Economic survey gist

Performance of Public sector Banks

While the CRAR of the scheduled commercial banks (SCB) at 12.75 percent as of September 2014 is
Satisfactory .

As per the RBI’s Financial Stability Report, the gross nonperforming advances (GNPA) of scheduled
commercial banks as a percentage of the total gross advances increased.

Five subsectors, viz.

infrastructure,
iron & steel,
textiles,
mining (including coal), and
aviation.
hold 54 percent of total stressed advances of PSBs. This was significantly higher than that of private-
sector banks and foreign banks .

Steps to resolve NPA issue of PSBs

Towards strengthening recovery from non-cooperative borrowers, the RBI has tightened the norms
for asset reconstruction companies (ARC) whereby the minimum investment in security receipts
should be 15 per cent, as against the earlier norm of 5 per cent.

Financial Inclusion

The objective is to ensure the excluded sections, i.e. weaker sections and low income groups, access
to various financial services such as a basic savings bank account, need-based credit, remittance
facility, insurance and pension.

The Payment and Settlement Systems Act 2007 (PSSAct) was enacted with a view to providing
sound legal basis for the regulation and supervision of payment systems in India by the RBI.

The Union has approved a proposal allowing PSBs to raise capital from public markets through
FPO (follow on public offer) or QIP (qualified institutional placement) by diluting Government of
India holding up to 52 per cent in a phased manner based on their capital requirement, stock
performance, liquidity, market appetite and subject to certain conditions.

Non-banking financial companies

There are two broad categories of NBFCs based on whether they accept public deposits, viz.,
deposit-taking NBFCs (NBFC-D) and non-deposit-taking NBFCs (NBFC-ND). i.e. with asset size
Rs.500 cr and above.
Insurance Sector

insurance penetration has grown from 2.3 per cent in 2000 to 3.9 per in 2013.

Insurance Laws (Amendment)Ordinance 2014 to

removing archaic and redundant provisions in the insurance laws,

empowering the Insurance Regulatory and Development Authority (IRDA) to enable more
effective regulation, and
enhancing the foreign equity investment cap in an Indian insurance company from 26 to 49
per cent with the safeguard of Indian ownership and control.

Pension sector

The Swavalamban Scheme, a co-contributory pension scheme launched in 2010 for persons in the
unorganized sector, The Pension Fund Regulatory and Development Authority (PFRDA) Act 2013,
The PFRDA Act seeks to vest the PFRDA with statutory status in order to allow it to perform its
regulatory and developmental roles effectively.

Climate Change & Sustainable

Development
Sustainable Development Goals (SDGs), replacing the Millennium Development Goals.

A major development attracting attention worldwide has been the Joint Announcement on Climate
Change by the United States and China—the world’s two largest emitters

India’s national solar mission is being scaled up fivefold from 20,000 megawatts (MW) to 100,000
MW and the clean energy cess on coal has been doubled to Rs.100/tonne in 2014.

India’s Progress on Climate Change

India’s total renewable power installed capacity as on 31 December 2014 has reached 33.8 GW

1.Wind energy tops 2. biomass, 3.small hydro power, and 4.solar power.

The government has been promoting private investment in renewable energy through an attractive
mix of fiscal and financial incentives, in addition to preferential tariffs being provided at state level.
These include capital/interest subsidy, accelerated depreciation, and nil/concessional excise and
customs duties.

Some of India’s major immediate plans on renewable energy include

scaling up cumulative installed capacity to 170 GW (that includes 100 GW of solar power)
by 2022
Establishing a National University for Renewable Energy.
India introduced a clean energy cess on coal in 2010

‘National Adaptation Fund’ with an initial corpus of ` 100 crore has been set up to support adaptation
actions to combat the challenges of climate change in sectors like agriculture, water, and forestry.

Key Lima Outcomes

identification of information to be submitted by Parties under the Intended Nationally Determined

Contributions (INDCs), and enhancement of pre 2020 actions.

the new agreement will be under the UNFCCC and will reflect the principle of CBDR in the light of
different national circumstances.

It also addresses all elements, i.e. mitigation, adaptation, finance, technology development and
transfer, capacity building, and transparency of action and support in a balanced manner.

Sustainable development

Document—“The Future We Want”

17 SDGs
1. End poverty in all its forms everywhere.
2. End hunger, achieve food security and improved nutrition, and promote sustainable agriculture
3. Ensure healthy lives and promote well-being for all at all ages
4. Ensure inclusive and equitable quality education and promote life-long learning opportunities
for all
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, and decent work for all
9. Build resilient infrastructure, promote inclusive and sustainable industrialization, 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 for sustainable
development
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.
External Sector

India’s merchandise trade

India’s merchandise trade (on customs basis) increased
As per the World Trade Organization (WTO), India’s share in global exports and imports increased
from Its ranking in terms of leading exporters and importers improved
Composition of Trade

(1)Manufactured goods constitute the bulk of exports followed by

(2) crude and petroleum products (including coal) with a 20 per cent share, and
(3) agriculture and allied products with a share of 13.7 per cent share

top seven product groups accounting for nearly 80.9 per cent of India’s total exports

1. petroleum products
2. gems and jewellery
3. agriculture and allied products
4. textiles and allied products
5. chemicals and related products
6. transport equipment
7. machinery
Direction of Trade

India’s exports and imports from Europe, the USA, and Singapore have declined, while its trade with
Asia and Africa has increased.

India’s exports to the USA and UAE as major destinations

India’s exports to China and Belgium declined

China is the major source of India’s imports

Trade Deficit

India’s trade deficit (on customs basis) declined even though growth in exports was sluggish.

WTO NEGOTIATIONS AND INDIA

for India, viz. the Ministerial Decision for an Agreement on Trade Facilitation and the Ministerial
Decision on Public Stockholding for Food Security Purposes.
The Trade Facilitation Agreement (TFA), which was also endorsed by India at the Ninth Ministerial
Conference, is basically aimed at greater transparency and simplification of customs procedures, use
of electronic payments and risk management techniques, and faster clearances at ports.

The agricultural trade rules in the WTO’s Agreement on Agriculture do not bar public procurement
and stockholding for food security

However, if food for such programmes is acquired at administered prices and

not market prices, then this is deemed a support to farmers. As per WTO rules negotiated in the
Uruguay Round, all such support has to be kept within a limit of 10 per cent of the value of
production of the product in question.

Trade deficit continues to remain broadly at comparably moderate levels.

BOP

Balance of payments accounts are an accounting record of all monetary transactions between a
country and the rest of the world.

These transactions include payments for the country's exports and imports of goods, services,
financial capital, and financial transfers.