preduction rose 38 per cent (5) A number of river valley and multipurpose projects were undertaken like Bhakra Nangal, Damodar Valley, Hirakund Valley projects ete (6) Prices came down by about 13 percent Second Plan The Second Five-Year Plan (1956-57 to 1960— 61) sought to promote a pattern of development which would ultimately lead to the establishment of a socialistic pattem of society in India. Its main sims were (i) An inerease of 25 per cent in the national income; (ii) Rapid industriatizaion with particular emphasis on the development of basic and heavy industries; (ii) large expansion of employment opportunities; and (iv) Reduction of inequalities im income and wealth, and a mare even distribution of economic power. The Plan also, aimed at increasing the rate of the investment from about 7 per sent of the national income to 11 per sent in 1960-61, It aid special stress on industrialization, increased production of iron, and steel, heavy chemicals including nitrogenous ferti and development of beavy engineering and machine-bul industry. Objectives Its broad objective was the establishment of a socialistic pattern of society, It aimed at rebuilding rural India, development of basic and heavy industries and enlarging scope of public sector, ‘Achievements National income rose 19.5 per cent. Per capital income rose & per cent. tndustrial production went up 7 per cent Three steel plants were undertaken in the public sector viz., (2) Durgapur 2) Bhilai and (3) Rourkela, Third Plan The Thiré Plan (1961-62 to 1965-66) aimed at securing a marked advance towards self-sustaining growth, Its immediate objectives were to : (i) Secure an increase of five per cent per annum in the national income and atthe same time ensure a pattem of investment which could sustain this rate of growth during subsequent Plan periods; (ii) Achieve self sulicieney in foodgrains snd increase agricultural production to meet the requirements of industry and exports; (ii) Expand basic industries like steel, chemicals, fuel and power, and to establish machine-building capacity so that the requirements of further industrialization could be met within a period of 10 years or so, mainly, from the country’s own resources: fe fully the manpower resources of the country and censure substantial expansion in employment opportunities; and (v) Establish progressively greater equality of opportunity, nd bring about reduction in disparities af income and wealth, and 4 more even distribution of economic power. The Plan simed at increasing the national income by about 30 per cent from Rs 14,500 crore in 1260-61 10 about Rs 19,000 crore by i Indian Economy C163 1965-6 (at 1960-61 prices) and per capitaincome by about 17 percent from Rs 330 to Rs 385 during the same period. ‘Objectives It represented the first step towards long term. development of the economy by (i) Augmenting agricultural production in order to secure self-sufficiency in foodgrains and to meet the requirement of exportand industry. i) Development of basic industries in such a manner 20 as to effectively meet within a period of next ten ycars or so, the requirement of further industralization from ocal resources. Aili) Fallest utilization of manpower resources and generating employment opportunities (iy) Reduce disparities in income of different sections of soviety and equitable distribution of economic power to provide equality of opporunit (8) Achieve minimum $ per cent per annum growth in the National Income and to devise the pattem of investment so as to ensure the proposed rate of growth in faturc plan periods. Drawbacks ‘The Chinese aggression and Pakistan conflict affected the progress of the Third Plan; asa result: (@) Price increased by 32 percent (b) Agricultural production fell by 30 percent (©) Pet capita income fellby about 2 per cent Achievements Despite the economic problems generated by ‘external conflicts, the achievements ofthe Third Plan include. (2) Growth in Industrial production by about 7.9 per cent (b) Introduction of bonus for industrial werkers.. (©) Malaria eradication and Family Planning campaigns ‘were initiated ona large scale. Plan Holiday (1966-67t01968-69) Owing to war with Pakistan and other factors, the formulation of the Fourth Five- ‘Year Plan was delayed, Instead, three Annval Plans were made and implemented. During these Annual Plan periods the Rupee had to be devalued but it helped in increasing agricultural production and overcoming recession. This paved the way for the implementation of the Fourth Fives Year Plan. The situation crested by the Indo-Pakistan conflict in 1965, two successive years of severe drought, devaluation of the currency, general rise in prices and erosion of resources available for Plan purposes delayed finalization of the Fourth Five-Year Plan, instead, between 1966 and 1969, three Annual Plans were formulated within the framework ofthe draft outline ofthe Fourth Pian. Fourth Plan (1969-74) Aimed at accelerating the tempo of development and reducing fluctuations in agricultural production as well asthe impact of unceriaintics of foreign aid. Tt sought to raise the standard of living through programmes designed to promote equality and social justice. The Flan particular emphasis on improving the condition of the less privileged and weaker sections especially through provision of ‘employment and education. Efforts were also directed towards reduction af concentration and wider diffusion of wealth, income and economic power.C.A64 The Pearson General Knowledge Manual Objectives (i) To achieve self-reliance in agricultural and industrial production. (ii) Toenlarge the income of rural popalation. (iii) Tocolarge supply of goods wf mass consumption (ie) Ta limit growth of population Achievernents It failed to achieve the targets. Agricultural production growth was only 2.8 per ent per annum Industrial output growth was only 3.9 per cent per annum. Overall economy averaged at 3.3 per cent per annum, but it was an ‘important period, for it brought a scientific temper to Indian, agriculture Filth Plan (1974-79) was farmuloted against the backerop of severe inflationary pressure. The major objectives of the Plan wore to achieve self-reliance and adopt measures for raising, the cousumption standard of people living below the poverty line. This plan also gave high priority to bringing inflation under control and to achieve stability inthe economic situation, I targeted an annual growth rate of S.$ per cent in national income, Four Annual Pkans pertaining to the Fifth Plan pettod were completed. It was subsequently decided to end the Fiflh Plan peried with the close of Annual Plan 1978-79 and initiate work fora new Plan for the next five years with new priorities, and programmes, Farly Termination The Plan was terminated by the Janata, government in 1978, one year before the scheduled period Rolling Plan The Fifth Five-Year Plan was terminated by the Janata Government one year earlier (that is, 1 April 1978) and the concept of a Rolling Plan Was introduced with effect from, 1 April 1978. Under the rolling plas strategy, the Planning Commission prepares a detailed plan for the first year and a bread plan for the subsequent four years. After one yet nto account the actual achievements in the past year, a detailed plan is, prepared for the next year and a broad plan forthe subsequent four years. And the process of revision continues om year 10 ‘year though the timeframe of the plan remains ive years, Objectives () Toattain increased selfreliance Fi) Todispense with foreign aid (iii), To inerease employment avenues (iv) Toachieve an annual growth rate of 5.5 per cent Achievements There was self-sufficiency in the agricultural sector, but prices increased resulting in inflation. Industrial production touched an all-time high record of 9.2 per cent and average growth rate of the economy was 13.9 per cent. Sixth Plan Removal of poverty was the foremost objective of the Sixth Plan (1980-85). The strategy adopted for the Plan consisted essentially in moving simaltaneousty towards strengthening infrastructure for both agriculture and industry, Stress was laid on dealing with inter-related problems through a, system approach rather than in separate compartments; greater management, efficiency and intensive monitoring inall sectors; and aetive involvement of people in formulating specific schemes of development at the local level, and scouring their specely and effective implementation. The actual expenditure in the Sixth Plan stood at Rs 109,291.70 crore (current price) against the envisaged total public sector outlay of Rs 97,500 crore (1970-80 prices) accounting fora 12 percent inerease in nominal terms. Average annual growth rate targeted forthe plan was 5.2 percent, ‘The end of the Fifth Plan was followed by two annual plans. ‘The Sixth Five-Year Plan was therefore launched only on 1 April 1980 to cover the period 1980-81 to 1984-85 Objectives (H. Removal of uremployment (Gi), Rise in the standard of living of the poorest section of, population Provision of basic needs by the State (Gu) Reduction in disparities of income and wealth Gv) Ensuring continued progress towards self-reliance (¥) Ttenvisaged growth rate of 4.7 per cent and expected potential fora 5.5 per cent growth by the end ofthe plan period. ci) To achieve these objectives the plan lad emphasis on four areas, they are (i) Agriculture (Gi) Cottage and smail-seale industries (ii) Arca planning for integrated rural development tiv) Provision forminimumneeds ofthe community Achievements During the sixth plan, the rate of growth of National income underwent significant variation, During the first year (1980-WI) the increase was 7.8 per cent. It was followed by an increase of 4.5 per eent in 1982-83 and 7.6 per cent in 1983-84 over the preceding years. During the Inst year these was.an inerease of 4 per cent over the pecceding yeur. The economy actually grewat the ra of 54 per cent per annum, Seventh Plan (1985-90) smphasized policies and programmes which aimed at rapid growth in foodgrain production, increase in employment opportunities and productivity within the framework of basic tenes of planning, namely, growth, modernization, self-reliance and social justice. Foodgrain production during the Seventh Plan grew boy 3.23 per cent a8 compared to along.term growth rate of 2.68 per cent from 1967-68 to 1988-89 and a growth rate of 2.85 per cent in the eighties due to overall favourable weather conditions, implementation af various thnust programmes and swith concerted efforts of the Govemment and the farmers. To reduce uncimployment and consequently, he incidence of poverty, special programmes like Jawahar Rozger Yojana, ‘were initiated in addition to the already existing programmes. Due recognition was also accorded to the role small scale and food processing industries eam play in this regard. The total expenditure during the entire Seventh Plan stood at Rs 2,18,729.62 crore (cuerent prices against the envisaged totalpublic seetor outlay of Rs 1,80,000 crore), resulting in = 21.52 per cent inerease in nominal terms. During this Plan period, the Gross Domestic Product (GDP) grew at an average rate of 5.6 per cent execeding the targeted growth rate by 0.6 percent. Objectives Targets Agricultural growth rate of 4 per cent per an growth ete of 8 percent perannur. ‘The plan aimed at; Annual growth rate of 5 per cent per annum. n. Industrial Improving general efficiency inall sectors Reducing the number of peaple below the poverty Tine Creating employment opportunities for 40 million people while the Tabour force was expected to increase by 39miltion (iv) Eliminating illiteracy and providing for basic needs of food, clothing, shelter and health eare for all Achievements Against the target of five per cent growth in national income. 5.3 per cent was achieved, Industrial growth rate was around 8.5 per cent and agricultural growth rate touched about 4.3 per cen Annual plans The Eighth Five-Year Plan (1990-98) could not take off duc to the fest changing political situation in the Centre. The new government which assumed power at the Centre by June 1991 decided that the Eighth Five-Year Plan ‘would commence on | April 1992, and that 1990-91 and 1991— 92 should be treated as separate Annual Plans Formulated within the framework of the earlier Approach to the Fighth Five-Year Plan (1990-95), the basic thrust of these Annual Plans was on maximization of employment and social transformation, Fighth Plan The Eighth Five-Year Plan (1992-97) was, launched immediately after the initiation of structural adjustment and macto-stabilization policies which were necessitated by the worsening balance of payments position and inflation during 1990-91 Various steuctural adjustment policies were introduced ‘gradually so that the économy could be pushed to a higher {growth path and to improve its strength, end thus, prevent the balanee of payment snd inflation crises én furure, The Eighth Plan took note of some of these policy changes which were 10 come about duc to these reforms Some of the salient features of economic performance during the Eighth Five-Year Plan indicate, among other things a) Faster economic growth; (b) Faster growth of manufacturing sector, and agriculture andallied sector, (©) Significant growth rates in exports and imports, improvement in trade and current account deficit, and significant reduction in the central government's fiscal deficit, ‘However, shortfall in expenditure in the Central Sector due to inadequate mobilization of intemal and extra budgetary resources by the PSUs and various departments was witnessed. Indian Economy _C.165 In the states sector, the reason for shortfall was lack of mobilization of adequate resources due to deterioration in the balance of current revenues, erosion in the contribution of state electricity boards and state road transport corporations, negative opening balance, mounting non-plan expenditure and shortfalls in theollection of small savings, ets, Objectives The Eighth Five-Year Plan was designed to tackle the twin problems of unemployment and poverty by mobilizing resources through hard options like strict fiscal discipline, a ‘broader tax base and curbs on non-productive expenditures. An annual average growth rate of $.6 per cent was envisaged; marginally higher than 3.3 percent achieved inthe Seventh Plan Reducing the number of persons existing below the poverty ine by another 10 percent ising employment average growth rate three per cent pa. over the rate achieved the end of Seventh Plan Ensuring annual average foodgrain availability at 195g per person (present level 175g) Hi Accent on exports to achieve target of 12 per cent in volume & Universalization of elementary education and ceradicatingilliteracy Supply of clean drinking water forall by 1995 Ninth Plan (1997-2002) The Ninth Plan recognised the integral link between rapid economic growth and the quality of life ofthe people. Italso recognized the need to combine high growth policies with the pursuit of our ultimate objective of improving policies which were pro-poor and were aimed at the correction of historical inequalities, Thus; the focus of the Ninth Plan ean be deseribed as: “Growth with Soeia| Justice and Equi Objectives The specific objectives of the Ninth Plan as approved by the National Development Council areas follows: (i) Priority to agriculture and rural development with a view to generating adequate productive employment and eradication of poverty: (is) Accelerating the growth rate of the economy with stable prices; (iii) Ensuring food and nutritional security for all, particulaily the vulnerable sections of society; (iv) Providing the basic minimum services ofsafe drinking water, primary health care facilites, universal primary education, shelter, and connectivity (o all in a time bound manner, (¥) Containing the growth rate of population; (vi) Ensuring environmental sustainability of the development process through social mobilisation and participation of people at all levels; (sii) Empowerment of women end socially backward groups such as Scheduled Castes, Scheduled Tribes, Other Backward Classes and Minorities as agents of socio-economic change and development;IndianEconomy C.167_ Table C64 FiveYear Plans 1951-32 t0 1955-56 First Plan Priority to agriculture and irigation| 1956-56 to 1960-61 ‘Second Plan Development of basic and heavy industries. 1961-62 1 1965-66 Third Plan Long tem development of India’s eso0omy 1966-67 1 1968-69 Annual Plan Pan holiday period—China and Pakistan wars 1966-70 10 1973-74 Founh Plan 1974-75 10 1977-78 Fifth Plan TTensinated a year cater, by the Janata Government which introduced ‘Rolling Plan’ concept 1978-79 10 1979-80 Annual Plan _Lauached bythe Janata Goverment 1980-81 10 1984-85 Sith Plan Originally launched by the Janata Government. sever, abandoned by be new Govern ands revised plan for 981-85 wat approved 1985.36 10 1989.90 Seventh Plan Food, work and producti were the tsi priorities 1990 to 1991-92 Annual Plan ‘The Eighth plan was to begin from April 1990 but successive goverments (V. P. Singh and Chandrshethar) were unable to finalize the plan document, The rr-ysar shift of the five-year plan by treating 1990-91 and 1990-92 as Annual Plan periods was necessitated, andthe Eighth Plan was finaly launched on April 1992 and covers the period 1992-93 to 1996-97 1992-93 10 1996-57 Eighth Plan _Envisages overall growth rate of 56 per cent per annum over the pried 1992-95 to 1996-99 1997-2002 Ninth Plan Ploy to agicltre and rl development 2002-2007 Tenth Plan Rapid economic growth, dlfernial development strategy, reforms in governance, poli ond instnational reforms. 2007-2012 Eleveath Plan Fate end more ici promt: ney acces fo lv the base rtysial infants, health and education with a projected growth rate af 10 per cent by the end of the plan period and an expected growth of per cent in the agriculeral sectors reduction in disparities across all sata and fast employment creation. 1.4 Eleventh Five Year Plan Objectives “Faster and More Inclusive Growth”; growth rate of approximately 10% by the end of plan period: growth of 4% in the agriculture sector, faster employment creation, reducing, disparities across regions and ensuring access to basic physical infrastructure and health and educstion services to all, Allocations for Major Sectors Increase in provision for Bharat Nirman by 31.6% from Rs 18,696 crote to Rs 24,603 crore, for education by 34.2% to Rs 32,352 crore é& for health and family welfare by 21.9% to Rs 15,291 erore. Means-Cum-Merit Scholarships National Means-cum-Merit, Scholarship Scheme to be introduced to arrest drop out ratio; selection through anational test from among students who have passed class VIII; each student to be given Rs 6,000 per year; 100,000 scholarships to be awarded every year; a corpus fund Of Rs 750 crore to be created this year, and augmented by alike amount annually over the next three years. Drinking Water and Sanitation Allocation for Rajiv Gandhi Drinking Water Mission to be increased from Rs 4,680 crore to Rs 5,850 crore and for Total Sanitation Campaign from Rs 720 crore to RS 954 crore, Health Sector, National Rural Health Mission All districts, to complete preparation of District Health Action Plans by March 2007; major emphasis to be on mother and child care ‘and on prevention and treatment of communicable diseases; convergence sought tobe achieved among various programmes, such as immunization, antenatal care, nutrition and sanitation, through Monthly Health Days (MHD) organised at Anganwadi centres: 320,000 Associated Social Health Activists (ASHAS) recruited with over 200,000 given orientation training; 90,000 fink workers selected by the States: AYUSH systems being mainstreamed into health delivery system at all levels; inerease in allocation for NRHM from Rs 8,207 crore t0 Rs 9,947 crore, HIV/AIDS NACP-IIL, starting in 2007-08, to target high risk groups; access to condoms to be expanded and universal access, to blood sereening and safe blood to be ensured; more hospitals, to provide treatment to prevent transmission of HIV/AIDS, From mother to child; provision for AIDS control programme to be Rs 969 crore, Polio Number of polio rounds to be increased, monovalent vaccine to be introduced, with intensive coverage in the 20 high risk distriets of Uttar Pradesh and 10 districts of Bihar, provision of Rs 1,290 crore in2007~2008. Integrated Child Development Services To cover all, habitations and settlements during Eleventh Plan and to reach ut to pregnant women, lactating mothers and all children below the age of six; allocation to be increased from Rs 4,087 eroreto Rs4,761 erore, National Rural Employment Gurantee Scheme Allocation, of Rs 12,000 crore for NREGS; coverage to expand fromC.168 The Pearson General Knowledge Manual 200 districts to 330 districts; Rs 2,800 crore pravided for Sampoorna Gramin Roagar Yojana in districts not covered by NREGS; allocation for Swaranjayanti Gram Sarozgar Yojana to promote self employment among rural poor to increase from Rs 1,200 to Rs 1,800 crore. Urban Unemployment Increase in allocation for Swarna Jayanti Shahari Rojgar Yojana from Rs 250 erore 10 Rs 344, Targeted PDS and Antyodaya Anna Yojana Scheme for evaluation, monitoring, management and strengthening of targeted PDS to be implemented, will include computerization of PDS and an integrated information system in Food Corporation of India. Scheduled Castes and Scheduled Tribes Allocation of Rs 3,271 crore in respect of schemes benefiting only SCs and STs and Rs 17,691 crore in respect of schemes with a least 20% of benefits earmarked for SCs and STs; increase in allocation for Rajiv Gandhi National Fellowship Programme from Rs 35 crore to RS88 crore; Post-Mattic Scholarships: provision, tobe increased from Rs 440 crore to Rs 611 crare; a separate provision of Rs 91 crore proposed for similar scholarships to students belonging to socially and educationally backward classes. Minorities Increase in share capital of National Minorities, Development and Finance Corporation to Rs 63 crore: provision of Rs 108 crore for a multissector development programme in districts with a concentration of minorities; allocation for Pre- matric scholarships at Rs 72 crore, Post-matric scholarships at Rs 90 crore and Merit-cum-Means scholarships at graduate and postgraduate levels at RS 48.60 crore. Women Outlay for 100% women sepeific programmes is, Rs 8,795 crore and for schemes whereat least 30% allocation is, forwomen specific programmes.is Rs 22,382 crore. North Eastern Region(NER) Allocation increased from Rs 12,041 crore to Rs 14,365 erore; new industrial policy for NER, with suitable fiseal incentives, ta be in place before 31 March 2007. Supplement {o GBS: Allocations under Plan ‘A’ at Rs 205,100 crore; under plan ‘B' additional resources to the extent of Rs 7,000 crore tobe found through better tax administration during the course of the year; under Plan °C’ resources available ‘outside Budget to be leveraged for investment, especially in infrastructure, 1.5 Poverty Line Poverty Line In 1980, the Planning Commission in its Sixth Five-Year Plan document defined poverty tine on the basis, ‘of nutritional standards, The people Tiving below the barest desirable nutritional standards of daly calorie intake of 2,400 calories per person in rural and 2,100 calories per person in urban areas are said to be living below the poverty line. In terms ‘ofmoney, the poverty ine was computed at Rs 76 per capita per month in rural and Rs 88 per capita per person in urban areas ‘Committee on Poverty Line “Tha Pianring Corimession has Sel up a committee to study ‘whether autrtional requirement of people especially in Urban areas have gone down over the years, Commitee ‘will also discuss whether the detnition of poverty should ‘add greater emphasis.on expenditure on items other than food which nave gained signficance in the consumption Ppatlern. The present datinition is in toms of tho caloric Intake, and anyone who has a dally consumption of ess than 2400 in rural and 2100 iq urban areas, is classiiec as 0dr In 1909-4, the proaulation below poverty ine was 36 Percent, which came gown 1a.27 per cant during 2000-01, In 1994-95, the poverty line was revised upwards in terms of monetary expenditure but the basis of calorie intake remained unchanged, iz: © Calotie intake por person per day below Por capitaexpondiune pir month balow |W Annual household consumption expenditure {average amity o!5 parsons) below 1 Pereantage of population ving below the ove figures For Rural Population For Urban Population 2400 calories 2.100 calories Ae 107 pm. Re 12pm Fre .420p2. Re7atopa. 25 dpe cent (out which 75 per cant i tb) Table C.6.5 Population below Poverty Line Period Poverty ratio per cent Na. af people below poverty Fine in milion Rural Urban Total ‘Rural Urban Total 1972-73 Sad 412 SUS 44.2 a3 DLS 1977-78 512 382 482 253.1 337 3068 1st-as 399 ma 369 222 sos m7 1989-90 282 193. 258 168.6 na 2108 (ConyIndian Economy C.169 Period Poverty ratio per cent ‘No. of people belone poverty Hine in milion Rural Urban Total Rural Urban Tout 1990-2000 2.1 236 261 1708 206 2007 (estimates) 21-1 Is 193 a 7 = Poverty Line at Current Prices (1990-91) Keeping the calorie intake unchanged, in terms of monctary expenditure, the poverty line stands revisedas follows: ForRural ForUrban | Population Population [esis oat porsac er 8 240 Sree 2 caren | day beiow |Porcaptaomenciue per ReiS2pm As 1a3p.m | rsonth below ‘Anpuaihousehold below Re®120. Rs 7o80p8 |consumpionaipendie pa (avg family of5 persons) At1991=92 prices According to figures released to the Rajya Sabha in December 1992, there are approximately 24 crore peaple below the poverty line, out of which about 19.6 crore are in rurs] and more than four crore are in urban areas. The poverty line has been fixed at Rs 11,000 per annum per family at 1991-92 prices during the Eighth Plan, 1.6 Performance of Social Sectors Medical Health Care and Family Welfare Health programmes are primarily the responsibility of the state government, but the Union government provides finance for improvements in public health services. The structure of the health system is based on a network of primary health centres. Till 2003-04, there were 1,63,196 Sub-centres! Primary Health Centres/ Community Helath Centres (SC/PHC! CHC), 38031 Dispensaries and Hospitals (all), 914,543 Beds (Private and Public), 8,36,000 Nursing Personnel, 6.28.131 Doetors (Modern System) in the country. Over the years, there has been an overall improvement in the health. The substantial improvementis the result of many factors inchading improvement in public health, coupled with infectious disease prevention and control, a: also application of moder medical practices in diagnosis and treatment of variousailments, National Health Policy (NHP), 2002 The basic objective of achieving an acceptable standard of good health amongst the general population of the country is set out in NUP 2002. Improvement in the general levels of health through larger allocations and more effective implementation of communicable discase programmes, changes in pattem of assistance and impementation, and greater focus on tertiary healthcare have received special emphasis. Despite overall improvertent in socio-economic stalin and increasing life expectancy, the prevalence of infectious diseases continues to bean area of majoc concer in Health sector. Poverty For the country as a whole, the poverty ratio has Acclined from $4.9 per centin 1973-7.4t0 36 per centin 1993-04 ‘The poverty ratio has declined inthe last wo decades follows: RuralAreas Urban Areas) 1903-1908 STapercent $2. 4percent 1969-2000 27-1 porcent — 23.6porcent (SE ASP ce aa DE a SESS Although reduction in the poverty levels in the last two decades is significant in both sural and urban sectors, but overall results are weak as compared to many other East-Asian countries like China, Indonesia, Korea, Malaysia, Philippines ‘and Thailand, etc., due to their faster economic growth. In general, the faster the rate of overall growth, the faster isthe rate of poverty reduetion, The sustained solution to the problem ‘of poverty depends upon the creation of opportunities for broad based economic development and higher growth Together with the overall economie growth, the antic poverty and employment generation programmes have helped in reducing the insidenee of poverty over the long run, ‘The Prime Minister's Integrated Urban Poverty Eradication Programme (PMIUPEP) Scheme, was introduced in January 1996. The Scheme was envisaged to attack the urban poverty im the targeted urban areas in an integral manner, The scheme had two components, Self Employment Scheme (SES) and Shelter Upgradation Scheme (SUS), and is being implemented inover 400 urban agglomerations, People with income below Rs 11,850 per annum were cligible for assistance under this, scheme, Mainly target customers were the urban poor including slumipavement dwellers and street‘destitute children, ete, Under the SES scheme, the borrowers financed fora project costof Rs | lakh only, of which the bank isto finance 9 percent and only’ per eent will have to be met by the borrower himself, ‘The loan repayment had an initial moratorium of 6 1918 months and the instalments are spread over 3 to 7 years of time period. No collateral is required under SES scheme. Under SUS, the borrower is given a monetary assistance Lup to Rs 10,000 for univrenovation/tepair of the household— 7S per cent of the eost of projeet work will be financed and 25 per cent of the amount will form as subsidy. The repayment period is up to 10 years and appropriate guarantees are required for geting the loan approved. Employment The number of persons om the live registers of the employment exchanges gives an idea of the trend of ‘unemployment subject to certain limitations. Employment exchanges cover mainly urban areas and notall the unemployedo (m) (a) O) was launched in 2000-01 in all the states and UTS in order to achieve the objective of sustainable human development at the village level, The PMGY envisages the allocation of Additional Central Assistance to the states and UTs for selected basie minimum services in order to focus on certain priority areas of the ‘government. PMGY initially had five components v primary health, primary education, rural shel drinking water, and nutrition. Rural electrification has bbecn added as an additional component from 2001-02. The Planning Commision directly implements this programme, Pradhan Mantri Gramodaya Yojana (Gramin Awas) It seeks to achieve the objective of sustainable habitat developmentat the village level Pradhan Mantri Gram Sadak Yojana (PMGSY) Launched in December 2000 asa 100 per cent centrally sponsored scheme, it is a programme to provide road connectivity through good all-weather roads to 1,60 lakh unconnected habitations with a population of 500 persons or more in the rural arcas by the end of the Tenth Plan period (2007) at an estimated cost of Rs 60,000 crore. The programme is being ‘executed in all the states and six Union Tertitoi While the focus of the programme is on providing road connectivity to unconnected habitations of stipulated population size, connectivity is being provided to all panchayat headquarters and places of tourist interest under the PMGSY, irrespective of the population size. The present source of funding for PMGSY is the diesel cess, 50 per cent of which is earmarked for PMGSY, Efforts are underway to raise additional resources for the programme with financial assiatance from the World Bank and the Asian Development Bank, ‘Antyodaya Anna Yojana (AAY) It was launched by the Prime Minister in December 2000, Under the scheme, 2 erore of the poorest families out of the BPL families covered under the Targeted Public Distribution system are identified. To cach eligible family, 25 kg of foodgrain is made available at a highly subsidised rate of Rs 2 per ke for wheat and Rs3 per kg for rice ‘This quantity had been enhanced from 25 to 35 ke with effect from April 2002 for a period of one year that isy upto 31 March 2003. Annapurna Wt was launched on I April 2000, asa 100 per cent centrally sponsored scheme. It aims at providing food security to mect the requirement of those senior citizens who, though eligible for pension under the National Old Age Pension Scheme, are not getting the same. Ten kilogram of foodgrains per person per month are supplied free of cost. IndianEconomy C.171 (p) Indira Awaas Yojana VAY) It aims at providing welling units, free of cost, tothe poor. The Ministry of Rural Development (MORD) provides equity support to the Housing and Urban Development Corporation (HUDCO) for this purpose. (@) Rural Employment Generation Programme (REGP) It ‘was launched in 1995 with the objective of creating slf- employment opportunities in the rural areas and small towns, and is being implemented by the Khadi and ‘Village Industries Commision (KVIC). Under REGP, ‘snterprencurs can establish village industries by availing of margin money assistance fram KVIC and bank loans forprojects witha maximum cost of Rs 25 lakh. (8) Prime Minister's Rozgar Yojana (PMRY) It was started with the objective of making available self ‘employment opportunities tothe educated unemployed youth by assisting them to set up any economically viable activity. While the REGP is implemented in the rural areas and small towns (population upto 20,000) for setting up village industries without any cap on income, educational qualifieation or age of the beneficary, PMRY is meant for educated unemployed youth with family income of up to Rs 40,000 per annum, in both urban and raral areas, for engaging in any economically viable activity (8) Jai Prakash Rozgar Guarantee Yojana JPRGY It secks to provide guaranteed employment to the unemployed in the most distressed districts of the country, Operational modalities for launching of the scheme are being worked out () Swarna Jayanti Shahari Rozgar Yojana (S)SRY) The Urban Self-Employment Programme and the Urban Wage Employment Programme are two special sehemes of the SISRY, initiated in December 1997, which replaced various programmes operated earlier for urban poverty alleviation. This is funded ona 75 :25 basis between the Centre and the states (u) Valmiki Ambedkar Awas Yojana (VAMBAY) It was formally launched by the Prime Minister on 2 December 2001. The Scheme secks to ameliorate the conditions ofthe urban slum dwellers living below the poverty line who do not possess adequate shelter. ‘The scheme has the primary objective of facilitating the construction and upgradation of dwelling units for slum dwellers and providing a healthy and enabling urban environment through community toilets under Nirmal Bharat Abhiyan, a component of the scheme. The Central Government provides a subsidy of 50 per cent, the balance $0 per cent being arranged by the state government with ceiling costs prescribed both for dwelling units and community toilets.IndianEconomy CA73 (ICURRENCYsysTEM 2.1 Historical Background Im First gold coins were introduced! during the reign ofthe Gupias Ab 390-850, Rupee was frst minted in India during the reign of Sher Shah Suri around ao 1542. Iwasasilver coin weighing around 179 gmand it replaced the gol coins In 1873, when the price of silver fell in the world arket, the silver eain Host its metallic value, The F the Indian rupee was Rs 10 per 1873 ia was introduced in 1882 by the exchange valu pound sterling Paper currency in Ind British government. BE With the establishment of the Reserve Bank of India, im 1935, the Indian rupee became an independent currency, although for exchange purposes it continued tobe dependent on Sterli HE In 1947, India became a member of the Intemational Monetary Fund (IMF) and exchange walue of the rupee came tobe fixed by IME standards, 2.2. The Decimal System “The Indian currency system was converted into decimal system by Indian Coinage (Amendment) Act 1955 which was brought, ‘nto forve from 1 April 1957. The old system of rupee, annas, and paisc (1 rupee ~ 16 annas and 1 anna = 12 paise) was replacedby’ topes and Paise system ‘The first one-paise coin under the decimal system was issued in Marc 1962 andthe fst ane rape coin in ly T9C2 Issue and Distribution of Currency All coins and one rupee notes are issued by Government of India and, therefore, the one rupee note docs not bear the signature of the Governar of the Reserve Bank of India Currency Denominations At present eurrency notes of «denominations of Rs 1, 2.5, 10, 2, $0, 100, $00.and 1,000 are in circulation. The current series which began in 1996 is called ‘he Matagme Gand Series, The currency notes of Rs $00, bearing a portrait of ‘Mahatma Gandhi and the Ashoka Pillar emblem were issued by RBI from 3 October 1987. All notes above one rupee denomination are issued by the Reserve Bank of India and, therefore, currency notes shove (NRUBLIC FINANCE Power toraiseand disburse public funds has been divided under the Constitution between the Union and the state governments. Ministry of Finance is responsible for administration of finances of the government. This Ministry comprises ‘one rupee denomination bear the signatures of the Governor of Reserve Bank of India, These notes are alzo called bark nates. Each bank nove has its amount written in 15 languages (English, Hindi and 13 others om the back), illustrating the diversity of the country Distribution and administration of all currency is done by the Reserve Bank of Indio as an agent to the Government of India Demonetization of Currency Demonetization refers 10 the withdrawal of currency from circulation which is done to ambush black market curreney and unaccounted:money, So far, ddemonetization has taken place twiee, vie, 1. First Demonetization was done in 1946 (World War 11) which called for declaration af notes of Rs 100 and above, All notes of Rs $00 denomination and above were demonstized 2. Secand Demonetization was dane in January 1978, through which currency notes of higher denominations of Rs 1,000, Rs 5,000 and Rs 10,000 were demonetized. 2.3 Devaluation of Currency Devaluation refers to reducing value of the Indian rupee in comparison to the US dollar in the world market In 1947, India became a member of the International Monetary Fund (IMF) which necessitated fixing of exchange value of the Indian rupee as per IMF standards. As 4 result, India was abliged to devalue the rupee and so far, the following evaluations have taken place: First Devaluation In Jung 1949, the Indian rupee was devalued by 30.5 per cent, Dr John Mathai was the Finance Minister Second Devaluation In June 1966, whereby the Indian rupee was further devalue by 57 per cent. Sachindra Chaudhry was the Finance Minister. Third and Fourth Devaluations On I July 1991, the Indian rupee was devalued by 9 per cent and again further dewatucd by HI percent on 3 July 1991, bringing the toral devaluation 10 20 pot cent, This was during the finance ministership of Dr Manmohan Singh. Since 20 August 1994, the rupee has been made a freely convertible currency on current account three departments: (i) Department of Economie Affairs; Gi) Department of Expenditure, and (iii) Department of Revenue, These are concemed with all economic and financial matters affecting the country as a whole. It also regulates,